The credit crisis in western financial markets has created more opportunities for large and midtier gold companies to target juniors, many of whom are struggling to finance the exploration and development of their projects, Kinross Gold CEO Tye Burt said on Wednesday.

"We are seeing a lot of stuff lobbed our way, in terms of juniors' development projects that are hung up,” Burt said in response to a question on the company's future growth plans.

Smaller, one-mine companies were “struggling a bit with their development profile and capital needs”, he commented.

Kinross, which will commission two new mines and finish expanding a third this year, expects to have increased production by 70% between 2007 and 2009, when it expects to produce more than 2,5-million gold-equivalent ounces (ounces), Burt said.

The company also owns 49% of the giant Cerro Casale deposit, in Chile, which has reserves of 23-million ounces of gold and six-billion pounds of copper.

The project, in which gold major Barrick Gold holds the balance, could be in production in four to five years' time, Burt said.

Kinross has maintained its production forecast for 2008, of between 1,9-million and 2-million ounces, despite a below-par performance in the first quarter of the year.

The company produced 31 784 oz in the first quarter of 2008, compared with 389 394 ounces in the same period last year, after operational trouble at its Fort Knox, Round Mountain and La Coipa mines.

However, Burt said that the problems were short-term in nature, and were not expected to continue into subsequent quarters.

COSTS BITE

Kinross was particularly hard hit by the cost inflation afflicting miners around the world, with first quarter cost of sales rising 44% to $472/oz, from $328/oz a year earlier.

Burt said costs were driven upwards by the weaker US dollar against currencies like the Chilean peso and the Brazilian real, higher labour and contractor costs, as well as increasing prices for materials.

As a result, the company has revised its cost outlook for the year upwards, to between $385/oz and $395/oz, a $20/oz increase on earlier guidance.

The revision was partly to reflect the higher-than-expected first-quarter numbers, as well as higher operating costs which were expected to continue into the year, primarily at the group's Maricunga and La Coipa mines, CFO Thomas Boehlert said on a conference call.

However, the company expects both production and costs to improve over the rest of the year, as it commissions its Kupol mine, in Russia, followed by Buckhorn, in the US, as well as completing an expansion project at its Paracatu mine, in Brazil.

Mining has been under way for some time at Kupol, and the mill began processing ore on Wednesday, Burt reported.

The first gold and silver production at the mine is expected this month, and the mill is expected to reach full capacity in October.

“We are looking forward to better costs and growing production for the balance of the year,” Burt said.

Kinross shares fell 2,56% on Wednesday morning, to C$19,39 a share by 11:32 in Toronto.