Investors dumped Kinross shares Tuesday, pushing the stock down more than 6 per cent and below $16 for the first time since late 2008.

While investors remain skeptical on the Kinross strategy to pay a premium for Red Back, the Toronto-based gold producer is adamant the move into one of the world's fastest-growing gold regions will pay off over the longer term.

Acknowledging investors are “low on us,” Kinross chief executive officer Tye Burt said the company will soon show proof that the Red Back assets in Mauritania and Ghana are worth the price.

“Our goal will be to fast track that work and ultimately to help the market understand the value as we see it,” Mr. Burt told analysts Tuesday.

Kinross shares have been sliding since the company first signalled it wanted to buy Red Back in early May, when it bought a 9.4 per cent interest. Since then, Kinross has underperformed the S&P/TSX Global Gold Index by 9.4 per cent, while Red Back has outperformed the index by 8.4 per cent, according to Canaccord Genuity.

“While we believe the acquisition makes strategic sense with Kinross gaining foothold in the regionally high potential West Africa, in our view the acquisition is a costly one for Kinross,” said TD Newcrest analyst Greg Barnes in a report.

“The question that overhangs the transaction now is whether or not Kinross shareholders will approve it … our guess is that at the end of the day, they are likely to,” he said.

Analysts are also concerned about the dilutive effect of the deal.

Kinross is issuing 425 million shares as part of the transaction. Some had expected an even steeper stock drop on Tuesday, which suggests investors are cautious, but also waiting to see if the strategy will be a success.

Red Back's Tasiast mine in Mauritania has been cited as a potential flagship operation for Kinross. It will also gain Red Back's Chirano gold mine in Ghana.

If the deal is passed, Kinross will own 10 operating mines and four development projects in eight countries, adding West Africa to its list. Kinross already has operations in Russia, South America and the United States.

The two companies will have a market capitalization of about $18-billion, making it the world's fifth-largest producer.

With Red Back, Kinross's annual gold production is forecast to hit 3.9 million ounces by 2015, up from an expected 2.2 million ounces this year.

Red Back, meanwhile, said it co-operated with Kinross on the friendly merger believing the senior gold producer offered the best potential for its stock to accelerate further. Red Back shares have risen nearly five-fold over the past two years.

“With a combined company, the growth potential is quite big, we can get a higher stock price,” Red Back chairman Lukas Lundin said in an interview.

Red Back shares rose nearly 6 per cent Tuesday on the takeover news to $27.45, which is below the $30.50 per share value of the Kinross offer announced late Monday, suggesting a competing bid is unlikely – although analysts aren't ruling it out.

“As far as other players that may come in and make an offer – we believe that Newmont would be the only other company which could make an offer,” National Bank Financial analyst Tanya Jakusconek said in a note.

Goldcorp Inc. is not expected to venture into Africa any time soon, while Barrick Gold Corp., the world's largest producer, recently spun off its African assets into a smaller, separate company.