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Kinross Reports 4Q Loss, But Production Rises

(Kitco News) -Kinross Gold Corp. (TSX: K, NYSE: KGC) reported a narrower loss in the fourth quarter as gold prices and production rose from a year ago.

The company late Wednesday listed an adjusted net loss of $50.9 million, or 4 cents per share, compared with an adjusted loss of $68.8 million, or 6 cents, per share in the same period a year ago. The net loss was $116.5 million, or 9 cents per share, compared with a reported loss of $841.9 million, or 73 cents per share, for the fourth quarter of 2015. The net loss fell sharply due to lower impairment charges, Kinross said.

Production was 746,291 gold-equivalent ounces, compared with 623,716 in the fourth quarter of 2015. The average realized gold price increased to $1,217 per ounce from $1,108. All-in sustaining costs edged up to $1,012 per gold-equivalent ounce sold, compared with $991 last year.

Meanwhile, for full-year 2016, Kinross listed adjusted earnings of $93 million, or 8 cents per share, compared with an adjusted net loss of $91 million, or also 8 cents, for full-year 2015. The net loss was $104 million, or 8 cents, compared with a loss of $984.5 million, or 86 cents, for 2015.

“Kinross ended 2016 on a strong note, establishing a new record of almost 2.8 million gold-equivalent ounces for full-year gold production, and meeting our annual guidance on production, costs, and capital expenditures for the fifth straight year,” said J. Paul Rollinson, president and chief executive officer. “We generated operating cash flow of $1.1 billion for the full year, a 32% increase over the previous year, and improved our adjusted net earnings by more than $180 million.”

For 2017, Kinross expects to produce 2.5 million to 2.7 million gold-equivalent ounces at all-in sustaining costs of $925 to $1,025.

“We are forecasting another year of solid production in 2017, with costs expected to be consistent with 2016 levels. We are making excellent progress advancing our development projects at Tasiast and Bald Mountain, and continue to advance attractive organic development opportunities at other sites,” Rollinson said.

Meanwhile, Kinross said proven and probable mineral reserves doubled to 2.1 million gold ounces at Bald Mountain, meaning a potential significant extension of the mine life.

Development of the first phase of the Tasiast expansion is on schedule and on budget, Kinross said. Full commercial production is expected in the second quarter of 2018, with this phase expected to almost double production to approximately 400,000 gold-equivalent ounces per year. A feasibility study for the second phase should be completed in the third quarter of 2017, at which time the company expects to make a development decision, Kinross said. This phase expected to result in output of approximately 780,000 gold-equivalent ounces per year.

By Allen Sykora of Kitco News;



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