Kinross Adjusted Profit Declines With Output But Tops Forecasts
(Kitco News) - Kinross Gold Corp. (TSX: K, NYSE: KGC) late Wednesday reported a decline in adjusted profit for the third quarter on lower revenues as both output and the gold price fell from the same period a year ago.
Adjusted net earnings came in at $84.1 million, or 7 cents per share, down from $128.7 million, or 10 cents, in the same quarter of 2016.Still, BMO Capital Markets said this topped consensus forecasts of around 2 cents.
Meanwhile, overall net earnings increased to $60.1 million, or a nickel, compared to $2.5 million, or zero cents per share, in the year-ago period. Much of the improvement was due to a non-cash impairment charge recognized in the same quarter of last year.
Kinross reported July-September production of 653,993 gold-equivalent ounces, down from 684,129 a year ago. Further, the average realized gold price fell to $1,283 per ounce from $1,336. Against this backdrop, revenue from metal sales decreased to $828 million in the third quarter from $910.2 million a year ago.
Still, despite the lower ounces, all-in sustaining costs fell to $937 per gold-equivalent ounce from $1,001 in the year-ago period, Kinross said. AISC per gold ounce sold on a by-product basis were $927, down from $987.
“We are on target to meet our annual guidance range for the sixth consecutive year, and are tracking towards the high end of our production and the low end of both our cost of sales and all-in sustaining cost guidance,” said J. Paul Rollinson, president and chief executive officer.
The 2017 output guidance is 2.5 million to 2.7 million gold-equivalent ounces. The guidance on cost of sales is $660 to $720 per gold-equivalent ounce, while the AISC range is $925 to $1,025.
Rollinson was upbeat about progress on the company’s organic growth projects.
“Tasiast Phase One is on track for full commercial production towards the end of Q2 2018 and engineering at Phase Two is now 25% complete,” he said. “We also expect to start construction at Tasiast Phase Two, Round Mountain Phase W and the Vantage Complex at Bald Mountain early next year, as initial development work at all three projects is already in progress.”