Kinross Gold Corp. (TSX:K) is at it again.
The Toronto-based miner bought a $600 million stake in Vancouver-based Red Back Mining Inc. (TSX:RBI) May 4.
Kinross is also in the midst of a $139.2 million all-share proposed acquisition of Vancouver’s Underworld Resources Inc. (TSX-V:UW).
(See “Kinross in bid for Underworld” (BIV#1065, March 23-29.)
Red Back CEO Rick Clark said: “They have shown great confidence in both countries in which we operate, Ghana and Mauritania, and have recognized the significant growth potential at both [the] Chirano and Tasiast [gold mines].”
Kinross’ private placement comes in the form of 24 million shares it bought for $25 apiece. That translates into a 9.4% stake in a company that has a market capitalization of $5.8 billion. Kinross is paying a premium on Red Back’s shares, which closed at $24.46.
Red Back intends to spend the cash on general working capital purposes including any anticipated processing and mining expansion at its Tasiast gold mine in Mauritania.
Clark said: “We are now financially secure for future development plans and can focus on increasing reserves and production going forward.”
By Glen Korstrom