TRAVEL restrictions brought on by the COVID-19 pandemic could delay the development of Kinross Gold Corporation’s phase two expansion of Tasiast, a gold mine in West Africa’s Mauritania.
Commenting in its first quarter results published overnight, the Toronto-headquartered gold producer said the expansion of Tasiast remained “on schedule” to increase throughput capacity to 21,000 tons a day of ore by the end of 2021 before expanding again to 24,000 tons of ore daily by 2023.
It said, however, that the project’s “… timing could be challenged by constraints on the global movement of people and supplies caused by prolonged COVID-19-related travel restrictions”. Kinross said that its project team was studying “… potential longer-term impacts and mitigation measures”.
“During the quarter, ongoing de-bottlenecking work in the processing plant continued, along with critical path construction activities on the power plant,” the firm said.
Kinross plans to increase gold production from Tasiast to an average of 563,000 ounces a year between 2022 and 2028. Last year, the mine produced 391,097 oz in 2019, 140,000 oz more than in Kinross’ 2018 financial year.
For the first quarter, production totalled 103,837 oz which compares to first quarter production last year of 101,358 oz.
Total first quarter production from Kinross’ West African assets, which includes the Chirano mine in Ghana, was 148,302 oz (2019 Q1: 153,680 oz) – about 26% of the group’s total first quarter production which was 571,773 oz (611,263 oz).
Kinross said on Tuesday that a strike had been called by unionised employees at Tasiast, a development it viewed as “opportunistic course of action during the global pandemic”. Kinross said it disagreed with the basis for the strike but gave no additional details. Kinross is due to update investors on its first quarter performance and prospects today.
Said the company: “The company disagrees with the basis of the strike notice but remains open to discussions with the staff delegates to resolve the situation.
Kinross said it had “rigorously complied” with the collective labour agreement that had been finalised in November as well as applicable labour codes. “There have been four short labour actions at Tasiast since Kinross acquired the mine, the last being in 2016. The average length of these labour actions have been approximately nine days, and none have had a material impact on the company.”
As with other gold mining firms, Kinross had withdrawn gold production guidance. It had also drawn on debt to bolster its balance sheet during the COVID-19 pandemic notwithstanding the improvement in gold prices as investors flock to the metal’s safe haven characteristics amid the onset of global recession.
The drawdown included the previously planned $200m utilisation of a $300m facility for the phase two expansion of Tasiast. The loan, arranged in December, is the largest by the International Finance Corporation in Mauritania.
