Kinross Starts Construction at Dvoinoye

Kinross Gold’s Dvoinoye gold mine, shown here during construction, is expected to produce between
215,000 -250,000 oz/y of gold equivalent over its first three full years of operation.
(Photo courtesy Kinross Gold)
Kinross Gold has started construction at its Dvoinoye underground gold mine proj-ect, located about 100 km north of its Kupol gold operations in the Chukotka region of far-east Russia. The Dvoinoye mine is expected to produce 1,000 mt/d of ore to be shipped to the Kupol mill, which will be expanded to process approximately 4,500 mt/d. Gold equiva-lent production from Dvoinoye ore for the first three full years of operation is expected to average between 215,000 and 250,000 oz/y, providing total expect-ed production from Kupol of 650,000 to 700,000 oz/y.

Dvoinoye is scheduled to deliver its first ore to the Kupol mill in the second half of 2013. Life-of-mine production is expected to total approximately 1.1 mil-lion oz of gold and 1.14 million oz of sil-ver. The Dvoinoye reserve will be mined using underground mechanized equip-ment, similar to the operation at Kupol. Life-of-mine ore production will total about 2.1 million mt of ore at grades of about 17 g/mt gold and 21 g/mt silver. Recoveries are expected to average 94% for gold and 80% for silver.

The project has an estimated mine life of seven years.

Capital expenditures to develop the Dvoinoye project are estimated at $370 million, including $175 million for infrastructure construction and upgrades to the Kupol mill.

The Dvoinoye feasibility study envi-sions mining costs of about $80/mt, pro-cessing costs of about $50/mt, and trucking costs of about $35/mt. Total life-of-mine production cost of sales per gold equivalent ounce is expected to be in the range of $575 to $600, based on an oil price of $90/bbl, gold royalties of 6%, silver royalties of 6.5%, and a cor-porate income tax rate of 20%.

Going forward, Kinross will report Dvoinoye and Kupol results as a com-bined operation.

As of the end of the first quarter of 2012, surface infrastructure construc-tion at Dvoinoye was about 16% com-plete, and underground development was about 23% complete. Earthworks and roads for site facilities, including the per-manent camp, were largely complete. Construction of the all-season road between Dvoinoye and Kupol was pro-gressing well, with 32 km of the total 84 km completed. Surface construction activities will peak this summer.

As featured in Womp 2012 Vol 06 -