TORONTO (miningweekly.com) – Canadian gold miner Kinross Gold on Wednesday reported a multibillion-dollar net loss for the fourth quarter after taking a $3.2-billion impairment charge mostly related to its Tasiast mine, in Mauritania, which outweighed an increase in revenue.
The miner said the net loss included an after-tax noncash impairment charge of $3.2-million, of which the Tasiast project represented $3.09-billion.
Kinross in 2010 acquired the mine in a blockbuster $7.1-billion acquisition of Redback Mining.
In December 2011, however, the miner took a $2.9-billion impairment hit for Tasiast and the Chirano gold mine, in Ghana, which it acquired in the same transaction.
Kinross reported a net loss of $2.98-billion or $2.62 a share for the fourth-quarter ended December 31, compared with a net loss of $2.79-billion or $2.45 a share in the same quarter a year earlier.
For the full year, the company’s net loss was $2.5-billion or $2.24 a share, compared with a loss of $2.09-billion or $1.84 a share for full-year 2011.
When one-time items were removed, the company reported adjusted earnings of $276.5-million or 24c a share for the fourth quarter, compared with $187.2-million or 16c a share a year earlier. This was higher than the 22c a share analysts had expected on average.
Adjusted net earnings for the full year were $879.2-million or $0.77 a share, compared with $850.8-million, or 75c a share for full-year 2011.
The company reported its revenue for the quarter improved by 29% to $1.19-billion, compared with $919.8-million during the same period in 2011, mainly owing to increased production and a higher realised gold price. Analysts had expected $1.15-billion in revenue for the quarter.
Full-year revenue increased by 12% to a record $4.3-billion, compared with $3.8-billion a year earlier.
The average realized gold price was $1 707/oz in the quarter, compared with $1 598/oz year-on-year. The average realised gold price was $1 643/oz for full-year 2012, versus $1 500/oz for full-year 2011.
Kinross produced 724 510 attributable gold-equivalent ounces (GEO) in the fourth quarter, a 16% increase over the fourth quarter of 2011, mainly owing to production increases at Fort Knox, in Alaska, and La Coipa, in Chile.
Full-year production was 2.61-million GEO, which was more than the best-case 2.6-million GEO the company had expected in the year. The company produced 2.5-million ounces in 2011. The full-year production increase was mainly owing to stronger production at Fort Knox.
The production cost of sales per gold-equivalent ounce was $686 for the fourth quarter, compared with $635 for the fourth quarter of 2011, owing mainly to higher input costs for energy, labour and consumables.
Production cost of sales for full-year 2012 was $706, in line with the company's guidance of $690 to $725 per gold-equivalent ounce, and compared with $592 for full-year 2011. The increase was mainly a result of higher input costs for labour, energy and consumables and the increase in the processing of lower-grade ore.
Kinross expects to produce about 2.4-million to 2.6-million GEO at production costs of between $740 and $790 a GEO. It expects total capital expenditures of about $1.6-billion this year, about $325-million less than in 2012.
Kinross’ New York-listed shares closed down 1.25% at $7.89 apiece on Wednesday.