Kinross announces ownership of shares of Relevant Gold

Rhea-AI Summary

Kinross Gold (TSX: K, NYSE: KGC) has announced a strategic investment in Relevant Gold Corp. through a non-brokered private placement agreement. The deal involves acquiring 15,410,000 common shares at $0.30 per share, totaling $4,623,000.

Following the transaction, Kinross will increase its ownership from 6.8% to approximately 19.9% of Relevant Gold's issued and outstanding shares. Including 2,550,000 share purchase warrants, Kinross's ownership would reach 21.8% on a partially diluted basis. The company has agreed not to exercise warrants that would result in over 20% ownership without shareholder approval.

The transaction is expected to close in March 2025, subject to customary conditions.

Positive

• Strategic expansion of gold portfolio through significant stake in Relevant Gold
• Increased ownership from 6.8% to 19.9% strengthens market position
• Warrants provide potential for additional ownership increase to 21.8%

Negative

• Significant cash outlay of $4.62M in current investment
• Warrant exercise restrictions limit immediate ownership expansion potential

Insights

Financial Analyst

Kinross Gold's strategic acquisition of a 19.9% stake in Relevant Gold Corp for $4.62 million CAD represents a calculated move to expand its exploration portfolio with minimal initial capital commitment. This transaction structure - moving from a 6.8% position to 19.9% - is particularly noteworthy as it positions Kinross just below the 20% regulatory threshold that would trigger additional disclosure and shareholder approval requirements.

The fixed price of $0.30 CAD per share through a private placement provides Kinross with a strategic foothold without paying the premium typically associated with open market accumulation. The careful structuring around warrant exercise limitations demonstrates sophisticated capital deployment strategy aimed at maintaining flexibility while securing meaningful influence.

For context, this $4.62 million investment represents just a fraction of Kinross's available capital, given its $13 billion market capitalization. This signals a low-risk, high-optionality investment approach rather than an immediate material impact on operations.

The designation as a "strategic investment" suggests Kinross sees specific geological or operational synergies with Relevant Gold's assets, potentially allowing Kinross to gain exposure to promising exploration properties without committing to full acquisition costs and risks.

Mining Industry Specialist

This stake acquisition reveals Kinross's tactical approach to pipeline development through minority investments in junior explorers rather than solely relying on internal exploration programs. By securing a 19.9% position in Relevant Gold, Kinross gains significant influence without triggering control person status or incurring full ownership responsibilities.

The transaction structure - specifically the undertaking not to exercise warrants beyond the 20% threshold without shareholder approval - indicates a methodical approach to investment that preserves optionality while maintaining significant influence over Relevant Gold's strategic direction.

Kinross appears to be implementing a "project incubator" strategy, where it can leverage its technical expertise and capital to guide Relevant Gold's exploration activities while maintaining the ability to increase ownership if promising results materialize. This approach optimizes capital efficiency by allowing Kinross to evaluate multiple opportunities simultaneously with financial exposure.

The carefully crafted ownership ceiling at 19.9% suggests Kinross wants significant influence in Relevant Gold's operations and potential priority access to promising discoveries, while maintaining the flexibility to either increase its position or divest depending on exploration outcomes - a prudent risk management approach in the inherently uncertain mineral exploration sector.

(All dollar amounts are expressed in Canadian dollars, unless otherwise noted.)

TORONTO, Feb. 28, 2025 (GLOBE NEWSWIRE) -- Kinross Gold Corporation (“Kinross” or the “Company”) (TSX: K, NYSE: KGC) announced today that it has entered into an agreement to acquire 15,410,000 common shares (the “Shares”) of Relevant Gold Corp. (“Relevant Gold”) in a non-brokered private placement at a price of $0.30 per Share for total consideration of $4,623,000. Accordingly, as of today, taking into account the Shares already held by Kinross, Kinross is the deemed beneficial owner of Shares representing approximately 19.9% of the issued and outstanding Shares of Relevant Gold and is therefore required by applicable Canadian securities laws to issue this press release and file a corresponding early warning report.

Prior to completion of the transaction, Kinross held 5,100,000 Shares, representing approximately 6.8% of the issued and outstanding Shares, and 2,550,000 Share purchase warrants of Relevant Gold (the “Warrants”), representing approximately 9.9% of the issued and outstanding Shares on a partially diluted basis assuming exercise of the Warrants. Following completion of the transaction, Kinross will own 20,510,000 Shares and 2,550,000 Warrants, representing approximately 19.9% of the issued and outstanding Shares on a non-diluted basis and approximately 21.8% of the issued and outstanding Shares on a partially diluted basis assuming exercise of the Warrants. Kinross has signed an undertaking not to exercise its Warrants if it would result in Kinross owning more than 20% of the issued and outstanding Shares until such time as Relevant Gold can obtain disinterested shareholder approval of the creation of a new control person.

Kinross agreed to acquire the Shares as part of a strategic investment in Relevant Gold. Kinross may or may not purchase or sell securities of Relevant Gold in the future on the open market or in private transactions, depending on market conditions and other factors. Kinross currently has no other plans or intentions that relate to its investment in Relevant Gold. Depending on market conditions, general economic and industry conditions, Relevant Gold’s business and financial condition and/or other relevant factors, Kinross may develop other plans or intentions in the future.

The transaction is subject to the satisfaction of certain customary conditions and is expected to close in March 2025.

A copy of the early warning report filed by Kinross in connection with the investment will be available on Relevant Gold’s SEDAR+ profile at www.sedarplus.com. Alternatively, you may contact Luke Crosby, Vice President, General Counsel and Corporate Secretary at 647-788-4478 to obtain a copy of the report. Kinross is organized under the laws of the Province of Ontario and its head office is located at 25 York Street, 17th Floor, Toronto, Ontario M5J 2V5. Relevant Gold’s head office is located at 3000 - 1055 Dunsmuir Street, Vancouver, British Columbia V7X 1K8.

About Kinross Gold Corporation

Kinross is a Canadian-based global senior gold mining company with operations and projects in the United States, Brazil, Mauritania, Chile and Canada. Our focus is on delivering value based on the core principles of responsible mining, operational excellence, disciplined growth, and balance sheet strength. Kinross maintains listings on the Toronto Stock Exchange (symbol:K) and the New York Stock Exchange (symbol:KGC).

Media Contact
Victoria Barrington
Senior Director, Corporate Communications
phone: 647-788-4153
victoria.barrington@kinross.com

Investor Relations Contact
David Shaver
Senior Vice-President, Investor Relations and Communications
phone: 416-365-2761
InvestorRelations@kinross.com

Cautionary statement on forward-looking information

All statements, other than statements of historical fact, contained in this news release constitute “forward-looking information” or “forward-looking statements” within the meaning of certain securities laws, including the provisions of the Securities Act (Ontario) and the provisions for “safe harbor” under the United States Private Securities Litigation Reform Act of 1995 and are based on expectations, estimates and projections as of the date of this news release. The words “may”, “will”, “plan” or variations of or similar such words and phrases or statements that certain actions, events or results may, could, should or will be achieved, received or taken, or will occur or result and similar such expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Kinross as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The estimates, models and assumptions of Kinross referenced, contained or incorporated by reference in this news release, which may prove to be incorrect, include, but are not limited to, statements regarding the subscription for Shares, including the expected closing date, and the ownership and future intentions regarding securities of Relevant Gold Corp. Forward-looking statements are necessarily based upon a number of assumptions that, while considered reasonable by Kinross as of the date of such statements, are inherently subject to significant uncertainties and contingencies. These uncertainties and contingencies can affect, and could cause, Kinross' actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Kinross. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

Kinross disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.

Source: Kinross Gold Corporation

FAQ

What is the value of Kinross Gold's (KGC) investment in Relevant Gold Corp?

Kinross is investing $4,623,000 to acquire 15,410,000 common shares at $0.30 per share.

How much ownership stake will KGC have in Relevant Gold after the transaction?

Kinross will own 19.9% of Relevant Gold's shares (non-diluted) and 21.8% on a partially diluted basis including warrants.

When is the Kinross Gold (KGC) investment in Relevant Gold expected to close?

The transaction is expected to close in March 2025, subject to customary conditions.

What restrictions are placed on KGC's warrant exercise in Relevant Gold?

Kinross cannot exercise warrants that would result in over 20% ownership without obtaining disinterested shareholder approval.