Kinross to publish Great Bear resource estimate with 2022 results

Canada’s Kinross Gold (TSX: K; NYSE: KGC) expects to declare an initial mineral resource for its recently acquired Great Bear gold project in Red Lake, Ont., as part of its 2022 year-end results, it said in an update.

The gold miner, which paid $1.8 billion in cash and shares for Great Bear in a deal that closed in late February, said the estimate predominantly in the inferred resource category, with some indicated resources.

It also noted that it plans to submit an initial project description to permitting authorities in early 2023, after which it will start a pre-feasibility study on the project.

Closing the door on Russia and its Chirano mine in Ghana, has shifted Kinross focus toward the Americas and lower geopolitical risk jurisdiction, BMO metals and mining analyst Jackie Przbylowski said in a note to investors.

“We continue to see Kinross’ next phases of growth as coming from its organic pipeline — most notably Great Bear, but also Manh Choh (in Alaska), Curlew (in Washington State), and other projects,” Przbylowski wrote.

An important implication of this, according to the expert, is that Kinross is unlikely to be a participant in meaningful mergers and acquisitions deals in the near term.

So far, the company has drilled about 83,000 metres at Great Bear and is on track to complete about 200,000 metres of exploration and infill drilling in 2022 on the LP Fault zone.

“Completing the maiden resource will free up resources to focus on step-out exploration and underground potential,” Przbylowski said.

Kinross is targeting construction by 2027 and first production by 2029, but doesn’t rule out a “schedule compression.”

The development of Great Bear comes at a time of rising capital and operating cost inflation, analysts at the National Bank of Canada said, giving the project a $1.6 billion value.

Tight labour markets, high energy costs and higher prices for items such as steel are expected to increase the cost of developing new mines, the bank added.

US projects

Kinross said a feasibility study for its 70%-owned Manh Choh gold mine in Alaska is near completion, adding that it expects first production in the fourth quarter 2024, subject to permitting.

The underground drilling program at the company’s Curlew Basin exploration project in Washington State in undergoing, Kinross said. It noted it was targeting to declare a total mineral inventory of one million ounces of gold by year-end.

BMO forecast beginning of production at Curlew by 2026 depending on the pace of the permitting process, including drystack tailings.

After completing the sale of its Russian business, Kinross’ rebalanced portfolio is anchored by two tier one assets – Tasiast, in Mauritania and Paracatu, in Brazil.

The gold producer also has a strong portfolio of mines in the Americas, including a growing business in Chile.