Unformatted text preview: nt of
operations. vi. Inventories
Inventories consisting of metal in circuit ore, metal in-process and finished metal are valued at the lower of cost
or net realizable value (“NRV”). NRV is calculated as the difference between the estimated gold prices based on
prevailing and long-term metal prices and estimated costs to complete production into a saleable form.
Metal in circuit is comprised of ore in stockpiles and ore on heap leach pads. Ore in stockpiles is coarse ore that
has been extracted from the mine and is available for further processing. Costs are added to stockpiles based on
the current mining cost per tonne and removed at the average cost per tonne. Costs are added to ore on the
heap leach pads based on current mining costs and removed from the heap leach pads as ounces are recovered,
based on the average cost per recoverable ounce of gold on the leach pad. Ore in stockpiles not expected to be
processed in the next twelve months is classified as long-term.
The quantities of recoverable gold placed on the leach pads are reconciled by comparing the grades of ore
placed on the leach pads to the quantities of gold actually recovered (metallurgical balancing); however, the
nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, the
metallurgical balancing process is constantly monitored and the engineering estimates are refined based on
actual results over time. Variances between actual and estimated quantities resulting from changes in
assumptions and estimates that do not result in write downs to NRV are accounted for on a prospective basis.
The ultimate actual recovery percentage of gold from a leach pad will not be known until the leaching process
has concluded. In the event that the Company determines, based on engineering estimates, that a quantity of
KINROSS GOLD 2012 ANNUAL REPORT FS11 gold contained in ore on leach pads is to be recovered over a period exceeding twelve months, that portion is
classified as long-term.
In-process inventories represent materials that are in the process of being converted to a saleable product.
In process and finished metal inventories, comprised of...
View Full Document
This document was uploaded on 03/30/2014.
- Spring '14