Kinross Reports on Paracatu Gold Expansion, Mexican Exploration Agreement

Kinross Reports on Paracatu Gold Expansion, Mexican Exploration Agreement

Kinross Gold said Brazilian currency fluctuations will likely increase the total cost of its
expansion project at the Paracatu mine, shown here, by $40 million.

Kinross Gold reported in early November that the Paracatu gold mine expansion project in Brazil is on schedule for start-up in mid-2008. Physical construction is approximately 57% complete, with capital committed or spent to date approximately 83% of budget. Steelwork for the crusher and grinding buildings is well advanced with steelwork beginning in the flotation area. All major equipment has been received at site or is on schedule for delivery. Preliminary environmental approval for construction of the 230-kV power line has been received, with final approval expected in the fourth quarter.

Kinross’ board of directors had approved an estimated $470-million expansion at Paracatu. Due to the impact of the appreciation of the Brazilian real, Kinross said actual costs for the expansion project through September 30 exceeded budget by approximately $16 million. At current exchange rates, costs are expected to increase further by approximately $24 million through project completion.

For the first ten years, average annual output at Paracatu is expected to be approximately 490,000 oz at an average cost of sales of $259/oz. Kinross’s total production for 2009 is expected to reach 1.8 million to 1.9 million oz of gold equivalent.

In an unrelated development, on October 22 Kinross and a subsidiary of Linear Gold signed a definitive option agreement whereby Kinross has the option to earn up to a 70% interest in the 95,000-hectare Ixhuatan project located in Chiapas, Mexico, by conducting a twoyear, $15 million exploration program and making various payments.

As featured in Womp 07 Vol 8 - www.womp-int.com