On July 15, Kinross Gold announced the results of its pre-feasibility study for the company’s Lobo-Marte project in northern Chile.

Results from the study include an additional 6.4 million ounces to the project’s mineral reserve estimates, an increase of 25 per cent, and extend the project’s reserve life by two and a half years. The study also estimates that the project will produce approximately 4.5 million ounces of gold over its 15-year mine life.

The study estimates that at a gold price of US$1,200 per ounce, the project will have a net present value of US$150 million and an internal rate of return of seven per cent. The study also estimated that at gold prices of US$1,500 per ounce and US$1,800 per ounce, the project’s net present value and internal rate of return would increase to US$770 million and 14 per cent and US$1.355 billion and 21 per cent, respectively.

The project is estimated to have an average all-in sustaining cost of US$745 per ounce of gold for an estimated capital cost of US$765 million, not including an additional US$230 million in contingency costs.

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“The Lobo-Marte project provides Kinross with an excellent, organic development option that has attractive all-in sustaining costs and offers substantial upside leverage to the gold price, without increasing project cost requirements and risk,” said J. Paul Rollinson, president and CEO of Kinross Gold. “The project represents a potential synergistic, long-term mine life extension in a favourable mining jurisdiction and delivers a significant 6.4 million ounce addition to our current gold reserve estimates, increasing the company’s overall reserve mine life.”

The company plans to begin a feasibility study in the second half of this year, to be completed by the fourth quarter of 2021, which would provide information for an environmental impact assessment and permit applications. The company expects to begin project construction in 2025 and is slated for initial production in 2027.

Kinross has stated that the project’s development is dependent on factors such as the gold price, permitting, expected economic returns and the company’s capital priorities. It also expects that production at Lobo-Marte will begin only after mining concludes at its La Coipa project, where the company is currently looking to restart operations and extend the mine life.