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Canada’s Kinross Gold (TSX:K) (NYSE:KGC) has reached an in-principle deal with the government of Mauritania, which the company says will better balance the interests of both parties involved in the Tasiast gold mine.
Under the terms of the agreement, Mauritania would provide Kinross with a 30-year exploitation licence for Tasiast Sud, granted with expedited permitting and the possibility of early mining.
It could also see the comeback of a tax exemption on fuel duties and Kinross receiving nearly $40 million back in outstanding tax refunds, to be paid by 2025.
The deal, chief executive Paul Rollinson said, is a further sign of a “positive” foreign investment climate in the West African nation
Kinross, in turn, would make a $10 million payment to the government after completion of definitive agreements around fuel and tax issues.
It would also pay Mauritania another $15 million to resolve disputed matters related to the miner’s prior application to convert the Tasiast Sud exploration licence into an exploitation permit.
The deal, chief executive Paul Rollinson said, is a further sign of a “positive” foreign investment climate in the west African nation.
The Tasiast open-pit mine, located in northwestern Mauritania, about 300 km north of the capital Nouakchott, produced 391,097 gold-equivalent ounces in 2019. The figure was significantly higher than the 250,965 ounces it churned out the year before.
Kinross is in the midst of an expansion at Tasiast, which aims to increase throughput by more than 50%, for an initial capital cost of $150 million.
The project will incrementally increase throughputs to 24,000 tonnes a day by mid-2023, up from the current 12,000 tonnes per day range. It will also extend the mine life four years, to 2033.
The exploration program at the Tasiast Sud property is expected to focus on upgrading existing indicated resource estimates of 193,000 ounces and inferred resource estimates of 817,000 ounces. It would potentially enhance the probable reserve estimate of 144,000 ounces.
Kinross’ goal is to produce 563,000 ounces of gold a year at the mine by 2023.
2 Comments
Tasiast union Delegates
Thanks for the News From our side as employees we are happy for this agreement between Mauritanian Government and Kinross Tasiast company , By the way actually the employees strike at Tasiast Mine site was only suspended May 21 in response to Mauritanian Gov rep mediation, to re activate it , it needs only 24h notice if delegate can conclude long term agreement with tasiast management .
Tasiast union Delegates
A message from Tasiast Union Delegates after A seventeen day strike at tasiast site ( repplay to kinross managment statement May 22 , 2020
We are Kinross Tasiast TMLSA employees, first, we are very loyal to our company and proud of it.
We have always consider the success of our company as our first priority all the time and particularly in these taught covid 19 time.
The reason why we thought about contacting you directly is that we have the feeling that you don’t have the right picture of what is going on here now.
In fact, we are going through a very conflictual situation with the site general management.
The way the actual general management team manage things with employees does note reflect the values of Kinross where people are first priority .
We believe that the General Management show no respect, no transparency to mauritanian employees , they are considered as second degree employees compared to expatriates staff.
We are under the impression that employees are not involved in any decision making process here, it s very humiliating!
Local employees are no longer mentally able to keep working in these conditions , they are being under a strong pressure on site and that started affecting production.
We believe that is time to establish a better work environment where a social and constructive dialog with local employees can be conducted, in order to keep the mine running.
It is known that this strike has been postponed intermittantly twice last year in the hope of a mutual agreement that will be satisfactory to both parties. The company has however thrown aside all of these attempts turning deaf ears to the majority concerns. In the last quarter of the previous year a labour agreement was reached following marathons of meetings which we have accepted. The aim of this agreement was to enforce a productive social environment over 3 years. Nonetheless the company has unilaterally violated in many instances the terms of this agreement. Including and not limited to the bonus payment which was messed up with and didn’t follow any attainable objectives which left the employees on ground of uncertainty not knowing if anything will be gained at all which turned to be the case as all objectives have intentionally been high to reduce to nothing the employees bonus and if anything is achieved the calculations were wrong which resulted in money lost for the employees. The second example of violations was the unilateral suspension of all local promotions and execution of expats perssonel promotions which is a clear segregation and a racist approach from general management. …etc
With Covid 19 outbreak early March this year the company launched a set of improvised rules and regulations thinking that it was precautionary measures but these rules were extraordinarily exaggerated and were not consulted with the employees delegates and we ended up with hundreds of local employees confined on site and forced to work beyond normal rotations with no known compensation plan and a ban on normal accumulation of leave days. When the company decided lately to compensate for the covid 19 confined and overly worked local workers the bonus paid to expats was nothing compared with what paid to locals. The locals were invited to accept a little above 100 dollars for 6 weeks of nonstop work while the expats have been given tens of thousands. Provided that the production has doubled during this period and the gold price has reached unprecedented levels in years.
This and more was at the core of our issues with the general management.
We remain open to any constructive discussions that would solve these issues for confidence building and transparency with sound production and sustainable development.
NB: By the way actually the strike was only suspended in response to Mauritanian Gov rep mediation, to re activate it , it needs only 24h notice if delegate can conclude long term agreement with tasiast management.
We thank you in the name of Tasiast TMLSA employees,
Thank you,
Tasiast Union Delegates