Nord Gold, Russian mining giant Severstal's gold subsidiary, has set a 300-390 pence or $4.70-6.20 per share price range ahead of its initial public offering on the London Stock Exchange, valuing the company at 2.5-3.2 billion pounds, or $4.0-$5.1 billion, Nord Gold said on Thursday.

Nord Gold, Russia's second largest gold miner including foreign production, plans to float about a quarter of its capital, or 113.1 million new shares and 94.9 million existing shares, the company said in a statement.

Book-runners will have a greenshoe option for 15% of shares. If they use it, Nord Gold's free float will amount to about 29%.

The capital raised in the IPO will be used to refinance loans granted by Severstal and to back Nord Gold's further development, including the development of its key projects and acquisitions.