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In a mystery fit for the tumultuous history of Russia's ostentatious elite, the 8-cm (3-inch) golden egg was spirited out of St Petersburg after the 1917 Bolshevik Revolution and then disappeared for decades in the United States.
An unidentified man in the United States spotted the egg while searching for scrap gold and purchased it for $14,000, hoping to make a fast buck by selling it to the melting pot.
But there were no takers because he had overestimated the value of the watch and gems tucked inside the egg.
In desperation, the man searched the Internet and then realised he might have the egg that Russian Tsar Alexander III had given to his wife, Maria Feodorovna, for Easter in 1887.
When the scrap metal man approached London's Wartski antiques dealer, he was in shock.
"His mouth was dry with fear - he just couldn't talk. A man in jeans, trainers and a plaid shirt handed me pictures of the lost Imperial egg. I knew it was genuine," Kieran McCarthy, director of the Wartski antique dealer, told Reuters.
"He was completely beside himself - he just couldn't believe the treasure that he had," said McCarthy, who then travelled to a small town in the US Midwest to inspect the reeded yellow golden egg in the man's kitchen.
Wartski acquired the egg for an unidentified private collector. McCarthy said he could not reveal the identity of the man who found the egg, its sale price or the collector, though he did say that the collector was not Russian.
Some estimates put the egg's value around $US20 million.
Reuters was unable to verify the story without the identities of those involved and when questioned whether the story was perhaps too fantastic to be true, McCarthy said:
"We are antique dealers so we doubt everything but this story is so wonderful you couldn't really make it up - it is beyond fiction and in the legends of antique dealing, there is nothing quite like this."
Rich Russians, who before the revolution once dazzled European aristocracy with their extravagance, have since the 1991 fall of the Soviet Union returned to stun the West by snapping up treasures, real estate and even football clubs.
Metals tycoon Viktor Vekselberg bought a collection of Imperial Faberge Easter Eggs for $90 million from the Forbes family in 2004. The eggs were brought back to Moscow and put on exhibition in the Kremlin.
A Russian businessman with a passion for Tsarist treasures, Alexander Ivanov, said he was behind the $18.5 million purchase of a Faberge egg in London in 2007.
Peter Carl Faberge's lavish eggs have graced myths ever since they were created for the Russian Tsars: Only royalty and billionaires can ever hope to collect them. Current owners include Queen Elizabeth and the Kremlin.
Tsar Alexander III asked Faberge to make one egg a year until his son, the next Tsar Nicholas II, ordered him to make two a year - one for his wife and one for his mother. The tradition ended in 1917 when Nicholas was forced to abdicate and he and his family were executed by the Bolsheviks.
As Russia's rich rushed to the exits, treasures were sold off under Vladimir Lenin and his successor Josef Stalin as part of a policy known as "Treasures into Tractors".
The mystery golden egg, which opens to reveal a Vacheron Constantin watch set with diamond set gold hands, was last recorded in Russia in 1922, two years before Lenin's death. It will go on display in London next month.
"It is nothing but wonderment and miracle - a miracle that the egg survived," said McCarthy. "The treasure had sailed through various American owners and dangerously close to the melting pot."
Peter Carl Faberge made some 50 imperial eggs for the Russian Tsars from 1885 to 1916. Forty-two have survived, according to Faberge. Some others were made for merchants.