Chirano Mine Development

Kinross
 

Key Facts

Commodity Gold
Location Ghana
Nearest Landmark: BIBIANI
Distance: 15km NNE from the nearest Landmark
Owner Kinross (90%), Government of Ghana (10%)
Production Gold 183k oz in 2009
Deposit Type epigenetic, mesothermal gold deposits
Reserves & Resources Gold 2.24m oz
(proven probable reseerve, Dec 31, 2009
Mine Type Open Pit & Underground
Processing Method milling, carbon-in-leach
Mine Life to 2019

Overview

Kinross acquired its ownership in the Chirano mine on September 17, 2010 upon completing its acquisition of Red Back Mining Inc. Chirano is located in southwestern Ghana, approximately 100 kilometres southwest of Kumasi, Ghana's second largest city. Chirano achieved its first gold pour in October 2005, and consists of 11 deposits: Akwaaba, Suraw, Akoti South, Akoti North, Akoti Extended, Paboase, Tano, Obra South, Obra, Sariehu and Mamnao.

The mine is within the Bibiani gold belt and the mining plan at the time of Kinross' acquisition of Red Back calls for the expl oitation of 11 gold deposits spread along a strike length of approximately10 kilometres by both open pit and underground mining methods. Ore production at Paboase, an underground deposit for which an inaugural probable reserve of 920,000 ounces was released on July 19, 2010, is expected to commence late 2011.

Open pit and underground ore are processed at the Chirano plant. The capacity of the mill is approximately 3.5 million tonnes per annum. Processing involves crushing, ball mill grinding, leaching, and CIL. Gold is recovered by an elution circuit.

Location

The mine is situated in southwestern Ghana, 100 kilometers south-west of Kumasi, which is Ghana's second largest city. The town of Bibiani lies 15 kilometers north-northeast of the mine area (37 kilometers by road). Access to the mine from the capital Accra is via a sealed highway to Kumasi and then sealed highway running south-west towards Bibiani and onwards to the town of Sefwi-Bekwai. The final approach is via a 13 kilometer gravel road whose junction is approximately 9 kilometers beyond Sefwi-Bekwai. Mine infrastructure comprises a centrally located processing plant, tailings storage facility, water storage facility, staff village, workshops and offices.

Geology

The Chirano mine area lies within the Proterozoic terrain of southwest Ghana, along a major structure separating the Sefwi Belt to the west from the Kumasi Basin to the east known as the Bibiani Shear zone. The belt and basin architecture comprises rocks of Birimian age, with the belts being dominated by mafic volcanics and the basins typified by fine grained, deep marine sediments. Both are intruded by granites.

The Chirano gold deposits lie close to a splay off the main Bibiani shear zone known as the Chirano Shear. The two are separated by a small inlier of younger Tarkwaian epiclastic sediments. The deposits occur at regular intervals along a mineralized zone eleven kilometers long. The mineralized horizon is characterized by foliation, veining and brecciation, and is interpreted as a splay fault off the Chirano Shear with mineralization occurring within 200 meters to the west of the Chirano Shear.

Mineralization

The Chirano gold deposits are hosted by fractured and altered mafic volcanics and granite, and include stacked arrays of parallel veinlets, veinlet stockworks and mineralized cataclasites. The geometry and shape of the deposits range from tabular (Obra), or pipe-like (Tano), to multiple parallel lodes (Paboase). The mineralized zone thickness ranges from a few meters to over 70 meters. Most deposits dip very steeply towards the west or southwest, and also plunge very steeply. Generally, the tenor of the gold mineralization correlates with the intensity of alteration, veining and brecciation. The gold mineralization is fine grained and is associated with 1% to 5% pyrite, and the distribution of gold appears to be closely associated with the presence of pyrite. The hydrothermal alteration assemblage is characterized by silica, ankerite, albite, sericite and pyrite.

Mining & Operations

The mine construction was completed in September 2005. The final development capital cost of the mine was $73.4 million. Red Back commissioned the Chirano gold plant in September 2005 with the first gold pour on October 10, 2005. To December 31, 2008 the Chirano Mine has produced a total of 405 thousand ounces of gold.

Conventional open pit mining methods are used to mine the ore and waste. The operation utilizes selective mining techniques to separate ore and waste. The contractor has a mining fleet which is a combination of 250 tonne hydraulic excavators with 14 m3 buckets loading 90 tonne trucks. All primary (fresh) material is drilled and blasted. The majority of oxide requires drilling and blasting.

Gold produced at the mine site is shipped from site, under secured conditions, to a refining company. Under pre-established contractual instructions, the refiner delivers the refined gold directly to an account held by Chirano with an international financial institution. Once received at the financial institution, the refined gold is sold in the market at spot as Chirano is not a party to any contract for the sale of its gold with proceeds automatically credited to a Chirano bank account.

The mine is estimated to have a life of a further 10 years.

Processing

The original process plant is currently being expanded to enable treatment of 3.5mtpa to accommodate the Akwaaba underground ore. Once completed in 2009 the treatment plant flow sheet will comprise tertiary stage crushing, ball milling, pre-leach thickening, a single stage of leaching and a nine stage CIL circuit. Gold is recovered by an elution circuit with electro-winning of the gold onto stainless steel cathodes. The gold is removed from the cathodes with high pressure water sprays and smelted to a final bullion product. Historic gold recoveries have ranged from 90% to 93% and this is expected to continue for the life of the mine.

Environment & Community

An Environmental Impact Statement (EIS) has been completed by environmental consultants SGS and submitted to the Environmental Protection Authority in Ghana. The EIS has been accepted and the EPA permit was granted on 5 April 2004. The EIS identified an increase in dust and noise levels and deterioration in water quality as potential impacts of the mine. Knight Piesold (KP) undertook investigations of the waste materials in order to characterize them and assess the potential for acid rock drainage (ARD) and/or highlight other potential environmental issues. The main conclusion from the KP ARD report is that the waste rock from the Chirano Gold Mine is classified as non-acid forming.