Tasiast at dusk, in Mauritania
Photo by: Kinross Gold
VANCOUVER (miningweekly.com) – Canadian multinational gold producer Kinross Gold has reported a 435% jump in headline profit for the three months ended March 31, as 30% higher year-on-year margins and a decrease in depreciation, depletion and amortisation boosted the bottom line.
Adjusted net earnings increased to $125.2-million, or $0.10 a share, double the average Wall Street analyst forecast calling for earnings of $0.05 a share, on revenue of $827.71-million, according to data provided by Thomson Reuters.
Reported net earnings came to $106.1-million, or $0.09 a share, for the first quarter, compared with earnings of $134.6-million, or $0.11 a share, in the comparable period of 2017.
Revenue from metal sales increased 13% year-on-year to $897.2-million, compared with $796.1-million during the same period in 2017, owing to an increase in gold equivalent ounces sold and a higher realised gold price.
The operating cash flow for the period jumped 41% to $293.5-million, helped in part by 6% lower cost of sales at $658/oz of gold equivalent, with all-in sustaining costs (AISC) for the period falling 11% to $846/oz sold.
Kinross produced nearly 3% less gold-equivalent ounces than in the year-earlier period at 653 937 oz as lower grades at key mines in North America, West Africa and Russia impacted on planned operations.
Kinross is looking towards strong organic production growth in the near term, with work on the Tasiast Phase 1 expansion nearing its end. The Mauritania-based operation, which Kinross acquired through the blockbuster $7.1-billion acquisition of Red Back Mining in 2010, is expected to achieve 12 000 t/d throughput by the end of June.
The company advised that it is assessing a request by Mauritania to enter into talks regarding all of Kinross’ activities in Mauritania, with a view to improving economic benefits to the country, including the potential impact on the 800 000 oz Phase 2 expansion.
Further, Kinross reported that construction of the Round Mountain Phase W project, in Nevada, is progressing according to schedule, with engineering 90% complete and initial low-grade ore expected by mid-2019. At the Bald Mountain Vantage Complex, engineering is now 90% complete with commissioning of the heap leach pad and processing facilities expected to start in the first quarter of 2019.
In Russia, Kinross noted that the Moroshka project, located near Kupol, remains on schedule and on budget, with mining of high-grade ore slated to start in the second half of the year.
Further, the Fort Knox Gilmore project feasibility study, in Alaska, is on schedule to be complete by June.
Kinross also said it will start feasibility work by July at the 844 000 oz La Coipa Restart project, in Chile.
Kinross confirmed its full-year guidance to produce 2.5-million ounces of gold equivalent at a cost of sales of $730/oz and AISC $975/oz.
As of March 31, Kinross had cash and cash equivalents of $997.9-million and available credit of $1.57-billion, for total liquidity of about $2.6-billion, and no debt maturities until 2021. S&P Global Ratings has recently upgraded Kinross’ credit rating to investment grade, noting the company’s long record of maintaining low leverage.
Kinross equity listed on the NYSE closed Tuesday 2.23% higher at $4.12 a share, and in after-market trading gained a further 3.16% to trade at $4.25 apiece. Since the start of the year, the stock has lost nearly 5% in value.