The appointment is designed to win back investors’ trust following last year’s ugly court battle in London between the Assaubayev family, which founded KazakhGold, and Russian gold miner Polyus, which agreed to buy it in 2009.
“At the maximum we will be on the board of directors, but we won’t participate in management,” Kanat Assaubayev, who founded the company, told The Telegraph. “We won’t use local management again, we want to use international management.”
Mr Assaubayev would not reveal the name of his new chief executive, who he said had been appointed by his investment bankers.
But reliable sources confirmed Mr Mills’ appointment. Mr Mills was ousted by Lonmin’s board in September 2008, at the peak of a hostile takeover battle with Xstrata, the London-listed miner.
Mr Mills had overseen a tripling in the company’s share price since taking the reins in March 2004. His success in turning Lonmin from an unloved offshoot of Tiny Rowland’s Lonrho conglomerate into a FTSE-100 favourite was helped by a global boom in platinum.
But the former BHP Billiton executive has a reputation as a tough, plain-speaking, operations man, well-suited to turning round a troubled but promising business like KazakhGold.
During last year’s court battle, Polyus said that the Assaubayev family had “substanitally inflated” gold production figures, and arranged “diversion of funds [through] sham contracts", charges the family strongly denied, and which Polyus dropped as part of December’s settlement.
To convince investors that the reserves are as claimed, Altyngroup has hired KPMG and Wardell Armstrong, the mining consultancy.
AltynGroup announced last Monday that it had renegotiated the settlement it reached with Polyus in December. Under the settlement, it will buy back the operating assets of Kazakh Gold. This will leave Polyus with a London-listed shell into which it can reverse its $10bn business, creating London’s largest gold miner.
The new deal extends the date by which AltynGroup has to make its first payment to Polyus from March 11 to September 12, and also allows it to buy only 51pc of Kazakh Gold’s operating assets by that time, instead of 65pc, giving it until the end of 2012 to buy the rest.
AltynGroup is working with VTB Capital, the Russian investment bank, and ING, the Dutch investment bank, to raise part of the $509m (£312m) needed to buy back the KazakhGold assets, and also to fund investment in the company’s mines.
The family would be able to put in $100m to $200m of the required investment.
The company is then planning to float in London, or possibly Hong Kong, next year.