Development continues on Gold Hill gold mine By ADELLA HARDING Mining Quarterly Editor
ELKO — Round Mountain Gold Corp. still expects to begin pouring gold in August at the new Gold Hill satellite mine in Nye County, where construction continues on the project. Gold Hill is roughly five miles north of the Round Mountain open pit and facilities but is connected by a road. “Gold Hill will essentially be a ‘stand alone’ operation with the significant exceptions of management and maintenance. To that end, construction is well under way on the leach pad and plant,” said Randy Burggraff, general manager of Round Mountain Mine operated by Kinross Gold Corp. He said mining has started with removal of rock and dirt from the pit site for leach pad construction, but production mining hasn’t started. “Leach pad construction takes advantage of materials from the mining footprint, so in that sense mining has also started,” Burggraff said on Feb. 21. “A slight delay in permitting combined with cold weather in mid-December and January slowed placement of compacted fills. However, we are still on schedule to pour some gold in August 2012.” Meanwhile, mining continues at Round Mountain with gold production similar in the fourth quarter of 2011 to the fourth quarter of 2010, according to the Kinross earnings report. Round Mountain produced 43,584 ounces of gold for the company, which owns 50 percent of Round Mountain. Barrick Gold Corp. owns the remaining 50 percent. The mine produced 43,521 ounces for Kinross in the fourth quarter 2010. Kinross reported cost of sales were down in the 2011 quarter at Round Mountain to $597 per ounce, compared with $759 in the 2010 quarter. For the year, Round Mountain produced 187,444 ounces for Kinross, compared with 184,554 ounces in the fourth quarter of 2010. Costs for the year were $697 per ounce, up from $625 per ounce in 2010. North American production totaled 156,346 ounces in the fourth quarter, including production from Fort Knox in Alaska and Kettle River-Buckhorn in Washington, compared with 181,915
78 MINING QUARTERLY, Elko, Nevada SPRING 2012
ounces in the 2010 quarter. Production from the North American operations was down for the year at 652,530, compared with 733,093 in the 2010 quarter, according to Kinross. Costs for the year were at $619 per ounce, up from $506 in 2010. The Toronto-based company reported companywide production in the 2011 quarter was 643,288 gold equivalent ounces, down 5 percent from the 2010 quarter, mainly due to an expected reduction in grades at several mines. Cost of sales companywide were at $636 per ounce in the quarter, compared with $549 per ounce in the 2010 quarter. The average realized gold price was $1,601 per ounce in the fourth quarter, up from $1,333 per ounce in the 2010 quarter, Kinross reported. The company’s gold equivalent production for the year was 2.61 million ounces, up 12 percent over the prior year, and revenue was up 31 percent to $3.94 million for the year. Kinross announced a net loss of $2.78 billion, or $2.45 per share, in the fourth quarter of 2011 because of a goodwill writedown on the Tasiast Project in West Africa, but the company’s adjusted net earnings were up 24 percent. Revenue was up 3 percent for the quarter to $949.3 million, and Kinross increased its semi-annual dividend to 8 cents per share from 6 cents. The fourth-quarter loss compared with a loss of $72.9 million, or 6 cents per share in the 2010 quarter, while adjusted net earnings excluding the impairment charges totaled $196.6 million, or 17 cents per share, compared with adjusted net earnings of $158.5 million, or 14 cents per share, in the 2010 quarter. Kinross acquired Tasiast from Red Back Mining for $7.1 billion in 2010, but the carrying value has been affected by cost pressures for labor and materials, according to the company. Although Kinross took a charge on Tasiast, development of the mine is still a priority, according to Kinross President and Chief Executive Officer Tye Burt. “Tasiast remains our first development priority in a measured and prudent plan for capital allocation and growth designed for long-term value and financial strength,” he said in the fourth-quarter earnings announcement.