Kinross flags $US1bn expansion spend
CANADIAN miner Kinross Gold Corp has announced it will spend more than $US1 billion on expansion projects in West Africa and the US.
The company plans to proceed with a $US590 million Phase 2 expansion of its Tasiast gold mine in Mauritania, raising its milling capacity from 12,000 tonnes per day (t/d) to 30,000 t/d.
The expansion would replace the two current ball mills with a new larger ball mill, and add new leaching, thickening and refinery capacity and additions to the mining fleet, and a new power plant would be added to power the 30,000 t/d mill.
The upgrade was expected to increase gold production at the project to 812,000 ounces per annum (ozpa) for the first five years at all-in sustaining costs of $US655/oz.
The company said the project would generate free cash flow of $US2.2bn over the life of the mine.
Construction has been slated for early next year, with an aim to reach commercial production by Q3 2020.
Kinross said it would also spend a further $US445m to add five years of mine life to its Round Mountain project in Nevada, pending completion of the permitting process – which Kinross said was proceeding as planned – adding 1.5 million ounces of gold reserves.
The miner said it expected to finance the projects through its strong balance sheet and a liquidity of about $2.5bn.
“Our decision to proceed with the Tasiast Phase Two expansion underscores our determination to realise the potential of this world-class asset and generate significant value for our shareholders,” Kinross chief executive J. Paul Rollinson said.
“This strong improvement in Tasiast’s performance is expected to positively impact overall company performance metrics, strengthening our production profile and increasing cash flow.
“We have applied the same financial and technical rigour to the Phase W expansion at Round Mountain.
“Lower operating costs, combined with an optimized mine plan, have contributed to a further de-risking of the project and improved returns.”
Kinross is the world’s fifth largest gold producer.