Kinross inks Omolon deal

Kinross Gold‘s (K-T) 54.7%-owned Russian subsidiary, Omolon Gold Mining, has inked a deal with the Magadan administration and most of its Russian shareholders that will ensure the full payment of loans from the administration to the shareholders.

Under the plan, Omolon will offer to buy, from cash on hand, its outstanding shares currently held by all the Russian shareholders for a total of US$45.4 million. The Magadan administration will ensure that all the shares are tendered to the offer.

Once the deal is cemented, Omolon will become a wholly owned subsidiary of Kinross. Kinross also expects that all lawsuits launched by the Russian shareholders will be terminated. The deal is slated to close by mid-November.

Kinross hopes the deal will allow it to bring the Birkachan deposit into production in 2004. At last count, resources there stood at 726,700 tonnes grading 18.76 grams gold per tonne.

Situated in far-eastern Russia, the Birkachan deposit lies within trucking distance of Kinross’s 54.7%-owned Kubaka mine and thus requires minimal capital to be advanced to production.

At Kubaka, open-pit mining of the high-grade deposit was completed in early October. The mill will continue to process stockpiled ore supplemented with material from residual underground mining in 2003.