(Corrects to “Kinross estimated it would have to spend $920 million” from “Kinross said it would spend $920 million” in headline and first paragraph; adds paragraph 3 to clarify that the company is yet to make a decision on phase 2 of the expansion)
March 30 (Reuters) - Kinross Gold Corp estimated it would have to spend $920 million on a two-phase expansion of its Tasiast mine in Mauritania in North Africa, lower than it had earlier estimated.
The Canadian miner, the fifth biggest gold producer in the world, said in November that it was studying the expansion of Tasiast in a “bite-sized,” two-step expansion that was less risky in a lower gold price environment.
The company said on Wednesday it was going ahead with the first phase of the expansion, but it has yet to decide on the second phase.
The $300 million first-phase expansion is expected to increase the mill throughput capacity to 12,000 tonnes per day from 8,000 tonnes per day, the company said on Wednesday.
The second part of the expansion, to increase combined mill throughput to around 30,000 tonnes per day, is expected to cost $620 million.
Kinross said the total capital expenditures of $920 million is lower than a 2014 estimate of $1.6 billion as the throughput capacity has been reduced by about 21 percent from the estimated 38,000 tonnes per day.
In February 2015, the company halted a $1.6 billion expansion of Tasiast because of a 40 percent drop in gold prices since late 2011.
The expansion of the mill at Tasiast is Kinross’ biggest growth project, and without it analysts are concerned about the company’s growth prospects unless the miner makes an acquisition.
Kinross acquired Tasiast as part of its $7.1 billion takeover of Australia’s Red Back Mining in 2010. It has written down virtually all of the acquisition price of the takeover, which cost former Kinross CEO Tye Burt his job. (Reporting by Manish Parashar in Bengaluru; Editing by Don Sebastian)