Kinross Gold recently its 75%-owned subsidiary, Chukotka Mining and Geological Co. (CMGC), has acquired the remaining 25% for $350 million. On completion of the transaction, Kinross will own 100% of CMGC, which in turn, holds both the Kupol mine and the Kupol East-West exploration licenses in the Chukotka region of the Russian Federation. The transaction will consolidate Kinross’ ownership in a world-class mine, located in a key region, with significant production, low costs and strong cash flow. Prior to this transaction, Kupol was expected to account for 17% of the company’s gold equivalent production in 2011.
“This acquisition increases Kinross’ stake in a high quality asset, increases our gold equivalent production, and further strengthens our position in Russia, a country which ranks second in the world in gold reserves and resources,” said Tye W. Burt, president and CEO, Kinross. “It also allows us to realize the full benefit of our Dvoinoye development.” With the recently completed acquisitions of the Dvoinoye deposit and Vodorazdelnaya property, and B2Gold’s right to an interest in the Kupol East-West exploration licenses, Kinross says it’s now in a position to benefit fully from this prospective high-grade epithermal district. The transaction is expected to close during the third quarter of 2011, and is subject to certain conditions, including other governmental approvals in Russia.