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DAILY NEWS Aug 9, 2013 12:54 PM - 0 comments

Workers strike at Tasiast; Kinross to pick up option at Las Pampas

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News of a strike action at Kinross Gold’s (TSX: K; NYSE: KGC) troubled Tasiast gold mine in Mauritania brings the total number of strikes to three since the Toronto-based producer acquired its 100% stake in 2010.

The first strike in May 2011 lasted less than a day and the second strike in June 2012 continued for three days. The current work stoppage boils down to a failure to agree on the calculation of bonus payments, Louie Diaz, the company’s manager of external communications, told The Northern Miner.

“That remains the one key outstanding issue,” Diaz said. “I don’t want to get into a lot of detail and don’t want to negotiate through the media ... we hope to get back in discussions with them as soon as possible and get people back to work as soon as possible.”

Over the last six months, writedowns at Tasiast have added up to US$4.5 billion.

Meanwhile, as the company continues to review its operations with a focus on cost-cutting and preserving cash flow, management announced yesterday that it has signed a non-binding letter of agreement to acquire up to a 75% stake in the Las Pampas property in northern Chile owned by Iron Creek Capital Corp. (TSXV: IRN).

The definitive option agreement has yet to be finalized and a deal is subject to a 60-day review period, Diaz noted.

Under the initial option, Kinross can earn 60% by spending US$5 million on exploration over four years, including a minimum of US$500,000 during the first year. An additional option gives Kinross the ability to increase its stake by 15% by spending an additional US$20 million on exploration over a five-year period after the exercise of the initial option, or by completing a bankable feasibility study.

The centre of the silver-gold project is about 42 km southwest of Yamana Gold’s (TSXL AUY) gold-silver mines at El Penon and Fortuna and about 50 km northwest of Austral Gold’s (ASX: AGD) precious metals deposits at Guanaco.

The northern portion of the property, spanning about 31,000 hectares, is called Pampa Buenos Aires, and the 13,000-hectare southern portion is called Pampa Sur.

The Las Pampas project covers more than 30 km of continuous strike length of the prospective Dominador Fault Zone.

Iron Creek has been exploring the property for epithermal gold and silver mineralization and also for possible porphyry copper mineralization. 

Access to the property is good, as it lies alongside the main paved Pan-American Highway, about midway between the coastal port towns of Antofagasta and Talta.

The volcanic belt of northern Chile underlies much of the Atacama Desert in the Antofagasta and Atacama regions of northern Chile. The belt extends about 600 km and is bounded by the Coastal Cordillera to the west and the Domeyko Cordillera to the east. The geology of the belt is dominated by Late Cretaceous to Early Tertiary calc-alkaline to sub-alkaline bimodal volcanic rocks that range from basaltic andesite to rhyolite, and by sub-volcanic porphyritic intrusions and granitoid stocks.

The section of the belt that includes Las Pampas is characterized by exposures of felsic volcanic rocks.

Iron Creek released drill results in February 2012 from Pampa Sur that included intercepts of 26 metres grading 8.5 grams silver per tonne from 192 metres to 218 metres, including 12 metres of 14.8 grams silver. Other highlighted intercepts were 56 metres of 2.1 grams silver and 46 metres of 6.6 grams silver and 0.09gram gold.

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The plant at Kinross' Tasiast gold mine in Mauritania. Source: Kinross Gold
The plant at Kinross' Tasiast gold mine in Mauritania. ...

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