Canadian miner Kinross Gold selling 100% of Russian assets as it exits country

Canadian miner Kinross Gold Corp. is selling all of its assets in Russia as a growing number of companies withdraw from the country following the invasion of Ukraine.

The Toronto-based gold miner said Tuesday it’s selling 100 per cent of its Russian assets to the Highland Gold Mining group of companies and its affiliates for US$680 million in cash.

Kinross owns the Kupol underground mine in the country’s eastern Chukotka region and surrounding exploration licenses as well as the Udinsk development-stage project in the Khabarovsk region.

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The company said Highland Gold is one of the largest gold mining companies in Russia with mining operations in both of the areas where Kinross has assets.

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The transaction is subject to the approval of the Russian government.

Mike Parkin, head of mining research at National Bank Financial, said in a client note that obtaining approval from the Russian government is a potentially significant hurdle.

Still, Parkin said in the note that selling the assets to a third-party mining company is positive as it eliminates potential environmental risks associated with the sale.

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RBC Dominion Securities Inc. analyst Josh Wolfson called the transaction fair.

In a note to clients, he said the closing of the deal and the ability for Kinross to receive funds under current sanctions is uncertain and carries above-average risk.

Kinross is the latest in a raft of companies to exit Russia following its unprovoked attack on Ukraine.

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It’s also one of the more significant withdrawals from the country, as other companies have largely paused or suspended operations but maintained assets on the ground.

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