Petropavlovsk, which has a market capitalisation of 118 million pounds ($154.99 million), said it had appointed advisers AlixPartners UK to help the board explore options.
"These options include the sale of the company's entire interests in its operating subsidiaries as soon as practically possible," it said.
The company said it was not currently clear what return, if any, might be secured for shareholders or bondholders from this process.
Petropavlovsk said it had been unable to make loan interest payments due in March to Russian bank Gazprombank, as the Russian bank is on the UK sanctions list. The company can also no longer sell its gold to Gazprombank.
Petropavlovsk also said it was aware of reports of proposed Russian legislation to make it a criminal offence for entities in Russia to refuse to deal with counterparties because of sanctions.
"If such legislation is enacted, the board may not be able to ensure that its subsidiaries will comply with the regulations in Russia," it said.
Petropavlovsk is due to make a coupon payment in May on a $500 million bond, which matures in Nov 2022.
"In the present circumstances, the board considers that it will be very challenging to refinance the notes," the company said.
($1 = 0.7613 pounds)
(Reporting by Carolyn Cohn. Editing by Jane Merriman)
