Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Canada’s third main gold miner Kinross Gold (TSX:K) will focus on its wholly-owned Paracatu mine, in Brazil’s Minas Gerais state, after it sold its stake in the Crixas gold mine to South Africa’s AngloGold Ashanti for $220 million, reports BNamericas.
On Tuesday, Toronto-based Kinross announced it was selling its 50% interest in the Brazilian Crixas mine as it needed to focus on its core projects.
Kinross became the sole owner of Paracatu in 2004, when it acquired the remaining 51% from Rio Tinto. The mine recently underwent a major expansion, increasing its lifespan and production capacity. According to Kinross’ website, at full capacity Paracatu will be the biggest gold producer in Brazil.
Paracatu, which produced over 450,000oz gold equivalent in 2011, has over 17Moz of proven and probable gold reserves, and a mine life of some 30 years, corporate communications VP Steve Mitchell told BNamericas.
Earlier this month, the company said it expected to produce between 2.6 million and 2.8 million gold-equivalent ounces from current operations this year.
The miner, which has been bludgeoned in the markets after taking a $2.5 billion writedown in February, produced 6% less gold during the first quarter of 2012 compared to the same period last year.
Kinross has said its biggest priority now is developing the massive Tasiast project in Mauritania.
In Latin America, Kinross also operates in Chile and Ecuador.
