Polymetal (LON: POLY) shares have been horribly badly hit by the varied sets of sanctions surrounding Russia and the Ukraine. Which is a pity, as it's a well run gold miner with significant interests in both Russian and Kazakhstan. Absent these current troubles it would probably be worth several multiples of the current share price - as it was before the current troubles. Still, at least it's better off than one of the other London listed Russian gold miners, Petropavlovsk (LON: POG), which was driven into bankruptcy by the implications of those sanctions.
The difficulties come from both sides. The original stock was fungible between three exchanges, London, Moscow and Almaty. It was possible to buy on any one and sell on either of the other two. This system broke apart as a result of sanctions - NDS no longer spoke to euroclear. Therefore dividends could not be paid as it wasn't possible to track down shareholders who owned the Russian version of the stock. So any dividend or payout simply was not possible.
There were other problems as well from the Russian side but they didn't in fact impact Polymetal all that much. They had exported gold concentrates so changes on bullion sales didn't worry them. There were problems with inflation rates, not being able to use certain foreign contractors and so on but the business has continued, even if not as wonderfully as before.
Polymetal share price from London Stock Exchange
Today's 25% drop comes on the news that the only way out here is for the company to relocate to Kazakhstan. The Almaty quote will become the main and only one (at least until someone willing to handle a GDR program can be found). The Kazakh market has markedly less liquidity than London and so we should expect the valuation multiple to be lower. On the other hand the move should - should note - lift all of the operational difficulties and might well lead to a resumption of dividend payments.
So it's possible to think that at some price it's worth buying into POLY. There's going to be a suspension - the quote will vanish - and then the new quote will go live sometime later. So there's going to be a gap. But bridging that gap? It might well be worth it. But this is not a speculation to be financed and not in any large quantity. It would need to be an outright purchase then a wait and hope. Which may or may not work but it's possible that it will.
Will the lifting of operational difficulties outweigh the depressive effect on the stock price of being on a minor exchange?