Kinross Gold Corporation ( KGC ) has announced the pricing of unsecured 10-year debt securities. The offering comprises of $500 million principal amount of 5.95% senior notes due 2024.
Net proceeds from the issuance of senior notes will be utilized to repay a portion of Kinross' term loan, which is due Aug 2017. The offering is expected to close on Mar 6, 2014. Shares of Kinross gained as much as around 2% during the trading session following the news.
The senior notes to be offered will be unsecured and hold senior obligations of Kinross. The notes will also be wholly and unconditionally guaranteed by some of Kinross' fully- owned subsidiaries that are also guarantors under the company's senior, unsecured credit agreement.
Kinross posted its fourth-quarter 2013 results on Feb 12. The company logged net loss of $740 million (or 65 cents per share) on a reported basis in the quarter, lower than the net loss of $2,984.9 million (or $2.62 a share) recorded in the year-ago quarter. The company had narrowed losses in the fourth quarter on lower impairment charges.
Adjusted (excluding one-time items) loss was 2 cents per share in the fourth quarter as against adjusted earnings of 25 cents earned in the year-ago quarter. The results missed the Zacks Consensus Estimate of earnings of 3 cents per share. The bottom line was hit by lower gold prices, higher production cost of sales and depreciation.
Revenues decreased roughly 26% year over year to $877.1 million in the quarter due to lower average realized gold price. However, it came ahead of the Zacks Consensus Estimate of $859 million.
For 2014, Kinross expects to produce roughly 2.5-2.7 million gold equivalent ounces. The company expects production cost of sales of $730-$780 per gold equivalent ounce and also anticipates its all-in sustaining cost to be $950-$1,050 per gold equivalent ounce. Total capital expenditures are expected to be around $675 million, down roughly $585 million from 2013.
Kinross currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the mining industry are AngloGold Ashanti Ltd. ( AU ), Lake Shore Gold Corp. ( LSG ) and Pretium Resources Inc. ( PVG ). While AngloGold carries a Zacks Rank #1 (Strong Buy), both Lake Shore Gold and Pretium Resources maintain a Zacks Rank #2 (Buy).