We released our 2015 Q3 results on November 10th. It was another strong quarter with the lowest operating costs in 3.5 years and we continue to rank among the best of our peers in safety. I would like to share a few highlights and comments:
- Excellent safety performance continues: As of the end of the third quarter, Kinross’ year to date Total Reportable Injury Frequency Rate was 0.31, and the injury severity rate was 0.8, which continue to rank among the best of our peers. Congratulations to everyone for another outstanding quarter of working safely.
- Q3 was another strong quarter, with the lowest operating costs in 3.5 years: Strong performance from our operations contributed to an excellent third quarter on production and costs. We remain on track to meet both our overall production and cost guidance for 2015, despite the impact of drought conditions at Paracatu, which have resulted in recent production curtailments. Thanks to everyone for the continued hard work that helped deliver these results.
- Spending review resulted in corporate headcount reductions: Further to my email on November 5 about the Company’s cost reduction efforts in a challenging gold price environment, we announced a reduction in our corporate headcount costs of approximately 23%. Once again, I would like to recognize the contributions of our colleagues who are leaving and wish them all the best in their future endeavours.
- Tasiast expansion update: We have begun early-stage engineering work on a potential two-phased expansion which we believe could provide a path to growth at Tasiast. We are proceeding with a feasibility study for an initial Phase One expansion, which would increase throughput capacity from 8,000 tonnes per day to 12,000 tonnes per day. We believe this increase in production could potentially turn the operation cash flow positive without a large capital expenditure. Phase Two of a potential expansion could further increase throughput capacity to as much as 38,000 tonnes per day.
- La Coipa pre-feasibility study (PFS) results: We also announced the results of our La Coipa pre-feasibility study, which estimates total life of mine production of approximately 1.03 million ounces at an average cost of sales of $674 per gold ounce (click here for “Kinross reports 2015 third-quarter results” news release for a summary of PFS estimates). The potential project has a number of attractive features, including leveraging existing infrastructure, modest capital investment, and exploration upside potential. We plan to proceed with permitting and complete further studies to assess potential blending and throughput optimization.
Again, thanks to everyone for another strong quarter. I look forward to updating you on our Nevada acquisition, as well as our Q4 2015 results when we release them in February 2016.
J. Paul Rollinson
President & CEO
Kinross Gold Corporation