Kinross Gold Corporation announced today that it has completed the sale of 100% of its Russian assets to the Highland Gold Mining group of companies for total consideration of $340 million in cash, half the price previously agreed.
The structure of the payment involved the receipt of $300 million in U.S. denominated cash in its corporate account and a deferred payment of $40 million on the one-year anniversary of closing.
As disclosed on April 5, 2022, the previously agreed total consideration for the transaction was $680 million, which included a payment of $100 million upon closing, with the remaining $580 million scheduled to be received in annual payments from 2023 through to 2027.
The transaction consideration was adjusted by the parties following review by the recently formed Russian Sub-commission on the Control of Foreign Investments, which approved this transaction for a purchase price not exceeding $340 million.
With the approval and completion of the sale, Kinross has divested all of its interests in Russia and has no further obligations or liabilities in the country.
J. Paul Rollinson, Kinross President and CEO, said:
“After the completed divestment of our Russian business, Kinross’ rebalanced portfolio maintains a substantial production outlook anchored by its two tier one assets – Tasiast and Paracatu – as well as a strong portfolio of mines in the Americas, a growing business in Chile, and the large, world-class Great Bear project in Canada.
“We would like to thank our Russian workforce for their dedication, professionalism and hard work. Their ongoing commitment to safety and the environment, especially during the transition of our business in the country, has been commendable.”
Paul Robinson
The Purchase of Kupol Mine
Russian authorities in March 2022 had stipulated that any transaction between Russians and foreign counterparties requires permission from the commission, saying it wanted to ensure decisions to exit were considered and not driven by political pressure.
Highland Gold operates several mines in the country, including in Chukotka and Khabarovsk regions where the Kupol mine and Udinsk project are located.
The US-listed shares of Kinross were up 3% in premarket trading, mirroring gains in other gold miners on a stronger bullion.
Since March 2022, Kinross has continued to operate its Kupol gold mining complex. It is likely the Kupol mine may have generated tens of millions of dollars in tax revenue and other payments for Vladimir Putin’s regime.
Kinross’s Kupol mining complex, located in the far east of Russia, approximately 7,000 kilometres from Ukraine, had long been a star performer, contributing US$442.7 million to the company’s operating earnings in 2021, more than any other mine. Excluding losses from non-operating segments, total operating earnings were US$765.5 million.
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