Tasiast, Mauritania (source Kinross)
Kinross Gold Corporation (TSX:K; NYSE: KGC) this week announced that it is proceeding with a project to incrementally increase throughput capacity at its Tasiast mine to 24,000 tonnes per day (t/d). Based on the results of the completed “Tasiast 24k” feasibility study, the project is expected to increase production, reduce costs, and generate significant cash flow and attractive returns at an initial capital outlay estimate of $150 million.
J. Paul Rollinson, President and Chief Executive Officer Kinross Gold Corporation (source Kinross)

J. Paul Rollinson, President and CEO, made the following comments in relation to the Tasiast 24k project, “We are excited to be moving ahead with the value-enhancing Tasiast 24k project. The project allows us to further unlock Tasiast’s substantial value through a capital efficient, low-risk investment which maximizes the mine’s potential through continuous improvement and leverages the knowledge we have gained from running the successful Tasiast Phase One expansion. The 24k project is expected to increase production and lower costs while generating attractive returns and significant free cash flow.”

He went on to say that, “We are well positioned to successfully execute the Tasiast 24k project. We have strong liquidity, the $300 million project financing is proceeding as planned, the expanded Tasiast operation continues to consistently outperform initial expectations, and permits for the project are in place. The Tasiast 24k project further strengthens our development pipeline, adding to our high-quality projects in the U.S., Chile and Russia.”

Tasiast 24k project feasibility study highlights

(Based on a $1,200/oz. gold price and $55/bbl oil price)
Throughput capacity (t/d)                                                  :24,000
Average annual production                                                :(Au oz.) (2022 – 2028) 563,000
All-in sustaining cost (per oz.)                                           :(2022– 2028) $560
Production cost of sales (per oz.)                                       :(2022 – 2028) $485
Net present value (NPV)                                                       :($ billions) $1.7
Initial capital expenditures ($ millions) (incremental)   :$150
Internal rate of return (IRR)(incremental)                       :60%

 
Kinross Tasiast 24K Project Flyover  ( Source Kinross)

 

The Tasiast 24k project takes a continuous improvement approach to increasing throughput, which is expected to ramp up to 21,000 t/d by the end of 2021, and then to 24,000 t/d by mid-2023. The project is expected to extend life of mine by four years to 2033. Throughput increases is expected to be achieved through minor upgrades and de-bottlenecking initiatives in the plant. The project includes modifications to the existing grinding circuit, adding new leaching and thickening capacity, as well as incremental additions to onsite power generation and water supply.

Tasiast 24k Project Timeline

TimelineOperational metricEstimate
2022 – 2028Average annual production (Au oz.)563,000 
Production cost of sales (per Au oz.)$485 
All-in sustaining costs (per Au oz.)$560 
Average CIL grade processed (g/t)2.2 
Strip ratio5.9 
Average processing cost (per tonne)$14.20 
Average mining cost (per tonne)$2.40 
Total material mined (tonnes)375,900,000 
2029 – 2033Average annual production (Au oz.)281,000 
Production cost of sales (per Au oz.)$860 
All-in sustaining costs (per Au oz.)$940 
Average CIL grade processed (g/t)1.1 
Strip ratio5.1 
Average processing cost (per tonne)$14.20 
Average mining cost (per tonne)$2.65 
Total material mined (tonnes)94,300,000 
2020 – 2033
(Life of mine)
Average annual production (Au oz.)445,000 
Production cost of sales (per Au oz.)$585 
All-in sustaining costs (per Au oz.)$6654 
Average CIL grade processed (g/t)1.8 
Average recovery rate93% 
Strip ratio6.1 
Average processing cost (per tonne)$14.60 
Average mining cost (per tonne)$2.45 
Total material mined (tonnes)628,800,000 
Total ounces recovered6,200,000

With the go-ahead decision for Tasiast 24k, the project team has been established and work packages and initial contracts are expected to be awarded shortly. The Company has permits in place for the 24k project and detailed engineering is now more than 50% complete. The Company expects to file an updated Tasiast Technical Report at the end of October 2019 that incorporates the 24k project.

Lower capital costs and relative execution risk 

The initial project capital costs are expected to be approximately $150 million, which is significantly less than the capital estimate for the original 30,000 t/d Phase Two expansion plan. The 24k project has reduced execution risk, requires less additional infrastructure, and leverages greater utilization of the existing facilities.

The design and engineering of the project benefitted significantly from the knowledge acquired operating the Phase One expansion, which helped identify many of the opportunities included in the 24k plan. For example, the project leverages the upside flexibility of the SAG mill, instead of requiring the addition of a new ball mill, resulting in substantial capital savings.

The project also incorporates operational efficiencies in maintenance, mining, supply chain and processing, which have contributed to Tasiast’s record operating performance over the past three quarters since the completion of the Phase One expansion.

About Kinross Gold

Founded in 1993, Kinross Gold is a senior gold mining company with a diverse portfolio of mines and projects in the United States, Brazil, Chile, Ghana, Mauritania, and Russia. Headquartered in Toronto, Canada, Kinross employs approximately 9,000 people worldwide. The Company is focused on delivering value through operational excellence, balance sheet strength, disciplined growth, and responsible mining.

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