TSX- and NYSE-listed Kinross Gold has added to its portfolio in Russia with the $283-million acquisition of a gold project from private mining company N-Mining.

The company will buy Chulbatkan – a heap leach development project with significant upside potential – for $113-million in cash and $170-million in Kinross shares, the Toronto-based miner announced on Wednesday.

N-Mining would also have the right to economic participation equivalent to a 1.5% net smelter return payment and contingent consideration linked to future reserve additions.

Kinross said that, in the next three years, it would conduct a comprehensive exploration programme, complete prefeasibility and feasibility studies at Chulbatkan, and that it was targeting a two-year construction period.

The miner already operates the Kupol and Dvoinoye mines in Russia and stated that the initial timing complemented its existing operations in that country.

President and CEO Paul Rollinson described Chulbatkan as “an excellent fit” for Kinross as it enabled the company to leverage its expertise as “a world-class cold climate heap leach operator”.

With a large estimated mineral resource, Chulbatkan had the potential to be a significant low-cost, low-strip, high-return operation that would strengthen Kinross’ longer-term production and cash-flow profile, he added.

Meanwhile, Kinross also announced its second-quarter results on Wednesday and said that it remained on track to meet its 2019 guidance of 2.5-million ounces of gold equivalent (GE), cost of sales of $730/oz of GE, and all-in sustaining costs (AISC) of $995/oz of GE.

The miner reported net earnings of $71.5-million, or $0.06 a share, and adjusted net earnings of $79.6-million for the second quarter of 2019, as well as an operating cash flow of $333-million and adjusted operating cash flows of $287.7-million for the period ended June 30, 2019.

Adjusted net earnings, meanwhile, were $79.6-million, or $0.06 a share, for the quarter, while the reported net earnings were $71.5-million, or $0.06 per share. This increase, the company said, was primarily a result of the increase in operating earnings, partially offset by an increase in income tax expense.

During the quarter, Kinross produced 648 251 attributable GE ounces, compared with 602 049 attributable gold ounces in the second quarter of 2018.

Production cost was $663/oz of GE for the second quarter, compared with $767/oz a year earlier, mainly owing to lower costs at Paracatu, Tasiast and Round Mountain.

AISC for each ounce of GE sold was $925 in the quarter, compared with $1 018 in the prior comparable period.

Revenue from metal sales increased to $837.8-million, from $775-million during the same period in 2018, mainly owing to an increase in GE ounces sold.