Growth through Exploration
In 2011, Kinross' exploration efforts will focus on upgrading
the asset portfolio through organic growth.
Key initiatives include expansion and upgrading of mineral
resources and mineral reserves at Tasiast, Dvoinoye and White Gold,
along with advancing exploration work at key brownfields targets in
the Lobo-Marte, Vodorazdelnaya, La Coipa, Fruta del Norte, Kupol
and Buckhorn districts. Greenfields and generative exploration will
continue to be focused in West Africa, Alaska, the Yukon Territory,
Mexico and the Chukotka region of Russia.
The total expensed
and capitalized exploration expenditures in 2011 is
forecast to be $175 million. The majority of exploration will focus
on Tasiast and the infill and mineral resource expansion
drilling of the Greenschist Zone at West Branch, which remains open
down-plunge, targeting extension of mineralization beneath the open
pits, and drilling district targets along the 70 km greenstone
trend beyond the mine corridor.
At Kupol, the Company will continue definition drilling at the
North Extension target and testing of new targets on the mine
licenses and adjacent Kupol East and West exploration licenses.
Exploration will continue at Dvoinoye with the aim of expanding
mineral resources beyond the current footprint of drilling.
Other key initiatives in 2011 include Fort Knox, Chirano and White
Gold.
Kinross also continues to be focused on establishing
mutually-beneficial partnerships with promising junior exploration
companies. A selection of these partnerships is featured below.
Partnerships
Millrock Resources Inc. (Millrock) is a Canadian exploration
company focused on prospecting and packaging projects for joint
venture and for the discovery and development of major gold and
copper deposits in Alaska and Arizona.
In April 2010, Kinross and Millrock finalized an exploration
agreement to explore for gold deposits in the Council District on
the Seward Peninsula of western Alaska. Under the terms of the
agreement, Kinross can earn a 55% joint venture interest by funding
US$3.0 million of exploration expenditures, paying Millrock
US$260,000 and purchasing shares of Millrock through a C$250,000
private placement financing. Kinross may further increase its
interest in the project to 75% by incurring an additional US$3.0
million of exploration expenditures. Millrock will be the
project operator for 2010.
Golden Star is a mid-tier gold mining company with two operating
mines in Ghana, West Africa. In June 2010, Kinross and Golden Star,
through its wholly owned subsidiary Caystar, executed a letter of
intent in respect of Caystar's Sao Bartolome project in Brazil.
Under the LOI, Kinross can earn an initial 51% interest by spending
US$2 million on exploration over four years and by making a series
of annual cash payments totaling US$225,000. CNM can then move to a
65% interest by defining a compliant resource and completing a
scoping study. Caystar has a time-limited right to elect to
participate at 49% once CNM exercises its first option.
Laurentian Goldfields Corporation (Laurentian) is a Canadian
minerals exploration company with a strategy of generating gold
targets in Canada's frontier exploration areas. In August 2009,
Kinross and Laurentian commenced an exploration alliance to explore
for economic deposits in the Uchi Subprovince of Canada. Under an
initial one year term, Kinross and Laurentian will invest CDN$0.4
million and CDN$0.1 million, respectively, for early-stage
exploration to identify new gold exploration projects. Kinross may
elect to form a joint venture with Laurentian on an initial 50/50
percentage basis in any of the projects identified and acquired as
a result of the Alliance.
Teryl Resources Corporation (Teryl) is a Canadian minerals
exploration company with a focus in Alaska. Kinross and Teryl have
an 80/20 percentage joint venture agreement to explore the Gil
Mineral Claims that are located adjacent to Kinross' Fort Knox
Mine. The joint venture commenced in October 1999 and to date has
incurred exploration expenditures of US$7.5 million.
Focused Strategy
In 2010, our exploration efforts will support Kinross' strategy
to rejuvenate its asset portfolio through organic growth. Specific
objectives include continuing to upgrade the exploration pipeline
with new projects, executing on existing exploration programs and
growing reserves.
