Kinross Gold To Sell Stake In Chilean Gold Operations

Kinross Gold Tuesday reported it agreed to sell its 25% interest in the Cerro Casale gold-mining project in Chile, and its 100% interest in the Quebrada Seca exploration project located adjacent to Cerro Casale, to Goldcorp (GG) for up to $320 million and royalties, in a transaction expected to close in Q2.

Kinross said the sale price would include $260 million in cash, payable at closing; $40 million in cash, payable following a construction decision for Cerro Casale; assumption by Goldcorp of a $20 million payment obligation due to Barrick Gold Corporation (ABX) and 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 $10 million. Kinross said it expects to use sale proceeds for development projects and to strengthen its balance sheet.

By Standard Staff Contributor