Kinross Gold (TSX: K; NYSE: KGC) has announced overnight that it will suspend all development work at its Udinsk gold project in Russia as international sanctions and legal restrictions intensify due to Russia’s invasion of Ukraine.
The company says it will also suspend operations at its Kupol mine, focusing on the safety and well-being of its more than 2,000 employees and recognizing its obligations to manage and mitigate the mine’s environmental impact on an ongoing basis.
Kinross said it undertook to adhere to all sanctions and legal restrictions that have, or will be, announced by relevant governments.
The company has also made a donation of US$1 million to the Canadian Red Cross Ukraine Humanitarian Appeal to assist displaced Ukrainians.
International sanctions limit the ability of Russian domestic banks to purchase Kinross’s produced gold.
The Chulbatkan gold project in Russia’s Far East, 15 km southwest of Udinsk. Credit: Kinross Gold.
Kinross has been operating in Russia for about 25 years and currently operates the Kupol underground mine and mill in Russia’s Far Eastern region of Chukotka, about 7,000 km from Ukraine. The mine produced 481,108 gold-equivalent oz. last year.
In 2013, the company expanded the mill from 3,500 to 4,500 tonnes per day to process additional ore from the Dvoinoye mine, about 100 km to the north, where mining activities ceased in 2020. Stockpiles from Dvoinoye are expected to be processed until about 2024.
In January 2020, Kinross acquired the Chulbatkan licence, also in Russia’s Far East. Drilling there has focused on the Udinsk resource pit, which is the first project it expects to develop on the licence, with the first production forecast to start in 2025.
In 2022, Kinross expects approximately 13% of its global production to come from Russia.
Kinross’s NYSE-quoted equity is down nearly 18% over the past 12 months at US$5.24 per share, giving it a market capitalization of US$6.83 billion.
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