Kinross profits jump as margins increase

Kinross Gold has reported net earnings of US$210.9 million on revenues of $1.2 billion for the quarter to June 30, a 39.7% increase over the same period of 2023.

The company produced 535,338oz of gold equivalent at an all-in sustaining cost of $1387/oz, a 5.9% increase over the March quarter, although a higher average realised gold price of $2342/oz saw its AISC margin increase to 40.7% from 36.6% quarter-on-quarter. It said it is on track to meet its annual guidance of 2.1Moz at an AISC of $1360/oz.

"Kinross had another strong quarter supporting an excellent first half of the year. Our portfolio of mines performed well, delivering high-margin production, and we remain on track to meet our annual production and cost guidance for 2024," said Kinross Gold chief executive Paul Rollinson, during its results conference call.

Kinross ended the quarter with $480 million in cash, $1.2 billion in debt, having repaid $200 million against its term loan in the quarter, $2.1 billion in total liquidity, and it declared a 3c per share quarterly dividend. Its free cash flow more than doubled to $345.9 million compared with the March quarter.

"We plan to continue allocating excess free cash generated against the remaining $800 million due on the term loan in 2025," said Kinross Gold CFO Andrea Freeborough.

Kinross said it saw sustained strong performance at Tasiast in Mauritania, which continues to be the highest-margin operation in its portfolio. During the quarter, the company saw the first gold pour from Manh Choh in Alaska, USA. Full commissioning of the Fort Knox mill modifications, where high-grade Manh Choh ore is processed, is expected to be completed in the September quarter.

The company is on track to release a preliminary economic assessment (PEA) for its Great Bear project in Ontario, Canada, in September. It recently drilled its deepest drill hole there to date, which returned 3.8m at 9.52gpt of gold at a vertical depth of 1575m, which it said demonstrated robust mineralisation at depth, well outside the current resource. Early works are due to start later this year and construction of the exploration decline will begin next year.

"The Great Bear PEA will only include drilling up to April. It will give visibility on the open pit and the initial production scale, costs and margins for the underground," said Kinross Gold COO Claude Schimper.

Heap leach

With heap leach pads in the spotlight following the heap leach failure at Victoria Gold's Eagle mine in Yukon, Canada in June, Kinross Gold Kinross SVP technical services William Dunford provided an overview of the company's heap leach pads. Its Fort Know operation in Alaska was a model example of a cold weather heap leach operation for Victoria Gold. "We mainly have run-of-mine heap leach pads with larger rocks that reduce the risk of liquefaction and increase the structural stability of the pads. The topography of our pads is also relatively flat, with Fort Knox the only valley fill site," he said.

Kinross Gold has been one of the best-performing gold stocks this year, with its share price up 49.75% year-to-date. Its shares are trading at $9.06, valuing the company at $11.1 billion.