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)

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.