Mining Auction Fails to Attract Major Investors
Only one bidder - LLC Mining Investments (company id: 404415824) - participated in an auction of a 27-year extraction license for gold, copper and other precious minerals in the Shida Kartli region held on February 29 by the Agency of Natural Resources. Mining Investments received the license for GEL 110.5 million (starting price: GEL 110 million).
The company was registered in Tbilisi on 13 February 2012, two weeks before the auction took place (the auction was first announced on January 19th 2012). Alvydas Brusokas, a Lithuanian citizen, is the sole owner and director of the company, whose legal address is (Gudiashvili Square 4, using the office of the law firm BLC). TI Georgia did not have much time to monitor the process: The auction ended within a minute, after the chairman of the meeting announced that LLC Mining Investments has won the license for GEL 110.5 million, one bidding step of GEL 500,000 above the starting price.
As we wrote in our previous blog post, we believed that this existing mine was an extremely valuable and attractive asset, and the fact that only one bidder participated indicates that the auction process was - once more - not designed to attract a large number of international investors with relevant experiences.
Brusokas himself was not present at the auction. We recognized at least one familiar face in this auction, who we believe represented Brusokas’ company. In a previous auction, this individual seemed to represent the Caucasian Mining Group, a company with fairly opaque ownership, which won another major gold and copper mining license in October 2011.
In the next few days, we will provide you some more analysis about recent mining auctions in Georgia.