Paul Rollinson, CEO of Kinross Gold Corporation (KGC), said that the existing Tasiast, Mauritania mine could become the largest company mine, with costs among the lowest in the portfolio, if a mill expansion is undertaken. He was speaking at the Denver Gold Forum in Denver, Colorado.
The Tasiast mine has an 8,000 tpd mill originally designed to process ore from a series of small open pits. Although the company will not decide until next year whether to proceed with a mill expansion at the site, Rollinson said the projection for average annual production from 2018 to 2022 is 848,000 oz. The life of the mine is expected to extend to 2029.
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The site is a “relatively low-risk brownfields project,” Rollinson said, with Kinross able to capitalize on an existing operation, a highly trained local team, infrastructure already in place, an established relationship with the government, and most major permits and concession rights in hand.
The company is exploring project finance options, but expects to fund the balance from existing cash balances and operating cash flow.
Kinross Gold Corp. operates in Russia, North America and South America (the U.S., Brazil and Chile) and West Africa. The overall company produced 1.34M gold equivalent ounces in H1 2014, with a 2014 cost of sales guidance of $730-$780/oz, with a 2014 all-in sustaining cost guidance of $950-$1,050/oz.
Rollins noted operational improvements as a key to continuing growth, highlighting several locations as success stories.
Kinross’s Maricunga, Chile operation has implemented changes that resulted in higher production and lower costs, Rollinson said. It is expected to produce 64,290 gold equivalent ounces in Q2 2014, with a declining cost of sales per ounce of $874 in Q2.
Rollinson also cited the La Coipa project in Chile as a growth opportunity. Kinross is in a pre-feasibility study focused on the Pompeya deposit, where drilling has outlined higher average grades than previously processed at La Coipa. The company is also conducting a scoping study to focus on processing options for known near-surface sulfide mineralization in the district, and is exploring other targets.
The company has a strong liquidity position, boasting $2.3 billion as of June 30 in cash, cash equivalents, restricted cash and undrawn credit facilities. The company has a net debt of $1.3 billion as of June 30, 2014.
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