Dual-listed Kinross Gold has completed the $283-million acquisition of the Chulbatkan heap leach development project in Russia, and has started a comprehensive drilling programme aimed at updating the resource base by year-end.

Kinross will be spending about $10-million on initial exploration drilling at Chulbatkan during the year.

The company is also planning to convert estimated mineral resources to estimated mineral reserves, complete prefeasibility and feasibility studies for the project within about three years, and is targeting a subsequent two-year construction period.

Kinross in October received anti-monopoly approval from Russian regulators for its deal with N-Mining. All other conditions precedent regarding the acquisition have been satisfied.

Based on due diligence work and internal analysis, Kinross currently estimates about 3.9-million gold ounces in indicated mineral resources and 80 000 gold ounces in estimated inferred mineral resources for the project.

The footprint of the current Chulbatkan resource represents less than 1% of the total 120 km² licence area, which hosts multiple, untested high-quality targets.

In accordance with the acquisition agreement, the first instalment of $141.5-million, plus $3.1-million of ordinary course working capital adjustments, representing about 50% of the $283-million purchase price, were paid. The agreement was amended to permit the first instalment to be paid all in cash, which has minimised share dilution and leveraged the company’s strong liquidity profile. The amendment also provides that 60%, and at Kinross’ sole discretion up to 100%, of the second and final instalment of $141.5-million, due on the first anniversary of closing, may be paid in Kinross shares.

Chulbatkan is located in the Khabarovsk region of Far East Russia, about the same distance from the company’s regional office in Magadan as its existing Kupol and Dvoinoye operations.