Kinross has announced it will invest US$150-million into the Tasiast mine in Mauritania, predicting production will eventually rise to an annual average of 445,000 ounces of gold in 2020, up from 250,000 ounces last year.Kinross/Supplied
Kinross Gold Corp. is moving to expand its Tasiast mine in West Africa in a bid to reduce its costs of production and boost output in the region.
On Sunday, Toronto-based Kinross announced it will invest US$150-million into the mine in Mauritania, predicting that production will rise to an average of 445,000 ounces of gold a year starting in 2020. Last year, the mine produced about 250,000 ounces.
The announcement comes after a previous, more expensive expansion plan for Tasiast was put on hold in 2018. Acquired by Kinross in 2010, the mine’s expansion plan has been in limbo for more than a year amid protracted negotiations with the Mauritanian government over taxes and procurement agreements.
In an interview, Kinross chief executive Paul Rollinson expressed optimism that continuing talks with Mauritania, which recently underwent a regime change, will end positively.
“It’s important that we resolve things and we’re confident we will,” he said.
In August, 2018, Kinross put a previous US$600-million expansion plan for Tasiast on hold. Kinross had envisaged expanding Tasiast to a 630,000-ounce-a-year operation with a return of investment of about 23 per cent. Under the revised plan, the miner predicts a 60-per-cent return on investment.
Kinross said it has identified cost savings such as using existing infrastructure at the site. The company had previously thought it would need to build a new grinder, for example.
Kinross acquired Tasiast through its US$7.1-billion acquisition of Red Back Mining Inc. in 2010. At the time, it was hoped that the mine would be a huge growth project for Kinross that could help offset a portfolio heavily weighted toward older and high-cost mines. But amid struggling gold prices and rising input costs, Kinross has struggled to realize Tasiast’s potential.
Kinross says it is forging ahead with the latest expansion at Tasiast even as talks with Mauritania continue. Sticking points have included the need to reach an agreement on value-added tax refunds, fuel taxes and procurement agreements.
Historically sought out as a safe-haven investment, the price of gold bullion has been on a tear this year, with the precious metal up about 20 per cent amid falling interest rates, a deteriorating world economy and a trade war between the United States and China.
Shares in Kinross, Canada’s fourth-largest gold company by market value, have risen 43 per cent this year.
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