Kinross Gold Corporation
) recently came out with a denial statement regarding a joint
venture (JV) agreement between Kinross and Southridge Enterprise
Inc. ("Southridge"). The announced JV between the two parties
related to the Cinco Minas and Gran Cabrera properties in Mexico.
Southridge also announced that the joint partnership would be
valued at about $550-$600 million.
Kinross also stated that it has no plans to strike any deal or
agreement with Southridge in the future. Kinross also clarified
that the statement that was attributed to the company's employee
in the Southridge news release was incorrect.
Last month, Kinross released its third quarter 2012 earnings.
The company posted adjusted earnings of 22 cents per share in the
third quarter of 2012, beating the Zacks Consensus Estimate of 19
cents but trailing the year-ago earnings of 24 cents. Net
earnings, as reported, went up roughly 8.6% to $224.9 million or
20 cents from $207.1 million or 18 cents in the year-ago
Revenues increased 6.6% year over year to $1,109.7 million,
aided by an increase in production. Sales came ahead of the Zacks
Consensus Estimate of $1,087.0 million.
Gold production was 672,173 equivalent ounces, a 6.3%
year-over-year increase, mainly due to production increases at
Fort Knox and Kupol. The average realized gold price was $1,649
per ounce, up slightly from the year-ago quarter.
Production cost per gold equivalent ounce was $677 in the
quarter versus $626 in the prior-year quarter. Margin per gold
equivalent ounce sold was $972 in the quarter, down 5% from the
prior-year quarter, mainly due to higher production cost of sales
Kinross expects to achieve the higher end of both the
production guidance of 2.5-2.6 million gold equivalent ounces
from its continuing operations and its cost of sales forecast of
$690-$725 per gold equivalent ounce in 2012.
Kinross, like other gold producers
Barrick Gold Corporation
Newmont Mining Corp.
), benefits from rising gold prices. However, its results are
constrained by rising costs and lower grades like the other
players in the industry.
The company currently carries a Zacks #3 Rank, reflecting a
short-term (1 to 3 months) Hold rating. We have a long-term (more
than 6 months) Neutral recommendation on the shares of
BARRICK GOLD CP (ABX): Free Stock Analysis
KINROSS GOLD (KGC): Free Stock Analysis
NEWMONT MINING (NEM): Free Stock Analysis
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