Kinross Gold has dropped its $1.6bn expansion plan at its Tasiast mine in north-western Mauritania, citing weak gold prices.

Kinross Gold CEO Paul Rollinson said: "2014 marked another excellent year for Kinross operationally with record production of 2.71 million ounces (Moz), declining costs and strong cashflow generation, despite lower gold prices.

"With ten consecutive quarters of having met or exceeded expectations, the company continues to deliver on its commitment to operational excellence, financial discipline and balance sheet strength."

The company believed that the mill expansion had the potential to offer a rare combination of large and low-cost production.

"Kinross Gold’s decision to forgo the expansion will preserve its cash position, which is said to be around $1bn at year-end."

Kinross Gold’s decision to forgo the expansion will preserve its cash position, which is said to be around $1bn at year-end.

Tasiast was acquired by Kinross Gold as part of the company’s $7.1bn acquisition of Australia-based Red Back Mining in 2010, Reuters reported.

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By GlobalData

The company, which anticipates total capital expenditures of around $725m this year, hopes to produce about 2.4Moz to 2.6Moz of gold-equivalent at a production cost of sales per gold-equivalent ounce of $720 to $780.

Claimed to be the world’s fifth biggest gold producer based on output, Kinross has operations in North and South America, Africa and Russia.

Image: Kinross Gold acquired Tasiast as part of its $7.1bn acquisition of Red Back Mining. Photo: courtesy of Kinross Gold Corporation.