As Kinross closes in on Aurelian ownership, analysts, small investors not all happy

The acquisition of junior explorer Aurelian Resources gives Kinross a foothold in Ecuador, which has yet to see a major gold mine under development. However, not everyone is happy with the deal.

RENO, NV -

Much to the consternation of a number of some small investors who insist Aurelian Resources (TSX: ARU) could have got a better deal for its shares, Kinross Gold announced Thursday that it has acquired 74.8% of the outstanding shares of Aurelian.

Kinross had offered an all-share deal valued at $1.2 billion.

In a news release Thursday Kinross President and CEO Tye Burt said, "We are pleased that Aurelian's shareholders have accepted our offer. We welcome them as Kinross shareholders and as participants in our growth strategy, including our plans to advance development of the Fruta del Norte deposit responsibly, in co-operation with the government and the people of Ecuador."

Despite the fact that, thus far, Fruta Norte has only an inferred resource of 13.7 million ounces of gold (58.9 million tonnes grading 7.23 g/t gold), several analysts have suggested that it could develop into a world class deposit.

However, analysts have also noted that the fate of the Kinross acquisition rests with the Ecuadorian government's attitude toward mining. In April the country froze all mining exploration in the country and revoked all mining concessions. Some working concessions were frozen for six months until new contracts could be negotiated.

A new mining law is also in the works, but is not expected to be approved by Ecuador's Constituent Assembly until early next year.

Meanwhile, a small shareholder revolt is being encouraged on the small cap investment website Agoracom and on the blogsite "Inca Kola News" by Aurelian shareholders who claim they could have gotten a better offer for their shares. Aurelian shareholders who tendered to the offer will receive 0.317 of a Kinross common share and 0.1429 of a Kinross common share purchase warrant for each Aurelian common share.