DRILLING AND BLASTING OPTIMIZATION Kinross maricunga

1. February 2015 DRILLING AND BLASTING OPTIMIZATIONKinross maricunga Jorge Flores - CMM CristobalMimica - CMM Benjamin Cebrián - BC

2. ISEE – 41st International conference – New Orleans , USA SUMMARY In early 2013, Kinross Gold’s Maricunga Mine (Region III, Chile) decided to pursue improved D&B practices to improve crushing performance. The sequence of re-thinking the processes, evaluating options, and achieving positive results is presented here.

3. ISEE – 41st International conference – New Orleans , USA INDEX • Site Description • First Approach – D&B symptoms • Audit • Follow up • Main improvements • Final Impacts

4. ISEE – 41st International conference – New Orleans , USA DESCRIPTION of KINROSS MARICUNGA SITE • MINE SITE • High Andes at 4200 y 4700 m.a.s.l. • 185 Km East Copiapo. • Winter: -30° to -5 °C. Summer: 0° to 20 °C. • Snow: 1 m/yr average • Wind: Up to 100 Km/hour • Humidity: 20% to 40% RH. DEPOSIT The rock densities  2.37 and 2.57 t/m3 low grade gold deposit – 0.5 to 1.3 g/t grade The rock hardness  40 to 150 MPa CHILE Maricunga Mine Pancho Pit 2009 to 2016. Z = 4700 m.a.s.l.

5. ISEE – 41st International conference – New Orleans , USA FIRST APPROACH Real problems observed Symptoms observed

6. ISEE – 41st International conference – New Orleans , USA FIRST APPROACH Why we have high blasting costs and very poor performance in the rock fragmentation? Why we have high-energy blasting with a very poor performance in the rock fragmentation? Do we have the cattaking care of the meat? Mr. Benjamin Cebrian – Blast Consult, was hired as an independent consultant to complete a Whole Audit, reviewing Maricunga’s D&B practices Some examples of the fragmentation performance

7. ISEE – 41st International conference – New Orleans , USA AUDIT SUMMARY OUTPUT – BLAST DYNAMICS May 2013 The average value in the global industry is 2,94 The average overall score was below versus other mines in the industry.

8. ISEE – 41st International conference – New Orleans , USA SOME OBSERVATIONS 31% de tacos cortos 57% de pozos cortos 12% de tacos largos

9. ISEE – 41st International conference – New Orleans , USA SOME OBSERVATIONS

10. ISEE – 41st International conference – New Orleans , USA FOCUS • Drilling Practices: • Build a D&B design matrix based on hardness and Rock Mass Classification (FF). • QAQC of the drilling (over drilling / short holes / xyz / etc.). • Pre-Blast Practices: • Change the use of 100% emulsion (1.34 gr/cm3) to 100% ANFO (0.8 gr/cm3) – Energy Blasting Criteria.(50% reduction) • QAQC of explosive blended in the hole.. • Blasting Practices: • Timing sequence re-definition • Blasting documents with pre and post analysis (CI). • Focus onto main customer – Crushing Performance. • General Practices: • D&B should take back control of the process. • Improving integration between key areas involved -- D&B & Geology & Operations & Geomechanics & Mine Planning.

11. ISEE – 41st International conference – New Orleans , USA FIRST RESULTS – DEC 2013 AUDIT RE-VISIT

12. ISEE – 41st International conference – New Orleans , USA FIRST RESULTS – DEC 2013 AUDIT RE-VISIT

13. ISEE – 41st International conference – New Orleans , USA FIRST RESULTS – DEC 2013 AUDIT RE-VISIT Before improvement After improvement

14. ISEE – 41st International conference – New Orleans , USA FIRST RESULTS – DEC 2013 AUDIT RE-VISIT Before: Load Factor Now: Energy Factor

15. ISEE – 41st International conference – New Orleans , USA FIRST RESULTS – DEC 2013 AUDIT RE-VISIT Additionally, the boulder problem was solved.

16. ISEE – 41st International conference – New Orleans , USA FOLLOW UP - DEC 2013 AUDIT RE-VISIT 12% improvement

17. ISEE – 41st International conference – New Orleans , USA 2014 RESULTS – DEC 2014 AUDIT 2ND RE-VISIT 90% reduction of Boulder Events. Wall Damage Control. Significant Improvement into crests of final walls.

18. ISEE – 41st International conference – New Orleans , USA 2014 RESULTS – DEC 2014 AUDIT 2ND RE-VISIT 29% overall improvement Top 5 World Class Standard

19. ISEE – 41st International conference – New Orleans , USA 2014 RESULTS – DEC 2014 AUDIT 2ND RE-VISIT Before improvement After improvement Before improvement After improvement 8% primary YTD crusher tonnage Significant Improvement size distribution

20. ISEE – 41st International conference – New Orleans , USA 2014 RESULTS – DEC 2014 AUDIT 2ND RE-VISIT Production Performance Improvement. Significant Improvement into YTD processed tonnage. 8% improvement +1.2 Mton THE PRODUCTION LEVELS WERE GREATLY INCREASED WITH AN IMPORTANT COST REDUCTION Mid 2013 Pre-Audit Budget cost estimated USD$ 2.7M – Cost Avoidance USD$ 300k - Cost Savings

21. ISEE – 41st International conference – New Orleans , USA CONCLUSION Can weimprovefragmentation and reduce the D&B cost? • YES!!!! • 1.2 Mtonmaincrushingover 2014 Budget - BestYearEver • USD $300k directsavingson 2014 • USD $2.7M costavoidance.