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Kinross CEO Tye Burt (Fred Lum/Fred Lum/The Globe and Mail)
Kinross CEO Tye Burt (Fred Lum/Fred Lum/The Globe and Mail)

Kinross bids for rest of Underworld Add to ...

Kinross Gold Corp. is offering to pay a premium to buy the rest of Underworld Resources Inc. in a stock-and-cash deal that values the junior mining company at $139.2-million.

Kinross, which is one of Canada's largest gold producers, already owns 8.5 per cent of Underworld's common shares and is offering to buy the rest in exchange for a fraction of a Kinross share plus a penny cash.

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The offer of 0.141 share plus 1 cent in cash was worth $2.62 per Underworld share based on the Wednesday closing price of $18.54 per Kinross share.

The value of the offer will fluctuate with the price of Kinross shares, which dropped 30 cents to $18.24 in early trading Thursday after the announcement.

Kinross says it's offering an attractive premium for Underworld, whose shares closed Wednesday at $1.93 on the TSX Venture Exchange.

In addition, Kinross says Underworld's shareholders will have the opportunity to have a stake in a senior gold producer and continue to share in the growth potential of the smaller company's assets.

Underworld's key asset is the White Gold project, 95 kilometres south of Dawson City in Yukon Territory.

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