|
Kinross Gold Corporation (TSX: K)(NYSE: KGC) released additional information regarding its proposed friendly combination with Red Back Mining Inc., following Red Back's disclosure today of an updated mineral resource estimate at its Tasiast deposit in Mauritania.
'Red Back's updated mineral resource estimate confirms Kinross' view of Tasiast's tremendous potential based on our six months of intensive due diligence. So far in 2010, measured and indicated mineral resources at Tasiast have increased by approximately 2.74 million gold ounces, and inferred mineral resources have increased by 0.63 million ounces, a remarkable rate for mineral resource additions,' said President and CEO Tye Burt. 'We expect to add significant further new resources following the closing of the transaction, by increasing the number of drill rigs at Tasiast and accelerating the current drilling campaign to delineate the high-grade zone at depth,' he added. To provide context for Red Back's latest mineral resource estimate, and additional perspective on the friendly combination of Kinross and Red Back, Kinross today released further information regarding its conceptual estimate of the potential size of the Tasiast deposit. Kinross' current preliminary estimate is that the Tasiast deposit contains a minimum total potential mineral resource of 350 million to 425 million tonnes grading 1.5 to 1.8 g/t gold for life of mine.(1) Kinross expects to mine higher grade ore earlier in the mine life. Kinross plans to accelerate drilling at Tasiast with the expectation of providing an upgraded NI 43-101 compliant mineral resource estimate by February 2011. Planned exploration activities will focus on expected delineation of additional mineral resources laterally and at depth in the Greenschist Zone, a new style of gold mineralization discovered at Tasiast in July 2009. Kinross has based this current estimate on the extensive geological and technical due diligence undertaken by its internal and external experts over the six months preceding announcement of the transaction. The Greenschist Zone is characterized by consistently thick intervals averaging approximately 60 to 100 metres wide, grading 1.5 to 3.0 g/t Au (true widths exceed 90% of drill hole intercepts). Current drilling has delineated the zone for over a kilometre of strike and to approximately 430 metres true depth. Geologic modeling by Kinross' technical experts indicates that the zone plunges gently south consistent with mineralization in other ore bodies mined along the eight kilometre Tasiast deposit. Based on strong continuity of Greenschist geology both locally and in the district, Kinross believes that gold mineralization will continue laterally and at depth in the same direction. The Tasiast deposit is located in the apex of a shallow plunging anticline in the hanging-wall of an adjacent major fault. The geologic architecture is analogous to trap sites for major gold deposits in similar greenstone belt settings such as those observed at Kalgoorlie in the Yilgarn Craton of Australia and at Timmins in the Superior Craton of Canada. 'It should be remembered that these preliminary conceptual estimates are based on data gathered from exploring only 8 kilometres of Tasiast's 70 kilometre greenstone belt, which underlines the exceptional upside potential that we see beyond the range provided here,' said Rob Henderson, Kinross' Senior Vice President, Technical Services. In addition, Kinross expects growth in the mineral reserve and mineral resource estimates at Red Back's Chirano mine in Ghana. Chirano's publicly disclosed mineral reserves are approximately 3.19 million ounces, representing approximately 41.3 million tonnes at an average approximate grade of 2.40 g/t. Kinross expects to realize significant development synergies in the combination by fast-tracking engineering and design, project development, procurement, permitting, and tendering for an EPCM contractor at the Tasiast project. The company expects to complete a scoping study by December 2010, and a feasibility study by mid-2011. The development plan for Tasiast currently envisions construction of a new mill with increased capacity from the current level of 10,000 tonnes per day to approximately 60,000 tonnes per day, and purchase of a new, larger mining fleet, tailored to the scale of the expanded operation. Kinross plans to deploy its extensive technical and project development resources, and financial depth, to achieve the full potential at Tasiast. 'With the expansion in production, better margins, and higher cash flow per share that Kinross expects as a result of this combination with Red Back, we would also expect a re-rating by the market, and a positive impact on our share price,' said Mr. Burt.  |
