Kinross President and CEO Tye Burt told analysts Thursday that the recent re-election of Ecuador's Rafael Correa, combined with Ecuador's good relationship with the Canadian Government bodes well for the Fruta del Norte gold project.
In a conference call to discuss Kinross financial results, Burt said the company expects to attend $40 million to $45 million this year on the project of which $10 million will be budgeted for exploration.
The company expects to receive the necessary drilling permits by mid-year to proceed to proceed with a drilling program to support a pre-feasibility study.
Meanwhile Burt told analysts that the Russian Government's recent designation of Kinross's Kupol gold project as a strategic mineral deposit was anticipated and is not an issue for us since the designation doesn't impact acquisitions made by foreign mining companies prior to the enactment of the policy.
The company's drilling program at Kupol has Kinross quite excited about what we're seeing there, Burt said. For the first quarter of this year, Kinross' shares of production was 169,292 ounces of gold and 1,697,485 ounces of silver at the Kupol mine.
In their guidance, Kinross hopes to produce 2.4 million to 2.5 million gold equivalent ounces this year, a 32% increase over 2008 production. Cost per gold equivalent ounce is expected to average $390 to $420 for this year.
On a by-product basis, Kinross expects to produce 2.2 million to 2.3 million ounces of gold and 12 million to 12.5 million ounces of silver this year at an average cost per gold ounce of $360 to $390.
Kinross reported net income for the first quarter of $76.5 million or 11-cents per share, compared with net earnings of $70.9 million or 12-cents per share for the same quarter for 2008. Net earnings for the first-quarter 2009 include a forex gain of $5.65 million or 1-cent per share.
Capital expenditures for 2009 are expected to be $475 million. Exploration and business development are forecast to be $75 million of which approximately $65 million will be allocated for exploration and corporate development.