Kinross Gold’s Lobo-Marte cost jumps 67% as NPV more than triples

AI desk brief

Kinross raised the projected capex for its Lobo-Marte gold project in Chile by nearly two-thirds to $1.8bn (C$2.5bn), but the project still screens strongly with a post-tax NPV of $4.3bn, a 26% IRR and a 2.3-year payback at $4,100/oz gold. Management said the update mainly reflects inflation since the 2021 study, plus higher equipment, construction and indirect costs; even at $3,500/oz gold, the project still shows a $3.2bn NPV and 22% IRR.

Lobo-Marte is expected to produce about 350,000 oz/year for 15 years at AISC of roughly $1,000/oz, making it material to Kinross’ portfolio and extending its Chilean life into the 2040s. Scotiabank said the capital estimate came in about 10% below its model and projected mine costs around 30% lower, while BMO cut its target to C$49 from C$51 but kept an outperform rating, arguing the project still leaves significant valuation upside. Kinross shares fell 2.2% on the day.

For the gold market, the main takeaway is that inflation has materially lifted new mine development costs, even for a high-grade heap-leach project with strong economics. That supports the longer-term narrative that replacement ounces are becoming more expensive to bring online, though the article is company-specific rather than a direct read-through on near-term bullion pricing. Key catalysts are the firmer cost estimate after detailed engineering and any further changes to capex as Kinross advances permitting and execution planning.