Kinross Gold Corporation (TSX:K; NYSE:KGC) (“Kinross” and the
“Company”) today provided an update regarding the temporary
suspension of milling operations at its Tasiast mine due to a fire
that occurred on June 15, 2021.
Mining activities and project work have
resumed
Kinross confirms there were no injuries as a
result of the fire. Mining activities have resumed at Tasiast,
including stripping to access higher grade ore. Construction work
on the Tasiast 24k expansion project has also resumed and the
Company is evaluating opportunities to optimize the project while
milling operations are suspended.
Kinross is drawing on resources from across the
Company to expedite actions to reduce the SAG mill’s downtime and
to review all potential strategies to mitigate the expected
production deferral. With mining activities continuing at Tasiast,
Kinross expects to process stockpiles of higher grade ore when the
mill restarts.
Tasiast has property damage and business
interruption insurance in place and has commenced the claims
process with its insurance carriers.
Government authorities have visited the site and
Mauritania’s Minister of Petroleum, Mines and Energy has expressed
solidarity and support for the Company.
The Company does not anticipate the fire to
affect Tasiast’s life of mine production and mineral reserve
estimates, or have a material impact on the mine’s overall
value.
Initial findings and
estimates
While Kinross is continuing to investigate the
cause of the fire, and is assessing the damage and expected impacts
to production and costs, initial findings include the
following:
- The fire began at approximately
11:00 p.m. local time on June 15, 2021 at the trommel screen of the
SAG mill.
- At the time the fire began the SAG
mill was shut down and undergoing scheduled maintenance, including
welding.
- Due to the quick actions of the
Tasiast team, the fire was mainly limited to the discharge area of
the SAG mill.
- The ball mills, leaching areas,
primary crusher, stockpile and the rest of the processing circuit
and other infrastructure were not affected.
- The Company is investigating the
condition of the mill shell, discharge bearing and the mill’s
gearless motor drive, all of which are important considerations in
determining the time and cost required to restart the mill.
- Preliminary estimates indicate a
restart of the SAG mill by year-end, with expected restart costs of
up to $50 million.
Appendix A – Photos of the Tasiast SAG
mill area:
https://www.kinross.com/KGC-Tasiast-June-21-Appendix-A
The Company has revised its 2021 production
guidance to 2.1 million Au eq. oz. (+/- 5%), compared with 2.4
million Au eq. oz. (+/- 5%) disclosed on February 10, 2021.
In 2022 and 2023, Kinross continues to expect
annual production to increase to approximately 2.7 million Au eq.
oz. and 2.9 million Au eq. oz., respectively.
Based on the initial estimate of the mill’s
downtime and with ongoing work on the 24k project, Tasiast’s
throughput capacity is now expected to reach 21,000 tonnes per day
during Q1 2022, compared with the previous estimate of year-end
2021. Throughput capacity is expected to increase to 24,000 tonnes
per day by mid-2023, which is unchanged from the original 24k
project estimate.
Despite the mill incident at Tasiast, the
Company remains in a strong financial position and is committed to
evaluating options to further enhance shareholder returns, which is
supported by Kinross’ Board of Directors.
CEO commentary:J. Paul
Rollinson, President and CEO, made the following comments in
relation to the fire at Tasiast:
“All of our people are safe and accounted for at
Tasiast, which is our most important priority. Our site team
responded quickly to the fire, which limited the main impacts to
the mill discharge area. While we are continuing to assess the
impact and are investigating the cause of the incident, we are
pleased to report that mining and project work have now resumed at
site. We are now focused on restarting milling operations at
Tasiast and are mobilizing technical resources from across the
Company to expedite actions and achieve this goal.
“Although this unfortunate incident is expected
to impact our annual production guidance, our financial position
and longer-term outlook remain very strong. We continue to expect
production to increase to 2.7 and 2.9 million ounces in 2022 and
2023, respectively, and drive our robust free cash flow profile.
The strength of our investment grade balance sheet, free cash flow
position and growing production from our global portfolio underpin
our commitment to further enhancing shareholder returns, including
a potential share buyback program.”
Conference call details
In connection with this news release, Kinross
will hold a conference call and audio webcast on Tuesday, June 22,
2021 at 8:00 a.m. ET to discuss the update, followed by a
question-and-answer session. The call-in numbers are as
follows:
Canada & US toll-free – (833)
968-2237; Passcode: 5787347 Outside
of Canada & US – (825) 312-2059; Passcode:
5787347 Replay (available up to 14 days after the call):
Canada & US toll-free – (800)
585-8367; Passcode: 5787347Outside
of Canada & US – (416) 621-4642; Passcode:
5787347
You may also access the conference call on a listen-only basis
via webcast at our website www.kinross.com. The audio webcast
will be archived on www.kinross.com.
About Kinross Gold Corporation
Kinross is a Canadian-based senior gold mining
company with mines and projects in the United States, Brazil,
Russia, Mauritania, Chile and Ghana. Our focus is on delivering
value based on the core principles of operational excellence,
balance sheet strength, disciplined growth and responsible mining.
Kinross maintains listings on the Toronto Stock Exchange (symbol:K)
and the New York Stock Exchange (symbol:KGC).
Media Contact Louie DiazVice-President,
Corporate Communicationsphone:
416-369-6469louie.diaz@kinross.com
Investor Relations ContactChris Lichtenheldt
Vice-President,
Investor
Relations phone:
647-821-1736 chris.lichtenheldt@kinross.com
Cautionary statement on forward-looking
information
All statements, other than statements of
historical fact, contained or incorporated by reference in this
news release including, but not limited to, any information as to
the future financial or operating performance of Kinross,
constitute “forward-looking information” or “forward-looking
statements” within the meaning of certain securities laws,
including the provisions of the Securities Act (Ontario) and the
provisions for “safe harbor” under the United States Private
Securities Litigation Reform Act of 1995 and are based on
expectations, estimates and projections as of the date of this news
release. Forward-looking statements include future events and
opportunities including, without limitation, statements with
respect to: the potential impact of the mill fire on operations at
Tasiast; our estimates, expectations, forecasts and updated
guidance for production at Tasiast, our revised production guidance
across all of our assets, our expectations regarding potential
enhancements to shareholder returns, all-in sustaining cost and
capital expenditures, cost savings, project economics (including
net present value and internal rates of return); the impact of the
fire on the mineral reserve and mineral resource estimates at
Tasiast, the timing and amount of estimated future production,
capital expenditures, the costs and timing of the development of
the 21k and 24k projects, and the proposed timing of re-commencing
mining and processing activities. The words “anticipate”,
“estimate”, “expect”, “opportunity”, and “option” or variations of
or similar such words and phrases or statements that certain
actions, events or results “may”, “could”, “will” or “would” occur,
and similar expressions identify forward-looking statements.
Forward-looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable by
Kinross as of the date of such statements, are inherently subject
to significant business, economic and competitive uncertainties and
contingencies. The estimates, models and assumptions of Kinross
referenced, contained or incorporated by reference in this news
release, which may prove to be incorrect, include, but are not
limited to, the various assumptions set forth herein and in our
Annual Information Form dated March 30, 2021 and our full-year 2020
and first-quarter 2021 Management’s Discussion and Analysis as well
as: (1) the estimated cost and projected timing of repairing and
re-starting the SAG mill being consistent with the Company’s
current expectations; (2) the Company’s estimates regarding the
timing of completion of the 21k project; (3) the Company’s ability
to successfully recover under its insurance policies being
consistent with management’s expectations; (4) the impact of the
incident on the Company’s current production guidance, mineral
reserve and mineral resource estimates, and estimated overall value
of Tasiast; (5) the estimated duration of the suspension of the SAG
mill being consistent with Kinross’ current expectations; (6) the
construction of the 24k project being unaffected by the suspension
or re-start of the SAG mill; (7) the estimated impact on the timing
of completion of the 21k project being consistent with the
Company’s expectations; and (8) the viability of options to enhance
shareholders returns and the Company’s ability to obtain the
necessary consents and approvals related to such options. Known and
unknown factors could cause actual results to differ materially
from those projected in the forward-looking statements. These
uncertainties and contingencies can directly or indirectly affect,
and could cause, Kinross’ actual results to differ materially from
those expressed or implied in any forward-looking statements made
by, or on behalf of, Kinross. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Forward-looking statements are
provided for the purpose of providing information about
management’s expectations and plans relating to the future. All of
the forward-looking statements made in this news release are
qualified by these cautionary statements and those made in our
other filings with the securities regulators of Canada and the
United States including, but not limited to, the cautionary
statements made in the "Risk Factors" section of our Annual
Information Form dated March 30, 2021 and the "Risk Analysis"
section of our full-year 2020 and first-quarter 2021 Management’s
Discussion & Analysis. These factors are not intended to
represent a complete list of the factors that could affect Kinross.
Kinross disclaims any intention or obligation to update or revise
any forward-looking statements or to explain any material
difference between subsequent actual events and such forward
looking statements, except to the extent required by applicable
law.
Other information
Where we say “we”, “us”, “our”, the “Company”,
or “Kinross” in this news release, we mean Kinross Gold Corporation
and/or one or more or all of its subsidiaries, as may be
applicable. The technical information about the Company’s mineral
properties contained in this news release has been prepared under
the supervision of Mr. John Sims who is a “qualified person” within
the meaning of National Instrument 43-101. Mr. Sims was an officer
of Kinross until December 31, 2020. Mr. Sims remains the Company’s
qualified person as an external consultant.
Source: Kinross Gold Corporation
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