Kinross Starting Feasibility Study on Tasiast Expansion (revised) - Analyst Blog

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Kinross Gold Corporation ( KGC ) recently said that it is moving ahead with a full feasibility study (FS) for a possible expansion of its Tasiast mine in Mauritania with a 38,000 ton per day (tpd) mill. The decision was based on the encouraging pre-feasibility (PFS) study results for the expansion project.

The PFS was based on constructing a new 30,000 tpd mill at Tasiast using heavy fuel oil as an energy source. The PFS found that during the first five years of production, a 30,000 tpd operation would yield average annual gold production of 830,000 ounces, at an initial capital cost of $2.7 billion, and an all-in sustaining cost of $735 per ounce.

Kinross is also looking to deploy the existing 8,000 tpd mill capacity at Tasiast in addition to a new 30,000 tpd mill. These studies concluded that a single new 38,000 tpd mill would be expected to provide the optimum economics for an expanded project. Based on these results, Kinross is proceeding with a full FS on an expanded Tasiast operation with a 38,000 tpd mill.

The FS work process will begin immediately, and is expected to complete in the first quarter of 2014. After the FS is complete, Kinross will make a decision on whether to complete engineering and proceed with construction. Kinross will base its decision on a number of factors, including gold price assumptions and projections, expected economic returns, and various technical and other considerations.

Kinross, which is among the prominent gold miners along with Barrick Gold Corporation ( ABX ), Newmont Mining Corporation ( NEM ) and Goldcorp Inc. ( GG ), is primarily involved in the exploration and operation of gold mines and benefits from higher gold prices, exploration projects and acquisitions.

Kinross currently carries a Zacks Rank #4 (Sell).

We have revised this article to correct a mistake. The previous version, published yesterday, should not be relied upon.



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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ABX , GG , KGC , NEM , PFS

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