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Cost-embattled Kinross clinches $1-billion loan

J. Paul Rollinson, new CEO of Kinross.

Kinross Gold Corp. has taken out a $1-billion (U.S) term loan and increased the size of a revolving credit facility to $1.5-billion as it tries to get key development projects into production in an environment of skyrocketing costs.

Toronto-based Kinross, which replaced its chief executive officer on Aug. 1 amid a building wave of investor discontent, said the funds were meant for general corporate purposes.

Kinross, with operations or projects in eight countries, has faced a steep rise in its operating costs as everything from the price of tires for its monster trucks to wages for the people who drive and maintain them has risen.

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Operations capital alone, also called sustaining capital, is slated to come in at some $1.2-billion this year, funded from cash from operations and existing cash balances.

The loan announced on Friday – to be repaid by August, 2015 – will go toward funding Kinross's additional $1-billion in planned spending, mostly on its two key development projects, the Tasiast mine in Muaritania and Dvoinoye in Russia.

Kinross, Canada's third-largest gold company, has pledged aggressive cost cutting as it refocuses development plans on its most important projects.

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About the Author
Mining Reporter

Pav Jordan is a mining reporter for the Report on Business. More

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