Boston, MA 04/01/2014 (usastockreports) – Gold mining giant, Kinross Gold Corporation (USA) (NYSE:KGC), has released its feasibility study for its Tasiast mines in Mauritania, which shows a significant reduction in operating costs compared to earlier given guidance. The company also announced it has not made a final decision on the way forward for the project, with a decision on the same expected to come in 2015, at the earliest.
The Canadian gold mining company had initially projected operating costs of $2.7 billion for the mines which have consequently been dropped to $1.6billion. The company’s Chief executive officer maintains that the feasibility study found out that the Mauritania mine has a huge potential which could result in a world class asset in the coming years.
Highlights of the Study
The study carried out last year found out that the mine has the capacity to grow from being a small mine with high costs of operations to being one of the largest mines with low costs of operations. The study was carried out with the view of finding out the best possible mill size for the mine as well as finding the economics of the mine.
The expansion of the mine is expected to boost Mauritania’s gross domestic product and expected to contribute up to $600 million in taxes and royalties in life time operation.
Kinross Weaknesses in the Market
Kinross Gold Corporation (USA) (NYSE:KGC) has been grappling with a number of challenges in the market with the notable one being the decline in its net operating cash flow which has dropped by highs of 61.76% to lows of $183.60 million. The company’s cash generation rate is also lower compared to that of the industry average.
Kinross net income growth is an underperformer when compared to that of other industry players despite growing by 75.2% from lows of $742.10 million to highs of $2,989.10 million in the fourth quarter of 2013. The company’s revenue was also down by 26.1% in the recent quarter earnings compared to a similar period the prior year.
Kinross Gold Corporation (USA) (NYSE:KGC) was down by 1.66% on Monday trading session closing week opening session at a low of $4.14.