April 29, 2013 / 12:22 PM / 5 years ago

UPDATE 1-Kinross pegs Mauritania mine expansion at $2.7 bln

* Expects average cash costs of about $500 per ounce

* Sees mill throughput at 30,000 tonnes per day

* Pre-feasibility study shows 20-year mine life for Tasiast

* Says full feasibility study will begin immediately

* Full feasibility study likely to be completed in Q1 of 2014

April 29 (Reuters) - Kinross Gold Corp is pushing ahead with plans to expand its Tasiast project in Mauritania with a feasibility study for a 38,000-tonne-per-day mill and said it expected the initial capital cost for the project to be about $2.7 billion.

The Toronto-based miner, which announced the results of a prefeasibility study on a 30,000 tonne-per-day option on Monday, said the feasibility study will contemplate an additional 8,000 tonnes per day in order to wrap production from the existing mill into one facility.

Work on the feasibility is set to begin immediately, with completion slated for the first quarter of 2014.

“Although there is considerable work to be done at the feasibility study level before we decide whether to proceed with construction, the results of the prefeasibility study are encouraging,” said Chief Executive J. Paul Rollinson in a statement.

During the first five years of production a 30,000-tonne-per-day (tpd) mill would produce around 830,000 ounces of gold per year, according to the pre-feasibility study. Average cash costs would be about $500 per ounce.

The West African mine produced just over 185,000 ounces at the existing 8,000 tonne-per-day mill in 2012, at total costs of sales of $1,061 per ounce.

Kinross acquired Tasiast as part of its $7.1 billion takeover of Red Back Mining in 2010 that was supposed to help launch the Canadian miner into the big leagues, but has so far failed to live up to lofty expectations.

The company, which operates mines in the Americas, West Africa and Russia, took a $3.21 billion impairment charge in the fourth quarter of 2012 related to Tasiast and a second West African mine acquired in the Red Back takeover.

That followed a previous $2.94 billion charge in 2011, also related to the two West African mines. Despite the writedowns Kinross has continued to push the Tasiast expansion ahead.

Kinross had forecast total capital expenditure for 2013 of about $1.6 billion, about $325 million less than in 2012, as miners around the world have slashed spending in an effort to rein in runaway development budgets.

Rollinson said in February the project remained a top priority for the company.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below