Replies to post #140051 on Zeev's Turnips Patch-No Politics (ZEEV)

[Benj]

mlsoft--- When I look at all the evidence I find myself in your camp. I see selected, unsustainable pockets of recovery. But I have been totally wrong about many things the past couple of years, especially realestate.
The Undertaker saw to that. I'm just trying to look at things with a ballanced perspective and make sure that I am not limiting myself to ideas that I just happen to agree with. Thanks for your perspective.

Now I fear I must again go out and try to catch the rat, literally, that is terrorizing our autos. A formidable opponent.

Benj

[basserdan]

*** Gold related post (KGC) ***

G'morning ml,
fyi......

Kinross share sale frees firm from long-term debt

'The timing was right and impact on profits is positive,' president says

By ALLAN ROBINSON
INVESTMENT REPORTER
Tuesday, August 12, 2003 -

Kinross Gold Corp. added to the recent wave of financings in the gold sector, agreeing yesterday to sell 20 million common shares to a syndicate of underwriters at $9.26 a share, raising $185.2-million in cash.

Depending on demand for the Kinross shares, lead underwriters CIBC World Markets Inc. and Scotia Capital Inc. also have an option to acquire an additional three million shares at the same price per share.

"The timing was right and impact on profits is positive," Robert Buchan, the president of Kinross, said on yesterday's share sale.

Kinross said the cash will be used to redeem about $195.6-million of the 5.5-per-cent convertible debentures outstanding. Although the debentures are not scheduled for repayment until late 2006, the money was available now, Mr. Buchan said. The financing will leave Kinross almost free of long-term debt, he said.

Kinross's stock fell 26 cents, or 2.7 per cent, to $9.26 on the Toronto Stock Exchange yesterday, dropping to match the issue price. Trading volume was 7.4 million shares, or more than triple its average daily volume.

The Kinross deal is the latest in a series of recent financings in the precious metals sector; mid-sized companies have been especially hot.

"The smaller companies are where the growth is," said John Ing, president of Maison Placements Canada Inc. "The investors are going to where the growth is and that's why they are playing these [smaller] situations."

There is a strong demand in the financial community for precious metal mining companies, and that demand isn't just coming from the specialist gold funds, said Eugene McBurney, chairman of Griffiths McBurney & Partners.

Among the bigger financings in the sector in the past six weeks was a $100-million sale of common shares and warrants by Longueuil, Que.-based Cambior Inc., as well as a $105.3-million equity issue from Northern Orion Resources Inc. of Vancouver.

Northern Orion used the proceeds from its offering to pay for the acquisition of a 12.5-per-cent stake in the Bajo de la Alumbrera gold and copper mine in Argentina.

Other recent financings by precious metal companies included $30-million by Miramar Mining Corp.; $34-million by Cumberland Resources Ltd.; $62-million by Eldorado Gold Corp.; and $10.2-million by Southwestern Resources Corp. FNX Mining Co. Inc., a mineral exploration company, raised $40-million. Pan American Silver Corp. raised $86.2-million through the sale of 5.25 per cent convertible debentures.

Kinross, the seventh-largest gold producer in the world, expects to produce 1.8 million ounces of gold in 2003 at an average cash production cost of $210 (U.S.) an ounce. Production in 2004 is estimated at two million ounces at a cash cost of $200 an ounce.

If underwriters exercise their so-called "greenshoe option," Kinross will not have to use any of its $125-million cash on hand to help redeem the debentures, Mr. Buchan said. The cash cost of debentures was about $11-million a year, but the accounting treatment for the convertible debentures resulted in additional costs being reported of almost $7-million a year. So, paying off the debentures will save the company $18-million annually in reported costs, Mr. Buchan said.

During the six months ended June 30, Kinross had a loss of $16.4-million, or 7 cents a share, on revenue of $274.8-million. Its loss in the second quarter was $5.2-million, or 2 cents a share, on revenue of $157.8-million.

The company's shares traded at a 52-week high of $12.33 on Jan. 6, 2003, and a 52-week low of $7.23 on Oct. 24, 2002.

Kinross expects the financing to close on Aug. 28 and to begin the redemption of the convertible debentures on Sept. 29.

The price of gold rose $5.40 (U.S.) an ounce yesterday to $361.70. Mr. Ing said the prices of gold mining stocks have been moving up ahead of an anticipated rise in bullion prices.

"In this go around, the stocks are leading bullion, whereas in the last go around bullion led stocks," Mr. Ing said.





http://www.globeandmail.com/servlet/ArticleNews/TPStory/LAC/20030812/RKINR/TPBusiness/MoneyMarkets