Kinross Update On Development Projects And Full Year-End 2020 Exploration Results
TORONTO - Kinross Gold Corporation, President and CEO, J. Paul Rollinson, said, “In 2020, we made excellent progress advancing our high-quality and diversified project pipeline and added 5.7 million gold ounces to our mineral reserve estimates after depletion. We extended mine life at Chirano by three years, and by one year at Kupol and Paracatu, and we continue to focus on opportunities for further mine life extensions. Our successful track record in project development, mine plan optimization and exploration underpins our robust production profile, which is expected to grow by 20% over the next three years. The Tasiast 24k and La Coipa projects, which are currently under construction, remain on schedule and are proceeding well. First gold was produced from the Fort Knox Gilmore project’s new heap leach pad, while study and development work at Lobo-Marte, Udinsk and Peak advanced well. We are looking forward to significant project milestones in 2021 and are ramping up our exploration efforts as we continue to strengthen our global portfolio.”
Development Projects: The Tasiast 24k project is advancing on schedule and on budget, expected to increase throughput to 21,000 t/d by year-end 2021 and to 24,000 t/d by mid-2023; Drilling and study work are progressing well at Udinsk. The pre-feasibility study has now commenced and is expected to be completed in Q4 2021; added 259 Au koz. to estimated measured and indicated resources and 94 Au koz. to inferred resources; The La Coipa Restart - Pre-stripping started on schedule in early January 2021 and first production remains on-track for mid-2022; added 103 Au koz. and 3,266 Ag koz. to mineral reserve estimates as a result of mine plan optimization; At Lobo-Marte, feasibility study is on-track for completion in Q4 2021; The Fort Knox Gilmore reported first gold ounces that were produced from the new heap leach pad in January 2021 and construction was completed on schedule and under budget; and Peak has commenced the drilling program and studies for permitting after acquiring 70% of synergistic, Fort Knox “bolt-on” project in September 2020.
Exploration and Mineral Reserves and Resources update: Kinross added 5.7 million Au oz. to proven and probable mineral reserves in 2020, a 23% year-over-year increase, to 30.0 million Au oz. mainly due to net additions of 6.4 million Au oz. at Lobo-Marte, 446 Au koz. at Chirano and 103 Au koz. at La Coipa, while maintaining a $1,200 per ounce gold price assumption; Due to successful exploration and mine optimization programs, Kupol and Paracatu extended mine life by one year to 2025 and 2032 respectively, and Chirano extended mine life by three years to 2025, with further opportunities for additional mine life extensions; and In 2021, Kinross expects to ramp up its global exploration program with a focus in Russia and Chirano, and will continue to prioritize opportunities within the footprint of existing mines in its global portfolio for mineral resource and reserve additions.
In 2020, drilling at the Chulbatkan license was focused within the Udinsk resource pit – the first project the Company expects to develop on the Chulbatkan license – with a total of more than 60,000 meters of infill drilling completed. The drilling program supported advancement of the Udinsk pre-feasibility study (PFS) and confirmed the layout of the Udinsk deposit within the larger Chulbatkan area. As a result of 2020 optimization and engineering work using a $1,600 per ounce gold price, approximately 259 Au koz. were added to measured and indicated resources and 94 Au koz. to inferred resources in 2020.
The Udinsk PFS commenced in partnership with a global EPCM firm with in-country experience and is expected to be completed in Q4 2021. The PFS will focus on an initial three-stage crush heap leach process flow and potential early works related to infrastructure, with the goal of fast-tracking construction. Kinross is targeting a declaration of mineral reserves at year-end following the expected completion of the PFS. The Company is also studying the viability of a power line connecting the project into the regional grid. First production at Udinsk is anticipated to occur in 2025.
On the larger Chulbatkan license, surface exploration activities such as soil geochemical sampling, induced polarization and magnetic and gravity geophysical surveys were carried out during 2020. These programs resulted in encouraging results which confirmed known targets and led to the discovery of new target areas, with new anomalies identified near the Udinsk resource pit to the northeast and southwest. As a result, the 2021 drilling program will prioritize the soil and geophysics anomalies as part of the first phase of the drilling program and is planned to be subsequently drilled for strike and depth extensions.
Kinross also acquired the land package surrounding the Chulbatkan license in 2020, which increased the total Chulbatkan license area from 120 km2 to approximately 450 km2. The Company is planning to commence greenfields exploration activities in 2021 in these new areas.
La Coipa Restart and Lobo-Marte
The La Coipa Restart project is progressing well, with pre-stripping starting in early January 2021 as scheduled, and first production remaining on-track for mid-2022. Camp refurbishments were completed in December 2020 and fleet refurbishments are more than half complete. The mobilization of the project management team and of the first major contractors for plant refurbishments have started on schedule.
Kinross added approximately 103 Au koz. and 3,266 Ag koz. in estimated mineral reserves at La Coipa primarily as a result of optimization of the Phase 7 mine plan. The Company also added approximately 206 Au koz. and 1,702 Ag koz. in estimated measured and indicated resources, mainly as a result of the change in gold price assumption for resources. Kinross continues to study opportunities to incorporate adjacent deposits with existing mineral reserves and resources into the La Coipa mine plan and potentially extend mine life.
At the Lobo-Marte project, the feasibility study continues to advance on schedule and is expected to be completed in Q4 2021. The Company is targeting production at Lobo-Marte to commence in 2027 following permitting and after the completion of mining at La Coipa, with construction potentially starting in 2025. Kinross continues to believe that Lobo-Marte has the potential to be a long-life, cornerstone asset with attractive costs.
At the Fort Knox Gilmore project, the first gold ounces from the new Barnes Creek heap leach pad were poured in January 2021. Infrastructure and processing facilities for the project were completed on schedule and under budget, and the project was fully transferred to the Operations team.
Kinross made good progress advancing the Peak project after acquiring a 70% interest at the end of September 2020. A metallurgical and geotechnical drilling program has commenced, along with engineering and environmental studies for permitting. A close working relationship has also been established with the local Upper Tanana Athabascan Village of Tetlin. A scoping study is expected to be completed in Q2 2021 and a feasibility study is expected to be completed by the end of 2022, with a target for first production in 2024.
Kinross’ total proven and probable gold reserve estimate increased by 23% to 30.0 million Au oz. at year-end 2020 compared with 24.3 million Au oz. at year-end 2019. The significant net year-over-year increase of 5.7 million Au oz. after depletion was mainly due to additions in Chile at the Lobo-Marte and La Coipa projects, and at Chirano, which extended mine life by three years to 2025. Additions to estimated mineral reserves at Kupol and Paracatu largely offset depletion and extended mine life by one year at both mines. Highlights of the Company’s net estimated mineral reserve additions include: 6.4 million Au oz. addition at Lobo-Marte after the project PFS was completed in July 2020; 446 Au koz. net addition at Chirano after depletion as a result of exploration and mine plan optimization success, extending mine life to 2025; and 103 Au koz. addition at La Coipa mainly due to optimization of the mine plan.
At Kupol, an addition of 345 Au koz. to mineral reserves was mainly the result of exploration success, which largely offset depletion and extended mine life by one year to 2025. At Paracatu, an addition of 911 Au koz. to mineral reserves before depletion was a result of mine plan optimization and additional engineering that extended mine life one year to 2032 at the long-life, cornerstone asset.
Kinross’ total proven and probable silver reserve estimate increased to 59.2 million Ag oz. at year-end 2020, compared with 55.7 million Ag oz. at year-end 2019. The increase was mainly due to a 3.3 million Ag oz. reserve addition at La Coipa. Kupol also added 4.0 million Ag oz. during the year, more than offsetting depletion of 3.4 million Ag oz. Silver price assumption for estimated reserves remained at $17 per ounce.
Kinross’ total estimated measured and indicated gold resources at year-end 2020 were 32.4 million Au oz. compared with 35.5 million Au oz. at year-end 2019. The decrease was mainly due to conversions of mineral resources to mineral reserves at Lobo-Marte and Paracatu, partly offset by the addition of the Peak project.
The Company’s change in gold price assumption to $1,600 per ounce from $1,400 per ounce in estimating its mineral resources, along with optimized resource pits, contributed to year-over-year increases at Maricunga, Round Mountain, Fort Knox, La Coipa and Chulbatkan. The acquisition of Peak also contributed to indicated resource additions.
Kinross’ total estimated measured and indicated silver resources increased by 4.3 million Ag oz. to 39.2 million Ag oz. at year-end 2020, mainly as a result of the acquisition of the Peak project, and additions at La Coipa. Kinross’ total estimated inferred gold resources at year-end 2020 increased 53% to 9.0 million Au oz. from 5.9 million Au oz. at year-end 2019. The 3.1 million Au oz. net increase was primarily due to the change in the gold price assumption and exploration success, which resulted in increases at Maricunga, Round Mountain, Fort Knox, Paracatu, Chulbatkan and the Curlew Basin exploration project at Kettle River. Engineering changes at Paracatu, Maricunga, Fort Knox and Chulbatkan also contributed to the overall increase in estimated inferred resources.
The Company’s exploration efforts continued to focus within the footprint of existing mines during 2020, with a total of more than 135,000 meters of drilling completed for brownfields projects. While the coronavirus pandemic affected surface drilling at Kupol, underground drilling was not impacted and returned strong results. Drilling programs at Chirano and at the Company’s Americas sites were not materially impacted by COVID-19. Highlights of the 2020 brownfields exploration program include significant results at Kupol and Chirano, which contributed to the extension of mine life for one year to 2025 at Kupol, and three years to 2025 at Chirano, with opportunities for further mine life extensions at both operations.
Exploration efforts and engineering optimization added a total of approximately 8.7 million Au oz. in estimated mineral reserves before depletion in 2020.
At Kupol-Dvoinoye, total of 409 Au koz. were added to estimated mineral reserves which largely offset depletion. Drilling, which tested targets at depth, and at the South and North extensions of the Kupol main vein system, yielded positive results. Drill intercepts continue to confirm high-grade, narrow-vein mineralization extending northwards and at depth below the Kupol mine workings. As a result of continued exploration success at Kupol and engineering optimization work at Dvoinoye, scheduled mill production at Kupol has been extended by another year to 2025, with further opportunities for additional extensions. The regional exploration program planned around the Kupol and Dvoinoye KSP (Kupol Synergy Zone of Influence project) areas was impacted by COVID-19 during the year. The majority of the KSP program, which is targeting the 130 km radius around Kupol based on an economic trucking distance to the mill, was deferred to 2021 .
The Chirano near-mine exploration activities, which included 52,600 metres of drilling in 2020, continued to focus on resource conversion and mine life extension. Exploration and engineering success added 660 Au koz. to its mineral reserve estimates before depletion, which resulted in a three-year mine life extension to 2025, with opportunities for further extensions. For 2021, the exploration budget (brownfields and greenfields) was increased to $120 million compared with $90 million in 2020. The increase is largely due to programs that will follow up on 2020’s exploration success and the acquisition of advanced exploration properties such as the 1,214 km2 Kayenmyvaam license in Russia, which is largely within the KSP, and the Peak development project in Alaska.
At Kupol-Dvoinoye the company expects to spend up to $24 million in 2021 to explore targets within the KSP, including the promising Kayenmyvaam license and the Kavralyanskaya license, which the Company received permits to explore in 2020. These targets, together with deferred work on numerous prospective tenements in the KSP, will continue to be a focus for 2021.
The Kupol Minex, during 2020, near-mine exploration activities identified the southern extension of the Vtoriy target and the main Kupol strike. Surface drilling intersected high grades from both Vtoriy and the Kupol trend, which could potentially be a significant extension off the Kupol strike that is untested to the south. The Company is expected to continue studying the North Extension of the Kupol vein system beyond the Northeast Extension into Zone 42, where drilling continued to intercept narrow, high-grade veins.
The Company is increasing exploration spending at Chirano to $12 million in 2021 to drill depth extensions at Obra, Akwaaba, Suraw and Tano. The budget includes the construction of an exploration decline to drill the northerly plunge extensions of the Obra high grade shoot from underground. In addition to the underground drilling program, plans include continuing to explore for open pit mining material near the Mamnao open pit operation. The Company is targeting conversion of a significant portion of estimated mineral resources to mineral reserves in 2021 and 2022 from Obra, Akwaaba, Suraw, Tano and Mamnao.
At Bald Mountain, the company expects to spend $6.5 million at Bald Mountain in 2021 with an increased focus on drill testing targets identified in 2020 to explore for both intrusive-related and sediment-hosted type deposits that can be potentially converted to mineral resources in subsequent years. Near-mine targets in the North area of Bald Mountain – such as Duke, Galaxy, Bida and Royale – are expected to be explored during 2021.
A large portion of the $6 million budget allocated for Round Mountain in 2021 is expected to focus on drilling the Phase X deposit. One part of the program plans to continue defining the narrow structurally controlled high-grade vein at the upper portions of Phase X that was identified in 2020. In addition, drilling is expected to test along-strike and down-dip extents of the mineralized structures with the goal of delineating high-grade material for potential underground mining.
Kinross is budgeting $5.5 million at Fort Knox, with the goal of converting mineral resources to mineral reserves at Gil-Sourdough and to continue to explore the western extension of Gilmore. The Company also expects to explore the newly-acquired Peak property to advance drill targets near the vicinity of the expected Peak pit area.
The Kupol Minex exploration program, along with Dvoinoye exploration, successfully added 409 Au koz. to estimated mineral reserves in 2020, largely replacing depletion for the second consecutive year and adding one year of mine life at Kupol to 2025. This addition is the largest at Kupol since 2014, with major portions delineated from the Kupol Deeps and the North Extension of the Kupol main vein. Additions were also realized from Zone 37 West, Moroshka South and Providence.
Six underground and two surface drill rigs continue to operate at Kupol with the goal of delineating inferred resources and upgrading mineral resources to reserves. Significant results received from late 2020 drilling have delineated substantial mineralization that was previously unrecognized at the southern extension of the Kupol ore body, which the Company expects to continue exploring in 2021 from both surface and underground.
The 2020 regional exploration program within the KSP area was impacted by the COVID-19 pandemic, and most of the exploration planned in 2020 was deferred to 2021. Notwithstanding this impact, a total of 33,200 metres of drilling was completed during 2020, with activities also focused on preparations for 2021, including the logistical coordination of remote camps for both the Kavralyanskaya and Kayenmyvaam project areas. These two areas are expected to be the priority for the KSP exploration drilling program this year, with the initial exploration program at Kayenmyvaam expected to focus on target generation from geochemical and geophysical mapping activities.
The 2020 near-mine exploration activities at Chirano continued to focus on resource conversions and mine life extension. A total of 52,500 meters of drilling was completed in 2020 resulting in a net reserve increase of 446 Au koz. after depletion and a three-year mine life extension to 2025. In addition, the Company is targeting a significant portion of estimated mineral resources for potential conversion to mineral reserves in 2021 and 2022 from Obra, Akwaaba, Suraw, Tano and Mamnao.
In 2020, drilling at Obra continued to demonstrate the potential for underground mining and the continuity of a high-grade shoot that was first encountered in 2019. As a result of these encouraging results, Kinross plans to construct an exploration decline in 2021 in order to drill the northerly plunge extensions of the high-grade shoot from underground.
The 2020 Akwaaba drilling program focused on testing the potential of further resource extensions beneath the current base of mineral reserves and probe up-plunge to test for continuity in the Akwaaba upper hanging wall shoot. Results confirmed and added to mineral reserves four mining levels in areas 100 meters below the 2019 mineral reserve depth, with mineralized extensions to the south within favorable lithologies.
A new near-surface mineralized structure was also identified to the immediate west and parallel to the Mamnao pit over a strike length of approximately 350 meters. The drilling and mapping has demonstrated near oxide surface potential with indications for future expansions of multiple sub-parallel structures and possible mineral reserve additions.
Bald Mountain exploration activities focused on near-mine and generative targets in 2020 and a total of approximately 19,700 meters of drilling was completed. At year-end, approximately 50% of depleted reserves were replaced through exploration and engineering optimization work. Drilling focused in the North area where encouraging drill results were received in the area between Duke and Duke South, (17.9 meters @ 1.4 g/t Au). At Bida, thick sections of mineralized rock were intersected in four holes to the east of the resource (82 meters @ 0.4g/t Au).
Generative exploration drill-tested 14 target areas along with fieldwork on an additional five targets to define future drilling. Encouraging results at Wino (57 meters @ 0.31 g/t Au and 27 meters @ 0.34 g/t Au) were received in zones of intrusive-related mineralization in the southern portion of the Numbers deposit in the North area. At West Mooney, drilling intercepted gold-bearing silicified breccia hosted in volcanic rocks. The program for 2021 plans to continue exploring these generative targets in the North area.
Exploration efforts at Fort Knox focused on the satellite Gil-Sourdough deposit, located 13 kilometers east of Fort Knox, with continued drilling in the western and eastern resource areas of the Fort Knox mine. Generative exploration carried out in 2020 tested targets within the northeast of the Fort Knox land area. A total of approximately 8,500 meters of drilling was completed in 2020.
Along the Northwest Bulge area, drilling was designed to delineate granite contact and to test for continuity of the Dandelion ore-shears. Drilling, pit optimization and the increase in the resource gold price assumption added 563 Au koz. to Kinross’ estimated measured and indicated mineral resources and a net increase of 283 Au koz. to its estimated inferred mineral resource, with a large portion attributed to the increase in gold price assumption used in the evaluation.
At Gil-Sourdough, the 2020 program sought to convert and upgrade inferred resources to reserves within the scoping-level pit design, and to focus on the conversion of mineral resources to mineral reserves in the West North Gil extension zone. Resource estimation using the new drill data is expected to be completed during the first half of 2021. In 2021, exploration will focus on extending the Gil-Sourdough deposit, and assessing targets in the northeast of the district and beyond.
The Curlew Basin Exploration (CBX) Project, which is located approximately 35 kilometers north of the Kettle River mill, continued to advance a three-year, multi-stage program to explore high-margin ounces for the potential future development on an existing mineral resource. The CBX Project involves dewatering, rehab, and exploration drift development for 15,000 meters of underground drilling with the goal of discovering new zones of mineralization, extend known mineralization, and provide critical infill on an existing mineral resource.
In 2020, approximately 5,100 meters were drilled over eight target areas in the Curlew district. Underground drilling led to the discovery of the Galaxie Vein (2.3 meters @ 5.87g/t Au) and surface drilling provided high-grade vein extensions at the Marlin target (0.4 meters @ 38 g/t Au, 1.0 meters @ 11.27g/t Au). The K2 deep vein structure was extended along strike by approximately 300 meters and a 50-meter dip extension. Drilling and preliminary engineering work added 292 Au koz. to the Company’s estimated inferred resources in 2020.
At Round Mountain a total of 11,500 meters of drilling was completed over four target areas – Phase X, the northeast end of the pit, Atlas (south Caldera rim), and Gold Hill – during 2020. Phase X drilling confirmed the continuity of mineralized structures. Most of the mineral resource additions in 2020 were the result of an increase in the gold price assumption used in the engineering optimization. In 2021, the exploration program will be focused on testing extensions at Phase X and beyond, with the goal of optimizing a potential pit shell design. The program is also expected to continue exploration drilling at Gold Hill and exploring other near-mine targets, and conducting regional exploration work.
In 2020, Kinross greenfields exploration program focused on targets in Nevada, the Abitibi region in Quebec and Ontario, Manitoba, areas of Eastern Russia, and northern Finland’s greenstone belts. Approximately 35,000 meters of drilling was completed on 12 greenfields projects, the majority of which are in North America.
In North America, Kinross explored projects in both joint venture (JV) and 100%-owned Kinross claims. Kinross and its JV partners undertook geochemical sampling, ground and airborne geophysical surveys and drilling programs. At several projects, exploration work identified indications of mineralization and generated prospective targets, with first and second phase drilling programs completed in 2020. The Company and its JV partners have also identified new opportunities in Nevada, Ontario, Manitoba, Far East Russia and Finland, and are reviewing potential drilling programs at these projects for 2021.
In Canada, exploration focused on properties which are under JV agreements and where Kinross is the operator, including, the Van Horne property in Ontario and the Laguna, Laguna North, and Berry Creek properties in Manitoba. Exploration work is expected to continue in 2021 after encouraging results in 2020.
Kinross’ greenfields exploration strategy continues to focus on strategic investments and partnerships with high-quality junior exploration companies to pursue high-margin deposits and opportunities. Kinross also focuses on fostering relationships with management teams that have a successful track record of discovery and maintaining a solid pipeline of quality targets that demonstrate scope and scale for significant discovery.