Amax buys Russian gold mine

Amax Gold (AU-N) has bought a half interest in the Kubaka gold mine in far eastern Russia from Cyprus Amax Minerals (CYM-N).

To complete the transaction, Amax issued 11.8 million shares of common stock to Cyprus. The other half interest is held by five Russian partners.

Amax will pay Cyprus another 4.2 million shares when the mine reaches commercial production. With these additional shares, Cyprus’s ownership of Amax will increase to 59%.

Kubaka poured its first gold in February. At full production, the mine is expected to produce 150,000 oz. gold annually over the next seven years. Cash costs are anticipated to be US$185 per oz. Capital costs for the operation are pegged at US$228 million.