Kinross Gold subsidiary Chikotka Mining and Geographical Company (CMGC) will repurchase 2.2 million shares, currently held by Chikotka Autonomous Okrug (Cue), for $350m, under a share purchase agreement.

On completion of the transaction, Kinross will own 100% of CMGC, which holds both the Kupol mine and the Kupol East-West exploration licences in the Chukotka region of the Russian Federation.

Based on its current 75% stake in Chukotka Mining, the Kupol mine is expected to account for about 17% of Kinross gold equivalent production in 2011.

Canadian-based Kinross plans to fund the transaction from the proceeds raised from the sale of shares in Harry Winston Diamond along with the $200m credit facility.

Export Development Canada and a few other banks are expected to provide funds for the purchase.

The transaction is expected to close in the third quarter of this year and is subject to certain conditions, including other governmental approvals in Russia.