Canada-based gold mining firm Kinross Gold has completed the acquisition of Chulbatkan development project, owned by Australian mining company N-Mining, for a total consideration of $283m.
Chulbatkan is a high-grade, open-pit, heap leachable project, which holds a near surface gold deposit with highly continuous mineralization.
The project is located in the Khabarovsk region of Far East Russia, approximately the same distance from the company’s existing Kupol and Dvoinoye operations, and its regional office in Magadan.
Kinross estimates the presence of approximately 3.9 million ounces of gold in indicated mineral resources and 80,000 gold ounces in estimated inferred mineral resources for the project, based on substantial due diligence work and internal analysis.
The mining firm stated: “The footprint of the current Chulbatkan resource represents less than 1% of the total 120 sq. km license area, which hosts multiple, untested high-quality targets.”
The company has started an exploration drilling programme at the Chulbatkan project to update the current resource base by the year-end of 2020, and intends to spend approximately $10m on initial exploration drilling in the year 2020.
Kinross will conduct pre-feasibility and feasibility studies at Chulbatkan Project
In addition, the firm is planning to convert estimated mineral resources to estimated mineral reserves, complete pre-feasibility and feasibility studies for the project within three years, and complete the construction within two years.
Under the transaction agreement, Kinross has paid $141.5m, along with $3.1m as ordinary course working capital adjustments, which form approximately 50% of the total acquisition price.
An amendment made to the agreement enables the payment of 60% of the second and final installment of $141.5m in Kinross shares. The second installement is due on the first anniversary of closing.
In October 2019, the company received an anti-monopoly approval from the Russian regulators for the acquisition, as per the schedule, satisfying all other conditions.
Kinross has mines and projects in the US, Brazil, Russia, Mauritania, Chile and Ghana.
