Kinross’ Chirano mine transaction with Asante Gold, one of the landmark sales in the global mining sector in H1 2022 is expected to close in August 2022.
The transaction which started on April 22, 2022, was initially scheduled to close on May 31, 2022, but rescheduled for a later date due to “pending resolutions of administrative of certain outstanding administrative matters.”
Despite the prolonged closure of the transaction, the terms of the transaction remains the same with Asante Gold owning 90% interest in the mine for a total consideration of $225 million in cash.
The structure of the purchase involves an upfront consideration for the Chirano Acquisition comprising of $115 million in cash and $50 million in common shares of Asante. Payment of the $50 million in Asante Gold’s common shares is based on the 30-day volume-weighted average price of the Shares prior to closing of the Chirano Acquisition.
J. Paul Rollinson, President and CEO of Kinross, made the following comments in relation to 2022 second-quarter results:
“With the completion of the sale of our Russian assets and pending sale of Chirano, approximately 70% of our production is now based out of the Americas. The new re-balanced portfolio is bolstered by our robust development projects, which all advanced well over the quarter.”
J. Paul Rollinson
With the exclusion of operations at its Kupol and Chirano mines, Kinross produced 453,978 Au eq. oz. in Q2 2022 from continuing operations, a 19% increase compared with 381,474 Au eq. oz. in Q2 2021.
Existing Mines to keep production on Track
Although having divested its Russian assets together with the Chirano mine, Kinross believes it is on track to significantly increase production in the second half of the year. This is primarily driven by stronger production at Paracatu, Tasiast and La Coipa. The Company expects to be at the low end of its 2022 production guidance range mainly due to temporary delays in the mill ramp-up at La Coipa.
Kinross is proceeding with development of the 70%-owned Manh Choh project in Alaska, which is expected to increase the Company’s production profile by approximately 640,000 attributable Au eq. oz. over the life of mine at lower costs.
The world-class Great Bear project in Red Lake, Ontario continues to make excellent progress, with drilling results from the first half of the year continuing to confirm Kinross’ vision of developing a large, long-life mining complex.
The Company plans to declare an initial mineral resource estimate as part of its 2022 year-end results. The Tasiast 24k project remains on plan to reach 24,000 tonnes per day throughput in mid-2023.
Kinross expects to maintain a substantial production profile with estimated average production of two million Au eq. oz. per year over the remainder of the decade.
“Looking ahead, we believe we have significant value upside. We are in excellent financial position, have strong liquidity of $2.1 billion, and continue to prioritize and strengthen our investment-grade balance sheet while returning capital to our shareholders. Our high-quality portfolio has a competitive reserve life, with production expected to increase to 2.3 million gold ounces next year, and average two million gold ounces per year over the remainder of the decade.”
J. Paul Rollinson
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