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.
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.