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Kinross Gold Posts 4Q Adjusted Profit; Guidance In Line With 2018 Output

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(Kitco News) - Kinross Gold Corp. (TSX: K, NYSE: KGC) reported an adjusted profit for the fourth quarter and full-year 2018 late Wednesday, with the company also listing 2019 production guidance that was comparable to its 2018 output.

Adjusted net earnings were was $13.5 million, or a penny per share, in the fourth quarter, compared to $16.3 million, also a penny, in the same period of 2017. Full-year adjusted net earnings were $128.1 million, or 10 cents per share, compared with $178.7 million, or 14 cents, for full-year 2017.

For the fourth quarter, the company reported a net loss of $27.7 million, or 2 cents per share, a turnaround from net earnings of $217.6 million, or 17 cents, in the same period of 2017. The full-year 2018 net loss was $23.6 million, or 2 cents, compared with net earnings of $445.4 million, or 36 cents, for 2017. The reversal was primarily a result of decreased operating earnings, a reversal of impairment charges related to the Cerro Casale sale in 2017, and an increase in 2018 income-tax expense, Kinross said.

The average realized gold price in the fourth quarter decreased to $1,226 per ounce from $1,276 a year earlier.

Kinross produced 610,152 gold-equivalent ounces in the fourth quarter of 2018, down from 652,710 in the year-ago period, mainly due to lower production at Fort Knox and Bald Mountain, partially offset by record production at Tasiast and Paracatu, the company said. For all of 2018, Kinross produced 2,452,398 gold-equivalent ounces, which was in line with 2018 guidance although down from 2,673,533 ounces for full-year 2017.

All-in sustaining cost per gold-equivalent ounce sold in 2018 was $965, which was at the lower end of the company’s guidance, compared with $954 for full-year 2017, Kinross said. AISC on a by-product basis was $959 for full-year 2018, compared with $946 for 2017.

Kinross said it expects to produce 2.5 million gold-equivalent ounces in 2019, in line with 2018 production. Output should lower in the first quarter than the rest of rest of the year, mainly as a result of the expected Bald Mountain Vantage Complex project ramp-up and lower production from Fort Knox, based on the operation’s mining and milling strategy, Kinross said. The company expects 2019 AISC of $995 per ounce sold on both a gold-equivalent and by-product basis, also in line with 2018 guidance.

“Kinross once again delivered on its commitments in 2018, as we met our production, cost and capital guidance for the seventh consecutive year,” said J. Paul Rollinson, president and chief executive officer. “Our portfolio of mines produced solid results, with standout performances from Paracatu and Bald Mountain, both of which delivered record annual production. Following successful completion of the Tasiast Phase One expansion, the mine achieved record production in the fourth quarter, with throughput and recoveries exceeding expectations.”

The CEO said the company expects to achieve milestones in a number of development projects during 2019. The lists includes the start of commissioning of the Bald Mountain Vantage Complex processing circuit and completion of the Lobo-Marte scoping study in the first quarter, the start of commissioning of the Round Mountain Phase W processing circuit in the second quarter, and completion of the La Coipa Restart feasibility study and the start of stripping at Fort Knox Gilmore in the third quarter.

Kinross said proven and probable gold reserve estimates stood at 25.5 million gold ounces at the end of 2018, compared to 25.9 million at the end of 2017. Kinross has maintained gold price assumptions used since 2011 of $1,200 per ounce for mineral reserves.

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