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3/31/16

Note to Reuters re. Kinross (K.to) (KGC): When covering a mining company please use a reporter who understands mining

Kinross yesterday lived up to its well-earned reputation of valuing style over substance with the publication of its much-anticipated re-work of the Tasiast expansion project. True to form the company didn't even wait til the end of the first paragraph before turning on the BS spigot...
"Phase One is expected to reach full production by the end of Q1 2018 with estimated capital expenditures of approximately $300 million."

...but we note with dry amusement that it had the desired effect with bizwires:
Kinross to spend $300 mln on N. Africa mine expansion
March 30 (Reuters) - Kinross Gold Corp said it would spend $300 million on the first phase of expansion at its Tasiast mine in Mauritania in North Africa. (continues here)

Because the only problem with that little nugget of information is that it's not true, apart from that we're good. As Special K pointed out just a few lines later:
"Preparations for Phase One construction will begin immediately, with expected forecast capital expenditures of $300 million, plus estimated capital stripping of $428 million (2016-2019)."
This creates existential questions in my head.  Things such as:

  • When is capex not capex?
  • Wouldn't it be fun to watch K spend $300m in capex, then decide not to spend that extra 428 large on capitalized stripping work, then try to claim all the capital expenditures on phase one are complete and they don't need to spend any more in order to mine phase one?
  • Why do birds fly South for the winter?*
  • Why do mining companies insist on bullshitting us to within an inch of our lives?
  • Why do fools fall in love? 
*it's too far to walk