Kinross (KGC) Completes Acquisition Of Chulbatkan For $283M
Zacks Investment Research | Jan 16, 2020 09:06PM ET
Kinross Gold Corporation (NYSE:KGC) announced the completion of its earlier disclosed acquisition of Chulbatkan from N-Mining Limited for an aggregate fixed consideration of $283 million.
Notably, Chulbatkan is situated in the Khabarovsk region of Far East Russia. It is a high-grade, heap leach development project and is anticipated to have significant upside potential.
The acquisition is anticipated to build on Kinross’ extensive operational and development experience as well as successful 25-year track record in Russia.
Notably, the first installment of $141.5 million, plus $3.1 million of ordinary course working capital adjustments, representing around 50% of the $283 million purchase price, was paid in compliance with the acquisition agreement.
The agreement was amended to allow the first installment to be paid all in cash, mitigating the dilution of share and leveraging the strong liquidity profile of Kinross. The amendment also specifies that 60% (which can be extended up to 100% at Kinross’ sole discretion) of the second (and final) installment of $141.5 million, due on the first anniversary of closing, can be paid in Kinross’ shares.
Kinross now started a detailed exploration drilling program in Chulbatkan to update the existing resource base by the end of 2020. The company anticipates spending $10 million on initial exploration drilling at Chulbatkan in the year.
Moreover, it plans to convert estimated mineral resources into estimated mineral reserves, and comIt also and aims for subsequent
plete pre-feasibility and feasibility studies for the project within roughly three years. It also aims for subsequent construction duration of two years.
Currently, Kinross forecasts around 3.9 million ounces of gold in indicated mineral resources and 80,000 ounces of gold in estimated inferred mineral resources for the project, based on extensive due diligence work and internal analysis.
Shares of the company have rallied 45.2% in the past year compared with the Zacks Investment Research
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