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Kinross Gold (KGC)
Q3 2012 Earnings Call
November 08, 2012 8:00 am ET
Thomas Elliott - Vice-President of Investor Relations
J. Paul Rollinson - Chief Executive Officer and Director
Brant E. Hinze - President and Chief Operating Officer
Paul H. Barry - Chief Financial Officer and Executive Vice President
George J. Topping - Stifel, Nicolaus & Co., Inc., Research Division
Patrick T. Chidley - HSBC, Research Division
Alec Kodatsky - CIBC World Markets Inc., Research Division
Anita Soni - Crédit Suisse AG, Research Division
Brian MacArthur - UBS Investment Bank, Research Division
David Haughton - BMO Capital Markets Canada
Greg Barnes - TD Securities Equity Research
Pawel Rajszel - Veritas Investment Research Corporation
Tanya M. Jakusconek - Scotiabank Global Banking and Markets, Research Division
John D. Bridges - JP Morgan Chase & Co, Research Division
Previous Statements by KGC
» Kinross Gold Management Discusses Q2 2012 Results - Earnings Call Transcript
» Kinross Gold CEO Discusses Q3 2010 Results – Earnings Call Transcript
» Kinross Gold Corporation Q2 2010 Earnings Call Transcript
Thank you, and good morning. Welcome to Kinross Gold Corporation's conference call to discuss 2012 third quarter earnings. With us today, we have Paul Rollinson, Chief Executive Officer; Paul Barry, Chief Financial Officer; Brant Hinze, President and Chief Operating Officer; and Glen Masterman, Senior Vice President, Exploration.
Following the presentation, there will be a question-and-answer session. Individuals are asked to restrict themselves to 1 question and 1 follow-up question.
Before we begin, I'd like to bring your attention to the fact that we will be making forward-looking statements during this presentation. For a complete discussion of the risks, uncertainties and assumptions which may lead to actual financial results and performance being different from estimates contained in our forward-looking information, please refer to Page 2 of this presentation, the news release dated November 7, 2012, and Management's Discussion and Analysis for the same period as well as the annual 2011 Management's Discussion and Analysis of our most recently filed AIF, all of which are available on our website.
I'll now turn the call over to Paul Rollinson, CEO of Kinross Gold Corporation.
J. Paul Rollinson
Thanks, Tom, and thanks to all of you for joining us on the call. Let me start with a brief overview of our performance for the quarter and an update on some key initiatives that we've launched. After that, Brant Hinze will provide additional color on our operations and projects, and Paul Barry will give details on our financial results.
As we announced earlier, Paul is leaving the company to pursue other interests. Paul will continue in a transition role for an appropriate period as we welcome our new CFO. But I'd like to take this opportunity to thank him for his dedicated service and many contributions to Kinross. Last week, we announced that Tony Giardini will become our new CFO effective December 1. Tony is a seasoned and accomplished finance leader in the mining industry, and we look forward to welcoming him to our team.
Now here are some of the highlights from the third quarter. We produced approximately 672,000 ounces at an average cost of sales of $677 per gold equivalent ounce. As planned, production increased in the second half of the year, and we remain on track to meet our guidance on both production and cost. For the full year, we expect to be at the high end of our guidance range on production and at the high end of our guidance range on cost. Our revenue was $1.1 billion, an increase of 7% year-over-year. Adjusted operating cash flow was $434 million or $0.38 per share, and adjusted net earnings were $250 million or $0.22 per share. All told, we had a solid quarter. We are now squarely focused on how we can do better.
Today I'll update you on our work over the past few months to apply a systematic approach to better manage cost and to deliver greater value from both our current operations and growth projects. This is about instilling a new way of looking at our business, and it will take time and hard work to deliver on many of the opportunities we see for improving value. One of my first priorities when I assumed the role of CEO was to visit our regions and to get a first-hand feel on how our operations are performing. These visits confirmed several facts.
Number one, our 4 regions comprise a solid foundation with significant potential to create value and generate free cash flow. Number two, everyone at Kinross clearly understands the pressures we face as a business and shares a commitment to raise our game. Number three, we have a great opportunity to apply lessons learned at our best run operations across the entire organization. As you travel from operations in West Africa to South America to North America, you witness a gradual but very clear step-up in operational efficiency. And finally, number four, we're working hard to maintain strong and positive relationships with the communities and host governments where we operate. I experienced this firsthand several weeks ago when I took part in the annual meeting of Russia's Foreign Investment Advisory Council chaired by Prime Minister Medvedev. Going forward, I believe there's a great opportunity to continue to transfer the things that we do best across all of our regions and to embed a common culture focused on the right behaviors and metrics.