Kinross denies Reuters report ‘putting future deals in Russia on hold’

Kinross Gold's Dvoinoye gold mine in Russia (above) began commercial production in October 2013. Credit: Kinross GoldKinross Gold's Dvoinoye gold mine in Russia (above) began commercial production in October 2013. Credit: Kinross Gold

A Reuters news report stating Kinross Gold (TSX: K; NYSE: KGC) is “putting future deals in Russia on hold” after recently acquiring a development project in the country is “an unfortunate mischaracterization,” the company told The Northern Miner.

“We are not paused in the country, as we are active with two operating mines, a robust and successful exploration program that has added to mine life, and we are planning to develop the Chulbatkan project,” Louie Diaz, the company’s senior director of corporate communications, confirmed in an email. “As always, we look at high-quality opportunities should they emerge.”

Kinross recently acquired the Chulbatkan development project in Russia’s Far East for US$113 million in cash and US$170 million in Kinross shares. The company said the open-pit heap leach project complements the company’s two existing underground gold mines in the country — Kupol and Dvoinoye.

Reuters reported on Sept. 30 that “foreign investment in new mining projects in Russia has grown scarce due to Western sanctions levelled after the 2014 annexation by Russia of Crimea from Ukraine.”

But the sanctions haven’t seemed to dampen Kinross’ enthusiasm for Russia.

On a conference call earlier this year in which he commented on the company’s Chulbatkan acquisition, CEO Paul Rollinson described the project as “an excellent fit for Kinross,” and said he was “pleased to be adding a high-quality project to our development pipeline.”

“The project already has the potential to be a substantial producer with an attractive cost structure,” Rollinson told analysts and investors on the call. “In addition, there is significant upside potential beyond the 4-million resource estimate, as the deposit is highly continuous, and is open along strike and depth. There are also multiple untested high-quality targets within the 120-sq.-km exploration licence.”

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