FILED BY KINROSS GOLD CORPORATION
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933
AND DEEMED FILED PURSUANT TO RULE 14D-2
OF THE SECURITIES EXCHANGE ACT OF 1934
SUBJECT COMPANY: CROWN RESOURCES CORPORATION
COMMISSION REGISTRATION NO. 333-11516
40 King Street West, 52nd Floor
Toronto, ON M5H 3Y2
www.kinross.com
Tel: 416 365 5123
Fax: 416 363 6622
[LOGO] Kinross Toll Free: 866-561-3636
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PRESS RELEASE
FEBRUARY 27, 2006
KINROSS RENEWS ACQUISITION AGREEMENT WITH CROWN RESOURCES
BUCKHORN WILL CONTRIBUTE TO PRODUCTION INCREASES
ALL DOLLAR AMOUNTS ARE EXPRESSED IN U.S. DOLLARS, UNLESS OTHERWISE STATED
TORONTO - KINROSS GOLD CORPORATION (TSX-K; NYSE-KGC) ("Kinross") has agreed to
extend the termination date to acquire Crown Resources Corporation (OTCBB-CRCE)
("Crown") to December 31, 2006. When completed, this acquisition will allow
Kinross to restart its Kettle River facilities which, along with the development
of Crown's Buckhorn Mountain project will contribute to Kinross' growing
production profile.
Kinross has signed an amendment (the "Amendment") with Crown to extend the
termination date of the definitive acquisition agreement (the "Agreement") to
December 31, 2006 and adjust the price that Kinross will pay to acquire Crown
and its 100 per cent-owned Buckhorn Mountain gold deposit located in north
central Washington State, USA, just 67 kilometres from the Company's Kettle
River mine.
Under the terms of the Amendment, shareholders of Crown will receive 0.32 shares
of Kinross for each share of Crown, a decrease of 0.02 over the previous
exchange ratio of 0.34, although the valuation collar has been removed. Assuming
all of the outstanding Crown warrants and options are converted, a total of
approximately 14.7 million common shares of Kinross will be issued upon the
completion of the transaction.
"The acquisition of Crown and its Buckhorn Mountain deposit is an excellent fit
with our growth plan," said Tye Burt, President and Chief Executive Officer of
Kinross Gold Corporation. "Buckhorn's reserves will represent an important
addition to our portfolio. Our existing Kettle River facilities and experience
in the region will allow us to move forward as an important contributor in the
area."
Kinross has also agreed to loan Crown $2 million if the transaction is not
closed by July 1, 2006. The $2 million would be used to buy out the only
existing net smelter return royalty from a third party covering the ore body at
the Buckhorn Mountain property. The loan will have a three-year term and bear
interest at the published (Wall Street Journal) prime rate at the time of
borrowing, plus 3 per cent.
PRODUCTION GROWTH OUTLOOK
Assuming the completion of this transaction, Kinross has also released forecast
production numbers for the years 2006 - 2009(1) as follows:
|X| As previously disclosed in the 2005 third quarter results, in
2006, Kinross expects to produce approximately 1.44 million gold
equivalent ounces
|X| In 2007, Kinross expects to produce between 1.5 million and 1.6
million gold equivalent ounces.
|X| In 2008, total production is expected to grow to between 1.6
million and 1.7 million gold equivalent ounces.
|X| In 2009, total production is expected to grow to between 1.65
million and 1.75 million gold equivalent ounces.
"Kinross' exciting growth profile is evidence of our strategic objective of
increasing cash flow and net asset value for shareholders," said Burt. "Kinross
is driving forward with growth through the expansion of existing facilities. We
will then use strategic acquisitions to upgrade our portfolio of mines."
BACKGROUND TO THE CROWN TRANSACTION
The agreement to acquire Crown was originally announced in November 2003. Now
that Kinross is up-to-date in its financial filings, it has renewed the
agreement on a new timetable. The transaction is subject to regulatory
approvals, a minimum two-thirds approval at a special meeting of Crown
shareholders and other customary closing conditions. Both parties are working to
close the transaction as rapidly as possible.
As at December 31, 2003, Crown had reported total proven and probable reserves
at Buckhorn of approximately 2.8 million tonnes grading 11.1 grams per tonne
gold and inferred mineral resources of approximately 0.3 million tonnes grading
15.0 grams per tonne gold as reported in the technical report prepared by SRK
Consulting dated December 2003. The technical report containing information
about reserves and resources is compliant with Canadian National Instrument
43-101, was filed on SEDAR on December 5, 2003 and can be found under Kinross'
profile at www.sedar.com. Please refer to the technical report for details of
the assumptions and qualifications relating to the above mineral reserve and
resource estimates. With the assistance of an independent consulting engineering
firm, Kinross is currently updating the Buckhorn Mountain reserve and
mineralized material estimates.
ABOUT KINROSS GOLD CORPORATION
Kinross, a world-class gold company based in Canada, has since 1993 become the
third largest primary gold producer in North America and the seventh largest in
the world. With nine mines in stable countries including Canada, the United
States, Brazil and Chile, Kinross employs more than 4,000 people worldwide.
Kinross' strong balance sheet and no-gold hedging policy allow us to take full
advantage of increasing cash flow, revenues and profit margins per ounce of
gold. Kinross is focused on a strategic objective to maximize net asset value
and cash flow per share through a four-point plan built on growth from core
operations; expanding capacity for the future; attracting and
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(1) Forecast production is based on the following gold prices assumptions:
2007 - $475; 2008 - $475; 2009 - $425.
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Kinross renews acquisition agreement with Crown
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retaining the best people in the industry; and driving new opportunities through
exploration and acquisition.
Kinross maintains listings on the New York Stock Exchange (symbol:KGC) and on
the Toronto Stock Exchange (symbol:K).
For additional information, e-mail INFO@KINROSS.COM or contact:
TRACEY M. THOM
DIRECTOR, INVESTOR RELATIONS
& CORPORATE COMMUNICATIONS
Tel. (416) 365-1362
Cell (416) 301-9022
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THIS PRESS RELEASE INCLUDES CERTAIN "FORWARD-LOOKING STATEMENTS" WITHIN THE
MEANING OF SECTION 21E OF THE UNITED STATES SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. ALL STATEMENTS, OTHER THAN STATEMENTS OF HISTORICAL FACT, INCLUDED
HEREIN, INCLUDING WITHOUT LIMITATION, PRODUCTION FORECASTS, STATEMENTS REGARDING
POTENTIAL MINERALIZATION AND RESERVES, EXPLORATION RESULTS AND FUTURE PLANS AND
OBJECTIVES OF KINROSS AND CROWN, ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE
VARIOUS RISKS AND UNCERTAINTIES. FORWARD LOOKING STATEMENTS ARE BASED ON THE
OPINIONS AND ESTIMATES OF MANAGEMENT AS OF THE DAY THEY ARE MADE. THERE CAN BE
NO ASSURANCE THAT SUCH STATEMENTS WILL PROVE TO BE ACCURATE AND ACTUAL RESULTS
AND FUTURE EVENTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN SUCH
STATEMENTS. DEVELOPMENT OF BUCKHORN MOUNTAIN IS SUBJECT TO THE SUCCESSFUL
COMPLETION OF THE ACQUISITION OF CROWN BY KINROSS, THE COMPLETION AND
IMPLEMENTATION OF AN ECONOMICALLY VIABLE MINING PLAN, OBTAINING THE NECESSARY
PERMITS AND APPROVALS FROM VARIOUS REGULATORY AUTHORITIES, AND COMPLIANCE WITH
OPERATING PARAMETERS ESTABLISHED BY SUCH AUTHORITIES. THERE ARE IMPORTANT
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM KINROSS' AND
CROWN'S EXPECTATIONS, SUCH AS: UNCERTAINTIES RELATED TO EXPECTED PRODUCTION
RATES, TIMING OF PRODUCTION AND COSTS OF PRODUCTION AND MILLING; UNCERTAINTIES
RELATING TO MINERAL RESERVE ESTIMATES, UNCERTAINTIES RELATED TO UNEXPECTED
JUDICIAL OR REGULATORY PROCEEDINGS, CHANGES IN LAWS AND REGULATIONS RELATING TO
MINING, ENVIRONMENTAL PROTECTION AND HEALTH AND SAFETY OF MINE WORKERS; CHANGES
IN THE PRICE OF GOLD AND SUPPLIES SUCH AS FUEL, DIESEL, TIRES, ENERGY, MINING
EQUIPMENT AND SPARE PARTS; FLUCTUATION IN EXCHANGE RATES IN THE CANADIAN
DOLLARS, CHILEAN PESO, BRAZILIAN REAL VERSUS THE US DOLLAR; UNEXPECTED
ENVIRONMENTAL ISSUES; GEOPOLITICAL UNCERTAINTIES AND LABOUR STRIKES, WORK
STOPPAGES OR OTHER EMPLOYMENT RELATED ISSUES. ADDITIONAL FACTORS ARE DISCLOSED
UNDER THE HEADING "RISK FACTORS" IN ITS ANNUAL INFORMATION FORM AND ELSEWHERE IN
KINROSS' AND CROWN'S DOCUMENTS FILED FROM TIME TO TIME WITH THE ONTARIO
SECURITIES COMMISSION, THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION AND
OTHER REGULATORY AUTHORITIES.
WHERE TO FIND ADDITIONAL INFORMATION ABOUT THE ACQUISITION:
This press release is not, and is not intended to be, a solicitation of proxies
or an offer of securities. Kinross has filed a registration statement on Form
F-4 with the Securities and Exchange Commission ("SEC") in connection with the
proposed acquisition. Investors and security holders of Kinross and Crown are
urged to read the proxy statement/prospectus and other relevant materials
included in the registration statement, as well as subsequent amendments to the
registration statement when they become available, as they contain important
information about Kinross, Crown and the proposed acquisition. The registration
statement, including the proxy statement/prospectus and other relevant
materials, and any other documents filed by Kinross or Crown with the SEC, may
be obtained free of charge at the SEC's website at WWW.SEC.GOV. A free copy of
the joint proxy statement/prospectus and other relevant materials may also be
obtained from Kinross, when finalized and available.
Crown and its officers and directors may be deemed to be participants in the
solicitation of proxies from its stockholders with respect to the transactions
contemplated by the proposed acquisition. A description of the interests of the
directors and executive officers of Crown will be contained in the definitive
proxy statement/ prospectus and the other relevant documents filed with the SEC.
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Kinross renews acquisition agreement with Crown
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