TORONTO (miningweekly.com) - Canadian gold-miners Barrick Gold and Kinross Gold have completed an updated prefeasibility study on their Cerro Casale gold/copper project, in Chile, and expect to wrap up a final feasibility study on the mine in the third quarter of this year, Kinross CEO Tye Burt said on Wednesday.

"We expect to make further decisions about Cerro Casale likely in the third quarter of 2009," he told analysts and investors on a conference call.

In the meantime, however, the partners have made progress on a new shareholders agreement for the joint venture, and have agreed on all the principal terms of the agreement, which will give both Kinross and Barrick 50% stakes in the project, Burt said.

The companies started talks on a new shareholders agreement after Kinross inherited a 49% holding in the project through its acquisition in 2007 of Bema Gold, and Barrick took over the balance of the project when it bought Arizona Star, towards the end of 2007.

The new agreement is expected to be executed by the two firms following a reorganisation of the Cerro Casale corporate ownership structure, Burt said.

The updated prefeasibility study will be released "shortly", and includes updated assumptions and estimates, while also identifying ways to improve the economics of the project.

In the previous resource and reserve estimate, the reserves stood at 23-million ounces of gold and six-billion pounds of copper.

However, based on "re-engineering and optimisation decisions", the proven and probable gold reserves have been reduced by 800 000 oz, Burt said.

The updated reserves were calculated at a $725/oz gold price and $2/lb copper price.

"Obviously that is above today's spot copper price, but I would say, based on the prefeasibility work that we have done with Barrick, and the current technical view, that it does have positive economics at those numbers," he said.

Optimisation work under way for the full feasibility study would also likely improve the economics, "and of course we are looking at ways that we can lock in some of the commodity prices", Burt said.

Kinross, which owns mines in the US, Brazil, Chile and Russia, started up two new operations last year - the Kupol mine in Russia, and the Buckhorn mine, in the US - and poured the first gold from its Paracatu expansion project, in Brazil, in October.

The firm also expects to complete a prefeasibility study on the Lobo Marte project, in Chile, that it bought from Teck Cominco and Anglo American, by the end of 2009, Burt said, and will spend as much as $45-million this year on its Fruta de Norte project, in Ecuador.

Kinross recently completed a $415-million equity financing, to shore up its balance sheet after the Lobo Marte transaction, and the acquisition of Aurelian Resources, which owned the Fruta del Norte asset.

Burt said he will continue to look for further acquisition opportunities, but added that it was important "to retain discipline on these things".

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