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Red Back Mining will be the subject of takeover speculation when markets open Wednesday, after the company raised $600-million late Tuesday by selling a stake in itself to Kinross Gold.

Red Back sold 24 million shares at $25 each to the always-acquisitive Kinross, a private placement that gives the senior mining company a 9.4 per cent stake. Kinross also got a seat on the Red Back board.

Spending this kind of money is the equivalent of buying an engagement ring - Kinross is clearly interested in this play, in the same way Goldcorp has a similar-sized position in Osisko Mining, and is therefore seen as the most likely buyer.

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Red Back needed cash to expand gold mines in Africa. The Vancouver-based company, founded in 1988, now has a $5.8-billion market capitalization, while Kinross sports a $13-billion capitalization. One analyst who follows the company, but cannot be named due to employer rules, said both sides are signalling their intentions.

"Red Back is amicable to having Kinross as a partner, which signals any alternative bidder will have to hostile, while Kinross can bide its time with this holding," said the analyst, who believes a takeover bid for all of Red Back remains well down the road.

As part of the Red Back financing, Kinross promised to hold on to its stake for a minimum of four months, but it's the prospect of more buying, not selling, that will turn heads.

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