Fort Knox owner adds anti-takeover measure

Posted: Wednesday, November 08, 2000

FAIRBANKS (AP) -- Kinross Gold Corp.'s board has adopted a plan to protect shareholders in the event of a takeover or other changes in control of the Canadian company that owns the Fort Knox Mine.

Kinross stock has dropped from more than $2 a share at the beginning of the year to just under 47 cents a share this week. Kinross owns Fairbanks Gold Mining Inc., which operates the Fort Knox Mine north of Fairbanks.

The low stock prices reflect low gold prices and make the company vulnerable to a takeover, said Kinross President and CEO Robert Buchan.

''We're a relatively high-cost producer,'' Buchan said. ''The market is quite brutal.''

Kinross' plan -- a poison pill -- would give the Vancouver, Canada-based company 60 days instead of 21 days to look for other buyers should a takeover bid be announced. The board approved the plan last week.

The idea is to find the best deal for the shareholders, Buchan said. He said he resisted the idea because he thought sound management was the key to share protection.

''At these prices, that no longer becomes a relative issue,'' Buchan said. ''We've been badly hit in relativity to our sector.''

Kinross' plan would be triggered by an acquisition of 20 percent or more of outstanding common shares or commencement of a hostile takeover bid.

Kinross isn't facing any imminent takeover threat, Buchan said. And the plan will not prevent a takeover bid, he said.

The plan is similar to those adopted by other Canadian companies, according to Kinross.

The company's recent third-quarter report shows Fort Knox is the company's biggest gold producer, expected to mine 350,000 ounces by the end of the year. The company's Kubaka mine in the Russian Far East and Hoyle Pond in Ontario are the company's next highest producers.

Larger gold companies have been acquiring mid-size companies such as Kinross instead of spending money on exploration, said Paul Metz, a geology engineer and mineral economics professor at the University of Alaska Fairbanks.

''They have significant reserves,'' Metz said, making them attractive as a buyout candidate.

''Certainly a friendly takeover would not necessarily be bad for Fairbanks,'' he said. ''A negative takeover from a less stable or financially sound company would have a negative impact on the company as well as operations here in Fairbanks.''

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