Kinross gold mine in Alaska’s Fort Know. Analysts expect the total production in the Red Back in 2015 could double to around one million ounces. Kinross gold mine in Alaska’s Fort Know. Analysts expect the total production in the Red Back in 2015 could double to around one million ounces.The Tasiast mine in Mauritania has been host to one of the best gold discoveries in decades. But by offering more than U.S. $ 7 billion in shares and warrants for Red Back Mining Inc., Kinross Gold Corp. is betting that he will get much bigger.
In the past few years, Vancouver-based Red Back has reached an astonishing press release after another detailing new exploration successes Tasiast. It is to add gold reserves at the project with a rate of 500,000 ounces per month, according to chief executive Rick Clark.
“The growth of the Tasiast is difficult for people to work around their heads,” he said in an interview. “Some people have said they last saw the growth as it was Bre-X.”
Mr. Clark thinks, there were skeptics who had trouble believing in the project. Kinross, was not one of them.
Kinross decided about a year ago, wanted in West Africa, one of the fastest growing regions in the world gold. It was found Red Back was the best entry point, largely due to the exploration potential of Tasiast.
Kinross approximately six months of due diligence on Tasiast have, before its offer. All that work led to believe that it is much more growth in production to be delivered to the site than the Street expected.
Analysts on average expect the total production Red Back in 2015 may double to around one million ounces.
Kinross Chief Executive Tye Burt will not say what his own goal but he is convinced he can do better than that. Therefore, he prepared a large premium for Red refundable.
“We have a lot of geologists and technical people on the ground [at Tasiast]. And just technical disclosure of individual analysts and possibly a site visit to work. We have a very different starting point,” he said.
He also pointed out that Red Back has just eight kilometers from the ground on total strike length of 80 km at Tasiast, to support his position that much more gold.
For Red Back, the merger with Kinross offers what Mr. Clark called the “Good Housekeeping seal of approval” on all the work that the company has done both and its Chirano Tasiast mine in Ghana. Tasiast And certainly a much become larger operation, with a senior gold mining company in step with a vast experience in building mines appropriate.
Toronto-based Kinross first agreed to invest $ 600 million back into the red in early May Since then, Kinross shares performers as investors began pricing in a potentially dilutive acquisition of the company.
The stock fell again Tuesday analysts pointed to short-term dilution from the deal. But they also acknowledged the long-term strategic advantage to Kinross a foothold in West Africa face, and exploration upside Tasiast.
“I would not be surprised if Tye pulled the trigger, even faster than he intended, because everyone was broadcast this deal,” said Dennis da Silva, a resource fund manager at Middlefield Capital. “Just get it done, it will overhang the market, and move on.”
He added that the Kinross offer the view that the existing resources at Tasiast gold could double acknowledges that the upside and Kinross needs the deal to make a positive contribution.
Mr. Burt said that although the first private placement to Save a mixed reaction from investors are received, they are happy with the full merger.
There is no consensus among analysts about whether Kinross will offer to increase. A rival bid is considered possible but unlikely.
source:montrealgazette
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