Kinross Gold Corporation
) posted adjusted earnings of $34.1 million or 3 cents per share in
the first quarter of 2014, down 80% from adjusted earnings of
$172.4 million or 15 cents per share recorded in the year-ago
quarter. Earnings per share were, however, at par with the Zacks
Reported net earnings were $31.8 million, or 3 cents per share,
in the quarter, an 80% fall from earnings of $162.4 million, or 14
cents per share, posted in the prior year quarter.
Revenues decreased roughly 22.7% year over year to $817.4
million in the quarter due to lower average realized
. However, it came ahead of the Zacks Consensus Estimate of $790
Gold production was 664,690 equivalent ounces for the quarter,
up around 2.4% year over year, mainly due to processing of higher
grade ore from the Dvoinoye mine that completed its first quarter
at full production. Average realized gold price was $1,299 per
ounce, down 20% from the year-ago quarter.
Production cost per gold equivalent ounce decreased to $727 in
the quarter from $729 in the prior-year quarter. All-in sustaining
cost per gold equivalent oz. sold decreased to $1,001 in the
quarter, from $1,030 in the year-ago quarter, mainly due to
declines in sustaining capital and exploration and business
Margin per gold equivalent ounce sold was $572 in the first
quarter, down 36.1% from the year-ago quarter.
Adjusted operating cash flow was $239 million, down 42.2% from
$413.7 million in the prior-year quarter. Cash and cash equivalents
were $704 million as of Mar 31, 2014, down roughly 50.5% year over
year, primarily due to debt repayment and capital spending. Total
long-term debt declined roughly 3% year over year to $2,025.4
Capital expenditures were $168.9 million for the reported
quarter versus $309.5 million in the comparable period last year.
The decrease was due to lower spending at Tasiast.
Kinross, in Mar 2014, announced Tasiast expansion feasibility
study results. The study, which is based on an optimal mill size of
38,000 tons per day (t/d), produced promising results indicating
Kinross' potential to generate significant additional cash flow per
share and production at overall lower costs.
Though the final construction decision for the Tasiast expansion
project is not expected to be made before 2015, a number of
activities will be pursued in the meantime so as to maintain
project momentum which will further enhance the viability of the
For 2014, Kinross expects to produce roughly 2.5-2.7 million
gold equivalent ounces. The company expects to meet its production
cost of sales guidance of $730-$780 per gold equivalent ounce and
its all-in sustaining costs guidance of $950-$1,050 per gold ounce
sold for 2014.
The company also expects its capital expenditure to be about
$675 million in 2014.
Kinross currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the gold mining industry include
AngloGold Ashanti Ltd.
Gold Fields Ltd.
Lake Shore Gold Corp.
). While AngloGold and Gold Fields carry a Zacks Rank #1 (Strong
Buy), Lake Shore Gold holds a Zacks Rank #2 (Buy).
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