Kinross Gold Corporation (NYSE:KGC) Q2 2020 Earnings Conference Call - Final Transcript
Jul 30, 2020 • 08:00 am ET
Paul B. Tomory
those people who work in the mill and in the process circuits. As a result, we've had to curtail the mining rate.
In the second quarter, Tasiast mined approximately 7.5 million tons, significantly lower than the 22 million tons that were planned in the budget. The principal impact of this result is a deferral of stripping tons and the associated capital dollars, and a commensurate delay in access to the ore from the West Branch for pushback. Production is not expected to be intact in 2020. But, the delay in access to new ore and the longer than planned reliance on stockpiles will result in lower production in 2021 than has been compared in -- contemplated in the original 20k mine plan. However, we expect no impacts to Tasiast's life of mine production, mineral reserve estimates for overall value, as we were able to adjust short-term mine plans given the availability of very-large stockpiles at the site.
As for the construction project, it continues to advance well, civil works are well-advanced and the project remains on schedule to increase throughput capacity to 21,000 tons per day by the end of 2021 and then onwards to 24,000 tons per day by mid-2023. However, if pandemic-related constraints and the global movement of people and supplies persist for a prolonged period of time, the schedule could yet be negatively impacted. However, I'm pleased to say, by the end of June, the Company had reinstated the rotation of expatriate staff in and out of Mauritania, which has improved the situation.
Moving on to our U.S. operations. Our three sites continue to move closer to normal as we maintain discipline on pandemic-related protocols and procedures. At Round Mountain, unit cost of sales increased slightly compared to the last quarter and last year due to lower grades and recoveries as planned. We expect production to increase in the second half of the year, particularly in the fourth quarter.
Exploration and drilling at Round Mountain continued to focus on the Phase X area, which is the conceptual name for the next major pushback after Phase W. Drilling has intersected significant mineralization in the upper proportions of the shallow section of the Phase X pit shell and confirmed that mineralization extends from Phase W. Further drilling will assess whether mineralization in the upper proportion of the Phase X could reduce the strip ratio. We've also initiated early engineering works on what a Phase X pushback might look like.
At Bald Mountain, production increased by approximately 15% compared with the last quarter and 20% compared with last year, due to improved grades and recoveries from Vantage. However, costs increase slightly compared to last quarter due to an increase in operating waste mined.
At Fort Knox production and costs, both improved compared with Q1 due to improved mill grade recovery and lower electricity costs. Results of Fort Knox are becoming more reliable and we expect Q3 to further improve ore results in the first half.
The Gilmore expansion project is