Kinross Gold On Track To Meet Annual Production

 

TORONTO - Kinross Gold reported that with strong operational performance during the quarter in the Americas, the region is on track to meet its 2017 guidance range for production and cost of sales per ounce, notwithstanding the temporary curtailment of mining operations at Paracatu.

At Fort Knox in Alaska, production and cost of sales per ounce were mainly in line with Q1 2017. Production decreased compared with Q2 2016 largely due to a colder spring season that affected heap leach performance, which was offset by an increase in mill grades. Cost of sales per ounce was lower year-over-year mainly due to a decrease in operating waste.

Round Mountain, in Nevada performed strongly during the quarter, with production increasing 12% compared with Q1 2017, and 24% compared with Q2 2016, primarily due to higher mill grades, the highest the mine has reached since 2008. The production increase was also as a result of more ounces recovered from the heap leach primarily as a result of higher grades. Cost of sales per ounce was at its lowest level since 2012, and was substantially lower both year-over-year and quarter-over-quarter mainly due to the higher mill grades. Labour costs also decreased year-over-year.

At Bald Mountain, also in Nevada production increased compared with Q1 2017 and Q2 2016 mainly due to a significant increase of tonnes placed on the heap leach pads, and ounces recovered. Cost of sales decreased compared with Q1 2017 mainly due to lower contractor costs and was lower year-over-year mainly due to a decrease in contractor and maintenance costs. The mine is expected to substantially increase production in the second half of the year due to mine sequencing and timing from the heap leach and is on track to double production for 2017 compared with full-year 2016.

At the Kettle River-Buckhorn Mine in Washington it outperformed during the quarter, as production increased compared with Q1 2017 and Q2 2016, with cost of sales per ounce decreasing mainly due to higher grades. While the last batch of ore was hauled from Buckhorn in July, the mill is expected to continue to process stockpiles, with minimal production expected in the third quarter. The small-footprint, high-grade underground mine performed strongly during its nine year mine life and exceeded expectations, with mine life originally slated to end in 2015. Exploration in the region continues in 2017.

At the Paracatu Mine, in Brazil production was higher compared with Q1 2017 and Q2 2016 mainly due to higher recoveries. Cost of sales per ounce decreased compared with Q1 2017 mainly due to the higher recoveries, and was higher compared with Q2 2016 primarily due to more operating waste mined and unfavorable foreign exchange movements.

At the beginning of July, the expected temporary curtailment of mining and Plant 2 operations commenced at Paracatu due to the lower than average rainfall in the area. The Company's 2017 production guidance took into account the potential curtailment and is not expected to be impacted at this time. The expected production impact has been partly mitigated by the tailings reprocessing initiative, which is expected to increase in the third quarter at Plant 1, while Plant 2 maintenance has been brought forward to coincide with the downtime. The production from the tailings reprocessing is expected to be approximately 25,000 - 35,000 gold ounces in the third quarter, with a processing rate of approximately 50,000 t/d at Plant 1. The Company also continued to implement water mitigation efforts, including an enhanced water pumping system, securing water rights, and installment of wells around the site. Curtailment of mining and Plant 2 operations will continue until the water balance allows for production to resume, which is expected in Q4 when the rainy season begins.

At Maricunga in Chile, production from the rinsing of the heap materials placed on the pads prior to the suspension of mining activities continued to produce better than expected results. Cost of sales per ounce was lower quarter-over-quarter and year-over-year due to higher ounces recovered. While the rinsing of the pads is now expected to continue for the remainder of the year, production is expected to be minimal and lower than the first half of 2017.