UPDATE 2-Kinross okays first-phase expansion of North Africa mine

Wed Mar 30, 2016 11:35am EDT
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(Recasts, adds CEO interview)

By Nicole Mordant

March 30 (Reuters) - Kinross Gold Corp said on Wednesday it plans to go ahead with a $300 million, first-phase expansion of its Tasiast gold mine in North Africa that will nearly double the mine's production and slash its production costs.

Kinross, the world's fifth biggest gold miner, also unveiled a smaller, lower-cost second-phase expansion for the mine in Mauritania but said it is still deciding whether to go ahead with it.

The Canadian miner now expects the two-phase expansion to cost $920 million, down from a 2014 estimate of $1.6 billion largely because it has reduced the size of the project to 30,000 tonnes per day from 38,000 tonnes per day.

"We are renovating as opposed to building a new mill. We will utilize components in the existing mill," Kinross Chief Executive Paul Rollinson said in an interview.

The Canadian miner said in November that it was studying the expansion of Tasiast in a "bite-sized," two-step expansion that was less risky in an environment of lower gold prices.

Hit by a nearly 40 percent slump in bullion prices since late 2011, gold producers globally have slashed capital spending and halted or slimmed down new mine builds and expansion projects.

The first expansion phase, which Kinross will proceed with immediately, will expand the mine's mill capacity to 12,000 tonnes per day from 8,000 currently.   Continued...