VANCOUVER, BRITISH COLUMBIA, May 4, 2010 (Marketwire) -- Red Back Mining Inc. (the "Company" or "Red Back") (TSX:RBI) is pleased to advise that it has agreed to a private placement financing with Kinross Gold Corporation ("Kinross").
Kinross will subscribe for 24 million common shares of Red Back representing approximately 9.4% of Red Back's issued and outstanding common shares after giving effect to the private placement. The subscription price is C$25.00 for total proceeds of $600 million. The private placement is subject to certain conditions, including approval by the TSX, and is expected to close in May. The shares are subject to a four month hold period. Kinross has the right to appoint one director to the Board of Directors of Red Back.
The proceeds of the placement will be used for general working capital purposes, including any anticipated processing and mining expansion at the Tasiast Gold Mine in Mauritania. The Company has already commenced studies towards this end, based on the rapidly growing resource/reserve base at Tasiast.
The private placement with Kinross ensures a financial base for the future Tasiast expansion and introduces another major North American gold producer to the exciting opportunities in West Africa, particularly in Mauritania.
Commenting, Rick Clark, President and CEO said: "We are delighted to welcome Kinross as a shareholder of Red Back. They have shown great confidence in both countries in which we operate, Ghana and Mauritania, and have recognized the significant growth potential at both Chirano and Tasiast. We appreciate their confidence and look forward to continuing Red Back's evolution. We are now financially secure for future development plans and can focus on increasing reserves and production going forward."
About Red Back
Red Back is an unhedged African focused gold producer. It owns and operates the Chirano Gold Mine in Ghana and the Tasiast Gold Mine in Mauritania and continues to expand the potential of those operations. In addition to its two mines, the Company holds an extensive exploration portfolio in West Africa.
This press release contains "forward-looking information" that is based on Red Back's current expectations, estimates, forecasts and projections. This forward-looking information includes, among other things, statements with respect to Red Back's plans, outlook and business strategy. The words "may", "would", "could", "should", "will", "likely", "expect", "anticipate", "intend", "estimate", "plan", "forecast", "project", and "believe" or other similar words and phrases are intended to identify forward-looking information.
Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause Red Back's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Such factors include, but are not limited to: uncertainties related to drilling results; further processing and mining expansion at Tasiast; the ability to raise sufficient capital to fund exploration and development; changes in economic conditions or financial markets; changes in prices for Red Back's mineral products or increases in input costs; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological or operational difficulties or inability to obtain permits encountered in connection with exploration and development activities; and labour relations matters.
This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. Red Back disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.
On behalf of the Board of Directors:
Richard P. Clark, President