Project update and new developments Project update and new developments
The forward-looking information contained in this section of the release is subject to the risks and assumptions contained in the Cautionary Statement on Forward-
Looking Information on page 12 of this news release.
Tasiast expansion project
As previously disclosed, Kinross expects to complete a pre-feasibility study (PFS) for construction of a mid-sized
CIL mill in the 30,000 tonne per day (tpd) range in the first quarter of 2013. The Company has made the decision
not to proceed with further study or implementation of a 60,000 tpd mill option. Work to date on the PFS suggests
that while a smaller mill would result in lower annual production than the 60,000 tpd option, it would reduce capital
requirements and execution risk, provide improved per ounce margins and cash flow, and preserve future
optionality and expandability. The Company expects to release the results of the PFS in April.
Work continues on building basic infrastructure improvements at Tasiast, as the new tailings pumping system,
West Branch dump leach pads, interim water supply and other non-process buildings were brought into operation
during the quarter. Work is nearing completion on the permanent camp and work is progressing well on the power
station, truck shop and other facilities. Permitting, engineering and bidding for a permanent seawater supply
system is progressing as expected.
Dvoinoye
Construction at Dvoinoye made good progress through the fourth quarter of 2012. The project remains on
schedule and on budget and is expected to commence full production in 2013. As scheduled, the first shipment of
ore to Kupol is expected in the second half of the year.
Underground development for the quarter is progressing ahead of plan, with 5,524 metres of development
completed at year-end and the installation of the permanent main ventilation fans. Construction of the surface
infrastructure and facilities is approximately 60% complete. All necessary permits for the current scope of
underground development and construction activities are in place, including approval for the mine design.
Procurement and engineering activities for all remaining work are proceeding as expected.
Fruta del Norte
The Company and the Government of Ecuador continue to make progress on negotiating the terms and
conditions of the exploitation and investment protection agreements and have reached conceptual understanding
in a number of key areas.
Under current arrangements with the government, the parties remain in the economic evaluation phase until
August 1, 2013, during which time the objective is to reach agreement on the terms and conditions of both the
exploitation and investment protection agreements.
The Government of Ecuador has the discretion to provide an extension of the economic evaluation phase up to
1.5 years beyond August 1, 2013 if the parties have not signed the agreements by that date. Alternatively, the
parties may jointly declare a phase change from economic evaluation to exploitation, which requires completing
and signing the exploitation agreement within the first six months of the commencement of this phase. It remains
Kinross’ position that an investment protection agreement be signed at the same time as the exploitation
agreement.
While the parties are working collaboratively to meet this deadline, there is no guarantee that further extensions
will be granted by the government, or that mutually acceptable exploitation and investment protection agreements
will be reached prior to August 1, 2013, or within the first six months of the above noted phase change.
The Company understands that various legislative proposals to enhance the fiscal and legal mining regime in
Ecuador (including the windfall profits tax) remain under consideration by the government.