Kinross Gold (TSX:G; NYSE:KGC) is selling its Russian assets to Highland Gold Mining for a total of US$680 million in cash, the Canadian miner said on Tuesday, a month after suspending its operations in the country.
Along with needing to comply with Western sanctions against Moscow over its invasion of Ukraine, several companies with exposure to Russia have taken steps to avoid reputational damage by staying in the country. Some of them have cited their own corporate responsibility standards for pulling back.
Kinross, which has been operating in Russia for about 25 years, will receive a total of US$400 million for its Kupol underground mine and the surrounding exploration licences in the country's Far Eastern region of Chukotka, about 7,000 km from Ukraine.
The gold miner will also obtain a total of US$280 million in cash for Udinsk, the first project it expected to develop on the the Chulbatkan licence, acquired in 2020. Kinross had envisioned to begin production at the pit in 2025.
Before the invasion of Ukraine, Kinross had forecast that about 13% of its global production would come from Russia.
Highland Gold is one of the largest gold producers in Russia, with a portfolio of assets located in four mining regions - Chita, Kamchatka, Chukotka and Khabarovsk. The company is also commissioning the Ozernoe mine in Buryatia.
The company's chief executive Vladislav Sviblov said in a separate statement that since the Kupol mine and Udinsk project were located close to its existing operations, Highland Gold expected operational, logistical and management synergies.
The transaction is subject to the approval of the Russian government and the finalization of certain ancillary agreements.