Kinross Gold to buy gold mine, assets in Russia for $368 million
21 Jan 2010
Kinross Gold Corporation, the third-largest gold mining company in North America by reserves, has agreed yesterday to buy gold deposit and assets near its Kupol mine in Russia for $368 million in a cash and stock deal
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Toronto, Canada-based Kinross Gold said that it has proposed acquiring the Dvoinoye deposit and the Vodorazdelnaya property from two unnamed Russian companies that are "related to" Russian billionaire Roman Abravomich's Millhouse LLC investment company, which have expressed their intention to remain shareholders of Kinross.
Kinross, listed in the Toronto and the New York Stock Exchange will pay $165 million in cash and issue 10.56 million Kinross shares, worth about $195 million based on the its closing share price yesterday.
The Dvoinoye deposit is located approximately 90 kilometres north of its Kupol mine in the remote and inhospitable Chukotka region in Eastern Russia.
Kinross said the deposit could contain between 3.5 million and 3.9 million tonnes of ore, with a grade of between 17 and 19 grams per tonne and the gold miner plans to process ore from Dvoinoye at its existing Kupol mill.
The Vodorazdelnaya property encompasses approximately 922 square kilometres and includes an exploration and mining licence.
The transaction will allow Kinross to leverage its existing Kupol facilities, eliminating the need for construction of an additional processing plant, and allow for blending of Kupol ore with higher-grade Dvoinoye ore.