Kinross opens fourth Russian mine
Kinross Gold Corporation (TSX:K)(NYSE:KGC) this week announced commercial production has begun at its underground gold mine Dvoinoye, located in Russia's Chukotka region, not far from the company's Kupol.
Kinross CEO Paul Rollinson, said at the opening Dvoinoye's low-cost structure fits in fits in with the Toronto-based company's focus on "maximizing margins and cash flow at both our existing operations and growth projects."
At peak production, Dvoinoye is expected to produce 1,000 tonnes of ore per day, which will be transported to Kupol for processing via an all-season road. The Kupol mill has been expanded from 3,500 to 4,500 tonnes per day to process the additional Dvoinoye ore.
Dvoinoye is expected to produce between 235,000 and 300,000 of gold equivalent ounces annually during its first three full years of production, which will be incremental to gold production from the Kupol underground mine. The cost of sales for the combined Russian operations between 2014 and 2016 is forecast to be $545-$600 per gold equivalent ounce according to a company statement.
First ore from development activities at Dvoinoye was delivered to Kupol in Q2 2013 and commercial production began in early October. Total production in 2013 is expected to be approximately 25,000 gold equivalent ounces. As of December 31, 2012, Dvoinoye had proven and probable gold reserves of approximately 1.1 million gold equivalent ounces with an average gold grade of 17.8 grams per tonne.
"Dvoinoye is the fourth mine Kinross has operated in Russia, which remains our lowest-cost jurisdiction and a core operating region for the Company," said Mr. Rollinson. "The new mine is a testament to our continued success in the region and our strong partnerships with local communities, the indigenous people of Chukotka, and the regional and federal governments."
Kinross will provide guidance for its 2014 production, cost of sales and all-in sustaining costs for its combined Russian operations and other regions in early 2014.