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Kinross Enters into Agreements to Sell Privately
US$420 Million of Convertible Notes
Toronto, Ontario, January 23, 2008
– Kinross Gold Corporation (TSX: K; NYSE: KGC)
(“Kinross”) announced today that it has entered into agreements with a group of initial
purchasers to issue and sell US$420 million (US$460 million if the overallotment option
granted to the initial purchasers is exercised in full) aggregate principal amount of its senior
unsecured convertible notes due March 15, 2028 (the “Convertible Notes”). The Convertible
Notes are being offered and sold at a price of 100% of their face value and will bear interest
at a rate of approximately 1.75% per year. Kinross expects to receive net proceeds of
approximately US$410 million from the offering of Convertible Notes, after payment of the
commissions of the initial purchasers and expenses of the offering. Kinross expects to use a
portion of the net proceeds to repay outstanding indebtedness under its term loan facility,
with the balance of the net proceeds to be used to fund capital expenditures and for general
corporate purposes.
The Convertible Notes will be convertible into Kinross common shares at a fixed conversion
rate, subject to certain anti-dilution adjustments, only in the event that (i) the market price
of Kinross common shares exceeds 130% of the effective conversion price of the
Convertible Notes, (ii) the trading price of the Convertible Notes falls below 98% of the
amount equal to Kinross’s then prevailing common share price, times the applicable
conversion rate, (iii) the Convertible Notes are called for redemption; (iv) upon the
occurrence of specified corporate transactions; or (v) if Kinross common shares cease to be
listed on a specified stock exchange or eligible for trading on an over-the-counter market.
The Convertible Notes will also be convertible on and after December 15, 2027. Kinross
may elect, in lieu of delivering Kinross common shares, to settle any conversion obligation
in cash or in a combination of cash and Kinross common shares, based upon the volume-
weighted average price of Kinross common shares on the New York Stock Exchange during
a prescribed measurement period following conversion. The Convertible Notes will be
convertible into Kinross common shares at a initial conversion rate of 35.1173 common
shares per $1000 principal amount of Convertible Notes converted, representing an initial
conversion price of approximately US$28.48 per common share, which is approximately
140.0% of the closing price of Kinross common shares on the New York Stock Exchange on
January 23, 2008. The offering of Convertible Notes is expected to close on January 29,
2008, subject to the satisfaction of customary closing conditions.
Holders of the Convertible Notes will have the right to require Kinross to repurchase the
Convertible Notes on March 15, 2013, 2018 and 2023, and, on or prior to March 20, 2013,
upon certain fundamental corporate changes. The repurchase price will be equal to 100%
of the principal amount of the Convertible Notes being converted, plus accrued and unpaid
interest to the repurchase date. Subject to specified conditions, Kinross may, at its option,
pay the purchase price in common shares or a combination of cash and common shares.
On and after March 20, 2013, Kinross may redeem the Convertible Notes for cash at a
redemption price equal to 100% of the principal amount of the Convertible Notes being
redeemed, plus accrued and unpaid interest to the redemption rate.
The offering is being made pursuant to Rule 144A under the Securities Act of 1933 (the
“Act”). The offering has not been registered under the Act and none of the Convertible
KINROSS GOLD CORPORATION