Kinross Gold Corporation announced that it has agreed to sell its 25% interest in the Cerro Casale project in Chile, and its 100% interest in the Quebrada Seca exploration project located adjacent to Cerro Casale, to Goldcorp Inc. (“Goldcorp”) for the following consideration:
- US$260 million in cash, payable at closing (which includes US$20 million for Quebrada Seca);
- US$40 million in cash, payable following a construction decision for Cerro Casale;
Assumption by Goldcorp of a US$20 million payment obligation due to Barrick Gold Corporation (“Barrick”) under the existing Cerro Casale shareholders agreement, which is payable when commercial production at Cerro Casale commences;
A 1.25% royalty from Goldcorp based on 25% of gross revenues from all metals sold at Cerro Casale and Quebrada Seca, with Kinross foregoing the first US$10 million.
Additionally, on closing Kinross will enter into a water supply agreement with the Cerro Casale joint venture. After certain conditions are met, the agreement will provide Kinross with certain rights to access, up to a fixed amount, water not required by the Cerro Casale joint venture. Kinross expects to use this water for its Chilean assets and would be responsible for the incremental capital costs to accommodate the supply of water to the Company along with its pro rata share of operating and maintenance costs.
Kinross expects to use the proceeds from the sale for its organic development projects and to further strengthen its balance sheet.The sale is expected to be completed in the second quarter of 2017, subject to customary conditions of closing as well as the closing of Goldcorp’s acquisition from Barrick of a 25% interest in the Cerro Casale project.
About Kinross Gold Corporation
Kinross is a Canadian-based senior gold mining company with mines and projects in the United States, Brazil, Russia, Mauritania, Chile and Ghana. Our focus is on delivering value based on the core principles of operational excellence, balance sheet strength, disciplined growth and responsible mining.
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