Canadian exploration company Kinross Gold has signed an agreement to acquire heap leach development project Chulbatkan from N-Mining for $283m.

The deal includes approximately $113m in cash and nearly $170 million in Kinross shares.

N-Mining will also have the right to economic participation equivalent to a 1.5% net smelter return payment and contingent consideration linked to future additions in a production capacity.

Kinross Gold president and CEO Paul Rollinson said: “Chulbatkan is an exciting high-quality development project with significant upside potential and low relative execution risk located in a country where we have had extensive experience and success, and maintain a strategic and competitive operating advantage.

“This acquisition is an excellent fit for Kinross as it enables us to leverage our expertise as a world-class cold climate heap leach operator. With a large estimated mineral resource, Chulbatkan has the potential to be a significant low-cost, low-strip, high-return operation that will strengthen our longer-term production and cash-flow profile.”

The transaction highlights the acquisition of the development project which has the potential to support a low-cost, low-strip, high-return, open-pit, heap leach operation.

It is expected to strengthen the Russian region’s long-term production and cash flow.

Kinross operates four mines, including developing mines Kupol and Dvoinoye, and two low-cost mines, which are on budget and on schedule.

Exploration and mining licenses of the project are in place until 2037.

Last June, Kinross announced plans to go ahead with the initial Gilmore expansion project at its Fort Knox mine, located in Alaska, US.