Here is another example of our Patrick talking from both sides of his mouth

GOLD NEWS

Kinross Gold plans to pick up Aurelian for Ecuador gold/silverproject

Tier 1 gold miner Kinross says it plans to take over Aurelian Resources in a friendly deal worth US$1.19 billion, primarily for its big Fruta del Norte gold and silver project in Ecuador.

TORONTO (REUTERS) -

Kinross Gold Corp (K.TO) said on Thursday it plans to buy Aurelian Resources Inc (ARU.TO) in a friendly deal valued at C$1.2 billion ($1.19 billion) that gives theCanadian mid-tier gold miner ownership of the big Fruta del Norte gold discovery inEcuador.

Kinross said it would offer Aurelian shareholders 0.317 of a Kinross common share, plus 0.1429 of a warrant, valuing its bid at C$8.20 per Aurelian common share. That is a 63 percent premium over the 20-day volume-weighted average price of Aurelian common shares.

Shares in Aurelian shot up 61 percent in early trade on the Toronto Stock Exchange to C$7.17, while Kinross stock fell 5 percent to C$19.78.

The Fruta del Norte deposit, the most significant discovery within Aurelian's Condor project, has an inferred resource of 13.7 million ounces of gold and 22 million ounces of silver.

"This is a late-stage exploration, or early pre-development stage asset which we think will be a good addition to our pipeline," said Kinross Chief Executive Tye Burt on a conference call.

Kinross has 47 million ounces of gold on a proven and probable basis with operations in the United States, Brazil, Chile and Russia.

Fruta del Norte has "great potential" but there remains much work to be done, Burt said. Notably, there is uncertainty over a new constitution and mining law that are being drafted in Ecuador.

Burt and Aurelian Chief Executive Patrick Anderson said they are confident that the country is moving "in the right direction" and they do not expect any "substantial" surprises in the mining law.

Kinross said it will need to see the new mining law and complete its own technical studies before setting a timetable for getting permits, mine development and operations. Aurelian had planned to start operations in 2013, mining 3,000 tonnes a day, Anderson said.

Kinross has also agreed to buy 15 million Aurelian shares on a private placement basis at C$4.75 per share, for a total of about C$71 million, to help develop Fruta de Norte and for general corporate purposes.

The private placement is not conditional on the success of the takeover.

Aurelian's board of directors recommends shareholders accept the offer, and the directors and senior officers of Aurelian have entered into lock-up agreements with Kinross and have agreed to tender all of their Aurelian common shares to the offer.

Under the proposed deal, which is subject to a C$42 million break fee, Kinross expects to issue about 47 million common shares. The warrants being offered expire in five years with a C$32 exercise price.