Kinross Gold‘s (K-T) 54.7%-owned Russian subsidiary, Omolon Gold Mining, has inked a deal with the Magadan administration and a majority of its Russian shareholders that will see loans from the administration to the shareholders become paid in full.
Under the plan, Omolon will offer to purchase, out of its cash on hand, its outstanding shares currently held by all the Russian shareholders for a total of US$45.4 million. The Magadan administration will ensure that all of the shares are tendered to the offer.
Once the deal is cemented Omolon will become a wholly owned subsidiary of Kinross. Kinross also expects that all lawsuits launched by the Russian shareholders will be terminated. The deal is slated to close by mid-November.
Kinross hopes the deal will allow it to bring the Birkachan deposit into production in 2004. At last count, resources at Birkachan stood at 726,700 tonnes grading 18.76 grams gold per tonne.
Situated in far-eastern Russia, the Birkachan deposit lies within trucking distance of Kinross’ 54.7%-owned Kubaka mine and thus requires minimal capital to be advanced to production.
At Kubaka, open-pit mining of the high-grade deposit concluded in early Oct. The mill will continue to process stockpiled ore supplemented with ore from residual underground mining at Kubaka during 2003.
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