Red Back Mining Inc. is an unhedged Vancouver based mineral resource company. Its focus is West Africa where it operates the Chirano Gold Project in Ghana and the Tasiast Gold Mine in Mauritania. It has one division, Red Back Mining NL, based in Perth, Australia. While independent it was considered one of Canada's Largest gold companies with a market capitalization of $ 5.8 billion or 3/4 as much as the 10th largest gold mining company in the world however at the time its key mines hadn't yet reached full potential or critical mass. In May 2010, there was an announcement of a private placement in which one of the world's largest gold mining companiesKinross Gold will purchase 9.4% of Red Back's outstanding shares. When the deal is completed Kinross will be the company's largest shareholder next to Fidelity Management which currently owns 6%. On August 3, 2010 an announcement was made by Kinross offering to merge Red Back into Kinross with Kinross paying $7.1 billion for all outstanding shares of Red Back. Current Red Back shareholders would own 37 percent of Kinross if the offer is accepted. The price offered was 15% above the current price of Red Back stock. According to Tye W. Burt, Kinross’s President, Red Back has reserves Kinross has the ability to develop. On September 15, 2010 two thirds of Kinross Gold's shareholders voted in favour of the USD 7.2 billion deal to acquire Red Back Mining. Despite opposition from an advisor to Kinross's Investors, KGC plans to close the deal within days of the approval. The acquisition price voted on gives Red Back's shareholders 1.778 KGC commons shares.
History
In 2003 it was formed after a merger between Red Back Mining NL of Australia and Champion Resources Inc of Canada.
Its flagship mine, Chirano began producing gold in 4th quarter of 2005 through its subsidiary Chirano Gold Mines Limited.
The Chirano mine produced 30,427 ounces of gold its first year and was scheduled to produce 123,000 ounces in each of the next 8.5 years.
2007 saw a 76% increase in gold production on a rising gold price; acquisitions; and higher probable reserve estimates for its key mines.
In 2009 it failed in its attempt to acquire Moto Goldmines whose key asset was a 70% stake in one of Africa's largest undeveloped gold deposits.
Production in 2010 and 2009
The company produced 342,085 ounces in 2009, a 31% increase over 2008 production, and has set a target of 800,000 oz for 2012. Red Back's 90% share of Chirano and 100% share of Tasiast produced 402,000 ounces of gold equivalent in 2010.
Tasiast Mine
*158,660 oz in 2009, 185,000 in 2010
Chirano Mine
*185,425 oz in 2009, 240-260,000 oz projected for 2010.
**4.4 million ounces of gold.
Cash operating costs per ounce in 2009 rose to $391 compared to $325–$350 for the previous year.
