Kinross plans to sell Russian mining assets

Canadian-based gold mining company Kinross is developing a transition plan to sell its Russian assets.

The company said it has received a number of unsolicited proposals regarding its Russian business and is now in exclusive negotiations with a third-party mining company regarding a potential sale of 100% of its assets in the country, subject to Russian government approval. The move follows the suspension of all activities at its Udinsk development project early March.

As part of the exclusivity agreement and to properly maintain assets pending a change of control, its Russian subsidiaries are continuing to operate during the transition period.

Kinross will also continue to manage and mitigate the environmental impacts of its operations, which includes overseeing monitoring systems and transporting industrial materials to the Kupol mine (pictured) that are not permitted to remain at the port to maintain safety and regulatory compliance. However, in a separate statement, it confirmed it is also in the process of suspending operations at its Kupol mine.

Kinross, which will continue to prioritise the well-being of its more than 2,000 employees in the country during the transition, has been "deeply concerned" about the loss of life and destruction in Ukraine.

The parent company will not benefit financially from the operations while the transition plan is finalised. Current activities will be funded through resources already in-country, with no additional investment required by the parent company.

Kinross expects to treat its Russian business as an asset held for sale from an accounting perspective until a change of control is completed. The Company will provide updates to its guidance at the appropriate time.

Kinross operates projects in the United States, Brazil, Russia, Mauritania, Chile, Ghana and Canada. 

Its involvement in Russia spans over 25 years, operating the low cost underground Kupol mine in the Chukotka region.

In the Udinsk pre-feasibility study, completed in Q4 2021, Kinross described the asset as a "low-cost and high-return project", with estimated production increasing compared with initial scoping study forecasts. A feasibility study was expected to be completed in Q3 with first production anticipated late 2025.

In 2021, exploration work in the Chulbatkan region identified key targets that are expected to be tested during 2022, including the Bismuth Cluster, Taimen and Soyka. Its Russia 2022 production guidance is 350,000geo, according to its website.