Kinross Gold Corporation
) reported adjusted (excluding one-time items) earnings of 15
cents per share in the first quarter of 2013, beating the Zacks
Consensus Estimate of 12 cents but falling behind the year-ago
earnings of 17 cents a share.
On a reported basis, the company posted a net profit of $160.5
million (or 14 cents per share) in the reported quarter, up 61%
from net earnings of $99.6 million (9 cents a share) recorded in
the year-ago quarter.
Revenues increased 5.3% year over year to $1,058.1 million due
to higher gold equivalent ounces sold. Sales came ahead of the
Zacks Consensus Estimate of $1,033 million.
Gold production was 648,897 equivalent ounces from continuing
operations for the quarter, a 7.4% year-over-year increase,
mainly due to a spurt in production at Tasiast and Fort Knox.
Average realized gold price was $1,624 per ounce, down 1.2% from
the year-ago quarter.
Production cost per gold equivalent ounce was $729 in the
quarter versus $738 in the prior-year quarter. The results
witnessed a declining trend, driven by continued focus on cost
management and increase in gold ounces sold. Margin per gold
equivalent ounce sold was $895 in the quarter, down 1% from the
Adjusted operating cash flow was $411.8 million in the quarter
compared with $319.3 million a year ago. Cash and cash
equivalents were $1,420.8 million as of Mar 31, 2013, compared
with $1,982.5 million as of Mar 31, 2012.
Capital expenditures were $317.8 million in the reported
quarter versus $529.3 million reported in the same period last
year. The decrease was due to the timing of expenditures at
Tasiast and the completion of the fourth ball mill at Paracatu
and SART plant at Maricunga in 2012.
Kinross is proceeding to a full feasibility study on the
Tasiast expansion project based on the recently announced
pre-feasibility results. The feasibility study is expected to
complete in the first quarter of 2014. After the feasibility
study is complete, Kinross will make a decision on whether to
complete engineering work and proceed with construction.
At Dvoinoye, construction is progressing ahead of plan with
underground development completing 1,567 meters. Kupol mill's
expansion is proceeding well and is expected to be complete by
third-quarter 2013. The project is in line with the budget and is
expected to start production at its full capacity in the second
half of the year.
The negotiation between the Fruta Del Norte (FDN) project and
Ecuadorian government regarding exploitation and investment
protection agreements is underway, however, due to some key
economic and legal matters the parties have not been able to come
to an agreement.
Kinross, which is among the prominent players in the
gold-mining industry along with
Barrick Gold Corporation
Newmont Mining Corporation
), expects to produce about 2.4-2.6 million gold equivalent
ounces from its current operations in 2013 and forecasts cost of
sales of $740-$790 per gold equivalent ounce for the year.
Kinross forecasts roughly $1.6 billion in capital expenditures in
2013. Kinross expects its all-in sustaining costs to be in the
range of $1,100-$1,200 per gold ounce sold on a by-product basis
Kinross currently carries a Zacks Rank #4 (Sell).
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