Despite write-down, Tasiast remains Kinross Gold's top priority
Kinross CEO Tye Burt said the company's technical understanding of the orebody "has grown substantially" at its controversial Tasiast gold project in Mauritania in West Africa.
Posted: Monday , 27 Feb 2012
RENO (MINEWEB) -
Kinross CEO Tye Burt stated Monday that the Canadian gold miner has no plans for significant mergers and acquisitions in the future, stressing the Tasiast remains Kinross's "top growth priority".
In a presentation to the BMO Global Metals & Mining Conference, Burt said the company's technical understanding of the Tasiast orebody "has increased substantially" as work at the gold mine accelerates.
Kinross acquired the Tasiast mine in northwestern Mauritania when it purchased Red Back Mining in September 2010 for $7.1 billion in shares. However, the company took a non-cash goodwill impairment charge of nearly $3 billion on the Tasiast and Chirano projects.
In his BMO conference presentation, Burt noted that Kinross has "rationalized" several assets in its portfolio over the years including 96% of Kubaka, 100% of Lupin, 90% of Julietta, 100% of Aquarius, 25% of Cerro Casale, 50% of New Britannia, 49% of the Porcupine JV, 32% of the Musselwhite JV, 100% of Blanket, and 9% of Diavick.
When asked by an audience member if Kinross would considered further disposal of assets, Burt responded that the company would definitely do so in the future.
Meanwhile, Burt outlined his priorities for Tasiast this year including: expanding the existing man camp to 3,000 beds; development of an interim water pipeline and wellfield, which is currently underway; incremental additions of 20 MW to site-based power supply; development of a truck shop, training center, additional fuel storage and warehousing; and expect delivery of an additional mining fleet of 12 trucks and two shovels.
Kinross hopes to commence construction at Tasiast in mid-2013. However, Burt observed, construction markets are currently tighter they have been in years. Capital expenditures this year at Tasiast are estimated to be $765 million.
Class action litigation against Kinross Gold was commenced earlier this month accusing Kinross and certain company officials of allegedly misrepresenting and/or failing to disclose that drilling results at Tasiast exhibited "high amounts of low-grade ores and that the company would, therefore, need to modify its mining processes to help minimize operating costs and maximizing profitability."
A decision on processing technology for Tasiast operations, including heap leach, is expected in the second quarter, Burt said. Kinross is currently examining the leachability of high-sulfide ore at Tasiast. He explained that the base of the deposit at Tasiast is high-grade gold ore that is surrounded by low-grade ore, which may be amenable to lower-cost processing.
Burt continued to stress that he considers Tasiast to be a district-wide opportunity with what Kinross believes is an extensive gold system that is largely underexplored. As of year-end 2011, Tasiast contained 7.6 million ounces in proven and probable gold reserves.
Meanwhile, Burt reported negotiations with the Ecuadorian government on an enhanced economic package for the Fruta del Norte gold project are progressing. Kinross recently placed Fruta del Norte on the back burner in its project pipeline.