Canadian miner Kinross Gold (TSX:G) (NYSE:KGC)聽is evaluating options for returning to long-term production in Chile, the world鈥檚 top copper miner, where the company already has two key assets.
One alternative the company is very keen on is resuming mining at its La Coipa gold and silver mine, located in Chile鈥檚 northern Atacama Region, it said while on Tuesday.
Alternatives include restarting the La Coipa gold and silver mine, idled since 2013
Kinross , when the targeted orebody run out of riches. But the results of a pre-feasibility study (PFS), completed in 2015, lead Kinross to evaluate extending the mine life through the so-called Phase 7, which has an expected initial investment of $200 million.
According to that study, the mine is expected to generate a 20% internal rate of return during the expected 5.5 year mine life at an assumed gold price of $1,200 per ounce, with average annual production of 207,000 ounces gold equivalent and average all-in sustaining costs of $767 per ounce of gold equivalent.
Last year, Kinross agreed to pay $65 million for the 50% of the Phase 7 deposit it did not already own and gain full ownership and related mining rights.
The transaction followed studies that allowed Kinross to add聽844,000 ounces of gold and 34 million ounces of silver in 2017 to mineral reserve estimates from the Phase 7 and Pur茅n deposits, which comprise the La Coipa Restart project.
The miner鈥檚 other option is the Lobo-Marte gold project, which it describes as one of the highest grade deposits in the Maricunga [gold] district.
Kinross鈥檚 other option is the Lobo-Marte gold project, which it describes as 鈥渙ne of the highest grade deposits in the Maricunga district鈥�.
Kinross said the completed scoping study for that project, which it acquired in 2009 from Teck Cominco and certain subsidiaries of Anglo American, showed 鈥渆ncouraging results鈥� for a potential return to long-term production in the South American country.
Lobo-Marte would begin production after the La Coipa restart, the company said.
Kinross used to have another mine in northern Chile, Maricunga, where the country鈥檚 environmental watchdog (SMA) ordered the closure of the wells serving the operation in 2016. The company halted all extraction, grinding and stockpiling of ore and laid off 300 people that year.
It also challenged the ruling in Chile鈥檚 environmental tribunal and then in the country鈥檚 highest court.
Late last year, the Supreme Court , pointing to the 鈥渋nadequate management of unforeseen environmental impacts on the Pantanillo-Ci茅naga Redonda basin,鈥� in the Atacama desert.
The Maricunga mine accounted for 8% of the miner鈥檚 total gold production in 2015.