UPDATE 2-Kinross okays first-phase expansion of North Africa mine

(Recasts, adds CEO interview)
By Nicole Mordant
March 30 (Reuters) - Kinross Gold Corp K.TO said on
Wednesday it plans to go ahead with a $300 million, first-phase
expansion of its Tasiast gold mine in North Africa that will
nearly double the mine's production and slash its production
costs.
Kinross, the world's fifth biggest gold miner, also unveiled
a smaller, lower-cost second-phase expansion for the mine in
Mauritania but said it is still deciding whether to go ahead
with it.
The Canadian miner now expects the two-phase expansion to
cost $920 million, down from a 2014 estimate of $1.6 billion
largely because it has reduced the size of the project to 30,000
tonnes per day from 38,000 tonnes per day.
"We are renovating as opposed to building a new mill. We
will utilize components in the existing mill," Kinross Chief
Executive Paul Rollinson said in an interview.
The Canadian miner said in November that it was studying the
expansion of Tasiast in a "bite-sized," two-step expansion that
was less risky in an environment of lower gold prices.

Hit by a nearly 40 percent slump in bullion prices since
late 2011, gold producers globally have slashed capital spending
and halted or slimmed down new mine builds and expansion
projects.
The first expansion phase, which Kinross will proceed with
immediately, will expand the mine's mill capacity to 12,000
tonnes per day from 8,000 currently.
Full production is expected by the end of the first quarter
of 2018. The expansion will see average annual production at
Tasiast rise by 87 percent to 409,000 ounces. Production costs
are expected to drop by 48 percent to $535 an ounce.
The expansion of the mill at Tasiast is Kinross's biggest
growth project, and without it analysts are concerned about the
company's growth prospects unless the miner makes an
acquisition.
A potential go-ahead decision for the second-phase
expansion, which would turn Tasiast into Kinross's biggest and
lowest-cost operation, is targeted for the end of 2017.
Asked if Kinross would consider taking on a partner to help
fund the second phase, Rollinson said it was "not something
Kinross was currently contemplating" although the company has
had "a lot of approaches."
Kinross acquired Tasiast as part of its $7.1 billion
takeover of Australia's Red Back Mining in 2010. It has written
down virtually all of the acquisition price of the takeover,
which cost former Kinross CEO Tye Burt his job.