Kinross Gold Corporation have just announced the agreement of a loan facility to support their gold exploration and development programme, which is great news.

No matter how good the story might appear if you cant raise the cash to finance the scheme then you are dead in the water.

Approximately $200 million of this loan is allocated for the Paracatu mine expansion in Brazil which Thomas Boehlert the chief Financial Officer for Kinross said; “The project will begin delivering significant new production in 2 years”. It will be interesting to see just how significant, in terms of numbers, this will be when more details are revealed. The main providers of this facility are Scotia Capital along with Export Development Canada, Societe Generale, Royal Bank of Canada and some international financial institutions.

Lenders prefer to spread the risk and the rewards with other lenders just as we as investors prefer to spread our investment funds across a number of gold mining stocks. The effect on the stock price may not be felt for some time however it is reassuring to know that Kinross has secured the means to progress a ‘pipeline’ of gold mining projects.

If you believe that gold prices have bottomed then this is a buy in our humble opinion. This gold stock is currently trading at $11.95 at the time of writing.

Kinross trades as K on the TSX and KGC on the NYSE.

20 September 2006