MAURITANIA – Kinross Gold of Toronto has decided not to proceed with the expansion at its Tasiast gold mine in this African country. The project feasibility study, released in March 2014, proposed that the mill be expanded to 38,000 t/d at a cost of $1.6 billion.
However, the study used a gold price of US$1,350 per oz, and the realized price has been much weaker than that for some time, trading in New York at midday on Feb. 11 at US$1,220.
"The company continues to deliver on its commitment to operational excellence, financial discipline and balance sheet strength," said CEO J. Paul Rollinson. "These principles underpin Kinross' decision not to proceed with the Tasiast mill expansion at the present time. We continue to believe a mill expansion has the potential to offer a rare combination of large, low cost production; however, preserving balance sheet strength remains our priority, particularly given the current gold price environment. This decision preserves our cash position – which was approximately $1 billion at year-end – and our liquidity, while giving us the financial flexibility to capitalize on a possible future Tasiast expansion, or other opportunities, should they arise."
Not all is gloomy at Kinross. The company logged record output of 2.71 million oz of gold equivalent in 2014, and sales generated $3.47 billion in revenue. All-in sustaining costs per ounce were only $973 per AuEq.
For 2015, the company expects to produce 2.4 million to 2.6 million oz AuEq from its existing operations. The lower figure is due primarily to lower grades at several properties due to mine sequencing and to reduced production from the Tasiast dump leach.
Please see Kinross.com for more information.
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