Kinross Gold Corporation ( KGC ) has announced that its Dvoinoye gold mine in Russia's Chukotka Region has started commercial production. Kinross built the project on time and within budget.
The mine is located 100 kilometers north of Kinross' Kupol mine. Dvoinoye ore will be processed at the Kupol mill, which has undertaken expansion from 3,500 tons per day (tpd) to 4,500 tpd for this purpose. The first ore from development activities at Dvoinoye was delivered to Kupol in the second quarter of 2013 and commercial production began in early October.
Production from the Dvoinoye mine is expected to be between 235,000 and 300,000 gold equivalent ounces annually during its first three years of production, which will be incremental to gold produced from the Kupol underground mine. Total production for this year is expected to be 25,000 gold equivalent ounces.
During peak production, Dvoinoye is expected to mine 1,000 tpd of ore a day, which will be transported to Kupol via an all-season road. Kinross expects cost of sales for the combined Russian operations between 2014 and 2016 to be in the range of $545-$600 per gold equivalent ounce.
Dvoinoye is the fourth mine that Kinross has operated in Russia. The low-cost mine reflects the company's strong focus on maximizing margins and cash flow at its existing operations as well as growth projects.
The commencement of the mine marks an important step in the economic and social development of Chukotka. Kinross plans to disclose guidance for the mine's 2014 production, cost of sales and all-in sustaining costs for its combined Russian operations and other regions in early 2014.
Kinross currently carries a Zacks Rank #3 (Hold).
Other companies in the mining industry with a favorable Zacks Rank include Pretium Resources Inc. ( PVG ) and Alamos Gold Inc. ( AGI ) and Franco-Nevada Corp. ( FNV ). All of them carry a Zacks Rank #2 (Buy).