KINROSS GOLD CORP

Moody's lifted Kinross to Baa2 from Baa3, and the company repaid the entire US$500 million of 4.50% notes some nineteen months before their July 2027 maturity. That is about US$700 million of debt repaid in 2025 and US$1.5 billion across 2024-2025, leaving US$750 million of senior notes outstanding.

debt financing

Third-quarter results carried a 17% dividend increase and a 20% rise in the 2025 buyback target to US$600 million, on production of 503,862 gold-equivalent ounces at US$1,150 cost of sales and US$1,622 all-in sustaining cost per ounce. Free cash flow of US$686.7 million was a record and the company reached a net cash position.

dividend declaration

The Great Bear preliminary economic assessment set out a combined open pit and underground mine of about twelve years, producing over 500,000 ounces a year at US$594 cost of sales and roughly US$800 all-in sustaining cost in the first eight years. Kinross also reported drilling below the resource used in the study.

resource reserve update

Declared Great Bear's first mineral resource a year after acquiring it: 2.737 million ounces indicated at 2.57 g/t over 33.1 million tonnes in an open pit, plus 2.290 million inferred, of which 1.684 million ounces is underground at 4.50 g/t.

resource reserve update

Committed to buy back US$300 million of stock over the rest of 2022 and 75% of excess cash in 2023 and 2024, subject to leverage limits, while keeping the dividend. Kinross said the programme followed discussions with activist holder Elliott Investment Management, which supported it.

security holder rights change

Closed the Chirano sale to Asante, taking US$60 million cash and 35.0 million Asante shares valued at US$36.2 million for a 9.9% stake, with US$128.8 million deferred over two years. With Russia and Ghana both gone, about 70% of 2022 production was expected from the Americas.

asset acquisition disposition

Completed the Russian exit for US$340 million, half the US$680 million agreed in April, after the Russian foreign-investment sub-commission capped the approved price. US$300 million was received in cash with US$40 million deferred a year; Kinross has no remaining Russian obligations.

asset acquisition disposition

Furnished three press releases: Q1 2022 results, the Q2 dividend (US$0.03 per share, payable 16 June 2022) and the 2021 Sustainability Report (US$3.5 billion benefit footprint in host countries). Q1 results showed 409,857 attributable gold equivalent ounces produced, net earnings of US$82.3m (US$0.07 per share) and total liquidity of about US$1.7bn. They also confirm the exits from Russia (100% to Highland Gold for US$680m cash, pending Russian government approval) and Chirano (90% to Asante for US$225m in cash and shares, closing targeted for end of May), plus the completed Great Bear acquisition on 24 February 2022. Guidance was maintained at 2.15m ounces for 2022 and 2.3m for 2023 on the reduced portfolio. Note the context records the Russia sale as US$340m against US$680m agreed; this filing only shows the US$680m agreement of 5 April 2022.

regulatory community update

Agreed to sell its 90% of the Chirano mine in Ghana to Asante Gold for US$225 million in cash, Asante shares and deferred payments, exiting Ghana entirely. Chirano was about 3% of Kinross reserves and had been acquired with Tasiast in the 2010 Red Back deal that produced the US$2.9 billion goodwill write-off.

asset acquisition disposition

Agreed to sell 100% of its Russian assets to Highland Gold for US$680 million, of which only US$100 million was payable at closing and US$580 million spread over annual payments to 2027, secured by share pledges, guarantees and an escrow.

asset acquisition disposition

Four weeks after suspending its Russian operations over the invasion of Ukraine, Kinross said it was in exclusive talks to sell all of its Russian assets and would treat them as held for sale. The parent would take no benefit from the operations meanwhile and fund the transition from cash already in the country.

asset acquisition disposition

La Coipa in Chile poured its first gold bar, on schedule and under budget, with the plant to reach full rate by mid-year. At the 2021 year end Kinross had lifted La Coipa's life-of-mine production 45% to about 1 million gold-equivalent ounces and extended it from 2024 to 2026 by adding the nearby Puren pit.

production update

Arranged a new US$1.0 billion three-year term loan maturing March 2025 with no scheduled amortisation, used to repay the revolver drawn to fund the Great Bear purchase. Acquisition debt termed out rather than added to.

debt financing

Suspended all work at the Udinsk development project and began suspending the Kupol mine after the invasion of Ukraine, with more than 2,000 employees in the country, and donated US$1 million to the Canadian Red Cross appeal. Russia had been a producing region for Kinross for 25 years.

production update

Closed the Great Bear acquisition. Shareholders electing cash were pro-rated to about C$25.80 plus 0.4257 Kinross shares each, against caps of roughly US$1.1 billion cash and 80.8 million Kinross shares. Kinross set a target of 200,000 metres of drilling at Dixie in 2022.

business combination

Agreed to buy Great Bear Resources and its Dixie project in Red Lake, Ontario for about US$1.4 billion (C$29.00 a share) in cash and stock, plus contingent value rights worth roughly US$46 million payable only if commercial production is declared with at least 8.5 million ounces of measured and indicated resources. Kinross was paying a top-tier price for a deposit with no declared resource of its own at the time.

business combination

Signed the definitive Mauritania agreement first agreed in principle a year earlier: fuel duty exemptions continue, the government repays about US$40 million of overdue VAT, Kinross pays US$10 million to settle disputes, and a gold-price-linked escalating royalty replaces the old structure, with two government observers on the Tasiast subsidiary board. The prospective Tasiast Sud ground is excluded and still unresolved.

material agreement

A fire at the Tasiast SAG mill trommel on 15 June, during scheduled maintenance welding, suspended milling and forced a cut to 2021 production guidance, though mining, stripping and 24k construction work resumed. Kinross said ball mills, leaching and crushing were undamaged, held 2022-2023 guidance, and had property and business-interruption cover in place.

production update

Agreed to buy 70% of the Peak Gold project in Alaska from Royal Gold and Contango ORE for US$93.7 million cash, with Contango keeping 30% and no vote on operations. Ore would be trucked 400km to the existing Fort Knox mill, giving about 1 million ounces over 4.5 years at roughly 6 g/t and an estimated US$750 all-in sustaining cost for US$110 million of project capital.

business combination

Declared a quarterly dividend of US$0.03 a share and committed to keeping it, alongside three-year guidance of production rising 20% to 2.9 million gold-equivalent ounces by 2023 with costs and capital spending trending down. Reserves stood at 24.3 million ounces at the end of 2019.

dividend declaration

The Lobo-Marte pre-feasibility in Chile added 6.4 million ounces of reserves, about a 25% increase on the company total, on 147 million tonnes at 1.35 g/t with 71% recovery, 4.5 million ounces produced over 15 years at US$545 cost of sales and US$745 all-in sustaining cost. Reserve growth from a shelved project brought back rather than from the drill bit.

resource reserve update

Kinross reached a non-final agreement in principle with Mauritania's government that, once definitive documents are signed, would give it a 30-year exploitation licence for Tasiast Sud, the ground left unresolved in the 2021 context item. The government would get a 15% free carried interest in Tasiast Sud with an option on a further 10%, and Kinross would pay US$10m and US$15m to settle disputes. Tasiast royalties would rise from a flat 3% to 4.0-6.5% depending on gold price from 1 July 2020, and the government would repay about US$40m of VAT refunds through 2025. The terms are subject to definitive documentation.

regulatory community update

Filed a new Paracatu technical report lifting expected life-of-mine production about 24% against the 2014 report, to an average 540,000 ounces a year from 2020 to 2031, and adding 828,000 ounces of reserves plus 1.1 million ounces of measured and indicated resources. The gain came from a grade-control and optimisation programme run through 2018-2019 rather than from new discovery.

resource reserve update

Closed the Chulbatkan purchase from N-Mining for US$283 million and immediately started a roughly US$10 million drilling programme, targeting reserves and a feasibility study within three years and construction over two more.

business combination

Signed a loan of up to US$300 million for the Tasiast mine with the IFC, Export Development Canada, ING and Societe Generale, borrowed at the Mauritanian subsidiary rather than the parent.

debt financing

Committed to the Tasiast 24k project, raising throughput to 24,000 tonnes a day for US$150 million of incremental capital, guided at 563,000 ounces a year over 2022-2028 at US$485 cost of sales and US$560 all-in sustaining cost with a 60% incremental return. A third, smaller step at Tasiast after the abandoned 38,000 tonne plan and the 12,000 tonne Phase One.

resource reserve update

Agreed to buy the Chulbatkan heap-leach development project in Russia from N-Mining for US$283 million fixed, split roughly US$113 million cash and US$170 million in Kinross shares, plus a 1.5% net smelter royalty and payments contingent on future reserve additions. Stated indicated resource was about 3.9 million ounces at the time of the deal.

drilling result

Committed to the initial Gilmore expansion at Fort Knox for about US$100 million of initial capital plus US$60 million of capitalised stripping, extending mining to 2027 and leaching to 2030 and adding 1.51 million ounces at US$650 cost of sales and US$950 all-in sustaining cost. The supporting Fort Knox technical report was filed with it.

resource reserve update

The SEC investigation into Kinross's West Africa operations ended with an agreed cease and desist order, a US$950,000 civil penalty and semi-annual reports to the SEC for one year. This resolves the thread open since 2013 (SEC subpoenas 2014-2015, DOJ requests); the DOJ had already closed its inquiry on 7 November 2017. The company says there was no material adverse effect, and the order makes no finding of bribery but cites deficiencies in internal accounting controls.

regulatory community update

Agreed to buy two hydroelectric plants in Brazil from a Gerdau subsidiary for US$257 million to lock in about 70% of the Paracatu mine's power at a fixed cost, expected to cut production cost of sales by about US$80 an ounce over the mine life. Kinross planned to fund roughly US$200 million of it with debt.

business combination

Gained mineral rights to the 287-hectare Gilmore parcel west of Fort Knox, adding 2.1 million ounces of measured and indicated and 300,000 ounces of inferred resources after 73,000 metres of drilling in 205 holes. About 260,000 ounces were converted to reserves, offsetting some of 2017 depletion and extending mine life by about a year.

resource reserve update

Committed to both the Tasiast Phase Two expansion to 30,000 tonnes per day and the Round Mountain Phase W layback. Phase Two is guided at about 812,000 ounces a year for five years at US$440 cost of sales and US$655 all-in sustaining cost, a 24% return and US$2.2 billion of life-of-mine cash flow.

resource reserve update

Closed the Cerro Casale and Quebrada Seca sale to Goldcorp on the terms announced in March, receiving US$260 million cash with the US$40 million construction payment and 1.25% royalty still contingent.

asset acquisition disposition

Agreed to sell its 25% of the undeveloped Cerro Casale project and 100% of neighbouring Quebrada Seca in Chile to Goldcorp for US$260 million cash at closing, a further US$40 million on a construction decision, assumption of a US$20 million obligation to Barrick, and a 1.25% royalty. Kinross also secured rights to surplus project water for its other Chilean mines.

asset acquisition disposition

Committed to Tasiast Phase One, lifting mill throughput from 8,000 to 12,000 tonnes a day for about US$300 million, guided at 409,000 ounces a year over 2018-2027 at US$535 cost of sales and US$760 all-in sustaining cost for a 20% return. Three years after the 38,000 tonne-a-day feasibility study, Kinross built a fraction of it.

resource reserve update

Announced a bought deal of 83.4 million shares at US$3.00 for about US$250 million, with roughly US$175 million going to repay the credit facility drawn to buy the Nevada mines from Barrick six weeks earlier. Equity issued to term out an acquisition, at a share price near the bottom of the cycle.

capital raising announcement

Completed the acquisition of 100% of Bald Mountain and the other 50% of Round Mountain from Barrick for US$610 million in cash, subject to a working capital adjustment. Barrick also gets a contingent 2% royalty on Bald lands gold after 10 million ounces of post-closing production.

business combination

Agreed to buy 100% of Bald Mountain and the other half of Round Mountain from Barrick for US$610 million cash, adding about 430,000 gold-equivalent ounces a year over three years and lifting US production 56%. The Bald Mountain purchase includes a 600 square kilometre land package, 40% of which will be explored in a 50/50 joint venture with Barrick.

business combination

On 2 October 2015 Kinross publicly addressed a regulatory review of its West Africa operations. It said it learned of allegations of improper payments to officials and internal control deficiencies in August 2013 and began an internal investigation. The SEC issued subpoenas in March and December 2014 and July 2015, and the DOJ made requests in December 2014. Kinross said its investigation had not found issues it believes would materially harm the company, but it is ongoing and more facts could emerge. The release does not state any fine or finding. This is a new open thread.

regulatory community update

Completed the Fruta del Norte sale for US$240 million, taken as US$150 million cash and US$90 million in Fortress stock at C$4.00 a share, leaving Kinross with about 25.8% of Fortress. Kinross agreed to hold the shares for six to twelve months.

asset acquisition disposition

Agreed to sell Aurelian Resources and the abandoned Fruta del Norte project in Ecuador to Fortress Minerals, a Lundin group company, for US$240 million in cash and Fortress shares. This closes out the project Kinross walked away from in June 2013.

asset acquisition disposition

The Tasiast expansion feasibility study cut expected initial capital from the pre-feasibility US$2.7 billion to about US$1.6 billion and lifted reserves by 3.1 million ounces to 9.6 million, for average output of 848,000 ounces a year over five years at US$501 cash cost and a 17% return. Kinross did not commit to build it at this point.

resource reserve update

Dvoinoye, a high-grade underground mine 100km from Kupol, reached commercial production on schedule and on budget, feeding the expanded Kupol mill. Guided to add 235,000-300,000 gold-equivalent ounces a year in its first three full years at a Russian regional cost of sales of US$545-600 an ounce.

production update

Two announcements in one filing. The larger one abandons the Fruta del Norte project in Ecuador after two years of failed negotiation with the government, ending the asset Kinross bought with Aurelian Resources; the second extends the US$1.5 billion revolver to August 2018 and the US$1.0 billion term loan to August 2017, leaving no debt maturing before 2016.

debt financing

The Tasiast expansion pre-feasibility put a 30,000 tonne-per-day mill at roughly 830,000 ounces a year for five years, cash costs near US$500 an ounce and all-in sustaining costs near US$735, but at a capital cost of about US$2.7 billion for an 11% return. Kinross opted to study a larger 38,000 tonne-per-day mill instead.

resource reserve update

The material change report behind the 2011 year-end results: a non-cash goodwill impairment of US$2,937.6 million on the Tasiast and Chirano assets bought from Red Back Mining in September 2010, of which US$2,490.1 million was Tasiast and US$447.5 million Chirano. Kinross blamed industry-wide cost inflation, lower sector valuations and its own improving understanding of the Tasiast mine plan, and cut back capital, deferring Fruta del Norte and Lobo-Marte.

other material event

Kinross said preliminary 2011 production was about 2.6 million gold-equivalent ounces at roughly US$600 cost of sales per ounce, both within guidance. It guided 2012 to 2.6-2.8 million ounces at US$670-715 and launched a capital and project optimization review of Tasiast, Fruta del Norte and Lobo-Marte that could extend their feasibility timetables.

production update

On 5 December 2011 Kinross reached a non-binding agreement in principle with Ecuador on the Fruta del Norte exploitation contract. Terms include a minimum 52% government share of project economic benefits, a sliding royalty of 5% to 8% by gold price, US$65m of advance royalties, 22% corporate tax, 15% profit sharing, and a 70% windfall tax above a base price of at least US$1,650 per ounce. Kinross said capital and operating costs are expected to be about 25-30% above the pre-feasibility estimates, and the feasibility study is due at year-end 2011. Binding agreements still need the study, a change in project status and definitive contracts. This continues the Fruta del Norte thread, which later ended with development abandoned in 2013. The release now cites about 8,000 employees, up from about 7,000.

regulatory community update

Kinross priced a US$1 billion offering of senior unsecured notes in three tranches: US$250 million of 3.625% due 2016, US$500 million of 5.125% due 2021 and US$250 million of 6.875% due 2041. Proceeds were for general corporate purposes, including capital expenditures, and the offering was expected to close on 22 August 2011.

debt financing

Kinross filed a technical report on the Kupol mine in Russia, effective 9 May 2011. It confirms that on 27 April 2011 Kinross's subsidiary CMGC repurchased the 25% held by the Chukotka state enterprise, so Kinross now owns 100% of Kupol and the Kupol East-West licences. This resolves the pre-approval from late March 2011. Kinross's original 75% came from the Bema Gold purchase on 27 February 2007. Resource, reserve and economic figures are cut off in the text, so none are given here.

resource reserve update

Kinross amended its unsecured revolving credit facility on 31 March 2011, raising available credit from US$600 million to US$1.2 billion. The facility now expires 31 March 2015 and was arranged by Scotia Capital and Merrill Lynch. The release attributes the increase to the company's growth over the past year, which is consistent with the Red Back deal. The filing does not say whether any of it is drawn. This replaces the facility terms in the earlier context (amended US$450m facility expiring Nov 2012).

debt financing

Kinross filed a technical report on its wholly owned Tasiast mine in Mauritania, effective 31 December 2010, now prepared by Kinross itself rather than for Red Back as in August 2010. It states reserves of 7.56 million ounces of gold and says the mine could keep producing until 2040 at about 250,000 oz a year. It also cites a December 2010 scoping study for an expansion: about 1.5 million gold-equivalent ounces a year over the first eight full years, with pre-commissioning capital of about US$1.8 billion plus roughly US$400 million contingency. A feasibility study has begun. This continues the Tasiast thread from the Red Back purchase; the later expansion plans were scaled down and not built as scoped (inference from the context).

resource reserve update

Two releases. On 25 March 2011 Kinross said Russia's foreign investment commission pre-approved raising its stake in the Kupol mine's owner to 100% from 75% by repurchasing shares held by the Chukotka state enterprise. It plans to fund this from the Harry Winston share sale proceeds plus a non-recourse debt facility of about US$200m, with EDC and commercial banks showing interest. The share purchase agreement is not yet signed and the commission's minutes may carry conditions. On 28 March it reported Tasiast drilling: 26 rigs, 70,000 metres drilled this year, two encouraging reconnaissance targets (Charlize, 15 km south, with intercepts such as 12 m at 2.06 g/t), the expansion feasibility study 36% complete, and positive step-out holes at Chirano in Ghana. This continues the Red Back/Tasiast thread, now closed as Kinross assets.

drilling progress report

The business acquisition report for Red Back Mining, acquired 17 September 2010. Consideration was 1.778 Kinross shares plus 0.11 of a four-year warrant exercisable at US$21.30 for each Red Back share, with options exchanged at a 1.81 ratio. No cash was paid; the whole US$7.1 billion was Kinross paper.

business combination

Closed the purchase of the companies owning the Dvoinoye deposit and Vodorazdelnaya licences in Chukotka for US$165 million cash and about 10.56 million new Kinross shares, held for four months. Kinross also closed its deal with B2Gold for the Kupol East and West exploration licences.

business combination

Kinross completed the sale of its 22.5% interest in the partnership holding Harry Winston's 40% of the Diavik diamond mine for US$220m: US$50m cash, about 7.1m Harry Winston shares (about US$100m when announced) and a US$70m note due in 12 months at 5% interest. This completes the deal agreed in principle on 23 July 2010 and unwinds the March 2009 diamond investment. After the earlier block sale of 15.2m shares, Kinross holds about 7.1m Harry Winston shares (about 8.5%); the note is an outstanding receivable.

asset acquisition disposition

Russia's foreign investment commission approved Kinross buying 100% of Northern Gold, owner of the Dvoinoye deposit in Chukotka, clearing the main condition on the deal first announced in January 2010 (US$368m, with Vodorazdelnaya via Regionruda). Completion procedures start once the official decision is released. Separately, Kinross named Brant Hinze, formerly of Newmont, as Executive VP and Chief Operating Officer from 1 October 2010, succeeding the retiring Tim Baker.

business combination

Agreed to acquire Red Back Mining in a friendly all-share plan of arrangement valued at about US$7.1 billion fully diluted, a 21% premium. Kinross expected to issue about 425 million shares and 26 million warrants, leaving its holders with about 63%, and said it would accelerate development at Tasiast.

business combination

Kinross reversed its March 2009 move into diamonds. It agreed to sell its roughly 19.9% Harry Winston stake (15.2m shares) in an underwritten block trade, and agreed in principle to sell its 22.5% partnership interest tied to the Diavik mine to Harry Winston for US$220m: US$50m cash, about 7.1m Harry Winston shares worth about US$100m, and a US$70m note. The March 2009 total was a net US$150m (US$104.4m for the partnership interest, US$45.6m for the shares). The Diavik sale still needs definitive documents, board, third-party and regulatory approvals including the TSX, and after it Kinross would hold no Harry Winston shares beyond those issued in the deal. The block trade price is not stated.

asset acquisition disposition

Kinross completed its acquisition of Underworld Resources on 30 June 2010 under a plan of arrangement, with each Underworld share exchanged for 0.141 of a Kinross share plus Cdn$0.01 cash. This completes the offer proposed in March 2010, and gives Kinross the White Gold project in the Yukon (named in the March release). The filing gives no total cost or final share count.

business combination

Kinross closed the sale of 25% of the Cerro Casale project in Chile to Barrick, announced 17 February 2010. Total value was about US$474m: about US$454m cash after working-capital adjustments plus Barrick assuming a US$20m contingent obligation. Kinross now owns 25% and Barrick 75%.

asset acquisition disposition

Kinross announced Cdn$705,000 of humanitarian aid after the 27 Feb 2010 Chilean earthquake, and said its La Coipa and Maricunga mines (about 1,000 km north of the worst-hit area, about 1,000 employees in Chile) had no damage and only limited production disruption from a brief power outage. The same filing also carries a 11 March 2010 release: a letter agreement to make a friendly takeover bid for Underworld Resources (White Gold project, Yukon) at 0.141 Kinross share plus $0.01 cash per share, about $2.62 implied and about $139.2m for the fully diluted company, a 36.0% premium. Kinross already owns 8.5% of Underworld; full acceptance would mean about 6.8 million new Kinross shares (about 1.0% of those outstanding), and the offer needs two-thirds acceptance plus regulatory approvals.

regulatory community update

Agreed in principle to buy the high-grade Dvoinoye deposit and the Vodorazdelnaya property, 90km north of Kupol in Chukotka, for US$368 million comprising US$165 million cash and Kinross shares, with ore to be processed at the existing Kupol mill. Classified as a drill result by the headline classifier; it is an acquisition.

business combination

Kinross reported Q2 2009 results: revenue doubled to US$598.1m (from US$298.7m), production was 560,479 attributable gold equivalent ounces (up 38% from 406,032), and net earnings were US$19.3m (US$0.03 per share) versus US$26.0m a year earlier, while adjusted net earnings rose to US$84.3m. It raised the dividend to US$0.05 per share, up 25% on the US$0.04 paid 31 March 2009, payable 30 Sept 2009; this answers the open question on dividend amounts. Full-year 2009 production guidance is 2.3-2.4 million ounces, trimmed because the Paracatu expansion ramp-up is taking longer, which continues the thread of Paracatu's slower ramp-up. Other threads: a Lobo-Marte pre-feasibility study is due by year-end, Fruta del Norte is awaiting final approval to resume infill drilling, the Cerro Casale feasibility study is on track for Q3 2009, and Kinross and Barrick signed a new shareholders agreement for the 50-50 joint venture, held in escrow pending a corporate reorganisation. A strike at La Coipa that began 8 July ended on 1 August, cutting July production by about 9,400 ounces.

dividend declaration

Kinross signed a subscription agreement with Harry Winston Diamond to invest a net US$150m: US$104.4m for a 22.5% interest in the partnership holding Harry Winston's 40% of the Diavik diamond mine joint venture (operated by Rio Tinto), and US$45.6m for 15.2m Harry Winston shares at US$3.00, giving 19.9% of Harry Winston. This is a new step into diamonds outside Kinross's gold business; the CEO calls gold the primary focus. Closing was expected in about two weeks, subject to conditions and regulatory approval of the share placement.

business combination

Kinross completed its purchase of a 40% interest in Minera Santa Rosa, owner of the Lobo-Marte gold project in Chile, from Anglo American for US$140m. It expected to buy the remaining 60% from Teck before the end of 2008 for about 5.6m Kinross shares, roughly US$40m net cash and a 1.75% royalty on 60% of future production.

business combination

Kinross filed a re-addressed technical report on the Fruta del Norte deposit in Ecuador (originally written for Aurelian by Micon in Nov 2007, amended 21 Oct 2008), with expert consents. The filing says Kinross had acquired all Aurelian shares as of 30 Sept 2008 under its friendly bid, which completes the bid launched in August. The report's contents are mostly an index; the visible tables list only inferred mineral resources, and no figures are visible. So the deposit was, per this report, at inferred-resource stage.

resource reserve update

Kinross reported Q2 2008 results: revenue US$298.7m (up 3%), net earnings US$26.0m (US$0.04 per share, versus US$53.0m a year earlier), and 406,032 gold equivalent ounces produced. Kupol poured its first gold on schedule, with first gold at the expanded Paracatu expected in September and Buckhorn first production in October, continuing the 2008 growth-project threads. Cost of sales per ounce was US$466, and the full-year forecast was raised to US$425-445 from US$385-395. 2008 production is now expected at 1.8-1.9 million ounces, slightly below the earlier forecast. Kinross also launched a friendly bid for Aurelian Resources (offer expires 3 Sept 2008), which opens the Fruta del Norte thread, and agreed to sell its 90% of the Julietta operation in Russia for US$20.0m plus other consideration. The filing also says a dividend was declared, but the amount is not in the visible text.

dividend declaration

Kinross agreed a friendly takeover of Aurelian Resources worth about C$1.2 billion, offering 0.317 of a Kinross share plus 0.1429 of a warrant per Aurelian share, a roughly 63% premium. The warrants had a C$32.00 exercise price and five-year term, and the prize was the Fruta del Norte gold deposit in Ecuador.

business combination

Kinross reported 2007 results: record revenue of US$1.1 billion (up 21%), net earnings of US$334.0 million (US$0.60 per share) and production of 1,589,321 gold equivalent ounces (up 8%). Q4 earnings included a US$138.3 million gain on the Goldcorp asset swap, which had closed; reserves rose 67% to 46.6 million ounces. It declared its first-ever dividend of US$0.04 per share, payable 31 March 2008, intended to be paid semi-annually, and approved a US$270 million Fort Knox expansion that it says would extend mine life five years. The Kubaka sale was completed in January 2008, and the convertible offering closed at US$460 million with about US$449 million net proceeds. Paracatu, Kupol and Buckhorn are said to be on schedule.

dividend declaration

Kinross agreed to sell US$420 million (US$460 million if the over-allotment is taken up) of 1.75% senior unsecured convertible notes due March 2028, convertible at about US$28.48 per share. It expects about US$410 million net, to repay its term loan with the rest for capital spending and general purposes. Holders can require repurchase in 2013, 2018 and 2023.

asset acquisition disposition

Kinross agreed an asset swap with Goldcorp: it sells its 31.9% of Musselwhite and its 49% of the Porcupine Joint Venture (the venture shown with Goldcorp as partner in the Dec 2006 report) and receives Goldcorp's 50% of Compania Minera Mantos de Oro, giving it 100% of the La Coipa mine in Chile, plus US$200 million cash. Kinross says it expects to lose about 100,000 to 120,000 ounces of annual production but with lower cash costs and higher margins; closing was expected within 60 days.

asset acquisition disposition

Kinross completed its acquisition of Bema Gold, with each Bema share exchanged for 0.4447 of a Kinross share and Cdn$0.01. Bema shares were to be delisted from the NYSE that day and from the TSX around February 28, 2007.

business combination

Kinross filed the full Arrangement Agreement with Bema Gold, dated 21 December 2006, as the formal legal text behind the deal announced the day before. The visible text (contents and definitions) shows a Completion Deadline of 30 March 2007, extended to 29 June 2007 if Russian anti-monopoly approval has not been obtained by then or a Kinross condition in section 6.2(h) is unmet. Bema holders need 66-2/3% of votes cast plus a majority excluding any votes required to be excluded under minority approval rules. It also contains non-solicitation and termination fee sections, but the amounts are truncated and not given here.

business combination

On 22 December 2006 Kinross and Bema Gold signed the definitive Arrangement Agreement for Kinross's purchase of Bema, the step flagged as pending in the 18 Dec update. Bema holders get 0.4447 of a Kinross share plus Cdn.$0.01 cash per Bema share, up from 0.441, and Bema's indirect interest in Petrex (Proprietary) Ltd. will no longer go to B2 Gold, as the 6 Nov 2006 deal had contemplated. Bema's board approved unanimously, and the Bema shareholder meeting is still set for 30 January 2007.

business combination

On 18 December 2006 Kinross and Bema Gold updated shareholders on the planned acquisition. Kinross had finished due diligence, a Canadian Competition Act advance ruling certificate had been issued, and a Russian competition filing was made on 8 December. The Bema shareholder vote was set for 30 January 2007, and the deadline to sign the definitive Arrangement Agreement was extended to 22 December 2006.

business combination

Agreed to acquire Bema Gold in a US$3.1 billion all-share deal, creating a US$7.9 billion producer with nine mines in five countries and 50 million ounces of gold reserves and resources. Output of 1.8 million gold-equivalent ounces in 2006 was guided to grow 56% to about 2.8 million by 2009; Bema added Kupol in Russia and Cerro Casale, and Kinross gained full ownership of Refugio.

business combination

Kinross completed its acquisition of Crown Resources on 31 August 2006, gaining the Buckhorn gold deposit in Washington State, about 76 km by road from its Kettle River mill. Buckhorn was expected to start production in late 2007 and contribute about 200,000 ounces a year from 2008.

business combination

Kinross told Canadian regulators it is replacing its auditor Deloitte & Touche with KPMG for 2005, after asking Deloitte on 7 Nov 2005 not to stand for reappointment. The notice discloses one past disagreement: over the Nov 2004 letter of intent to buy Rio Tinto's 51% of Paracatu, Deloitte held Kinross should test goodwill for impairment, and it was resolved when Kinross recorded a US$143m goodwill impairment in Q3 2004. Deloitte has withdrawn its report on the 2003 accounts, which are being restated. A same-day press release says Kinross has now filed audited 2004 statements with restated 2003 comparatives and restated 2004 quarterlies, and expects 2005 quarterlies by mid-December. The 2003 goodwill/exploration-property figures were adjusted slightly (goodwill down US$5.8m at the Jan 2003 TVX/Echo Bay acquisition date). It also seeks a court order to move the 2005 shareholders' meeting from 21 Dec 2005 to no later than 28 Feb 2006, with a hearing on 13 Dec 2005. The filing's text is truncated, so the effect on 2004 net loss beyond a US$0.2m tax adjustment is not given.

auditor change

Kinross announced on 1 June 2005 a fourth amendment to its deal to buy Crown Resources, owner of the Buckhorn Mountain gold deposit in Washington State. The end date moves to 31 March 2006, and Crown holders would now get 0.34 Kinross shares per Crown share, up from 0.2911, with the total value of Kinross shares issued held between US$77.5m and US$110m (excluding shares Kinross holds). Kinross will also buy a US$10m Crown convertible debenture, convertible into 5.8m Crown shares. About 16.6m Kinross shares would be issued if all Crown warrants and options are converted. The deal, first agreed 20 November 2003, still needs regulatory approval and a two-thirds vote of Crown shareholders. Tye Burt is named as President and CEO, replacing Robert Buchan in that role in the record. The Crown deal is still open here (the context shows it ultimately closing in Aug 2006).

business combination

Kinross filed its August 2003 prospectus papers for a sale of 20,000,000 new common shares at Cdn.$9.26 each (Cdn.$185,200,000 in total), underwritten by CIBC World Markets, Scotia Capital and RBC Dominion Securities, with an option for 3,000,000 more shares. A material change report listed in the filing says the proceeds are intended to redeem its 5.5% convertible unsecured subordinated debentures, which would swap debt for more shares outstanding. This follows the early-2003 combination of TVX, Echo Bay and Kinross listed in the filing's documents.

asset acquisition disposition