Kinross reports increase in earnings
Kinross Gold Corp. posted adjusted net earnings of $298.7 million, or 24 cents per share, for the third quarter, which the Toronto-based company's chief executive officer, J. Paul Rollinson, described as "another strong quarter for us."
The adjusted net earnings compared with $144.6 million, or 12 cents per share, in the third quarter of last year.
Rollinson also said during the Nov. 6 earnings webcast that "our production in the third quarter was strong," and Kinross will reach full-year production guidance of 2.1 million gold equivalent ounces. That production will include gold from the Round Mountain and Bald Mountain mines in Nevada.
Kinross produced 564,106 gold equivalent ounces in the third quarter, compared with 585,449 ounces in the 2023 quarter. The all-in sustaining costs for the quarter were $1,350 per ounce, compared with $1,296 per ounce in the 2023 quarter.
In the earnings report, Rollinson said Kinross remains "heavily focused on consistent operational performance, cost control, capital discipline and delivering on planned grades to generate value for our shareholders."
The realized gold price in the third quarter for Kinross was $2,477 per ounce, compared with $1,929 per ounce in the third quarter of last year. The gold price hit new records after the third quarter ended Sept. 30 before plunging Nov. 6 after former President Donald Trump won the presidential election for a new term.
The New York spot price was again rising on Nov. 7, with the late morning price at $2,696 per ounce, up $37.00.
Kinross shares were at $10.42, up 57 cents, in late morning trading on Nov. 7, the day after the company's board declared a dividend of 3 cents per share.
Rollinson additionally reported that Kinross posted a record $414.6 million in free cash flow in the quarter, and any excess cash will go to debt repayment. The free cash flow compared with $137.7 million in the 2023 quarter.
The company as of Nov. 6 has repaid $650 million on its $1 billion term loan.
The company's gold production was lower in the 2024 quarter because of planned lower production at Paracatu in Brazil due to mine sequencing and fewer ounces recovered from the heap leach pads at Round Mountain Mine, partially offset by new production from Manh Choh in Alaska, according to the earnings announcement.
Kinross reported that its U.S. operations – Round Mountain in Nye County, Bald Mountain in White Pine County, and Fort Knox in Alaska – combined produced 234,868 gold equivalent ounces in the third quarter. Fort Knox includes Manh Choh. Bald Mountain produced 43,496 gold equivalent ounces in the quarter, and Round Mountain produced 42,279 ounces.
Fort Knox produced 149,093 ounces in the third quarter, and Tasiast Mine in Mauritania produced 162,155 gold equivalent ounces, while Paracatu produced 146,174 ounces and La Coipa in Chile produced 50,502 in the quarter.
Round Mountain, meanwhile, is seeing high gold grades in the Phase X underground development project, and William Dunford, senior vice president of technical services for Kinross, said in the webcast that production at Round Mountain will be lower until 2027, when Phase X is in production.
He said a portion of the gold underground is very easy to access, and "we have crossed ore in our development. We still look at 2027 for production, but we will be looking at test stopes as part of the due diligence as we progress the project."
Infill drilling underground is "showing exciting results," and "opportunity drilling" is showing the potential to expand Phase X, Dunford said.
There has been 8,858 feet of development from the mine portal at Phase X, he said.
The company also reported that as part of the open-pit Phase S at Round Mountain, the heap leach pad expansion has been completed on time and on budget.
Bald Mountain, where many of the workers come from Elko County, is nearing the end of mining unless there are more projects. The mine earlier this year received U.S. Bureau of Land Management approval for the Juniper Project.
Executive Vice President and Chief Operating Officer Claude Schimper said Bald Mountain has a large resource and when the gold prices are high, Kinross has an advantage at Bald Mountain.
He said that unlike the rest of Kinross surface mines "where you're doing a massive layback, we have a whole bunch of little pits. So, again in the context of where we find ourselves in the gold price, we will be looking at some kind of quicker payback of satellite opportunities," he said in the webcast.
Looking at other operations, Kinross reported that the Manh Choh mine project was commissioned in the third quarter and is delivering gold to Fort Knox for processing, and the preliminary economic assessment for the Great Bear development project at Red Lake, Ontario, was released in the third quarter.
Rollinson said the PEA "reaffirms our view of a high-quality, high-margin asset with robust economics, modest capital requirements and clear opportunity for resource growth."
Kinross also reported that exploration at Curlew Basin in Washington State is progressing underground, and drilling this year expanded mineralization in zones with favorable grade and width to support higher-margin production.
