Kinross Gold Corp Acquires Mining Rights on Gilmore Property

With a news release dated Dec. 12 and published on its website, Kinross Gold Corp. ( KGC ) has informed its shareholders about its mineral rights' acquisition on a Gilmore piece of land in Alaska.

Gilmore is a 709-acre property, which is located very close to the Fort Knox mine.

The mineral rights' acquisition of Gilmore, together with a drilling program that Kinross Gold started on the area, including a Fort Knox property in 2014, culminated in the following results:

  • The update of the estimates on the mineral reserves and mineral resources that the miner holds at Fort Knox.
  • The conversion of 260,000 ounces of mineral resources into proven and probable gold reserves.
  • The increase by one year of the estimated life of the Fort Knox mine.

Kinross Gold also says that it started a feasibility study at Gilmore to possibly extend the life of the mine and to evaluate the possibility for upgrading a sizeable portion of estimated measured and indicated resources of the site.

An update on the feasibility study is expected to be released by the company sometime in summer 2018, and the process to obtain the necessary building permits at Gilmore is expected to start before the end of the year.

J. Paul Rollinson, president and CEO at Kinross Gold, commented on the acquisition:

"Gilmore is a promising organic development opportunity that can potentially extend mine life at our Fort Knox mine in Alaska, one of our top producing and high performing operations. With the Gilmore project, we continue to deliver on our strategy of pursuing low-risk, high-potential brownfield projects that can contribute to the long-term future growth of our Company."

Kinross Gold informed its shareholders that the total volume of proven and probable gold reserves is 1.315 million ounces at Fort Knox. This is a 191,000-ounce decrease from a volume of 1.506 million ounces of gold as of Dec. 30, 2016. The decrease is a result of reserve depletion in 2017.

Therefore, Kinross Gold Corp.'s probable and proven gold reserves were updated to 30.774 million ounces from a previous 30.965 ounces.

Kinross Gold has an EVO - the Enterprise Value per ounce of gold reserves - of $193.35, which is one of the lowest in the gold stock industry as of today.

As of Wednesday, Kinross Gold trades at $4.05 per share on the New York Stock Exchange. According to Yahoo Finance's chart, Kinross Gold gained 24.32% year to date and outperformed the VanEck Vectors Gold Miners ETF by 22.5%:

The 52-week range of Kinross Gold Corp. on the NYSE is $2.88 to $4.91.

The gold stock has a price-book (P/B) ratio of 1.25 versus an industry median of 2.01 and an EV-to-Ebitda ratio of 5.02 versus an industry median of 10.14.

The average target price is $5.31 per share and the recommendation rating is 2.5 out of 5.

Disclosure: I have no positions in Kinross Gold Corp.

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This article first appeared on GuruFocus .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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