Peak Gold is 40% owned by Royal Gold and 60% by Contango and hosts an estimated measured and indicated resource of about 1.2 million oz grading 4.1g/t, and an inferred resource of 116,000oz grading 2.7g/t.

Kinross will acquire the 40% stake from Royal Gold for $49.2 million in cash and a 30% stake from Contango for $44.5 million including $32.4 million in cash, and shares of Contango purchased from Royal Gold.

"The relatively high-grade, low-cost Peak Gold project is an excellent addition to our portfolio, as it allows us to leverage our existing mill and infrastructure at Fort Knox and strengthens our medium-term production and cash flow profile," said Kinross president and CEO Paul Rollinson.

"In today's gold price environment, Peak Gold is an attractive, high-margin project that is expected to generate robust returns."

Peak Gold has a large estimated resource base and is expected to commence production in 2024 as a low-cost, openpit mine. The project is about 400km from Kinross' Fort Knox mine where the company plans to process Peak Gold ore using its existing Fort Knox mill and infrastructure. Fort Knox has produced more than 8Moz and produced 200,263oz in 2019.

Peak Gold is expected to produce some 1 million ounces gold-equivalent over 4.5 years with an average mining grade of about 6g/t at an all-in sustaining cost estimated at about $750/oz following an initial capital expenditure of about $110 million.

Blending higher grade ore from Peak Gold with Fort Knox ore is expected to extend the mill operation and reduce overall costs, increasing cash flow. Kinross expects to complete permitting and a feasibility study by the end of 2022.

Peak Gold also has various exploration targets within a 2,732sq.km land package and Kinross plans to commence an infill, geotechnical and metallurgical drilling programme to further develop the existing resource base and focus on targets across the larger land package.