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Kinross Gold Corp. has struck a US$283-million deal to buy a Russian gold development project, its first gold acquisition in four years.

In a statement after the close of markets on Wednesday, Toronto-based Kinross said it had reached a friendly arrangement with privately held N-Mining Ltd. to purchase the Chulbatkan project for a combination of cash and stock. Kinross hopes to eventually develop the property, located in the Khabarovsk region of Russia’s far east, into a low-cost, open-pit gold mine. Cyprus-based N-Mining was founded by a number of former executives of Polyus Gold International Ltd., Russia’s largest gold producer.

Kinross said its own drilling, conducted over the past 16 months, indicates the Chulbatkan property contains a resource of 3.9 million ounces of gold. Over the next three years, Kinross plans to do more drilling to try to prove the project’s economic viability. Kinross’s early study points to a six-year mine life, with an all-in sustaining cost of US$550 an ounce and an initial capital cost commitment of half a billion dollars.

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“We’re really excited about the potential,” Paul Rollinson, chief executive officer of Kinross, said in an interview. The company expects the deal to close by early next year.

The Chulbatkan purchase broadens Kinross’s already considerable footprint in Russia. The company operates two gold mines in the country and about 20 per cent of its production comes from the region.

The pace of mergers and acquisitions in the gold sector has picked up over the past year with the world’s two biggest gold companies, Barrick Gold Corp. and Newmont Goldcorp Corp., striking multibillion-dollar deals amid improving balance sheets and rising gold prices.

There have also been a number of smaller deals over the past few months, with Australia’s St. Barbara Ltd. buying Vancouver-based Atlantic Gold Corp. in May for $722-million and Newcrest Mining Corp. paying US$806-million for a majority stake in one of Imperial Metals Corp.’s mines. Many of the deals have been driven by the need to replace dwindling gold reserves among many of the world’s miners. Kinross’s most recent gold acquisition was its US$610-million purchase of the Bald Mountain mine in Nevada from Barrick in 2015.

Separately on Wednesday, Kinross reported a net profit of $71.5-million for the quarter ending June 30, or 6 cents a share. The company beat the Street’s expectations on profit, costs and production.

Kinross also said it plans to update the market in September with a new expansion plan for its Tasiast mine in Mauritania in West Africa.

Kinross acquired Tasiast through its US$7.1-billion acquisition of Red Back Mining Inc. in 2010 and hopes a second expansion of the mine will significantly cut its costs and bump up its production profile.

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The expansion of Tasiast has been partially bogged down by protracted talks with Mauritania over the past year and a half. Sticking points have included the need to reach an agreement on value-added tax refunds, fuel taxes and procurement agreements.

“We have some issues, we do want to resolve them,” Mr. Rollinson said.

Complicating matters is the fact that Mauritania is undergoing a change of government and Kinross will need to build relations with a new administration. A new president will be inaugurated on Thursday.

Mr. Rollinson said the company hopes to meet with the new government later this summer.

Kinross is Canada’s fourth-biggest gold company with a market value of $7-billion. Its shares are up 27 per cent this year.

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