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Kinross Gold’s 1Q Adjusted Profit Dips But Tops Expectations

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(Kitco News) - Kinross Gold Corp. (TSX: K, NYSE: KGC) late Tuesday reported a smaller adjusted profit for the first quarter as revenues were dinged by lower production and gold prices.

The company says its adjusted profit was $83.3 million, or 7 cents per share, down from $125.2 million, or 10 cents, in the first quarter of 2018. The result topped consensus expectations that analysts said were 2 cents per share.

Net earnings fell to $64.7 million, or 5 cents, from $106.1 million, or 9 cents, a year ago.

Revenue from metal sales slid to $786.2 million from $897.2 million during the same period in 2018, with Kinross blaming this on fewer gold-equivalent ounces sold and lower prices. The average realized gold price in the first quarter was $1,304 per ounce, down from $1,330 a year ago.

Kinross listed output of 606,031 gold-equivalent ounces in the first quarter, compared with 653,937 in the year-ago period. Still, J. Paul Rollinson, president and chief executive officer, said the company’s three largest operations – Paracatu, Tasiast and Kupol – all exceeded expectations.

“At Paracatu, improved grade control, mill efficiencies, high recoveries and lower power costs resulted in record quarterly production and the lowest production costs since 2010,” he said. “Tasiast set another production record in the quarter and costs continued to decline. Kupol continued its consistent high performance and delivered yet another strong quarter.”

All-in sustaining costs per gold-equivalent ounce sold were $925 in the January-March period, compared with $846 a year ago. AISC on a by-product basis were $917, compared with $835.

Kinross said it still expects to meet its production guidance of some 2.5 million gold-equivalent ounces for full-year 2019. The company also expects to be near its AISC guidance of around $995 an ounce.

“During the quarter we advanced work on our development pipeline,” Rollinson said. “The Nevada projects at Round Mountain Phase W and Bald Mountain Vantage Complex are nearing completion and entering their commissioning phases. The Fort Knox Gilmore project is on schedule and heap leach construction activities are ramping up

“We completed the scoping study for Lobo-Marte and the results highlight the potential for long-term production in Chile in conjunction with the La Coipa Restart project. At Tasiast, we are continuing to evaluate low-cost alternative approaches to increase throughput, which we are targeting for completion in the second half of 2019.”

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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