Canadian-based mining company Kinross Gold Corp. (NYSE:KGC) announced plans to acquire Great Bear Resources Ltd. for an upfront payment of $1.8 billion, a huge acquisition in the Red Lake Mining District in Ontario, Canada.
Kinross’s main focus in acquiring Great Bear is their Dixie project located in Red Lake. The project is said to have shown exciting recent gold discoveries and characteristics of a top-tier deposit.
Paul Rollinson, Kinross’ President, and CEO, said in a press release regarding the acquisition: “The Dixie project represents an exciting opportunity to develop a potentially top-tier deposit into a large, long-life mine complex. In addition to the prospect of developing a quality, high-grade open pit mine, we also believe that a significant portion of the asset’s value is its longer-term potential, which includes the view of a sizable underground operation.”
Great Bear is a junior gold mining company, and purchased the Red lake property from Newmont Mining back in 2017. Within the four years of owning the Dixie project, the Vancouver-based company has made outstanding discoveries. To date, Great Bear has completed more than 340,000 metres of drilling in 794 drill holes and has identified five high-grade gold discoveries.
Chris Taylor, Great Bear’s president and CEO said: “Kinross first set foot on the Dixie property three years ago, and has closely monitored the discovery and growth of each successive gold discovery Great Bear has made. With extensive drilling now completed at Dixie, both companies have a shared vision of the clear potential for a multi-deposit mine complex consisting of a potential high-grade open-pit mine and a long-life underground mine. As Great Bear’s track record of continuous discovery shows, the Dixie project hosts a prolific gold system that remains completely unconstrained and open to extension. In the near-term, with over 80% of the property unexplored, our shareholders will continue to have exposure to ongoing advanced project development and extensive exploration upside in the lead-up to planned production.”
The Dixie project is 91 square kilometres of contiguous claims and 25 kms southeast of the town of Red Lake. Only 20% of the property has actually been explored, which leaves high potential for many more high-grade discoveries. Some analysts speculate that the property could contain up to 20 million ounces of gold, which would raise its status to one of the largest gold mines in Canada.
Kinross President J. Paul Rollinson commented, “the Dixie project has multiple high-potential mineralized zones which remain open along strike and at depth, and we are confident that the asset has strong untapped upside with numerous avenues for growth.”
The most well-known and significant discovery at Dixie is known as the “LP Fault” zone. This area has continuous wide, moderate grade mineralization along with subparallel high-grade gold lenses which forms a 200 to 400 metre wide envelope of stacked zones. Drilling in the LP Fault zone concluded there is gold mineralization down to a depth of 786 metres along 10.8 kilometres of strike. The LP Fault zone also is said to have similar geological features to the Hemlo deposit, which has been a successful operation for more than 30 years.
200,000 metres of drilling is planned for 2022 for the LP Fault zone, with expected long-term potential and value.
Red Lake is also home to multiple Indigenous communities, the Wabauskang and Lac Seul First Nations, in which Great Bear and Kinross recognize the important territorial claims they have within the area.
The company has already had a meeting with the chiefs of both First Nations and looks forward to maintaining and growing their relationships with both Indigenous communities. The company is committed to ensuring its operations leave a positive and lasting legacy, and that they develop the area in a way that honours Indigenous rights and brings long-term socio-economic benefits to the region.
Not only is Kinross dedicated to respecting the importance of the Indigenous community, they also have a goal of being a net-zero greenhouse gases emissions company by 2050. Dixie is located in a low carbon energy grid which supports this goal. Kinross is planning to incorporate energy-efficient initiatives as it develops the Dixie project, including evaluating electric and hydrogen fuel fleets.
The project is also located in an established mining camp, making skilled labour and infrastructure easily accessible resources. Dixie also offers the potential for long-term tax benefits.
“We are pleased to achieve our goal of adding a high-quality asset in our home jurisdiction that further bolsters our global portfolio and can potentially provide long-term tax benefits,” said Kinross’ Rollinson. The deal is likely to close in the first quarter of 2022.