Kinross acquires Great Bear for $1.42 billion to further expand gold exploration

Kinross Gold announced on Wednesday that it would buy gold prospector Great Bear Resources for about $1.42 billion.

The Canadian miner will pay Great Bear shareholders the equivalent of about C $29 a share on a fully diluted basis. They can choose to receive it in the form of cash or 3.8564 Kinross shares.

The deal represents a 26.5 per cent premium to Great Bear's closing price on Wednesday.

The Great Bear Dixie project in northwestern Ontario is considered to be one of the most important gold mine discoveries in modern Canadian history.

The project consists of 9140 hectares of continuous mining rights, extending more than 22 kilometers. The project is accessible through highways throughout the year and is close to important infrastructure, including paved roads, electricity and a natural gas pipeline provided by the town of Honghu, about 25 kilometers to the northwest.

So far, Great Bear has completed more than 340000 meters of drilling in 794 boreholes and discovered five high-grade gold deposits.

Paul Rollinson, CEO of Kinross, said, "the Dixie project represents an exciting opportunity to develop a potential top deposit into a large, long-lived mine complex.

Dixie's closest geological analogue, the large Hemlo gold mine, was historically operated by three separate companies before the merger, producing more than 20 million ounces of gold in more than 30 years of operation. Chris Taylor, CEO of Great Bear, said: "Great Bear shareholders will now be in a unique position to benefit from the potential of the top Dixie project under one company and will maintain a strong risk to the project through their Kinross shares.

Shares of Great Bear rose 4% Wednesday afternoon, giving the company a market capitalization of C $1.32 billion (US $1.04 billion).