Kinross PFS puts $995m price tag on Chile project
The Lobo-Marte project, in Chile, offers a potential cornerstone asset with an attractive cost profile for Canadian miner Kinross Gold.
The company on Wednesday published the results of a prefeasibility study for Lobo-Marte, which is 50 km from its La Coipa mine, detailing how the openpit operation could produce about 4.5-million gold-equivalent ounces (GEOs) at an average all-in sustaining cost (AISC) of $745/GEO, over a 15-year mine life.
The estimated capital cost for Lobo-Marte is $765-million, plus about $230-million in contingency, for a total of $995-million.
The project adds 6.4-million gold ounces, representing a 25% increase to the company’s 2019 year-end mineral reserve estimates. The reserve addition also increases Kinross’ reserve life index by about 2.5 years.
“The Lobo-Marte project provides Kinross with an excellent organic development option that has attractive AISC and offers substantial upside leverage to the gold price, without increasing project cost requirements and risk,” said president and CEO Paul Rollinson.
At a $1 200/oz gold price, the project has a 7% internal rate of return (IRR) and a net present value (NPV) of $150-million. At a consensus long-term price of $1 500/oz, the IRR increases to 14% and the NPV to $770-million, while at the spot price of $1 800/oz, the project has an IRR of 21% and an NPV of $1.36-billion.
Subject to a positive development decision, the PFS estimates Lobo-Marte project construction beginning in 2025, with first production expected in 2027. Production would start after the conclusion of mining at La Coipa project.
Kinross plans to start a feasibility study later this year, with scheduled completion in the fourth quarter of 2021.
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