Under terms of the agreement, Kinross will sell to Goldcorp its 31.9% interest in the Musselwhite Joint Venture, located in northwestern Ontario, and its 49% interest in the Porcupine Joint Venture, located in Timmins, Ontario. Goldcorp is currently the operator of both mines.

In exchange for these assets, Kinross will acquire Goldcorp’s 50% ownership position in Compañía Minera Mantos de Oro (MDO), thereby giving Kinross a 100% interest in MDO, which owns and operates the La Coipa mine in northern Chile. In addition, Kinross will receive a cash payment of $200 million from Goldcorp.

The transaction strengthens Kinross’ position in Chile, where the company currently operates the Maricunga mine. “This deal increases our strategic presence in the Maricunga District, one of the world’s most important gold producing regions. It adds to the excellent growth and development opportunities for Kinross in Chile, where we have a strong management team in place with proven operating expertise and well-established relations with local communities,” said Tye Burt, president and CEO of Kinross.

Burt explained that the $200 million in cash proceeds from the transaction will be used to help finance Kinross’ development projects currently under way. The company expects to expand its gold production by approximately 60% between 2007-2009 through a major expansion project at Paracatu in Brazil, and new development projects at Kupol in the Russian Federation, and Buckhorn Mountain in Washington State. These new projects are expected to add approximately 1.1 million oz of gold equivalent production annually during the first five years following the commencement of production.

For Kinross, the transaction is expected to result in a reduction in gold equivalent production of approximately 100,000 to 120,000 oz annually, balanced by lower cash operating costs, higher margins and increased free cash flow.

The boards of directors of both Kinross and Goldcorp have approved the transaction, subject to a number of conditions customary in a purchase and sale transaction of this nature.

In August, Kinross reported “significantly higher production” at La Coipa during the second quarter, with gold equivalent production higher as a result of a 335% increase in the silver grade, primarily from the Puren pit. The higher grades were partially offset by lower throughput as a decision was made to increase the retention time of Puren ore in the leach circuit to maximize recovery.

In an unrelated development, Linear Gold and Kinross reached an agreement for Kinross to earn an interest in Linear’s Ixhuatan project in Chiapas, Mexico.

Under the terms of the arrangement, Kinross can earn up to a 70% interest in the project by undertaking $15 million of exploration expenditures and making payments to Linear of $101 million plus a production decision fee of up to $15 million. Upon execution of the definitive agreement, Kinross will pay Linear $1 million, incur a minimum of $15 million of expenditures on the project within a 24-month period and will then have the option to acquire an initial 60% interest in the project by paying Linear $45 million. Kinross will have a further option to increase its interest in the project to 70% by making an additional payment to Linear of $55 million within 90 days of Kinross’ board of directors approving the construction of a mine based on a NI 43-101 compliant feasibility study.

If a production decision is made by Kinross, and the Proven and Probable gold reserves and Gold Equivalent Silver Reserves included in the feasibility study are greater than 2 million oz, Kinross will pay an additional production decision fee to Linear based on the following parameters: 2 million oz to 2.49 million oz–$5 million; 2.5 million oz to 2.99 million oz–$10 million; greater than 3 million oz–$15 million. Kinross will be operator of the project.

The Ixhuatán project hosts the Campamento gold deposit, the Cerro La Mina discovery, where copper, gold and molybdenum mineralization has been identified, and several mineralized zones including Laguna Chica, Laguna Grande, Caracol and the Western zone, all of which reportedly have returned significant drill results. pxploration throughout the Project has identified extensive areas of gold, copper and molybdenum mineralization.