Kinross to buy gold project in Washington state

Reuters, 10.08.03, 6:47 PM ET

VANCOUVER, British Columbia - Canada's Kinross Gold Corp. said Wednesday it will buy Crown Resources Corp. and its high-grade Buckhorn Mountain gold deposit in Washington state, in an all-equity deal.

Assuming all of Crown's warrants, options and convertible debentures are converted, Kinross will issue about 13.1 million shares to complete the purchase, which will beef up its reserve base and future production profile.

Using Wednesday's closing share price of C$10.21 for Kinross stock on the Toronto Stock Exchange, the transaction is valued at about C$133.8 million ($100 million).

The deal will see shareholders of Denver-based Crown receiving 0.2911 shares of Kinross for each Crown share.

"This acquisition is a building block towards our goal of increasing reserves and production and decreasing our total cash costs per ounce through accretive acquisitions," said Bob Buchan, Kinross's president and chief executive.

Kinross is the world's seventh biggest gold producer with output approaching 2 million ounces a year. It's single weakest issue is short mine life, which, at just 6-1/2 years of reserves left, is the lowest of North America's big producers.

At the end of last year, Buckhorn, situated about 67 km (42 miles) by road from Kinross's Kettle River gold milling facility, had proven and probable reserves of 1.94 million tonnes grading 13.44 grams of gold per tonne.

Buckhorn also reported further mineralized material of 1.07 million tonnes grading 13.82 grams of gold per tonne.

The current mine plan contemplates developing an underground mine at Buckhorn and, according to Kinross, addresses major environmental concerns identified during previous permitting efforts.

"Kinross is confident that by working in conjunction with federal, state and local agencies, as well as other stakeholders, the permitting process, initiated by Crown, will be successful in obtaining the necessary regulatory approvals to develop an underground mine in a timely manner," the company said.

It said it had been encouraged by recent legislative changes in Washington state, which had improved the business climate in an area where Kinross has had previous mining and exploration experience.

($1=$1.33 Canadian)

For More Information Contact: David Kliegman, Okanogan Highlands Alliance (509) 485-3361