This afternoon we released our 2015 Q1 results to the public, and tomorrow morning we will hold our Annual and Special Shareholders meeting. You can access the full news release here, which contains details of our first quarter results, as well as updates on other key issues. Here are a few highlights:
- Our safety performance for the quarter ranked among the best in Kinross history. We had zero lost-time accidents across our operations in the first quarter. Four of our mines – Kettle River-Buckhorn, Maricunga, Dvoinoye, and Kupol – did not have a single injury. Thanks to everyone for a truly outstanding quarter as we continue to set the industry standard for safety.
- We are off to a strong start to the year operationally. We produced 630,000 Au eq. oz. in the first quarter, which keeps us well on track to meet our full-year production forecast. With an average cost of sales of $709 per Au eq. oz. for the quarter we are tracking below our cost forecast, thanks in part to lower energy costs and favourable exchange rates. We improved our strong financial position in the quarter, adding cash to our balance sheet and paying down debt. This combination of consistent operational performance and balance sheet strength continues to position us well in the current gold price environment.
- Our team at Maricunga has done an outstanding job responding to the recent floods in Chile. Fortunately none of our employees were injured and our Maricunga facilities were not damaged by the heavy rains and mudslides that swept through the Atacama region in late March. However, many homes were damaged, including those of our employees, and the main roads and power lines to Maricunga were washed out. We have temporarily suspended mining and crushing operations, and are operating the ADR plant at 80% capacity. We expect to restart mining and crushing operations in June using backup power and expect to restore power lines by September. Our local team deserves special recognition for their tireless work responding not only to the needs of our employees and our operation, but also to those of the surrounding community.
- We are proceeding with organic production initiatives at Paracatu and Chirano. Our Paracatu team has identified a Continuous Improvement opportunity to process gold from the Santo Antonio tailings facility, starting in the fourth quarter this year. This is expected to add 34,000 Au oz. of new production at a cost of sales of just $400 per ounce and is a great example of how innovative thinking can add significant value to the business. At Chirano, we are moving forward with plans to extend Chirano’s mine life by one year to 2020 by adding ounces from Paboase, which is already in production, and Akoti, which will become the third underground mine at site. These two new production initiatives are in addition to our plans to complete the La Coipa Phase 7 pre-feasibility study later in the year.
This year, Kinross celebrates 20 years of operating in Russia. Congratulations to our teams in Kupol, Dvoinoye, Magadan, Moscow, Pevek, and Anadyr for making us Russia’s most successful foreign mining company.
Thank you all for your hard work and commitment which helped us achieve another strong quarter. I look forward to updating you on our progress when we release our second quarter results in late July.
J. Paul Rollinson
President & CEO
Kinross Gold Corporation