Kinross (TSX: K, NYSE: KGC) said today it produced 453,978 gold equivalent ounces (Au eq. oz. sold) in Q2 2022, a 19% increase compared with Q2 2021. The company said that the year-over-year increase was largely due to Tasiast, which had higher grades and throughput.
During the second quarter, revenue from continuing operations increased to $821.5 million, compared with $707.9 million during Q2 2021.
Margins were down. Kinross’ margin from continuing operations per Au eq. oz. sold was $845 for Q2 2022, compared with the Q2 2021 margin of $964. Adjusted net earnings from continuing operations were $37.4 million, or $0.03 per share, for Q2 2022, compared with $66.5 million, or $0.05 per share, for Q2 2021.
Production costs jumped. Cost of sales from continuing operations per Au eq. oz. sold increased to $1,027 for the quarter, compared with $850 in Q2 2021, mainly as a result of inflationary cost pressures and an increase in waste stripping. The company said it expects cost of sales per ounce sold to decrease in the second half of the year due to stronger production, notably at Tasiast, Paracatu and La Coipa, which Kinross said are its lowest-cost mines.
Kinross' assets mix changed dramatically over the past eight months due to the $1.8 billion Great Resources purchase and the sale of Kinross's Russian assets due to the war in Ukraine.
“With the completion of the sale of our Russian assets and pending sale of Chirano, approximately 70% of our production is now based out of the Americas," said CEO J. Paul Rollison. "At the world-class Great Bear project in Red Lake, Ontario, drilling results continue to show the significant potential of a deposit that can host a large, long-life mining complex. At Manh Choh in Alaska, we completed a feasibility study ahead of schedule, and are proceeding with a project that we expect will add approximately 640,000 lower-cost gold ounces to our production profile over its life of mine in one of the world’s best mining jurisdictions."
The company said it will be meeting the low end of its guidance. La Coipa mill ramp-up was delayed due to issues with the pumps and global supply chain challenges affecting availability of spare parts. Production should be stronger later in the year.
Kinross expects to declare an initial mineral resource for its Great Bear asset as part of its 2022 year-end results.
