Kinross Gold (TSX:K; NYSE: KGC) on Tuesday filed a new technical report for the company’s Paracatu operation in Brazil, showing an expected 24% increase in total gold production over the remaining mine life compared with its prior technical report published in 2014.
The new technical report is based on an asset optimization program that began in 2018 and completed in late 2019 with the successful implementation of a comprehensive grade control program. Kinross says the program has led to better characterization of the orebody, an improved ability to predict and react to ore variability, and better mill efficiency with improvements in throughput and recovery.
The technical report also incorporates continuous improvement programs that have resulted in improved mining rates and increased overall productivity, the addition of renewable power sources with the investment in two hydroelectric power plants in 2018, and the continued successful tailings reprocessing project.
Last year, Paracatu’s performance improved significantly due to the asset optimization program and continuous improvement programs, with the mine achieving record annual production and reducing cost of sales per ounce sold by approximately 20% over 2018.
The new technical report forecasts significant reductions to life of mine operating costs and improved capital efficiency and recovery rates compared with the 2014 report.
Paracatu is a cornerstone operation in Kinross’ portfolio that is expected to produce approximately 540,000 ounces of gold annually over 12 years from 2020 to 2031. Located near the city of Paracatu in Brazil’s Minas Gerais region, it is the largest gold mine in the country and one of the biggest in the world.
As previously disclosed in the company’s 2019 year-end mineral reserves and resources update, a new resource model has resulted in the addition of approximately 828,000 ounces to estimated mineral reserves, more than offsetting a depletion of 705,000 ounces in 2019.
Measured and indicated resources also increased by approximately 1.1 million ounces or 35% compared with 2018. Inferred mineral resources includes an estimated 367,000 ounces contained in the Santo Antonio tailings deposits, which are expected to continuously add low-cost gold ounces to the mine’s production.
The company plans to continue mining the tailings deposits after 2020.