London-listed Trans-Siberian Gold (AIM:TSG) has signed an agreement with Kamchatskenergo, the main provider of electrical power in Kamchatka located in the Russian Far East.
The two parties entered into an energy subsidy agreement to supply the Asacha Gold Mine on low-tariff rates in 2020.
Trans-Siberian, the Russian gold producer, said it had benefitted from a reduced tariff of RUR 4.69/kWh during 2019 which had subsequently led to ‘significant cost savings’.
The new agreement confirms that Kamchatskenergo will continue to supply electricity at a reduced tariff of RUR 4.75/kWh, approximately US$0.077/kWh.
Alexander Dorogov, Chief Executive of TSG said the producer would benefit from continued support from its local provider in 2020 “significantly reducing” energy costs whilst operating at the Asacha Gold Mine.
Shares in Trans-Siberian Gold were trading 5.42% higher at 87.5p on Friday morning.
Dorogov reaffirmed the incentive behind electricity subsidies and their role in supporting policy aimed at encouraging investment into the region.
He added, “Lower energy costs materially reduce the financial burden for companies operating in the Far East of Russia, and these regional economic growth incentives reaffirm the attractiveness of the region for investment.”
Trans-Siberian previously signed an agreement with Russia's Far East Development Corporation officially confirming the Company's residency in the Kamchatka Advanced Special Economic Zone in mid-December.
Established in 2014 by the Russian government, the ASEZ programme focuses specifically on aiding economic growth by providing preferential business terms to organisations operating within the region.
Currently, the programme comprises 20 priority development areas, including Kamchatka, where TSG operates.
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