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Kinross reports higher quarterly net income while gold production down in Q1

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(Kitco News) - Kinross Gold (TSX: K) announced Tuesday that in Q1 2022, the company produced 409,857 attributable Au eq. oz. from continuing operations, down 6% compared with 436,525 attributable Au eq. oz. in Q1 2021.

The company explained that the decrease in production was largely due to lower production at Round Mountain and Paracatu, partially offset by record high quarterly production at Tasiast.

Kinross added that during the first quarter, revenue from continuing operations was $768.0 million, in line with $768.7 million during Q1 2021.

The company’s attributable production cost of sales from continuing operations per Au eq. oz. sold increased to $1,000 for Q1 2022, compared with $798 in Q1 2021, mainly as a result of a decrease in ounces sold, inflationary pressures on consumables, and increases in operating waste mined at Tasiast, Paracatu and Fort Knox.

Free cash flow from continuing operations was a net outflow of $1.1 million in Q1 2022, compared with a net outflow of $46.5 million for Q1 2021. The decrease in free cash outflow was mainly due to lower capital expenditures.

The company said that reported net earnings from continuing operations were $82.3 million, or $0.07 per share for Q1 2022, compared with reported net earnings of $76.2 million, or $0.06 per share, for Q1 2021.

According to a press-release, the increase in reported net earnings was mainly due to a decrease in income tax expense, partially offset by an increase in production cost of sales.

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Adjusted net earnings from continuing operations were $70.6 million, or $0.06 per share, for Q1 2022, compared with $102.4 million, or $0.08 per share, for Q1 2021.

In Q1 2022, Kinross announced its plan to divest all of its Russian assets. As such, the company said that its Russian assets have been excluded from its Q1 2022 results, along with comparative figures, due to the classification of these assets as discontinued as of March 31, 2022.

Kinross pointed out that reported net loss from the Russian discontinued operations was $606.1 million in Q1 2022, which includes an impairment charge of $671.0 million related to the re-measurement of the Russian operations to fair value less costs to sell.

The company also noted that on a pro-forma portfolio basis, Kinross maintained its 2022 production guidance of 2.15 million Au eq. oz. (+/- 5%). The company continues to expect higher production in the second half of the year, which is largely driven by increased production at Paracatu, Tasiast and La Coipa.

The company’s 2023 and 2024 production guidance have been adjusted to 2.3 and 2.1 million Au eq. oz. (+/- 5%), respectively. Kinross said it expects to maintain a substantial production profile with estimated average production of two million Au eq. oz. per year over the remainder of the decade.

Kinross is a Canadian-based global senior gold mining company with operations and projects in the United States, Brazil, Mauritania, Chile, Canada, Russia and Ghana.

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