Name and Location
Tasiast gold mine expansion, Mauritania.

Client
Kinross Gold Corporation.

Project Description
The feasibility study completed on the Tasiast mine envisages the replacement of the existing 8 000 t/d mill at the mine with a new 38 000 t/d mill using heavy fuel oil for power generation at the site.

The new mill will consist of a primary crusher, a semiautogenous and ball mill grinding circuit, and a conventional carbon-in-leach (CIL) circuit. Existing dump-leach facilities will be phased out in 2019, but could be available for lower-grade ore in the future if it becomes economically viable or if new ore is discovered in near-mine deposits.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value of $1.2-billion and internal rate of return of about 17%, based on an expanded operation.

Value
The projected initial capital cost is $1.566-billion, including $182-million in contingency.

Duration
The project is expected to take three years to complete.

Latest Developments
Kinross will not go ahead with the expansion of its Tasiast mine because of the weak gold price.

Although Kinross is in a strong cash position and project financing talks have gone well, the company is concerned about cash flow during the 35 months of construction if the gold price drops further.

"We believe in the quality of the project. It's really about how much risk tolerance we are prepared to take on future cash flows looking out three years," says Kinross CEO Paul Rollinson.

The company has said it will "continue to assess market conditions with . . . expanding Tasiast, should circumstances change". It will also focus on reducing costs at the mine.

The mill expansion at Tasiast is Kinross' biggest growth project and, without it, analysts are concerned about the company's growth prospects.

Rollinson has said that the company will consider merger and acquisition opportunities, as it always has.

Kinross acquired Tasiast as part of its $7.1-billion takeover of Australia's Red Back Mining in 2010. It has written down virtually all of the acquisition price of the takeover, resulting in former Kinross CEO Tye Burt’s dismissal.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Kinross Gold Corporation VP: investor relations Tom Elliott, tel +1 416 365 3390 or email tom.elliott@kinross.com.