Kinross CEO Paul Rollinson
Canadian bullion producer Kinross on Tuesday provided a new production guidance to reflect the pending divestments of its Russian and Ghanaian assets. With these pending sales, and the close of the acquisition of Great Bear Resources, the group’s overall portfolio has been re-balanced, with about 70% of its production now expected to be generated by mines in the Americas.
Kinross said it would produce 2.15-million gold-equivalent ounces (GEOs) this year, increasing to 2.3-million GEOs in 2023. Although the 2022 guidance is down from the previously guided 2.65-million GEOs, the forecast remained unchanged on a pro-forma portfolio basis.
Kinross said it expected higher production in the second half of the year, which was largely driven by increased production at Paracatu, in Brazil, Tasiast, in Mauritania, and La Coipa, in Chile.
“We are excited about the future for Kinross which includes a production profile that averages two-million ounces a year to the end of the decade, anchored by two tier-one assets – Paracatu and Tasiast – accounting for more than half of our production, and a world-class development project in Canada,” said CEO Paul Rollinson.
In the first quarter, Kinross produced 409 857 GEOs from continuing operations, compared with 436 525 GEOs in the corresponding period. The decrease was attributed to lower output at Round Mountain and Paracatu, partially offset by record-high production at Tasiast.
Tasiast’s performance was mainly owing to higher grades, with higher mill throughput contributing to the production increase.
Adjusted earnings from continuing operations were $70.6-million, or $0.06 a share, compared with $102.4-million, or $0.08 a share, a year earlier.
The reported net loss from the Russian discontinued operations was $606.1-million in the first quarter, which includes an impairment charge of $671-million related to the re-measurement of the Russian operations to fair value less costs to sell.
DIVESTMENTS
Regarding the sale of the Russian operations to Highland Gold Mining for $680-million in cash, Kinross said that the parties were continuing to advance the closing process and that the transaction remained subject to Russian government approval.
“In light of unprecedented circumstances, the timing and outcome of such an approval is uncertain,” the precious metals producer said.
The total cash consideration includes $400-million for the Kupol mine and $280-million for the Udinsk project. Kinross will receive $100-million at closing and the remaining total consideration will be received in yearly payments from 2023 through to 2027.
The deferred payments were secured by an extensive security package that included share pledges, financial guarantees and an escrow account, with all payments payable in US dollars, Kinross stated.
The sale of Kinross’ 90% interest in the Chirano mine, in Ghana, for $225-million to fellow Canada-based miner Asante Gold would close by the end of this month, the company said.