Kinross Gold Corporation (TSX:K; NYSE: KGC) (“Kinross”) is pleased
to announce that it has completed its previously disclosed
acquisition of Chulbatkan, a high-quality, heap leach development
project in Russia, from N-Mining Limited (“N-Mining”) for total
fixed consideration of $283 million.
The Company has now commenced a comprehensive
exploration drilling program at Chulbatkan with the view to
updating the current resource base at year-end 2020. Kinross
expects to spend approximately $10 million on initial exploration
drilling at Chulbatkan during the year. The Company is also
planning to convert estimated mineral resources to estimated
mineral reserves, complete pre-feasibility and feasibility studies
for the project within approximately three years, and is targeting
a subsequent two-year construction period.
On October 18, 2019, the Company received a
timely anti-monopoly approval on the acquisition from the Russian
regulators. All other conditions precedent regarding the
acquisition have been satisfied.
Chulbatkan is a relatively high-grade, open-pit,
heap leachable project and is expected to have significant upside
potential. The Chulbatkan deposit is near surface with highly
continuous mineralization and is open along strike and at depth
with potential for additional high-grade structures. Based on
substantial due diligence work and internal analysis, Kinross
currently estimates approximately 3.9 million gold ounces in
indicated mineral resources and 80,000 gold ounces in estimated
inferred mineral resources for the project.1 The footprint of the
current Chulbatkan resource represents less than 1% of the total
120 sq. km license area, which hosts multiple, untested
high-quality targets.
In accordance with the acquisition agreement,
the first installment of $141.5 million, plus $3.1 million of
ordinary course working capital adjustments, representing
approximately 50% of the $283 million purchase price, were paid.
The agreement was amended to permit the first installment to be
paid all in cash, which has minimized share dilution and leveraged
the Company’s strong liquidity profile. The amendment also provides
that 60%, and at Kinross’ sole discretion up to 100%, of the second
and final installment of $141.5 million, due on the first
anniversary of closing, may be paid in Kinross shares.
Chulbatkan is located in the Khabarovsk region
of Far East Russia, approximately the same distance from the
Company’s regional office in Magadan as its existing Kupol and
Dvoinoye operations. The acquisition is expected to build on
Kinross’ extensive operational and development experience and
successful 25-year track record in Russia.
About Kinross Gold
Corporation
Kinross is a Canadian-based senior gold mining
company with mines and projects in the United States, Brazil,
Russia, Mauritania, Chile and Ghana. Kinross’ focus is on
delivering value based on the core principles of operational
excellence, balance sheet strength, disciplined growth and
responsible mining. Kinross maintains listings on the Toronto Stock
Exchange (symbol:K) and the New York Stock Exchange
(symbol:KGC).
Media Contact Louie DiazSenior
Director, Corporate Communicationsphone: 416-369-6469
louie.diaz@kinross.com
Investor Relations ContactTom
Elliott
Senior Vice-President, Investor Relations and Corporate
Development
phone:
416-365-3390
tom.elliott@kinross.com
Cautionary statement on forward-looking
information
All statements, other than statements of
historical fact, contained in this news release, including any
information as to the future financial or operating performance of
Kinross, constitute “forward-looking information” or
“forward-looking statements” within the meaning of certain
securities laws, including the provisions of the Securities Act
(Ontario) and the “safe harbor” provisions under the United States
Private Securities Litigation Reform Act of 1995 and are based on
the expectations, estimates and projections of management as of the
date of this news release, unless otherwise stated. The words
“assumed”, “estimate”, “expects”, “exploration”, “feasibility”,
“potential”, “pre-feasibility”, “target”, “upside”, or “view” or
variations of or similar such words and phrases or statements that
certain actions, events or results may, could, should or will be
achieved, received or taken, or will occur or result and similar
such expressions identify forward-looking statements.
Forward-looking statements are, necessarily, based upon a number of
estimates and assumptions that, while considered reasonable by
Kinross as of the date of such statements, are inherently subject
to significant business, economic and competitive uncertainties and
contingencies. The estimates and assumptions of Kinross contained
in this news release, which may prove to be incorrect, include, but
are not limited to: (i) the accuracy and reliability of the mineral
resource estimates of the project and the Company’s analysis
thereof being consistent with expectations (including but not
limited to tonnage and grade estimates) and the benefits to Kinross
from the project and any upside from the project; (ii) the
completion, timing and results, of the planned exploration program
and corresponding pre-feasibility or feasibility studies being
consistent with expectations; (iii) the Company’s economic model,
execution risk analysis, and preliminary mine plan; (iv) projected
production, all-in sustaining costs, capital expenditure and
stripping estimates for the project; (v) the continued availability
of regional tax incentives; (vi) the successful development of the
Chulbatkan project on the timelines anticipated, or at all; (vii)
impacts of the transaction on shareholder dilution and liquidity;
(viii), share price volatility; and (ix) fluctuations in the spot
and forward price of gold, silver, or certain other commodities
(such as, diesel fuel, natural gas, and electricity). In addition,
there are risks and hazards associated with the business of gold
exploration, development and mining, including environmental
hazards, industrial accidents, unusual or unexpected formations,
pressures, cave-ins, flooding and gold bullion losses (and the risk
of inadequate insurance, or the inability to obtain insurance, to
cover these risks). Many of these uncertainties and contingencies
can directly or indirectly affect, and could cause, Kinross' actual
results to differ materially from those expressed or implied in any
forward-looking statements made by, or on behalf of, Kinross,
including but not limited to resulting in an impairment charge on
goodwill and/or assets. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Forward-looking statements are
provided for the purpose of providing information about
management’s expectations and plans relating to the future. All of
the forward-looking statements made in this news release are
qualified by this cautionary statement and those made in our other
filings with the securities regulators of Canada and the United
States including, but not limited to, the cautionary statements
made in the “Risk Analysis” section of our MD&A for the year
ended December 31, 2018 and the Annual Information Form dated March
29, 2019. These factors are not intended to represent a complete
list of the factors that could affect Kinross. Kinross disclaims
any intention or obligation to update or revise any forward-looking
statements or to explain any material difference between subsequent
actual events and such forward-looking statements, except to the
extent required by applicable law. The technical information about
the Company’s mineral properties in this presentation has been
prepared under the supervision of Mr. John Sims, an officer of the
Company who is a “qualified person” within the meaning of National
Instrument 43-101.
Source: Kinross Gold Corporation
___________________________________1 Mineral
resource estimate is classified in accordance with the Canadian
Institute of Mining, Metallurgy and Petroleum's "CIM Definition
Standards -- For Mineral Resources and Mineral Reserves"
incorporated by reference into National Instrument 43-101
"Standards of Disclosure for Mineral Projects". Mineral resource
estimate is based on an internal block model and assumed a
constrained pit using a $1,400 per ounce gold price and cut-off
grade of 0.35 g/t.
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