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Kinross sells Russian assets

Kinross Gold Corporation has sold its Russian assets. This follows a definitive agreement (“Agreement”) inked between the firm and with the Highland Gold Mining group of companies (“Highland Gold”) and its affiliates to sell 100% of its Russian assets for total consideration of $680 million in cash.

Kinross assets in Russian include the Kupol gold mine and the Udinsk development project, and the company stated on March 2 it was suspending activities at Udinsk and looking at suspending operations at Kupol. At that time, Kinross expressed concern about the loss of life and the destruction in Ukraine after Russia’s invasion and donated $1 million to the Canadian Red Cross Ukraine Humanitarian Crisis Appeal.

Deferred payments

As part of the transaction, Kinross will receive a total of $400 million in cash for the Kupol mine and the surrounding exploration licenses, which includes payment of $100 million upon closing, as well as additional payments of $150 million before the end of 2023, $100 million before the end of 2024, and $50 million before the end of 2025. Kinross will also receive a total of $280 million in cash for its Udinsk project, which includes payments of $80 million before the end of 2025, $100 million before the end of 2026, and $100 million before the end of 2027.

The deferred payments are secured by an extensive security package that includes share pledges, financial guarantees and an escrow account. All payments under the Agreement are payable in U.S. dollars. Highland Gold is one of the largest gold mining companies in Russia and operates several mines in the country, including in the Chukotka and Khabarovsk regions where the Kupol mine and Udinsk project are located, respectively. The transaction is subject to the approval of the Russian government and the finalization of certain ancillary agreements.

 

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