TSX Commentary

Kinross Gold Corp. (K) – $19.40 CAD – Expanding Operations in Russian Far East
Outperform, Above Average Risk
Kinross plans to acquire the Dvoinoye deposit and Vodorazdelnaya property in Far East Russia for $165MM in cash and issuance of 10.56MM common shares; the transaction is vauled at $368MM. Assuming a 2.0MMoz recoverable gold reserve, Kinross’ purchase price of $186/oz is roughly in line with the $182/oz average for similar property transactions over the past 3 years. RBC CM believes a purchase price approaching the average is warranted for the offset of high grades with higher political risk. With the potential synergy created by the utilization of the existing Kupol mill, development costs for the project can
be kept down, and perhaps improve mill utilization rates. Dvoinoye will provide a source of higher grade ore that can be blended at the existing Kupol mill, a welcome option considering the declining grades at Kupol and increasing production costs. RBC CM is neutral on this acquisition however, given the increase in Russian exposure. The transaction is still subject to several conditions, most importantly, the approval from the Russian Government for foreign ownership of Dvoinoye as a strategic
deposit as required by Russian Federation Law. Pending all conditions being met, the transaction is expected to close by Q3/10.