-1.7 C
Belgrade
Supported byspot_img
spot_img

Kinross Gold considers joining forces with one of Russia’s largest gold mining companies

Member of Europium Groupspot_img
Supported byspot_img

The Canadian Kinross Gold Corporation may join forces with Highland Gold, one of Russia’s largest gold mining companies, owned by the Russian billionaire Roman Abramovich for the production of gold in the Russian Chukotka Republic.

That may take place in the form of a joint venture, that will be established by the companies and which will include their local gold mining assets.

Currently negotiations are ongoing. There is a possibility that the established venture will include Kinross’ Kupol and Dvoinoye gold fields, while in the case of Highland, that will be its Kekura field.

Supported by

In the case of Kupol, the development of the field began in 2008, its reserves are currently estimated at 1.68 million ounces (8.3 grams per tonne). The reserves of Dvoinoye, which development started in 2013, are currently estimated at 1.2 million ounces (8.4 g per tonne).

The Dvoinoye field was purchased by the Canadian company from Abramovich in 2010 for US$165 million and Kinross’ 5% stake, valued at US$203 million. The deal also included an exploration license for the development of the Vodorazdelnoye field.

To date, Kinross has invested more than US$1.45 billion in the development of both fields.

According to recent data of Kinross Gold Corporation, the reserves of both fields will be almost exhausted by 2021. The situation is aggravated by the fact that the volume of gold production by Kinross in Chukotka is steadily declining. This year production is expected to reach only 600,000 ounces in gold equivalent, compared to 734,000 ounces a year earlier.

In this regard, Kinross Gold Corporation considers the establishment of a joint venture with Highland as one of the ways for the stimulation of its stagnating Russian production. Participation in the joint venture will provide Kinross an access to the resources of Kekura, which are estimated at 2.6 million ounces of gold with a content of 7.6 g per tonne and will ensure profitability of its Russian production for the next several years.

According to earlier announced plans of Highland Gold, the company had plans to invest US$188 million in the building of a mining complex on the basis of Kekura, that will have the capacity to produce 209,000 ounces of gold per year. The production is scheduled for launch in 2020. Lifetime of the project will be 9 years.

At the same time, due to some financial difficulties of Highland, the volume of investments in the development of Kekura, that should be invested by the Russian company this year, may be less than the initially planned figures.

Russian analysts believe that the talks between the potential partners will continue, while the most important subject of them may be related with the future control in the establishing joint venture, as the position of a minority shareholder may not suit Kinross, that will probably claim for the controlling stake in the venture.

Source: investorintel

Supported byElevatePR Digital

Related News

Important Announcement to Our Readers

After years of dedicated efforts to promote the European mining industry and foster a balanced approach between environmental conservation and the responsible exploitation of...

India set to decide on import restrictions for metallurgical coke

India is set to make a decision soon on whether to implement import restrictions on metallurgical coke, a crucial ingredient in steelmaking. According to...

AMMC targets major production milestones by 2030 with ongoing development projects

Almalyk Mining and Metallurgical Combine (AMMC) has set ambitious production goals for 2030, aiming to achieve annual output of 500,000 tons of copper, 50...

Kazatomprom partners with Jordan uranium mining company on joint uranium exploration and extraction

Kazatomprom, Kazakhstan's national atomic company, has entered into a collaboration with Jordan Uranium Mining Company (JUMCO) to jointly explore and extract uranium in Jordan....
Supported by
Supported by
Supported by
error: Content is protected !!