(Recasts with CEO interview)
By Nicole Mordant
Nov 10 (Reuters) - Kinross Gold Corp revived on Tuesday the possibility of expanding its Mauritanian-based mine but in a “bite-sized,” two-step expansion that the miner’s chief executive said was less risky in today’s depressed metal price environment.
Kinross, the world’s fifth biggest gold miner by output, said it was finishing early stage engineering work on a possible two-phased expansion at its Tasiast mine in North Africa to increase its mill capacity by 50 percent to 12,000 tonnes a day.
It expects to decide in the first quarter of 2016 whether it will go ahead with the first phase, which it estimates will cost $290 million.
The Canadian-based miner in February put on ice a planned $1.6 billion expansion of Tasiast to a 38,000 tonnes per day operation because of a weak gold price, which has plunged 40 percent in the past four years.
“Building the 38,000 is like building a bridge across the river. Once you start you’ve got to finish,” Kinross CEO Paul Rollinson said in an interview after the company reported an adjusted quarterly loss that was not as large as expected.
“The two-phases is like building a small bridge out to an island that makes money. You can stop, look, listen. You haven’t bet the farm and then you can proceed, if the conditions are right, to the other side,” he said.
The second phase of the expansion would aim to get to close to 38,000 tonnes per day, Rollinson said.
The expansion of the mill at Tasiast was Kinross’ biggest growth project, and without it analysts are concerned about the company’s growth prospects unless the miner makes an acquisition.
Due to a weak gold price, the world’s miners are increasingly making “bite-sized” developments that carry less risk of budget disasters and fewer of the political and environmental disputes that have derailed mega-mines in recent years.
Earlier, Kinross reported a third-quarter adjusted loss of $23.9 million, or 2 cents a share, on the back of a lower gold price. Although that was a sharp swing from an adjusted profit of $70.1 million, or 6 cents a share, a year ago, it was slightly ahead of analyst expectations of a 3 cent loss.
Kinross produced 680,679 gold equivalent ounces in the third quarter, down from 693,818 ounces in the comparable quarter in 2014.
Its all-in sustaining costs were $941 per gold equivalent ounce in the quarter, up from $919 an ounce in the same quarter a year ago. (Reporting by Nicole Mordant in Vancouver; Editing by Lisa Shumaker and Chris Reese)