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 Notes or any
Kinross common shares issuable upon any conversion of the
Convertible Notes will be offered or sold in the United States
absent registration under the Act or the availability of an
applicable exemption from registration requirements. Offers and
sales in Canada are being made only pursuant to exemptions from the
prospectus requirements of applicable Canadian provincial or
territorial securities laws. This press release does not constitute
an offer to sell or the solicitation of an offer to buy any
security.
Cautionary Statement on Forward-Looking Information
This press release contains forward-looking statements regarding Kinross and its financing arrangements, including its expectations that the offering will be successfully completed consistent with the terms outlined above. Actual results and developments may differ materially from those contemplated by these statements depending on, among others, such key factors as market conditions, global political uncertainties, investor demand and the timing and final terms of such financing arrangements. Kinross disclaims any intention or obligation to update any forward-looking statement even if new information becomes available as a result of future events or for any other reason.