Red Back Mining
Encyclopedia
Red Back Mining Inc. is an unhedged
Vancouver based mineral resource company. Its focus is West Africa where it operates the Chirano Gold Project in Ghana
and the Tasiast Gold Mine in Mauritania
.
It has one division, Red Back Mining NL, based in Perth, Australia
.
Despite its size
(a market capitalization
of $
5.8 billion which is 3/4 as much as the 10th largest gold mining company in the world Largest gold companies
) its key mines have yet to reach full potential or critical mass and so based on revenue it is currently not considered a top industry player.
In May 2010, there was an announcement of a private placement
in which one of the world's largest gold mining companies Kinross Gold
will purchase 9.4 % of Red Back's outstanding shares. When the deal is completed Kinross will be the company's largest shareholder next to Fidelity Management which currently owns 6 %.
On August 2, 2010 an announcement was made by Kinross offering to merge Red Back into Kinross with Kinross paying $7.1 billion for all outstanding shares of Red Back. Current Red Back shareholders would own 37 percent of Kinross if the offer is accepted. The price offered was 15% above the current price of Red Back stock. According to Tye W. Burt, Kinross’s President, Red Back has reserves Kinross has the ability to develop.
On September 15, 2010 two thirds of Kinross Gold's shareholders voted in favour of the USD 7.2 billion deal to acquire Red Back Mining (99% of Red Back's shareholders approved the deal). Despite opposition from an advisor to Kinross's Investors (and others who estimate the company is overpaying for Red Back based on reserves estimates), KGC
plans to close the deal within days of the approval. The acquisition price voted on gives Red Back's shareholders 1.778 KGC commons shares.
Cash operating costs per ounce in 2009 rose to $391 compared to $325–$350 for the previous year.
Hedge (finance)
A hedge is an investment position intended to offset potential losses that may be incurred by a companion investment.A hedge can be constructed from many types of financial instruments, including stocks, exchange-traded funds, insurance, forward contracts, swaps, options, many types of...
Vancouver based mineral resource company. Its focus is West Africa where it operates the Chirano Gold Project in Ghana
Ghana
Ghana , officially the Republic of Ghana, is a country located in West Africa. It is bordered by Côte d'Ivoire to the west, Burkina Faso to the north, Togo to the east, and the Gulf of Guinea to the south...
and the Tasiast Gold Mine in Mauritania
Mauritania
Mauritania is a country in the Maghreb and West Africa. It is bordered by the Atlantic Ocean in the west, by Western Sahara in the north, by Algeria in the northeast, by Mali in the east and southeast, and by Senegal in the southwest...
.
It has one division, Red Back Mining NL, based in Perth, Australia
Perth, Western Australia
Perth is the capital and largest city of the Australian state of Western Australia and the fourth most populous city in Australia. The Perth metropolitan area has an estimated population of almost 1,700,000....
.
Despite its size
Largest gold companies
There are different methods by which gold mining companies are ranked. One is by their annual production. Another is by their cash cost per ounce...
(a market capitalization
Market capitalization
Market capitalization is a measurement of the value of the ownership interest that shareholders hold in a business enterprise. It is equal to the share price times the number of shares outstanding of a publicly traded company...
of $
Dollar
The dollar is the name of the official currency of many countries, including Australia, Belize, Canada, Ecuador, El Salvador, Hong Kong, New Zealand, Singapore, Taiwan, and the United States.-Etymology:...
5.8 billion which is 3/4 as much as the 10th largest gold mining company in the world Largest gold companies
Largest gold companies
There are different methods by which gold mining companies are ranked. One is by their annual production. Another is by their cash cost per ounce...
) its key mines have yet to reach full potential or critical mass and so based on revenue it is currently not considered a top industry player.
In May 2010, there was an announcement of a private placement
Private placement
Private placement is a funding round of securities which are sold without an initial public offering, usually to a small number of chosen private investors...
in which one of the world's largest gold mining companies Kinross Gold
Kinross Gold
Kinross Gold Corporation is a Canadian-based gold mining company with a gold production guidance of 4.5 to 4.9 million gold ounces by 2015. Kinross owns mines and projects in Canada, the United States, Brazil, Chile, Ecuador, Russia, Ghana and Mauritania, employing approximately 7,500 people...
will purchase 9.4 % of Red Back's outstanding shares. When the deal is completed Kinross will be the company's largest shareholder next to Fidelity Management which currently owns 6 %.
On August 2, 2010 an announcement was made by Kinross offering to merge Red Back into Kinross with Kinross paying $7.1 billion for all outstanding shares of Red Back. Current Red Back shareholders would own 37 percent of Kinross if the offer is accepted. The price offered was 15% above the current price of Red Back stock. According to Tye W. Burt, Kinross’s President, Red Back has reserves Kinross has the ability to develop.
On September 15, 2010 two thirds of Kinross Gold's shareholders voted in favour of the USD 7.2 billion deal to acquire Red Back Mining (99% of Red Back's shareholders approved the deal). Despite opposition from an advisor to Kinross's Investors (and others who estimate the company is overpaying for Red Back based on reserves estimates), KGC
Kinross Gold
Kinross Gold Corporation is a Canadian-based gold mining company with a gold production guidance of 4.5 to 4.9 million gold ounces by 2015. Kinross owns mines and projects in Canada, the United States, Brazil, Chile, Ecuador, Russia, Ghana and Mauritania, employing approximately 7,500 people...
plans to close the deal within days of the approval. The acquisition price voted on gives Red Back's shareholders 1.778 KGC commons shares.
History
- In 2003 it was formed after a merger between Red Back Mining NL of Australia and Champion Resources Inc of Canada.
- Its flagship mine, Chirano began producing gold in 4th quarter of 2005 through its subsidiary Chirano Gold Mines Limited (CGML).
- In August 2007 acquired the Tasiast gold mine from Lundin Mining Corporation for 225 million USD which opened on July 18, 2007.
- The Chirano mine produced 30,427 ounces of gold its first year and was scheduled to produce 123,000 ounces in each of the next 8.5 years.
- 2007 saw a 76% increase in gold production on a rising gold price; acquisitions; and higher probable reserve estimates for its key mines.
- In 2009 it failed in its attempt to acquire Moto Goldmines whose key asset was a 70% stake in one of Africa's largest undeveloped gold deposits.
Production in 2010 and 2009
The company produced 342,085 ounces in 2009, a 31 % increase over 2008 production, and has set a target of 800,000 oz for 2012. Red Back's 90% share of Chirano and 100% share of Tasiast produced 402,000 ounces of gold equivalent in 2010.- Tasiast Mine
- 158,660 oz in 2009, 185,000 in 2010 (2010 was previously forecast to be 245-265,000 ounces)
- Chirano Mine
- 185,425 oz in 2009, 240-260,000 oz projected for 2010.
- 4.4 million ounces of gold.
- 185,425 oz in 2009, 240-260,000 oz projected for 2010.
Cash operating costs per ounce in 2009 rose to $391 compared to $325–$350 for the previous year.
Main areas of exploration
- Mauritania - Tasiast
- Ghana - Chirano, Bolgatanga (in cooperation with Etruscan ResourcesEtruscan ResourcesEndeavour Mining Corporation is a mining company based in Nova Scotia, in Canada, that operates gold and diamond mines in Africa.Etruscan mines gold and diamonds in the West African countries of Burkina Faso, Cote d'Ivoire, Ghana, Mali and Niger...
Inc.), Ahafo North, Bibiani North, Akyem, Enchi, and Bole.