Kinross 2Q Adjusted Earnings Fall With Production
(Kitco News) - Kinross Gold Corp. (TSX: K, NYSE: KGC) Wednesday reported a decline in its second-quarter adjusted profit as revenue fell along with the number of gold-equivalent ounces that were mined.
Adjusted net earnings fell to $37.8 million, or 3 cents per share, compared with $54.9 million, or 4 cents, in the second quarter of 2017. Net earnings, including special items, were $2.4 million, or zero cents per share, compared to $33.1 million, or 3 cents, in the year-ago quarter.
April-June attributable output totaled 602,049 gold-equivalent ounces, down from 694,874 a year ago. But while production fell, the average realized gold price climbed to $1,306 an ounce from $1,260. Still, against this backdrop, revenue slid to $775 million from $868.6 million in the year-ago quarter, the company said.
Output fell at a number of mines. Among the biggest drops, declines at Fort Knox, Kupol and Paracatu were blamed largely on lower grades, while Round Mountain production was down year-on-year mainly due to lower recoveries from the heap-leach pads related to a decrease in tonnes of ore placed on the pads, the company said.
Still, Kinross said its outlook for the full year was unchanged. The company expects to produce 2.5 million gold-equivalent ounces.
J. Paul Rollinson, President and CEO, provided the following update on projects:
“At Tasiast, construction was completed at the phase-one expansion, with first ore now through the SAG mill. The project has been transferred to operations and is in the final stages of commissioning.
“We have decided to pause activities at phase two and, to maintain optionality, are analyzing alternative throughput approaches to expand Tasiast as we continue to engage with the government of Mauritania regarding our activities in the country. The completion of our evaluation of alternative approaches, and a phase-two re-start decision, are subject to our ongoing engagement with the government.”
“Our projects in the U.S. continue to make excellent progress, as the Fort Knox Gilmore, Round Mountain Phase W and Bald Mountain Vantage Complex projects remain on budget. We have also initiated a feasibility study for the La Coipa restart project, and a scoping study for Lobo Marte, to potentially return to production in Chile. In Russia, we expect production to commence at the Moroshka satellite deposit near Kupol early in the fourth quarter.”
On Tuesday, a Kinross subsidiary completed the previously announced transaction to acquire two hydro electric power plants in Brazil for $253.7 million. The company said these should provide a long-term supply of power and lower production costs at Paracatu.
By Allen SykoraFor Kitco News
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