TORONTO (miningweekly.com) - A project to increase capacity at Kinross' Maricunga mine, in Chile, will cost about $290-million, CEO Tye Burt said on Thursday.
Kinross, which announced this week it has agreed to buy West Africa-focused Red Back Mining, is expanding its existing operations and studying new mines to boost production and take advantage of strong gold prices.
The company has completed a feasibility study on the expansion at Maricunga, which will increase throughput to 26-million tons a year, from the current 16-million tons a year, increasing production incrementally by 90 000 oz to 100 000 oz a year.
The project scope includes a mine fleet of four haul trucks and one hydraulic shovel, a new primary crusher, a three-kilometre conveyor, two new secondary crushers, and conversion of two existing secondary crushers to tertiary crushers to operate in parallel with four
existing tertiary crushers.
Kinross also expects to announce the results of a handful of other studies in the next ten months or so, beginning with a prefeasibility study by the end of this year on the Fruta del Norte project, in Ecuador, which will be followed by a full feasibility study in the first half of next year.
The firm also plans to finish a feasibility study on the Lobo Marte project, in Chile, during the first three months of 2011, Burt said.
Kinross completed a prefeasibility study in January this year for the project, which is expected to produce an average of 350 000 oz/y to 400 000 oz/y in the first five years of operations.
The company plans to mine the Lobo and Marte deposits by openpit, and will build a 47 000-t/d heap leach operation, with a gold absorption and refining plans and a sulphidisation/acidification/recycle/thickening (or SART) plant to process the soluble copper.
Senior vice-president for projects Ken Thomas said that Kinross is also making good progress on the installation of a third ball mill at its Paracatu mine, in Brazil.
Paracatu was the main culprit behind Kinross revising its production targets downwards a couple of times last year, after the company had trouble ramping up an expansion at the project.
The firm has worked to improve plant availability, stability and volumes and announced in February this year it would go ahead with installing a third ball mill to increase throughput.
Construction at the site is 23% complete, the concrete pour for the mill foundation will be completed by the end of this month and the mill is on schedule for completion and commissioning by mid-year 2011, Thomas said.
The company is also moving ahead with a desulphurisation circuit, to improve gold recoveries at Paracatu, and a $46-million SART plant at Maricunga is on track to start up before the end of 2011.
CHALLENGES IN CHILE
Kinross still expects to meet its full-year output target of 2,2-million gold-equivalent ounces, but has lowered its expectations for production from its Chilean operations, after a number of "challenges" during the second quarter, COO Tim Baker said.
Production at La Coipa was impacted on by a higher concentration of clay in the ore blend which impacted on filter plant capacity which in turn reduced throughput in the second quarter, while at Maricunga, access to ore was restricted as mining reached the bottom of the Verde pit.
These declines were mostly offset, though, by higher production at the Fort Knox mine, in Alaska, which had not started production from the heap leach pad a year ago, as well as increased production at Paracatu and the Kettle Ricker/Buckhorn operations.
"At Paracatu, we are now beginning to reap the benefits of the improvements made over the past year," Baker commented.
Kinross has been active on the corporate activity front this year.
The firm announced in January it had agreed to buy a high-grade gold deposit located about 90 km from its remote Kupol mine, in eastern Russia, from entities related to billionaire Roman Abramovich's Millhouse LLC. The transactions received approval this week from the Russian government.
Kinross also acquired Underworld Resources in a friendly transaction, to get its hands on the White Gold project, in the Yukon, then announced in May that it had bought almost 10% of Red Back Mining,
This was followed by news that Burt had sold the firm's shares in Harry Winston Diamonds and its Diavik mine for a tidy profit, and then the announcement this week that the company plans to acquire the rest of Red Back for $7,1-billion in shares and warrants.
Kinross reported an adjusted net profit of $113,8-million for the second quarter, an increase of 34% after high gold prices offset the effects of lower production and sales volumes.
Shares in the company closed flat on Thursday, at C$16,09 a share by 16:20 in Toronto.