By Dorothy Kosich, Mineweb.com
Kinross revealed late Wednesday that it has agreed to sell one-half of its 50% interest in the Cerro Casale project in Chile to joint venture partner Barrick for $475 million including $455 in cash and the assumption by Barrick of a $20 million obligation.
Cerro Casale is believed to have reserves of 21 million ounces of gold and five billion pounds of copper. However, in 2007 Kinross took a $1 billion write-down of its acquisition of Cerro Casale from Bema Gold.
In an interview with the Globe and Mail, Kinross CEO Tye Burt said overall capex for the project is about $4.3 billion of which Kinross's share would be $1.1 billion. "That much spending doesn't make sense for us," he said. "We decided it was prudent to split our exposure and reinvest the proceeds elsewhere." Burt is a former Barrick executive.
Kinross also announced it has reorganized its business around four new strategic operating groups: Mining operations; Corporate Development; Project Development to be led by Senior Vice President Ken Thomas; and External Relations and Corporate Responsibility to be led by Executive Vice President James Crossland.
The company has recruited three men to oversee operations in each of Kinross's major geographic regions including: Sam Coetzer, senior vice president, South America; John Galassini, regional vice president, North America; and Warwick Morley-Jepson, regional vice president, Russia.
In its annual results, Kinross noted that gold equivalent production was 2,238,655 ounces, a 22% increase over 2008 and in line with the precious guidance.
As the company previously announced, Kinross expects to produce 2 million ounces of gold and 10 million ounces of silver this year.
Net earnings were reported at $309.0 million or 45-cents per share for the 2009, compared with a net loss of $807.2 million or $1.28 per share for 2009.
For the fourth-quarter 2009 net earnings were reported at $235.6 million or 34-cents/sh, compared with a net loss of $968.8 million or negative $1.47/sh for the same period of 2008.
Capital expenditures totaled $481.2 million for 2009, down from $714.7 million during 2008.
Exploration and business development for 2009 was reported at $72.5 million, compared with $59 million in 2008. Kinross was active on more than 40 mine site, near-mine and greenfields projects last year with a total of 166,514 meters drilled. Exploration and development expenses are forecast to be $102 million this year.
Capex for this year is expected to be $550 million including $91 million for the expansion of tailings facilities at Paracatu, Fort Knox and Kupol, $90 million for a third ball mill at Paracatu and $30 million to advance the Lobo-Marte project in Chile.