Petropavlovsk Suspended, Only Polymetal Left Standing

The Russian gold miner is the latest LSE stock to suspend its shares as it prepares to file for administration in London

James Gard 15 July, 2022 | 10:53AM
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Russian gold miner Petropavlovsk (POG) filed for administration this week, leading to its shares being suspended on the London Stock Exchange.

This means that, of the "big three" Russian resources stocks listed in London, only Polymetal (POLY) is still trading, with Evraz (EVR) shares suspended in March in the first wave of sanctions after the late February invasion.

Petropavlovsk was unable to repay a $201 million loan made to sanctioned Russian bank Gazprombank, which was due in April. The miner said this week it is planning to sell its subsidiaries but there’s no certainty that this will go ahead – it also warned investors to expect the worst.  

"It is highly unlikely there will be any return to shareholders given the level of the Group’s indebtedness," the company added as it filed for administration in London.

But in March the company had already flagged up the risks of Gazprombank being sanctioned in terms of losing a buyer of its gold and not being able to pay its creditor. In June it reiterated the risks of a total blowout in shareholder value.

Petropavlosk shares were suspended at 1.20p, a year-to-date fall of 93.68%. For context, the shares peaked at just below 600p in spring 2006. The company’s market cap was £1 billion at the start of 2022

Shares collapsed after the February 24 invasion but there were a number of shortlived rallies until the suspension on July 12. The most notable bounce was the move from 150p to nearly 5p in the last few days of March, and there was a minor repeat of this in May. What were investors thinking?

In March there at least remained the (remote) possibility of a quick resolution to the war and removal of sanctions. But some of this rally could be assigned to speculation: after a stock has bombed, there’s the chance of a recovery that could see a multiplication in the share price, rewarding the brave and/or foolish. Still, Petropavlovsk has been a "penny share" since 2013, so many investors could be willing to take a punt on a "cheap stock" – I addressed the dangers of low-price stocks in this article.

Could this also be a case of investors "picking up pennies in front of a steamroller", a phrase attributed to Black Swan author Nassim Taleb?

It’s a graphic image of the investment process and the leap of faith required by equity shareholders generally – there’s always the prospect of total collapse round the corner but investors are happy to pick up small gains in the interim.

In this case though, the steamroller was moving much faster than its real-world counterpart – and investors could not claim ignorance of a potentially painful outcome. We've updated our list of Russian companies listed on the LSE below.

The Back Story

Petropavlovsk was relegated from the FTSE 250 in the March reshuffle, while Evraz and Polymetal were demoted from the FTSE 100.

These companies listed in London were removed from the FTSE indices by FTSE Russell in the week beginning March 21 because of a lack of trading liquidity. 

At the time the index provider said it had received feedback from partners that the "ability to buy or sell shares of the index constituents below is severely restricted due to major international brokerage firms no longer supporting trading of these securities and therefore there is insufficient institutional liquidity and market depth". 

"Consequently, this will prevent index trackers from replicating the ongoing inclusion of these names within the FTSE Russell indices," FTSE Russell said.

Petropavlovsk was listed on the Alternative Investment Market as Peter Hambro Mining in 2004, changing its name in 2009 to reflect its Russian focus. The firm was founded by veteran mining investor Peter Hambro and businessman Pavel Maslovski and has undergone boardroom turmoil in recent years. 

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James Gard

James Gard  is senior editor for


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