Kinross buys Russian licences from B2Gold Corp.

Kinross Gold (K-T, KGC-N) is buying B2Gold‘s (BTO-T) right to acquire an interest in the Kupol East and West licences in Russia for an upfront payment of US$33 million and subsequent payments of US$15 million for each incremental million oz. gold of proven and probable reserves contained in the licence areas, up to a maximum of 9 million oz. gold.

B2Gold will also receive payments equal to 1.5% of net smelter returns from the start of production, subject to a right for Kinross to repurchase the royalty for US$30 million.

Under the terms of a previous agreement, Kinross had undertaken to secure a 37.5% joint venture interest for B2Gold in the Kupol East and West exploration licence areas. Under the new agreement, Kinross is no longer obligated to enter into a joint-venture arrangement.

The Kupol East and West licences are adjacent to the Kupol mine and will remain 100%-owned by the Chukotka Mining & Geological Company, which also owns 100% of the Kupol mine. CMGC is owned 75% by Kinross and 25% by the State Unitary Enterprise of the Chukotsky Autonomous Okrug (Chukotsnab).

Clive Johnson, Vancouver-based B2Gold’s president and chief executive, said proceeds from the sale would help the company chase additional acquisitions, while at the same time the terms of the transaction allow the company to benefit from the exploration upside at Kupol through contingent payments and royalties, making it a win-win.

B2Gold currently has two mines in Nicaragua and a development and exploration assets in Nicaragua, Colombia and Costa Rica.