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Konstantin Beyrit: We plan to commission the plant on schedule

13 january 2016

The year 2015 has significantly changed the lives of Russians: deterioration of the international situation, falling national currency and unstable forecast for the future. In his interview, Konstantin Beyrit, Member of the Company’s Board of Directors and Director of the Russian Funds Investment Group, tells about how Seligdar has survived through the year and what tomorrow will bring.     
 - Konstantin Alexandrovich, how has this year retained in your memory in terms of Seligdar’s operations?
- First of all, I should certainly say that this was a jubilee year. Seligdar turned 40. There are few Russian, and global, companies with such a considerable age and rich history.
As for the current situation, it is obvious that the time now is quite difficult for all of us. It is the time that brings new challenges to not only companies but also individuals, and even the entire country. I cannot say there is something unexpected for us about these challenges. Thank God, for 40 years Seligdar has survived through more than one crisis and has relevant experience, or I would even say some sort of immunity. Still, each time you face any challenge, you simply have to match it.
By the results of the year, I can say that despite rather difficult situation in the country, we implement the strategy that Seligdar had developed two years ago. The most important thing is that the construction of the plant on Ryabinovoye deposit has begun. This is our key facility today. Gold production has increased to two tons as a result of the commissioning. This is quite a strong result.    
Unfortunately, not everything runs smoothly. There are delays on the part of the contractors. In addition, the company has worked with cash flow constraints for a year, but we allocated all available resources to the construction of this facility. Including the dividends of the company’s shareholders, that they dropped in favor of the project’s implementation.   

- Does switching from Sberbank to VTB also have to do with it?
- On the whole, it does. We were in great need of debt payment break for 2016 because we needed sound liquidity to launch such a large scale facility as the plant; VTB allowed us to have it. Now we are discussing with our new partner the funding of not only the holding’s working activity, but also the construction of a new ore mining and dressing plant on Pravourmiyskoye; we also want it to become one of the market makers of our shares.
We have completely switched to VTB, but we are of course grateful to Sberbank for being our reliable partner for 6 years and for supporting the launch of several new objects – Ryabinovoye, Lunnoye, Podgolechnoye. The first achievements of our tin companies are also related to Sberbank.    
- What is now happening in the country’s economy, will it impact the industry as a whole, and if so, how will these changes influence the company’s work next year?
- Unfortunately, there will be consequences. For example, the delays in equipment supply that we are witnessing – they are a copy of what is happening now. The manufacturers and suppliers lack working assets. We have signed the supply agreements with both foreign and Russian producers: the main equipment – mills – will be Russian-made, whereas the supplementary equipment will be foreign. Anyway, we hope to follow the plant’s commissioning schedule – end of Quarter 3 of 2016.
- The plant’s construction is quite a noticeable event, apparent to the naked eye. What has been happening within the company this year?
- Equally important changes have occurred within the company, that I should mention. It is clear that changing the operating system and the established procedures is quite difficult, and this is indeed a very meticulous work. However, the way the company worked even at the beginning of this year and what we see now are two totally different things. The work conducted by the General Director, in particular, search for the internal reserves of efficiency and correct engineering solutions, results in the fact that Seligdar is becoming a large solid company. Large-scale internal reform is underway; new competencies have appeared, that weren’t there before. First of all, it has to do with the day-to-day operations management and planning. The results of these changes are already visible at the shareholder level, but it will take one or two years for them to become absolutely obvious.
- What are the results of the Holding’s tin division at the end of the year?
- In my opinion, this year Rusolovo Company has achieved an absolute result. Rusolovo has been operating under Seligdar’s management and as its subsidiary for the fifth year now. This year, the enterprises in Khabarovsk Krai have mined 570 tons of tin. This is more than in all previous years taken together.
Besides, this year Rusolovo has exported tin concentrate for the first time. The largest world traders became the buyers. This confirms that our tin’s quality meets the international standards. 
Solnechnaya MSP started working in 2015; a new separation technology – spiral separators – has been launched on Pravourmiyskoye. Next year, tin mining companies have many challenging tasks, including the production schedule of over 1000 tons of metal. Tin Mining Company (Rusolovo subsidiary – editor’s note) conducts capital work on reconstructing and commissioning Molodezhny mine. When you construct something new, you start from scratch, whereas when you reconstruct, you start from minus, which is much more difficult. We have already obtained the first ore from Molodezhny this year, but there is some way to go. First of all, we have to drive new permanent workings allowing to bring the mine to the commercially viable volumes - up to 400 thousand tons of ore a year. Pravourmiyskoye deposit has rich tin reserves, but unfortunately it is far from the Krai’s main infrastructure. At present, we are negotiating with the Far East Development Fund to get the state aid for infrastructure projects - construction of power supply lines and motorways.               
- What will be there next year?
- Our primary task is to commission the plant on Ryabinovoye in the second 6 months of the year 2016. And our plan is quite ambitious: to increase gold production by 30% and to double ore mining. We have to be able to implement all of that.
- Your wishes ahead of the New Year.
- A Concept of small achievements was conceived in Russia in the second half of the 19th century; it suggested every national to slightly improve Russia. This program resulted in Vologda butter, Matryoshkas, and many other things we love. It seems to me that this program is still topical today. If everyone tries to change the world around for the better, everyone will gain. So, my wish for the New Year is that everyone become a bit more efficient in his/her work, which will make the company more efficient. I wish good health, success, happiness, good mood and new achievements! Happy New Year!

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Konstantin Beyrit: We plan to commission the plant on schedule