The Canada-based gold producer said the project was an "excellent fit" for the company and would enable it to leverage its expertise as a world-class, cold climate heap leach operator.

"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," president and CEO J. Paul Rollinson said.

Kinross said it had conducted due diligence over 16 months and preliminary estimates were for a six-year mine life with initial capex of $500 million, producing 1.8 million ounces with all-in sustaining costs about $550/oz.

It said Chulbatkan had exploration and mining licences to the end of 2037 and starter infrastructure, including a base camp, trial pit, non-commissioned ADR plant and heap leach pad.

Kinross' Magadan office is equidistant between Chulbatkan and its Kupol gold mine.

Vendor N-Mining is set to receive $113 million in cash, $170 million in Kinross shares, a 1.5% NSR and contingent consideration of $50/oz of future proven and probable reserves beyond the first 3.25Moz.

Earnings increase in June quarter

Kinross meanwhile said it was on track to meet its 2019 gold-equivalent production guidance of about 2.5Moz.

It said its three largest mines - Kupol-Dvoinoye in Russia, Tasiast in Mauritania and Paracatu in Brazil - represented more than 60% of total company production and had achieved the lowest costs in portfolio for the June quarter and the first half of 2019.

Adjusted net earnings doubled from a year earlier of $79.6 million or 6c per share, up from $37.8 million or 3c per share in the second quarter of 2018.

Kinross reported revenue of $837.8 million for the period, up from $775 million a year earlier mainly due to an increase in gold-equivalent ounces sold.

It had cash and equivalents of $475.4 million.

Its Toronto-listed shares closed down about 5% yesterday to C$5.34, near the upper end of its 52-week range, capitalising it at $6.7 billion (US$5 billion).