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GOLD PRODUCTION NEWS Refugio Restart Promised

COPIAPO, Chile The boards of KINROSS GOLD and BEMA GOLD have officially approved the restart of operations at the...


COPIAPO, Chile The boards of KINROSS GOLD and BEMA GOLD have officially approved the restart of operations at their Refugio gold mine in northern Chile. Production at the heap leach operation is expected to begin again late in the fourth quarter of 2004 at capital costs of US$71 million. Resumption costs include a new mining fleet, plant modifications and upgrades, a modest prestripping program and connecting a 110-km transmission line to the Chilean grid to replace the previous diesel-generated power source.

The joint venture company, MINERA MARICUNGA, envisages expanding daily throughput by more than 25% compared to previous production levels of some 32,000 t/d., it said. The Verde pits are initially scheduled to produce 40,000 t/d and, subsequently, the new Pancho pit is expected to be mined at 35,000 t/d, extending the mine life to approximately 10 years at an assumed gold price of US$350/oz.

Life of mine annual production is expected to range from 230,000 oz to 260,000 oz at total cash costs averaging US$225/oz.

The Refugio gold mine started up in 1996 but, with four years of reserves left, was put on care-and-maintenance in May 2001 due to high production costs. Kinross and Bema launched a 56,000-m drill program late last year, then gold passed US$325/oz, allowing them to expand reserves. Proven and probable reserves are now estimated at 124 million tonnes grading 0.86 g/t Au for 3.43 million oz of metal.

The mine was designed to produce 230,000 oz/y of gold at cash costs of US$220/oz, but never performed in line with expectations on a consistent basis, partly because of its high altitude (4,200 metres) and a series of technical problems.


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