Kinross Gold suspending Russian operations
Kinross Gold Corp. (K-TSX, KGC-NYSE) has responded to the war in Ukraine by suspending operations in Russia that currently account for 13% of its global gold production.
The company says it is deeply concerned about the loss of life and destruction in Ukraine and wishes to express its sympathy and support for people who are suffering because of this tragic situation.
Kinross has announced a donation of $1 million to the Canadian Red Cross Ukraine humanitarian crisis appeal to assist those people most in need. “Kinross is hopeful for a peaceful and diplomatic solution in Ukraine,” the company said in a press release.
Meanwhile, the gold miner said it is suspending all activities at its Udinsk development project. The company is also in the process of suspending operations at its Kupol mine, with a focus on safety and well-being of more than 2,000 employees and in recognition of its obligations to manage and mitigate the mine’s environmental impact on a continuing basis.
“The company intends to adhere to all sanctions and legal restrictions that have, or will be, announced by relevant governments,” Kinross said.
Kinross is a Canadian senior gold mining company with mines and projects in the U.S., Brazil, Russia, Mauritania, Chile, Ghana and Canada.
News that it is suspending the Kupol and Udinsk operations comes just days after Kinross issued a statement saying those operations were unaffected by U.S. sanctions announced on February, 22, 2022.
The company said it has successfully operated in Russia for more than 25 years and has previously managed through similar situations while complying with applicable laws.
Kinross operates the underground Kupol mine in the Chukotka region. Ore stockpiles from the Dvoinoye operation, where mining activities ceased in 2020, are processed at the Kupol mill. Russian production amounted to 511,000 ounces of gold equivalent in 2020.
The Udinsk project in Khabarovski Krai, is currently in the feasibility study stage.
The company has diversified procurement and logistics structures in Russia, with the majority of its procurement coming from within the country. “Approximately 98% of employees of Kinross’s Russian subsidiaries are Russian locals, and given the ice road supply season, its operations have a fully year of supplies on hand,” the company has said.
Kinross said it refines gold production from its Russian mines in country and retains flexibility to sell its gold domestically and internationally. In 2022, Kinross expects approximately 13% of its global production to come from Russia. The company’s operations are located in the Russian Far East and are approximately 7,000 kilometres away from Ukraine.
On March 2, 2022, Kinross Gold shares rose 3.9% or 26 cents to $6.88 on volume of 6.00 million and currently trade in a 52-week range of $10.05 and $6.32.