Kinross Increased Production Driven By Higher Grades And Enhanced Seasonal Recoveries
TORONTO - Kinross Gold Corporation, President and CEO, J. Paul Rollinson, said, “We are excited about our pipeline of development and exploration projects, which all made strong progress during the third quarter. At the world-class Great Bear project, drilling results continue to fulfill our expectations, including high-grade intercepts at depth, and we are on track to declare an initial mineral resource early in 2023.
We have returned approximately $300 million of capital to shareholders during the third quarter and returned a total of approximately $450 million by the end of 2022 through our share repurchase and dividend programs. Since launching our enhanced share buyback program last September, we have spent $180 million, effectively repurchasing for cancellation the shares that were issued as part of the Great Bear transaction while maintaining our quarterly dividend and investment-grade balance sheet.
The Company continued to advance ESG goals. On climate change and emissions reductions, we have completed an analysis of climate-related scenarios and their potential impacts on our future business, advanced our pipeline of energy-efficiency projects, and entered into strategic partnerships with various technology providers, suppliers and electric utilities.”
As previously reported, operations increased production and lowered costs, primarily driven by higher grades at Paracatu, enhanced seasonal recoveries from our U.S.-based heap leaches, and the ramp-up at La Coipa, which progressed well and is expected to continue trending upwards with the mill averaging throughput levels of approximately 9,500 tonnes per day.
In January of this year, Kinross acquired deemed beneficial ownership of 5,018,017 common shares of Allegiant Gold Ltd. issuable upon exercise of common share purchase warrants previously acquired by Kinross. The warrants were acquired as part of the previously announced investment in Allegiant completed on March 17, 2022. Pursuant to the investment, Kinross purchased 10,036,034 units of Allegiant, representing 9.9% of the issued and outstanding shares of Allegiant. Each unit was comprised of one common share and one-half of one common share purchase warrant (each, a “Unit”, and collectively, the “Units”). The Units were acquired for a purchase price of $0.40 per Unit, representing an aggregate purchase price of $4,014,414.00. The common shares held represent approximately 9.8% of the currently issued and outstanding Allegiant common shares and the Warrants provide deemed beneficial ownership of common shares representing approximately 4.7% of the currently issued and outstanding Allegiant common shares. Kinross is the deemed beneficial owner of common shares representing approximately 14.0% of the issued and outstanding shares of Allegiant and is therefore required by applicable Canadian securities laws to issue this press release and file a corresponding early warning report.
Kinross acquired the Units as part of a strategic investment in the Issuer. Kinross may or may not purchase or sell securities of the Issuer in the future on the open market or in private transactions, depending on market conditions and other factors. Kinross currently has no other plans or intentions that relate to its investment in the Issuer. Depending on market conditions, general economic and industry conditions, the Issuer’s business and financial condition and/or other relevant factors, Kinross may develop other plans or intentions in the future.
Kinross previously reported that it will proceed with development of the 70%-owned Manh Choh project in Alaska. The project is expected to increase the Company’s production profile in Alaska by a total of approximately 640,000 attributable Au eq. oz. over the life of mine at lower costs. Initial production from Manh Choh is expected in the second half of 2024.
Early works at Manh Choh are focused on camp and initial road access, which are proceeding on schedule and on budget. At Fort Knox foundation work for the processing infrastructure upgrades are underway. Permitting is progressing well and the Company received its wetland permit in the third quarter. Procurement and contracting activities are advancing well, prioritizing local employment and contracting, including with the Native Village of Tetlin.
At Lobo-Marte, the company continued to advance permitting activities at in order to preserve its optionality for Kinross’ long-term portfolio. Continuing to study opportunities to extend La Coipa’s mine life up to the end of the decade, with the potential additions of a new Puren pushback, as well as the adjacent Coipa Norte and Can-Can pushbacks. Those extensions would enter into the regular permitting cycle in the upcoming years. As a result, the Company has decided to defer submission of the Lobo-Marte Environmental Impact Assessment (EIA), as the content of that application will depend, in part, on the extent of any mine life extensions at La Coipa and other factors such as gold price, local permitting process, and other economic considerations. The Company continues to believe in the project’s long-term development potential as a large, low-cost mine upon the conclusion of mining at La Coipa.
The exploration project Curlew, in Washington State, located approximately 35 kilometers north of the Company’s Kettle River mill by paved road, drilling from underground has confirmed the understanding of mineralized vein orientations. The Company is on schedule to declare a mineral resource in early 2023 with the drilling information to date. Underground exploration drilling is still underway and is continuing this year after which an updated resource will be presented at a later date as the project is expected to grow beyond the year-end resource.
The Gold Hill exploration project, located approximately seven kilometers northeast of Round Mountain in Nevada, exploration drilling continued in 2022 to return encouraging results. Drilling at the main zone (extension of the Gold Hill pit) has confirmed multiple >150m strike and dip extensions of the primary vein and parallel vein structures. Drilling along the parallel Alexandria vein (600m south of Main) has also returned encouraging results such as D-1176 – 1.9m @ 24.24g/t Au (Incl. 0.4m @ 107g/t Au), as well as visible gold in veins beneath the sinter. Gold Hill is a low sulfidation epithermal vein system consisting of high-grade narrow quartz veins with significant strike continuity. Historic underground mining (current pit area) produced approximately 40koz with a grade of 10g/t Au. Exploration focused on testing the strike and dip limits of Main and Alexandria, both of which remain open along strike. Exploration continued these efforts, as well as test for parallel veins outside of the two primary zones.
Last August, the Company completed the sale of all its interest in the Chirano mine in Ghana to Asante Gold Corporation for total consideration of $225 million in cash and shares. Kinross received $60 million in cash and approximately 35 million Asante common shares upon close, with the remainder in deferred payments.
Since completing the Chirano divestment, as well as completing the divestment of the Company’s assets in Russia, Kinross adjusted its regional head office presence to be more in line with its Americas-focused portfolio.
Following the publication of Kinross’ 2021 Sustainability and Climate reports in Q1 and Q2 respectively, the Company updated its contributions towards the Sustainable Development Goals developed by the United Nations as important societal goals, including a summary of results at the Chirano mine in Ghana, which was sold during the quarter.
In Mauritania, severe flooding in the Inchiri region in last September affected local cities and communities around the Tasiast mine, including the regional hospital. Kinross provided significant and timely humanitarian relief including food and supplies, as well as the delivery of a container of medical supplies and equipment through a partnership with health NGO, Project C.U.R.E., with a value of approximately $450,000.
Advancing the climate change strategy, Kinross completed an analysis of climate-related scenarios, following the governance recommendations of the Task Force on Climate-related Financial Disclosures. The Company also continued to advance its pipeline of energy efficiency projects, as well as strategic partnerships with various technology providers, Original Equipment Manufacturers and electric utilities. The Company has continued to improve our governance climate change risks and opportunities by embedding the forecasting of emissions directly into the life of mine models of each of its assets and projects.
Kinross’ strong ESG performance was externally-recognized in major ESG rankings and ratings. The Company’s S&P Global ESG score increased three points in 2022, ranking in the 96th percentile, the Company’s highest score since 2014, which was driven primarily by improved scores in the Environment dimension. The Company’s Sustainalytics risk rating improved to medium from high and its MSCI score was maintained at “A.”
The Company’s address is 25 York Street, 17th Floor, Toronto, ON M5J 2V5.