| Do Its Recent Acquisitions Have an Exploration Upside for Kinross? | |
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Is the Asset Acquisition from Barrick a Sweet Deal for Kinross? (Continued from Prior Part) Potential upside
The potential upside from Bald Mountain and Round Mountain informs the acquisition of these assets by Kinross Gold (KGC). During its November 12, 2015, management call, Kinross noted that there were multiple sources of upside at Bald Mountain, which covers 373 square miles, making it one of the largest mine sites in the US.
Bald Mountain
- Bald Mountain is a large, underexplored area land package that is located on the southern extension of the highly prospective Carlin trend.
- Kinross expects to convert 20% of the current estimated mineral resources to mineral reserves upon receipt of permits and modest infill drilling at Vantage in the South Zone. Also, based on historical conversion rates, it is assuming at least another 10% that would be converted within the remaining 100% areas, including the North Zone for a combined total of 30%.
- It also presents a good opportunity to leverage Barrick’s geologic expertise through both companies’ exploration partnership.
Round Mountain
- Kinross believes there is a meaningful upside to Round Mountain, which could lead to increased production and lower costs. The Process Solution Management (or PSM) program has been a success so far, and Kinross expects it to provide an upside going forward.
- There is an additional opportunity in the form of Phase W. Phase W is a large zone of known mineralization that exists at depth and to the west of the main Round Mountain pit. Kinross intends to start a scoping study on its potential expansion in December 2015.
- This potential increase is not included in Kinross’s mineral reserve and resource statement.
During its latest quarterly results, Kinross’s peer Newmont Mining (NEM) also reported that its Tanami Expansion could provide the company with a near-term production growth option. Meanwhile, Yamana Gold (AUY) is implementing exploration at various mines, which resulted in higher grade asset extensions in the past.
To get exposure to gold prices, investors can also consider gold-backed ETFs such as the SPDR Gold Shares ETF (GLD) and the iShares Gold Trust ETF (IAU).
Investors might be interested in knowing how Kinross’s financial position has changed after this acquisition. We’ll explore this topic in detail in the final part of our series.
Continue to Next Part Browse this series on Market Realist:
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Kinross Gold Corporation
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PRODUCER |
CODE : K.TO |
ISIN : CA4969024047 |
CUSIP : 496902404 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Kinross Gold is a gold producing company based in Canada. Kinross Gold produces gold, silver in Brazil, in Canada, in Chile, in Ghana, in Mauritania, in Russia and in USA, develops copper, gold and silver in Chile, and holds various exploration projects in Canada, in Chile and in Russia. Its main assets in production are ROUND MOUNTAIN in USA, CRIXÁS, MORRO DO OURO and PARACATU in Brazil, REFUGIO MINE (VERDE AND PANCHO), FORT KNOX, MARICUNGA and LA COIPA in Chile, PORCUPINE and MUSSELWHITE in Canada, CHIRANO in Ghana, TASIAST in Mauritania and KUPOL in Russia, its main assets in development are KETTLE RIVER, GOLD HILL and CERRO CASALE in Chile and its main exploration properties are AHAFO NORTH, BIBIANI NORTH, BOLE, BOLE - BOLGATANGA, AKYEM, RUSSIAN MOUNTAIN, HORN MOUNTAIN, GIL, ENCHI and GOLDBANKS - KINROSS in Ghana, FRUTA DEL NORTE in Ecuador, HAMMOND REEF in Canada, KUBAKA MINE - BIRKACHAN in Russia and LOBO-MARTE in Chile. Kinross Gold is listed in Canada, in Germany and in United States of America. Its market capitalisation is CA$ 11.2 billions as of today (US$ 8.1 billions, € 7.6 billions). Its stock quote reached its lowest recent point on October 27, 2000 at CA$ 1.43, and its highest recent level on December 13, 2002 at CA$ 9.99. Kinross Gold has 1 246 749 952 shares outstanding. |