| Kinross to Buy Nevada Assets from Barrick for $610 Million | |
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Kinross Gold Corporation KGC has inked a definitive asset purchase deal with Barrick Gold Corporation ABX. Per the deal, Kinross will purchase 100% of the Bald Mountain gold mine and 50% of the Round Mountain gold mine in Nevada from Barrick for a total consideration of $610 million in cash.
The acquisition will benefit Kinross in a number of ways. Through this purchase, the company will gain around 430,000 gold equivalent ounces (Au eq. oz.) in annual average forecast production over the first three years. The buyout is also expected to lower costs for the company. Additionally, the agreement should boost per share metrics such as production, cash flow, and mineral reserves and resources.
Moreover, the acquisition will strengthen Kinross’ portfolio by providing it with two mines with free cash flows. Both the mines have mineral deposit potential and are located at a prime mining jurisdiction, which makes them lucrative. With the buyout, the company’s production in the U.S will surge by 56%. The acquisition also provides opportunities for operational synergies.
The Bald Mountain property covers a 600 square kilometer prospective land package along the southern extension of the Carlin trend, which is the most prolific gold producing region in the U.S. The mine is expected to have an annual production in the range of 175,000–300,000 Au eq. oz. with an annual cost of sales range of $450–$1,000 per Au eq. oz. and an annual all-in sustaining cost range of $700–$1,130 per Au eq. oz. from 2016 through 2018.
The transaction will increase overall cash flow, lower cost and enhance credit metrics for Kinross. The company will finance the transaction with cash on hand and available liquidity. Post the transaction's closure, Kinross' balance sheet will likely remain strong with pro forma liquidity of $1.9 billion. The deal is expected to close by the middle of Jan 2016, subject to approvals and fulfillment of other conditions.
Kinross’ shares rose around 2.2% to close at $1.83 last Friday. Kinross currently carries a Zacks Rank #3 (Hold). Some better-ranked mining companies are NovaGold Resources Inc. NG and Asanko Gold Inc. AKG. Both of them hold a Zacks Rank #2 (Buy). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report KINROSS GOLD (KGC): Free Stock Analysis Report BARRICK GOLD CP (ABX): Free Stock Analysis Report NOVAGOLD RSRCS (NG): Free Stock Analysis Report ASANKO GOLD INC (AKG): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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Kinross Gold Corporation
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PRODUCER |
CODE : K.TO |
ISIN : CA4969024047 |
CUSIP : 496902404 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Kinross Gold is a gold producing company based in Canada. Kinross Gold produces gold, silver in Brazil, in Canada, in Chile, in Ghana, in Mauritania, in Russia and in USA, develops copper, gold and silver in Chile, and holds various exploration projects in Canada, in Chile and in Russia. Its main assets in production are ROUND MOUNTAIN in USA, CRIXÁS, MORRO DO OURO and PARACATU in Brazil, REFUGIO MINE (VERDE AND PANCHO), FORT KNOX, MARICUNGA and LA COIPA in Chile, PORCUPINE and MUSSELWHITE in Canada, CHIRANO in Ghana, TASIAST in Mauritania and KUPOL in Russia, its main assets in development are KETTLE RIVER, GOLD HILL and CERRO CASALE in Chile and its main exploration properties are AHAFO NORTH, BIBIANI NORTH, BOLE, BOLE - BOLGATANGA, AKYEM, RUSSIAN MOUNTAIN, HORN MOUNTAIN, GIL, ENCHI and GOLDBANKS - KINROSS in Ghana, FRUTA DEL NORTE in Ecuador, HAMMOND REEF in Canada, KUBAKA MINE - BIRKACHAN in Russia and LOBO-MARTE in Chile. Kinross Gold is listed in Canada, in Germany and in United States of America. Its market capitalisation is CA$ 11.5 billions as of today (US$ 8.4 billions, € 7.9 billions). Its stock quote reached its lowest recent point on October 27, 2000 at CA$ 1.43, and its highest recent level on December 13, 2002 at CA$ 9.99. Kinross Gold has 1 246 749 952 shares outstanding. |