Kinross swaps Yukon-based White Gold project for junior equity interest

VANCOUVER (miningweekly.com) – Canadian gold major Kinross Gold has agreed to acquire a 19.9% stake in Yukon Territory-focused junior explorer White Gold by selling its 100% interest in the White Gold exploration project to the company.

TSX- and NYSE-listed Kinross said Thursday the strategic ownership in White Gold will provide it with future optionality in the highly prospective White Gold district, and in the larger Yukon Territory.

Fellow senior miner Agnico Eagle Mines also holds about 19.9% equity of White Gold, and both Kinross and Agnico Eagle are expected to leverage their deep technical and operational experience to support White Gold's exploration and development efforts in the Yukon, including at the White Gold exploration property.

"We look forward to working with Agnico Eagle and White Gold to support the pursuit of quality development opportunities in this highly prospective and largely underdeveloped district. This investment will allow the three companies to pool their expertise together to strengthen their position in this excellent mining jurisdiction," Kinross president and CEO Paul Rollinson said in a press release.

Under terms of the sale, Kinross will receive payment of C$10-million in cash on closing; 17.5-million White Gold common shares at a deemed purchase price of C$2.01, with a current market value of about C$35.2-million; deferred payments of about C$15-million, payable in three equal payments of about C$5-million, each triggered by the announcement by White Gold of a preliminary economic assessment, the completion of a feasibility study, and upon taking a positive construction decision for the White Gold exploration project.

Kinross will also enter into an investor rights agreement with White Gold that will provide Kinross with the right to maintain its ownership position through participating in any future equity financings, and the right to nominate a board member in White Gold.

With seven projects in hand, comprising 23 properties totalling 297 000 ha, White Gold is the largest landholder in the White Gold district and its experienced exploration team has been involved in several significant discoveries in the Yukon.

The transaction is expected to close before July, subject to customary conditions of closing, as well as the concurrent closing of a private placement to Agnico Eagle to maintain its proportionate interest in White Gold, and obtaining TSX-V approval.