NEW YORK, Aug 2 (Reuters) - Gold miner Kinross Gold Corp on Monday said it will buy rival Red Back Mining Inc for around $7 billion, giving the company two new gold mines that will immediately add to its production and growth potential.
The company said it will pay around C$30.50 a share in stock and warrants for each Red Back share, a more than 17 percent premium to Red Back's current share price of C$26.02. Kinross already owns about 9.3 percent of the smaller company.
Kinross Chief Executive Tye Burt called the deal a 'transformative opportunity' for the miner, and praised 'the significant upside in reserves that we (Kinross) believe exists at Red Back.'
Red Back owns mines in Mauritania and Ghana. After the deal, the combined company will have 10 mines and 4 development projects in eight countries. Its pro forma 2010 production is expected to be about 2.6 to 2.7 million gold equivalent ounces.
Under the terms of the deal, Red Back shareholders will receive 1.778 Kinross common shares plus 0.11 of a Kinross common share purchase warrant for each Red Back share.
($1=C$1.0229)
(Reporting by Michael Erman; editing by Bernard Orr) Keywords: REDBACK KINROSS/ (Reuters Messaging: michael.erman.reuters.com@reuters.net; +1 646 223 6021) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The company said it will pay around C$30.50 a share in stock and warrants for each Red Back share, a more than 17 percent premium to Red Back's current share price of C$26.02. Kinross already owns about 9.3 percent of the smaller company.
Kinross Chief Executive Tye Burt called the deal a 'transformative opportunity' for the miner, and praised 'the significant upside in reserves that we (Kinross) believe exists at Red Back.'
Red Back owns mines in Mauritania and Ghana. After the deal, the combined company will have 10 mines and 4 development projects in eight countries. Its pro forma 2010 production is expected to be about 2.6 to 2.7 million gold equivalent ounces.
Under the terms of the deal, Red Back shareholders will receive 1.778 Kinross common shares plus 0.11 of a Kinross common share purchase warrant for each Red Back share.
($1=C$1.0229)
(Reporting by Michael Erman; editing by Bernard Orr) Keywords: REDBACK KINROSS/ (Reuters Messaging: michael.erman.reuters.com@reuters.net; +1 646 223 6021) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.