Kinross Gold Corp. says it has struck a $350-million (U.S.) deal to acquire full control of the Kupol gold mine in Russia.
Kinross said Monday it had signed a deal with a Russian regional government - the Chukotka Autonomous Okrug - to buy back nearly 2.3 million shares of the Kinross-controlled company that holds the Kupol mine.
The government stake represents just over 25 per cent of Kupol. The mine in the Chukotka region of Far Eastern Russia is expected to generate about 17 per cent of Kinross's gold output this year.
When the deal closes, Kinross will own 100 per cent of the Kupol mine and the Kupol East-West exploration licences.
The Toronto-based gold miner said the transaction will consolidate Kinross's ownership in a world-class mine, located in a key region, with significant production, low costs and strong cash flow.
"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," Kinross president and CEO Tye Burt said in a release after stock markets closed on Monday. "It also allows us to realize the full benefit of our Dvoinoye development."
Governor Roman Kopin of the Chukotka Autonomous Okrug, said the transaction is part of the regional government's original strategy for the mine, located "We feel confident and secure that Kinross will continue to operate gold mines effectively and responsibly, whereas the regional government will focus on its social role."
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 licences, Kinross said it's now in a position to benefit fully from the Russian gold project.
The transaction is expected to close in the third quarter and is subject to other governmental approvals in Russia.
The Kupol announcement came after the close of stock trading Monday. Earlier Kinross shares rose nine cents to close at $14.87 on the TSX.
Kinross, which employs about 7,000 people worldwide, has mines and projects in Canada, the United States, Brazil, Chile, Ecuador, Russia, Ghana, and Mauritania.