JOHANNESBURG (miningweekly.com) – Canada’s third-largest gold miner Kinross Gold has agreed to sell its stake in the Crixas gold mine (Serra Grande), in Brazil, to South Africa’s AngloGold Ashanti.
AngloGold, which already owns the other half of the property and operates the mine, bought Kinross’ interest for $220-million.
"Crixas is a nonoperated, noncore asset for Kinross," Kinross CEO Tye Burt said in a statement.
He added that the property’s divestiture was part of the company’s strategy of portfolio optimisation, and focusing its resources on its core operations and priority projects.
Earlier this month, Kinross reported a 58% drop in first-quarter earnings to $105.7-million, mainly owing to a once-off $110.3-million remeasurement of deferred tax liabilities, as a result of an increase in the Ghanaian corporate income tax rate from 25% to 35%.
The company also said earlier it would take a massive $2.94-billion noncash goodwill impairment charge related to its acquisition of the Tasiast mine in Mauritiana, and the Chirano mine in Ghana, which it bought for $7.1-billion from Red Back Mining in 2010.
Kinross said its share of Crixas' proven and probable gold reserves was about 375 000 oz as at December 31, and its share of forecast production for the year was about 70 000 oz of gold-equivalent ounces. The company expects to provide updated production guidance for the year with its second-quarter earnings announcement.
In 2011, the Serra Grande mine produced 134 000 oz of gold at an average cash cost of $767/oz. The Serra Grande operation comprises three underground mines, namely Mina III, Mina Nova and Mina Palmeiras, and one openpit mine on the outcrop of the Mina III mineralised zone, as well as a single dedicated processing plant.
To date, the Serra Grande mine has produced 3.4-million ounces of gold.
AngloGold Ashanti said it expects full ownership of the mine to bring its yearly production from Brazil to more than 500 000 oz and the contribution from the Americas region as whole to more than one-million ounces.
“This deal further simplifies our portfolio and gives us greater exposure to Brazil, where we have had significant success in growing our production, as well as our reserve and resource base. We see long-term, lower-risk potential from Serra Grande, which is a key component of our strategy to grow the contribution from the Americas,” AngloGold CEO Mark Cutifani said in a statement.