Kinross Gold Corp.
(KGC) recently said that it has subscribed 2 million units of BCGold Corp. in a private placement. Each unit consists of one-and-a-half of one common share purchase warrant. Each warrant allows the holder to buy one common share at an exercise price of CAD $0.12 (11 cents) for a period of 12 months following the closing of the private placement.

After the private placement, Canada-based Kinross will hold a 16% stake, or about 6 million shares and 1.5 million share purchase warrants, in BCGold. The subscription price for the units is CAD $0.06 (5 cents) each for an aggregate purchase price of CAD $120,000 (US $110,724). Kinross already owned 12.8% of BCGold. BCGold is a Vancouver-based junior resource company focused on copper and gold exploration in British Columbia and the Yukon.

Kinross had recently subscribed 12.5 million units of Canada-based Victoria Gold Corp. Each unit consisted of one-and-a-half of one share purchase warrant. After giving effect to the private placement and the exercise of the warrants, Kinross will hold 18.75 million common shares that, together with the 24.7 million common shares and warrants exercisable into 2.5 common shares held by its wholly owned subsidiary EastWest Gold Corp., constitute 34.4% of Victoria’s outstanding common shares.

Raising its stake in BCGold is a part of Kinross’ strategy to maximize exposure to new exploration prospects with a relatively small capital investment by collaborating with junior companies. Kinross plans to raise capital through a public offering of 20.9 million shares at a price of $17.25 per common share.

The gross proceeds of the offering will be approximately $360.5 million ($414.6 million if the over-allotment option is exercised in full). Kinross plans to use the net proceeds for enhancing its capital position following the funding of recent acquisitions and for general corporate purposes.

Read the full analyst report on “KGC”
Zacks Investment Research