Multi-million ounce gold producer, Kinross Gold (KGC), announced after today’s market close that it is reducing its 2009 gold production forecast due to lower production at its Paracatu gold mine, located in Paracatu, Minas Gerais State, Brazil. The company’s new full year 2009 guidance consists of 2.2 million gold equivalent ounces at an average cost of $435 to $450 per ounce, from its previous guidance of 2.3 to 2.4 million gold equivalent ounces at an average cost of $390 to $420 per ounce of gold.

The company cited more energy and grinding time than previously estimated to achieve grind size and a gold recovery rate that is consistent with plant design levels as the primary reasons for the reduction in gold production guidance and an increase in the average cost per ounce of gold. Thus far in October, grinding circuit throughput is at 70% of design capacity and gold recovery is at 74%, compared to a design target of 80% gold recovery. Kinross Gold went on to say that “as commissioning continues, work is ongoing to improve mill performance through various initiatives, including improving flotation, and blending mill feed with softer ore sourced from other areas in the pit. The company is also evaluating options to add additional grinding capacity, and a scoping analysis is expected to be completed by year-end.”

Kinross Gold is a Canadian-based gold mining company with mines and projects in the United States, Brazil, Chile, Ecuador and Russia, employing approximately 5,500 people worldwide. Shares of KGC closed down $1.03 to $20.34 and were down $0.17 to $20.17 in extended hours trading, while the gold price closed down $16.85 to $1,038.91 per ounce.