SOURCE: AXcess News

Axcess News

November 16, 2009 21:01 ET

AXcess News: Kinross Gold Bids on Teryl Resources Gil Property

NEW YORK, NY--(Marketwire - November 16, 2009) - Kinross Gold has made a bid to buyout Teryl Resources (TSX-V: TRC) (OTCBB: TRYLF) 20% stake in the Gil joint venture gold property that adjoins Kinross' Fort Knox mine outside of Anchorage Alaska. Terms of the deal were not disclosed, though Kinross' CEO Tye Burt had let slip during a mining conference in October that global supplies were dwindling and companies would need to find more sources. And in this case, Burt didn't have to look too far with Teryl Resources property just miles from one of the biggest gold mines in Alaska -- Fort Knox.

In an AXcess News feature story published October 20 2009, Burt was quoted as saying, "We may be in the midst of a perfect storm in terms of price and industry dynamics... Globally, production has been in decline since the peak of 81 million ounces in 2001 to 77 million ounces last year, and we see that decline continuing long term."

Motley Fool's Christopher Barker noted in an earlier story that month that Kinross was on the hunt for gold properties -- or companies -- it could acquire. Last summer Kinross swallowed up Aurelian Resources in a deal valued at $1.2 billion, concluding the acquisition months before Kinross' CEO had inferred that more gold properties were needed. Dundee Securities had acted as Aurelian's advisors and this year alone has been involved in three mining acquisitions.

Recently, Teryl Resources had announced the completion of a 3,000 foot service road Kinross had funded on the Sourdough Ridge property that adjoins the Gil claims. At the time of the announcement, Teryl's shares shot up more than 6.8% as gold futures set a then-record high of $1,111.40. Today, gold set another record, surpassing $1,134.50 per ounce.

The development brought Kinross' total investment in Teryl Resources' property to $9 million. Recent drilling reports indicated strong mine development potential on Sourdough Ridge, which could substantially raise the level of gold reserves and may have been a deciding factor in Kinross' move to acquire the property.

In a telephone interview late Monday afternoon, Teryl Resources President John Robertson said in commenting on Kinross Gold's offer, "They [Kinross] must be optimistic about the future of the property as it is today."

Robertson would not release any details on Kinross' offer, nor would he speculate on why Kinross was offering to buyout Teryl Resources' 20% stake before further drill results were in -- saying only that "the board of directors were reviewing the proposal."

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