TORONTO (miningweekly.com) – Kinross Gold is planning an “extensive” expansion programme at the Tasiast mine, assuming it is successful in buying the asset's owner Red Back Mining, and would aim to start operations at a new, much bigger mill before the end of 2013, the company said on Wednesday.

Kinross issued a statement with additional detail on its planned friendly acquisition of Red Back, as well as plans for development as Tasiast, “in response to a request from Institutional Shareholder Services”. ISS is a proxy advisory firm.

The Toronto-based gold miner agreed in early August to buy West Africa-focused Red Back for about $7-billion in shares and warrants.

The deal has been criticised as being too dilutive, and some shareholders and analysts suggested Kinross may be overpaying.

The smaller company's two producing mines are Tasiast, in Mauritania, and Chirano in Ghana.

The question of value largely hangs on the growth potential at Tasiast, which already has reserves of five-million ounces of gold.

Kinross CEO Tye Burt has literally asked shareholders to trust him that the deal will be accretive, citing extensive, "boots on the ground" due diligence conducted this year.

The company says it cannot go into any more detail on the potential at Tasiast until it has firm NI 43-101-compliant numbers to back it up.

In Wednesday's statement, Kinross said it will launch an “intensive” exploration programme soon after the deal closes, and plans to announce a new NI 43-101-compliant resource for Tasiast in February next year.

The company also expects to fast-track engineering and project development work on the Tasiast expansion, including tendering for an engineering, procurement, construction management contractor, completion of a scoping study by December 2010, and completion of a feasibility study by July 2011, it said.

Kinross is currently planning a new mill with an increased capacity from the current 10 000 t/d to around 60 000 t/d, together with a new, larger mining fleet.

The company will also begin community discussions and permitting activities related to the expansion plans, as well as the water, power and other infrastructure it will need.

Shareholders in both Kinross and Red Back will vote on the acquisition on September 15.

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