Kinross to buy Underworld

Friday March 12, 2010

By John Thompson

Canadian mining giant Kinross Mining Corporation is buying out Underworld Resources, owners of the White Gold property near Dawson City.

Kinross is one of Canada’s biggest gold producers. It owns eight operating mines in the United States, Chile, Brazil and Russia.

The proposed takeover is just the latest sign that something is up in the White Gold district, which has become the site of the biggest staking rush the territory has seen in a decade.

In January, Underworld turned heads at Vancouver’s Mineral Exploration Roundup when president Adrian Fleming announced the company believes it is sitting on more than a million ounces of gold.

It appears Kinross was listening. The company, which already holds 8.5 per cent of Underworld’s stock, announced yesterday its plans to buy-out Underworld’s remaining shareholders in a deal that would offer, through a mixture of Kinross stock and cash, a premium of 36 per cent.

The deal has the blessing of Underworld’s board of directors, who are recommending that shareholders accept the offer.

The final agreement is expect to be approved by March 15.