ASIANET: AMAX GOLD COMPLETES ACQUISITION OF KUBAKA MINE IN RUSSIA

ข่าวต่างประเทศ Monday June 2, 1997 09:40 —Asianet Press Release

DENVER, May 30 /PRNewswire-AsiaNet/ -- Amax Gold Inc. (NYSE: AU) announced that it has completed the acquisition of a subsidiary of Cyprus Amax Minerals Company that holds 50% of the Kubaka gold mine in far-eastern Russia. The other 50% is owned by five Russian partners. Kubaka represents the first U.S. mining venture to produce minerals successfully in Russia since the turn of the century. The Kubaka mine, which is located about 600 kilometers north and east of the port city of Magadan in the Magadan Oblast, poured its first gold February 20, 1997, and is expected to be completed at a capital cost of about $228 million. At full production, the mine is expected to produce about 150,000 ounces a year over its seven-year life for Amax Gold's account at a cash cost of about $185 an ounce. Milton H. Ward, Chairman and Chief Executive Officer of Amax Gold said: "We are proud of our ability to provide good, high-paying jobs to a population that needs and wants to participate in the free-market economy now emerging in the former Soviet Union. In addition, we want to thank our Russian partners, whose mining experience and high work ethic has helped to make this project a success." Mr. Ward added: "Needless to say, we are pleased to have this low-cost mine in Amax Gold's portfolio of properties. Together with our Refugio mine in Chile and our Fort Knox mine in Alaska, we now have developed three properties that we expect will catapult Amax Gold's annualized production to nearly 700,000 ounces." Under terms of the transaction, Amax Gold issued to Cyprus Amax approximately 11.8 million shares of Amax Gold common stock at closing, bringing Cyprus Amax's ownership of Amax Gold stock to 57.5%. Additionally, approximately 4.2 million shares will be paid to Cyprus Amax when the project is declared commercial, which is expected around mid-year. At that time, Amax Gold is expected to be 59.1% owned by Cyprus Amax. Additional shares may be issued to Cyprus Amax in the future if more reserves are discovered in Russia outside of the Kubaka project area. Amax Gold produces gold in the United States, Russia and Chile, and explores for gold primarily in the Americas, Australia, Africa and Russia. Amax Gold common stock is listed on the New York Stock Exchange (AU) and The Toronto Stock Exchange (AXG), and the $3.75 Series B Convertible Preferred Stock is listed on the New York Stock Exchange (AuPrB). Actual results may vary materially from any forward-looking statements the Company makes. Refer to the Cautionary Statement in the Company's most recent Form 10-Q. CONTACT: Marj Charlier, Director, Investor Relations, 303-643-5625, or D. Michael Rounds, Director, Communications, 303-643-5186, both of Amax Gold.

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