Kinross Gold Corporation (NYSE:KGC) Q2 2020 Earnings Conference Call - Final Transcript
Jul 30, 2020 • 08:00 am ET
Paul B. Tomory
advancing very well and the project remains firmly on time and on budget. We are looking forward to stacking first ore on the new Barnes Creek heap leach and completion of the project in the fourth quarter.
With Phase W, Vantage, Gilmore, and now potentially Phase X, we are very-pleased to be extending our time in the mining friendly states of Alaska, Nevada.
In Washington State, we completed in the quarter a high level engineering economic assessment of the potential for mining at the Curlew Basin at the historical K2 mine, which is approximately 35 kilometers north of our Kettle River mill. The results were encouraging. And as a result, we've reinitiated the rehabilitation and development of an advanced exploration defined to allow for underground drilling, targeting incremental high-margin ounces proximal to and as extensions of the K2 and K5 deposits.
Moving to Ghana at Chirano, we experienced some unplanned downtime at the process plant due to issues with the apron feeder thickener, and a mill motor, which negatively impacted production. Then, as Andrea mentioned, there were some untimely weather conditions that prevented the scheduled shipment further impacting sales. The plant issues have been resolved and the missed shipment has also been successfully completed.
Following successful near-mine exploration extensions in Chirano, we expect meaningful mine life extensions, the additional ounces are likely to be slightly lower grade and in narrower veins that could lead to slightly lower production levels and higher unit costs. However, most importantly, we expect these extensions to be economic at our $1,200 per ounce planning price.
Additionally, the exploration program continues to yield positive results. At the over deposits, drilling in the first half of 2020 yielded significant intercepts and has extended the depth of high-grade mineralization. As a result, we have begun development work on an exploration drift to better delineate the potential for an underground mine at Obra. Should this hypothesis play out, we could see mine life extensions beyond 2025.
Moving to our Chilean projects, La Coipa continues to make efforts to offset some lost time due to pandemic-related restrictions with good progress on hiring, engineering and procurement. Paul has already covered Lobo-Marte.
And finally, as Andrea stated, we are adjusting the timing of our capital program to capitalize on some valuable opportunities our teams have identified and to accommodate the various restrictions across our operations. As mentioned, some stripping at Tasiast has been delayed until 2021.
However, as noted earlier, the changes are not expected to impact the overall 24k project timeline. Some of these delayed expenditures will be offset as we bring forward other projects that add value, such as the purchase of some in-pit equipment at Paracatu that will allow for increased production sooner than initially planned. Additionally, we plan to relocate primary crusher at Round Mountain in order to increase mill recovery and lower crushing costs.
To wrap up, our priorities continue to be the health and safety of our employees as we manage through this ongoing pandemic; strong,