July 29, 2015 / 9:15 PM / in 2 years

UPDATE 2-Kinross mulls more job cuts at Mauritania mine to reduce costs

(Rewrites throughout after CEO interview)

July 29 (Reuters) - Kinross Gold Corp is again considering cutting jobs at its Tasiast gold mine in Mauritania, Chief Executive Officer Paul Rollinson said on Wednesday, as the Canadian miner looks for ways to reduce costs at its higher-cost mines amid sliding metals prices.

Kinross was in talks with the Mauritanian government on the “possibility of a head count reduction,” Rollinson said in an interview. He declined to discuss how many jobs could be lost.

Kinross in 2013 laid off about 300 workers at Tasiast to cut costs. Tasiast has 1,350 employees.

High costs have dogged Tasiast since its purchase as part of Kinross’ $7.1 billion takeover of Australia’s Red Back Mining in 2010.

The Toronto-based company was also studying if production costs at Tasiast, which rose 4 percent to $1,063 an ounce in the second-quarter, could be reduced by increasing the mine mill’s efficiency, Rollinson said.

Tasiast’s production costs are skating close to the gold price, which was last at $1,096 an ounce, squeezing margins.

If Kinross cannot achieve the margins and cash flow it wants from its mines it would consider shutting them down as it did with its La Coipa mine in Chile, Rollinson said. Such a move would not be taken lightly, however.

“We will turn over all stones before we get to that decision,” he said.

There was interest from other miners in becoming a partner in Tasiast, Rollinson said, but that was not Kinross’ focus right now.

An expansion of Tasiast, which has 9 million ounces of gold reserves, would help to lower its costs. Some analysts have said that a partner would be a good way to spread the risk of the $1 billion-plus cost of an expansion.

Kinross was “always” looking for acquisitions but had not seen one of late that made sense, Rollinson said.

Earlier Kinross released results showing it slid to a loss in the second quarter, in line with market expectations, on the back of a weaker gold price, lower gold sales and the temporary suspension of operations at a mine in Chile.

The company said it was tracking at the high end of its 2015 production forecast of 2.4 million to 2.6 million gold equivalent ounces and at the low end of its forecast for all-in sustaining costs of $1,000 to $1,100 per ounce.

It was also on track to come in below its 2015 capital spending forecast of $725 million. (Reporting by Nicole Mordant in Vancouver; Editing by Jonathan Oatis and Grant McCool)

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