(Kitco News) - Kinross Gold Corp. (KGC) is riding high after a robust 2024 marked by record free cash flow and a 123% surge in its share price, according to CEO Paul Rollinson. Speaking at the 2025 BMO Global Metals, Mining & Critical Minerals Conference, Rollinson attributed the company's success to a strong corporate culture rooted in "strong technical acumen," which led to meeting production guidance and effectively managing costs.
"The journey starts with meeting production guidance, and we did. After meeting production guidance, it's all about managing your cost profile," Rollinson told Kitco Mining. He highlighted that Kinross's margins expanded by 37% while the gold price only rose by 24%, demonstrating their success in "holding the line on costs in a rising gold price."
A key achievement for the company was the full repayment of a $1 billion term loan used for the Great Bear acquisition, completed in the first quarter of 2025. "The journey we were on last year, we said we're prioritizing debt repayment. And, uh, to your point, uh, last year and, and just in the first quarter this year, we fully repaid the 1 billion term loan that we put in place when we announced the Great Bear deal," Rollinson said.
Looking ahead, with a strengthened balance sheet, Kinross is turning its attention to returning capital to shareholders. "Beyond the debt repayment, we're now set up, coming out of a very strong 2024, with the wind in our sails for 2025 going ahead," Rollinson stated. While the first quarter is seasonally a cash outflow due to tax payments, he anticipates "power[ing] back up that cash and then start thinking about the return of capital to shareholders."
This could include reactivating their share buyback program around the second quarter, especially given the potential for strong free cash flow in 2025. "If you were to take those same metrics and it all depends upon the gold price, we think we can have a pretty attractive buyback proposition in the second half of the year, as well as rebuilding our cash to be there for the business as well going forward," he explained.
Rollinson emphasized the importance of grade enhancement in managing costs and expanding margins. He pointed to the Tasiast mill expansion and the restart of La Coipa as examples of how higher grades have directly boosted profitability.
While acknowledging increasing reserve and resource prices across the industry, Rollinson clarified that Kinross's adjustments reflect a "more realistic picture of what you should expect in the context of where the spot price is today." He stated, "We are not, and again I want to underline it, dropping cutoff grades. Our mills are full." This disciplined approach contrasts with past cycles, where higher gold prices led to lower cutoff grades with negative consequences.
Kinross is also focused on its internal growth pipeline, with the Great Bear project in Ontario being a significant near-term prospect. Rollinson highlighted the progress at Great Bear, noting that they have drilled out 7 million ounces of high-grade gold and completed a preliminary economic assessment (PEA) projecting 500,000 ounces of annual production at an all-in-sustaining cost of $800 per ounce. He described the acquisition of Great Bear three years ago as a success, having "paid for the project," "paid for the acquisition," and "paid off that term loan."
Regarding the broader industry landscape, Rollinson expressed his belief in consolidation, stating, "As an industry, it's healthy." He suggested that consolidation could lead to more disciplined capital allocation. While refraining from commenting on specific mergers, he noted the "industrial logic" of recent transactions aimed at preserving shareholder value.
With a "billion a year" capital expenditure plan, split roughly 50/50 between sustaining capital and growth, Kinross is confident in its ability to both maintain its operations and advance its pipeline, including Great Bear. Rollinson concluded by highlighting several key milestones for 2025, including permitting activities for Great Bear and La Coipa, and the greenlighting of the Redbird satellite development in Nevada. He also reiterated the company's attractive free cash flow yield, encouraging investors to examine their cash flow metrics.
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