Construction Proceeding At Paracatu Expansion

TORONTO - Kinross Gold reported that construction of the Paracatu expansion project in Brazil is proceeding on schedule and on budget and was approximately 80-per-cent complete as of January 31, 2008, with 85 per cent of capital spent and committed. Paracatu is targeted to begin commissioning in July 2008, and reach full production capacity of 160,000 tonnes per day by the end of commissioning. The project will increase gold production at Paracatu from approximately 175,000 ounces in 2007 to approximately 305,000-335,000 ounces in 2008, at an expected average cost of sales of $390-400 per ounce for 2008. The Paracatu cost of sales is expected to decrease to an average of approximately $345-355 per ounce in the fourth quarter of 2008.
The Maricunga mine in Chile produced 205,750 gold equivalent ounces to Kinross' account in 2007. Kinross held a 50-per-cent interest in Maricunga in 2006 and acquired a 100-percent interest following the completion of the Bema acquisition in early 2007.
Gold production in 2007 was lower by four per cent as compared to 2006. During the second and third quarters, severe weather conditions and conveyor repairs resulted in a combination of 16 lost production days and lower overall mine throughput. Despite lower production, revenues increased 11 per cent primarily as a result of higher gold prices. Cost of sales increased 12 per cent in 2007 as compared to 2006 due to increased maintenance and consumable costs.
At the Crix‡s joint venture mine in Brazil, tonnes of ore mined and processed both increased by four per cent in 2007 compared to 2006. However, gold equivalent production decreased by six per cent due to lower grades and recovery rates. Gold equivalent ounces sold increased by one per cent and revenues increased by 16 per cent in 2007 compared to 2006 to $66.2 million due to a higher realized gold price. Cost of sales increased by 41 percent to $24.9 million or $260 per ounce in 2007 compared to 2006 due to higher consumable costs, and the appreciation of the Brazilian real.