Kinross Gold has released a preliminary economic assessment for its Great Bear gold project in Red Lake in Ontario, Canada outlining initial production of over 500,000ozpa at an all-in sustaining cost of US$800/oz.

The PEA outlines a high-grade combined open pit and underground mine and 10,000tpd mill with a 12-year life, and average production of 431,000ozpa over its life.

The project would yield a net present value of $1.9 billion at a 5% discount rate and an internal rate of return of 24.3%, with a 2.7-year payback following an initial capital investment of $1.2 billion with $250 million in capitalised mine development prior to commercial production, using a $1900/oz gold price. The metrics improve to $3.3 billion, 35.5% and 1.7 years at a $2500/oz gold price.

"This PEA marks an important milestone for Great Bear and reaffirms our view of it as a high-quality asset with robust economics and a clear path to become a world class operating mine. The project represents a strong combination of high-margin production and modest capital requirements, with the opportunity for significant resource growth in the future," said Kinross Gold chief executive Paul Rollinson.

A resource update increased the inferred resources by 568,000oz to 3.9Moz, to add to the existing measured and indicated resource of 2.7Moz. The resource has potential to increase further as drilling to depths of up to 1600m has shown multiple wide, high-grade intercepts beyond the current resource that demonstrates the continuation of mineralisation at depth.

The initial mine plan outlines concurrent open pit and underground mining over the first eight years followed by combined underground mining and stockpile processing for the remaining years. The open pit will be mined with a dual fleet strategy to provide selective mining of the high-grade material and lower cost mining of the waste, mining a peak of 26Mt of material and peak of 9000tpd of mineralised material.

Underground mining will primarily be with long hole open stoping with paste backfill and cemented rock fill. The first stope production is expected to begin in 2029, subject to permitting, with a peak production rate of 6000tpd.

The operation would have a conventional milling circuit including semi-autogenous grinding and ball milling, pebble crushing, gravity concentration, leaching followed by carbon-in-pulp adsorption, elution, electrowinning, and smelting to produce gold doré, targeting an average processing rate of 10,000tpd.

The company said that the results of test work indicated clean metallurgy with no deleterious elements and strong recoveries, with average recovery of 95.7%. 

Kinross obtained the deposit through the December 2021 acquisition of Great Bear Resources, prior to the latter reporting a resource estimate.

Kinross ended the June quarter with $480 million in cash, $1.2 billion in debt.