Kinross pulls plug on Lupin

Soaring costs have forced Kinross Gold (K-T) to suspend operations at its Lupin mine in Nunavut, 400 km northeast of Yellowknife.

Despite a restructuring plan that improved costs, the stronger Canadian dollar has had the effect of offsetting any savings.

Some 235 employees plus another 70 contract workers will be laid off. A small group will remain on-site to address environmental matters and consider possible options for the project. One option is to mine the shaft and crown pillars, which are estimated to contain 400,000 tonnes grading 8.5 grams gold per tonne.

Lupin’s plant and equipment will remain dormant pending the results of a review.

Kinross inherited Lupin earlier this year via its combination with Echo Bay Mines (part of a 3-way merger that also included TVX Gold). The mine churned out 25,534 oz. gold at a total cash cost of US$409 per oz. during the recent second quarter. In all of 2002, it produced 113,835 oz. gold at US$330 apiece, and in 2001 it produced 139,327 oz. at US$246 per oz.

At the end of 2002, reserves stood at 1.2 million tonnes grading 8.57 grams gold.