Kinross buys Lobo-Marte project in Chile

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The Globe and Mail reports in its Friday edition that Kinross Gold is paying about $250-million (U.S.) to buy Minera Santa Rosa, owner of the Lobo-Marte gold project in northern Chile, from Teck Cominco and Anglo American. A Canadian Press dispatch to The Globe reports that Lobo-Marte is about midway between two Kinross mines, Maricunga and La Coipa. Chief executive officer Tye Burt says the acquisition "adds another attractive deposit to our development portfolio, while giving us access to a further 30,000 hectares for exploration in a highly prospective, mining-friendly district." Kinross has signed a binding letter of intent to acquire Teck's 60-per-cent interest in Minera Santa Rosa for 5.6 million Kinross shares and $40-million (U.S.) in cash. Teck also will get a 1.75-per-cent net smelter return royalty on 60 per cent of Lobo-Marte's future production if the gold price is over $760 (U.S.) per ounce. For Anglo American's 40-per-cent interest, Kinross is paying $140-million (U.S.) in cash. The deal follows Tuesday's expiry of Teck's right of first refusal on the Anglo American interest. Kinross says the acquisition allows it to further consolidate its presence in the Maricunga district of Chile.

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Kinross Gold Corp. has completed its acquisition of a 40-per-cent interest in Minera Santa Rosa SCM from certain subsidiaries of Anglo American PLC for a total purchase price of $140-million (U.S.). Minera owns 100 per cent of the Lobo-Marte gold project located in the Maricunga district of northern Chile, roughly midway between Kinross's Maricunga and La Coipa mines.

As announced (see news issued in Stockwatch) on Nov. 20, 2008, Kinross has also entered into a separate agreement with Teck Cominco Ltd., pursuant to which Kinross will acquire the remaining 60-per-cent interest in Minera for approximately 5.6 million common shares of Kinross, plus a net cash payment of approximately $40-million (U.S.) and a 1.75-per-cent net smelter returns royalty on 60 per cent of future production, payable when the gold price is $760 (U.S.) per ounce or more. Kinross expects the purchase from Teck to be completed before the end of 2008.

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The Globe and Mail reports in its Tuesday, Jan. 27, edition that Kinross Gold is aiming to cut a deal in Russia to develop one of the world's largest gold deposits. The Globe's Eric Reguly writes that Kinross and Polyus Gold agreed Monday to co-operate on a "prefeasibility" study of Polyus's Nezhdaninskoye deposit in Yakutia, a republic in the northwest of Russia that is rich in natural resources but not infrastructure. Polyus thinks the deposit could contain 15 million ounces of gold, potentially making it the country's third-largest gold deposit. Kinross has one Russian mine, called Kupol, which opened last year after an investment of about $750-million (U.S.). The mine is in Russia's extreme northeastern corner and has proved and probable reserves of 3.3 million ounces. Only 7 per cent of Kinross's reserves are located in Russia, the rest are in Chile, Brazil and the United States. The Globe says Polyus values Kinross's technical expertise, development skills and relatively easy access to the capital markets, which are all but shut to Russian firms as the financial crisis sweeps through the country. Kinross raised $360.5-million last week through the sale of 20.9 million shares at $17.25.

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Kinross Gold Corp. is closing its net $150-million (U.S.) strategic investment in Harry Winston Diamond Corp. that was announced in Stockwatch on March 19, 2009.

Kinross has subscribed for new partnership units representing a 22.5-per-cent interest in the limited partnership which holds Harry Winston's 40 per cent joint venture interest in the Diavik diamond mine, for a net effective subscription value of $104.4-million (U.S.). Kinross has also subscribed for 15.2 million treasury shares of Harry Winston at a price of $3 (U.S.) per share, representing approximately 19.9 per cent of the company's issued equity following the transaction, for an investment of $45.6-million (U.S.).

As part of the transaction, Thomas Boehlert, executive vice-president and chief financial officer of Kinross, will join the Harry Winston board of directors.