Kinross Gold Corp. has greenlighted development of the first phase of its Tasiast expansion project in Mauritania, positioning the company to finally generate some value from the long-troubled operation.
Toronto-based Kinross plans to invest US$300 million to boost capacity at the Tasiast mill to 12,000 tonnes a day, up 50 per cent from the current level. That move is expected to increase production at the mine by 87 per cent to 409,000 ounces a year, according to a feasibility study, and make the money-losing operation profitable.
The ultimate plan is to implement a second phase of the expansion, which would boost capacity to 30,000 tonnes a day and raise annual production to 777,000 ounces. The estimated cost for that second phase is US$620 million, and Kinross expects to make a decision on it by the end of 2017.
Prior expansion plans for Tasiast called for a significantly bigger operation, but Kinross pulled back on them due to concerns about high construction costs, high risk and low returns. The company decided that a cheaper “phased” approach was a better move in a volatile gold price environment.
“What’s great for me is for US$300 million of capital, we basically double the production and drop the operating costs significantly. It really creates a great mine that anyone would want to own,” chief executive Paul Rollinson said in an interview.
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