Canadian-based Kinross Gold Corporation, which operates gold mines in Ghana and five other countries, has said it is proceeding with the Phase One expansion of its Tasiast mine in Mauritania.
Phase One is expected to increase mill throughput capacity from the current 8,000 tonnes per day (t/d) to 12,000 t/d, while significantly reducing Tasiast’s operating costs and increasing production.
Kinross said in its update that preparations for Phase One construction to install incremental crushing and grinding capacity to the existing carbon-in-leach (CIL) circuit, which includes an oversised semi-autogenous grinding (SAG) mill and gyratory crusher, will begin immediately.
Phase One is expected to reach full production by the end of Q1 2018 with estimated capital expenditures of approximately $300 million.
President and CEO, J. Paul Rollinson, said: “This phased approach allows Kinross to transform Tasiast into a lower cost, cash flow positive operation in the near term while preserving the operation’s significant growth potential. Phase One, which is expected to reach full production by the end of Q1 2018, will require an estimated initial capital investment of approximately $300 million, to be self-financed by the Company. The expansion is forecast to reduce Tasiast’s production cost of sales per ounce by an estimated 48% while increasing annual production by an estimated 87% compared with 2015. The Phase One expansion has robust standalone economics, including a positive 20% expected internal rate of return”.
“Phase Two, which anticipates increasing total throughput to 30,000 t/d, underscores Kinross’ focus on financial discipline. The forecast total capital expenditure for the combined Phase One and Two has been significantly lowered compared to previous expansion studies. With lower capital required, the expected benefits remain compelling, with a 30,000 t/d Tasiast expected to be the Company’s largest and lowest cost operation with a long estimated mine life.
“The two-phased approach strikes the right balance between growth and preserving balance sheet strength and is well-suited to the current gold price environment. Phase One achieves Kinross’ near term goals with a manageable investment while allowing the Company to reassess market conditions and further optimise the project before deciding to proceed with Phase Two. In short, this is the right project for Kinross at the right time,” Rollinson said.
In addition to Ghana and Mauritania, Kinross runs mines and projects in Brazil, Chile, Russia, and the United States. Kinross maintains listings on the Toronto Stock Exchange (TSE: K) and the New York Stock Exchange (NYSE: KGC).