Kinross Gold Corporation KGC declared that operations at its Paracatu mine in Brazil have resumed normal production levels after remaining suspended at both the Plant 1 and Plant 2 facilities from Nov 5, 2015 owing to insufficient rainfall.
Both plants resumed full production since Nov 20 after the area witnessed an increase in seasonal rainfall. However, operations at the Santo Antonio tailings reprocessing project, slated to start production in the fourth quarter of 2015, remain temporarily suspended until the water balance is fully restored.
In its third-quarter 2015 results, Kinross reported that production increased sequentially at the Paracatu mine owing to higher mill grades and increased recovery. However, year-over-year production declined due to lower mill throughput, grades and recoveries. Due to lack of rainfall, management decided to temporarily halt operations at the mine until the water balance is sufficient to allow production to resume.
However, the suspension of operations at Plant 1 and Plant 2 is anticipated to reduce production by a minimum of 16,000 gold ounces and a maximum of 34,000 gold ounces in the fourth quarter of 2015, depending on the amount of rainfall in December. Moreover, this expected reduction contemplates another curtailment at the mine if the site receives less than one-third of the average rainfall this month. Nonetheless, this is least likely as December is typically the wettest month of the year.
Kinross, however, notified that this curtailment would not affect its production guidance for the full year. The company anticipates its production for the year to lie in the range of 2.5–2.6 million gold equivalent ounces.
Kinross currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the gold mining space include Harmony Gold Mining Company Limited HMY, NovaGold Resources Inc. NG and Richmont Mines Inc. RIC, all carrying a Zacks Rank #2 (Buy).
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