Kinross Starts Construction at Dvoinoye
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.