Phase W Project To Extend Round Mountain Mining Five Years
TORONTO - Kinross Gold Corporation reported that the Phase W project, in Nevada, which included a layback of the current pit, is expected to extend mining by five years and increase life-of-mine production by 1.5 million Au oz.
In the first quarter, at Round Mountain, mining activities were impacted by precautionary measures taken after wall movements in the north wall of the pit were detected by the site’s comprehensive monitoring system. The site deferred mining in the area, which delayed access to Phase W ore and affected production and cost of sales per ounce during the quarter. The site has accelerated dewatering in the area and is moving waste material to mitigate the issue and to enhance the stability of the wall. A mine optimization program has also commenced, which is expected to be completed in the second quarter of next year and will evaluate opportunities for Phase S, the mine’s next planned pushback after Phase W. While production timing and mine sequencing are expected to be impacted, including potentially deferring access to higher grade Phase W ore for approximately two years, Kinross does not anticipate this issue to impact the Company’s 2021 production and cost of sales guidance and its longer-term production profile, or Round Mountain’s total life of mine production.
The exploration program focused on four target areas – Phase X, the northeast end of the pit, Atlas (south Caldera rim), and Gold Hill. This year a large portion of the $6 million budget allocated for Round Mountain is expected to focus on drilling the Phase X deposit. In addition, drilling is expected to test along-strike and down-dip extents of the mineralized structures with the goal of delineating high-grade material for potential underground mining.
The Bald Mountain Mine, in Nevada, reported that production was in line with the previous quarter, and was higher year-over-year mainly due to timing of ounces recovered from the heap leach pads. Cost of sales per ounce decreased quarter-over-quarter primarily due to lower contractor and fuel costs, partially offset by higher operating waste mined. The year-over-year decrease in cost of sales per ounce was mainly as a result of higher production and lower contractor costs.
This year, Bald Mountain’s exploration budget of $6.5 million will be used to investigate drill testing targets identified and explore for both intrusive-related and sediment-hosted type deposits that can be potentially converted to mineral resources in subsequent years. Near-mine targets in the North area of Bald Mountain – such as Duke, Galaxy, Bida and Royale – are expected to be explored over the year.
Kinross expects to continue to develop Bald Mountain’s upside potential. With more than 3.5 million ounces of estimated measured and indicated gold resources and a pipeline of high-quality targets, the Company is exploring further opportunities for additional resource conversions and exploration success. In 2020, approximately 50% of depleted reserves were replaced through exploration and engineering optimization work at Bald Mountain. Bald Mountain is an open-pit mine with a large estimated mineral resource base located in Nevada along the southern extension of the prolific Carlin trend.
J. Paul Rollinson, President and CEO, said, “Our diversified portfolio of mines performed well to start the year, as we continued to mitigate the impacts of COVID-19 across all our operations and projects. The Company delivered a 51% year-over-year increase in adjusted net earnings, with margins increasing 25% to $1,031 per ounce sold, once again outpacing the increase in the average realized gold price. We are well-positioned to continue generating strong cash flow through the year, are on track to meet our annual guidance, and we are in an excellent financial position.
In line with our values and commitment to responsible environmental stewardship, Kinross is taking an important step and committing to reach net-zero greenhouse gas emissions by 2050. To support this goal, we are currently developing a strategy that we expect to finalize by year-end that will identify tangible GHG reduction targets for 2030, and the steps the Company plans to take to achieve those targets, leveraging our position as one of the lowest GHG emitters among our peers.”