Resource World Magazine

A U G U S T / S E P T E M B E R 2 0 1 9 www.resourceworld.com 55 Cost of sales per ounce sold decreased year over year due to lower waste mined, high recoveries and lower power costs as well as favourable foreign exchange rates. The Tasiast Mine in Mauritania, West Africa, set another production record in the first quarter, producing 101,358 ounces of gold equivalent at a cost of sales of US $662/oz. Tasiast continued its strong performance as a result of the completion of the Phase One expansion. The new SAG mill continued to outperform, with throughput during Q1 2019 averaging approximately 15,000 tonnes per day (tpd). Kinross will spend the second half of 2019 evaluating lower cost alternative approaches to increase throughput and potentially enhance the economics at the Tasiast operation. This includes increas - ing throughput to 30,000 tpd. Another approach will be to incrementally increase throughput to above 20,000 tpd by remov- ing bottlenecks and optimizing the current processing circuit. In an effort to fund its expansion efforts at Tasiast, the company is looking to raise US $300 million from Export Development Canada, the International Financial Corporation, and two commercial banks, and is targeting completion of the financing in the second half of 2019. At the Kupol operation and its satellite Dvoinoye deposit in Russia, production increased to 130,088 ounces gold equiva - lent at a cost of sales of US $598/oz. The increase was mainly attributed to higher grades at Kupol. The mine's cost of sales per ounce sold increased when compared with the same quarter last year. This was due to the higher operating waste mined and higher operating costs at the Dvoinoye satellite deposit. Kinross reports that devel - opment at the Dvoinoye Zone 1 deposit is proceeding on schedule and production is expected to commence in mid-2019. PIPELINE PROJECTS "During the first quarter we advanced work on our development pipeline. The Nevada projects at Round Mountain Phase W and Bald Mountain Vantage Complex are nearing completion and entering their commissioning phases," commented Rollinson. Kinross spent US $264.8 million on capi - tal expenditures earmarked for its pipeline projects in the first quarter. Kinross reports that the project is on schedule and on budget. Construction of the new heap leach pad is now complete, with Phase W ore currently being placed on the pads. Commissioning of the pro - cessing circuit has commenced ahead of schedule. The initial solution is being applied to the pads to prepare for comple- tion of the vertical carbon-in-column (VCIC) plant, which is approximately 80% complete. Construction of mine infrastruc- ture, including the truck shop, warehouse, wash bay and fuel island, is now 60% complete. Kinross states that the Bald Mountain Vantage Complex Project is also well- advanced, as the vertical carbon-in-column plant is approximately 70% complete, and the heap leach pad is approximately 90% complete, with ore being placed on com - pleted portions of the pad. The project cost forecast is now expected to be approxi- mately US $130 million, mainly due to weather challenges, higher than antici- pated construction contract rates, and issues with the supply of some of the fabri- cated components. Construction of support infrastructure, including the truck shop, warehouse and wash bay, is 60% com- plete. An operations readiness task force has been established to ensure a smooth transition of the project to Operations. Meanwhile, at the Fort Knox Gilmore Project in Alaska, Kinross reports that initial ore is expected in early 2020. Procurement and contracting for 2019 heap construction activities are proceed - ing well, with most contracts issued and awarded, and contractors mobilizing to the site. Stripping is on schedule to commence in Q3 2019, with expansion of the dewa- tering system continuing as planned. Rollinson went on to say, "We com- pleted the scoping study for Lobo-Marte and the results highlight the potential for long-term production in Chile in conjunc- tion with the La Coipa Restart project." The scoping study contemplates pro- duction commencing after the La Coipa Project's mine life, along with a heap leach and SART (sulphidization, acidification, recycling and thickening) plant operation. Preliminary estimates for Lobo-Marte include a mine life that could extend more than 10 years, with total life-of-mine pro - duction of approximately 4.1 million gold ounces grading 1.2 g/t. The initial capital estimate is US $750 million (+/- 20%), with an approximate three-year construction timeline after project approval. Lobo-Marte is now progressing to a Pre-Feasibility Study with completion estimated by mid- 2020. The Lobo-Marte Project represents one of the highest-grade deposits in the Maricunga district and is located approxi - mately 80 km southeast of La Coipa. Kinross reports it is on schedule to com- plete the La Coipa Restart Feasibility Study in Q3 2019. The La Coipa Feasibility Study and the Lobo-Marte PFS are expected to determine the degree to which resources such as personnel, water, energy and capi - tal equipment can be shared and leveraged for synergies and efficiencies between the two potential projects. A HEALTHY BALANCE SHEET As of March 31, 2019, Kinross had cash and cash equivalents of US $406.9 mil- lion, compared with US $349.0 million at December 31, 2018. The company also had available credit of $1.4 billion, for total liquidity of approximately $1.8 billion, and no debt maturities until 2021. The company stated that it expects to meet its production guidance of 2.5 mil - lion gold equivalent ounces (+/- 5%) for the year. Kinross also expects to be within its production cost of sales guidance of US $730 per gold equivalent ounce (+/- 5%) and all-in sustaining cost guidance of US $995 per gold equivalent ounce (+/-5%) in 2019. The company reported that it remains on track to meet its 2019 capital expenditure forecast of approximately $1.05 billion (+/-5%). Kinross Gold has a market capitalization of about $6.5 billion. n The Tasiast Mine in Mauritania, West Africa, set another production record. Photo courtesy Kinross Gold Corp. MINING

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