Some people think Kinross Gold Corp. is getting a good deal with its US$7.1-billion friendly offer for Red Back Mining Inc. Others think it is dramatically over-paying.

You can safely put Hallgarten & Co. analyst Christopher Ecclestone in the latter group. In a lengthy note titled “Just say No,” he slams the deal from all angles and urges Kinross shareholders to reject it with some very creative language.

Among his central points: Red Back is expensive “on any measure,” it does not have a pipeline of growth projects outside of its two mines, recent Kinross acquisitions have not yet borne fruit, it is paying for Red Back with stock that is already discounted, and the deal seems ill-timed and unnecessary.

“Kinross could ‘build its own Red Back’ out of available producing targets in West Africa [SEMAFO, Etruscan, Adamus, etc.] at a fraction of the price it is paying for Red Back Mining,” Mr. Ecclestone wrote.

He suggested that management at Kinross seems to be “almost alone” among its shareholders in supporting this deal (though Kinross may disagree with that). He added that the company should increase its dividend and focus on its existing portfolio instead of Red Back’s “less than unique” African offerings.

“The market has now decreed Kinross to be an indiscriminate and undiscerning buyer, which is a heavy reputational burden to carry and even more difficult to slough off,” he wrote.

Peter Koven