Kinross reports strong 2023 third-quarter results
Press Release
TORONTO, Nov. 08, 2023 — Kinross Gold Corporation (TSX: K, NYSE: KGC) (“Kinross” or the “Company”) today announced its results for the third quarter ended September 30, 2023.
Q3 2023 highlights from continuing operations:
- Guidance: Kinross remains on track to meet its 2023 annual guidance ranges for production, cost of sales per ounce, all-in sustaining cost and attributable capital expenditures. The Company is tracking in the lower end of its 2023 production cost of sales guidance and the higher end of its capital expenditure guidance.
- Production of 585,449 gold equivalent ounces (Au eq. oz.), a 11% year-over-year increase.
- Production cost of sales 1 of $911 per Au eq. oz. sold and all-in sustaining cost2 of $1,296 per Au eq. oz. sold.
- Margins 3 of $1,018 per Au eq. oz. sold.
- Operating cash flow 4 of $406.8 million and adjusted operating cash flow2 of $470.6 million. Free cash flow2 of $122.9 million.
- Reported net earnings 5 of $109.7 million, or $0.09 per share, with adjusted net earnings2, 6 of $144.6 million, or $0.12 per share2.
- Cash and cash equivalents of $464.9 million, and totalliquidity7 of approximately $2.0 billion at September 30, 2023.
- Kinross’ Board of Directors declared a quarterly dividend of $0.03 per common share payable on December 14, 2023, to shareholders of record at the close of business on November 30, 2023.
Operational and development project highlights:
- Tasiast achieved record quarterly production and sales, significantly exceeding the previous record achieved in the second quarter.
- Paracatu delivered higher production both quarter-over-quarter and year-over-year.
- La Coipa performed well and was once again the lowest cost mine in the portfolio, delivering high-margin production.
- At Manh Choh, a ceremonial groundbreaking was held, pre-stripping has commenced, and the project remains on track for initial production in the second half of 2024.
- At Round Mountain, Kinross has approved mining of the optimized Phase S open pit, which is expected to extend production out to the end of the decade and increase life-of-mine production by ~750,000 Au eq. oz. Phase S could provide synergies with potential future production from underground at Phase X and Gold Hill.
- At Great Bear, the exploration program continues to make excellent progress and drill results continue to exceed expectations around the strong resource potential of the deposit, including a recent high-grade intercept from the Hinge zone that returned 2.8 metres true width grading at approximately 260 grams per tonne (g/t) at a vertical depth of 870 metres. Permitting is ongoing at both the provincial and federal levels.
CEO commentary:
J. Paul Rollinson, President and CEO, made the following comments in relation to 2023 third-quarter results:
“It has been a great nine months at Kinross and we have delivered another strong quarter. Our production profile has been solid and generated significant cash flow. We continue to reduce the debt on our investment grade balance sheet and have completed our expansion projects at Tasiast and La Coipa. We remain well positioned to meet our annual guidance building on the robust results year-to-date.
“Our project pipeline continued to make excellent progress. At Great Bear, permitting is advancing well and drill results continue to exceed our expectations, demonstrating the strength of the resource at depth and in less-explored areas of the deposit, including a recent exceptional intercept from the Hinge zone. We officially broke ground at Manh Choh as the project continues to advance on schedule and on budget for initial production in the second half of next year.
“Our decision to proceed with Round Mountain Phase S underscores the successful optimization work to build a lower-investment, high-return operation that we expect will add approximately 750,000 ounces to the life-of-mine production profile. The future of Round Mountain has become clear, with the approval of Phase S, combined with Phase W that we are currently mining, we’re now expecting production at Round Mountain until the end of the decade. Longer-term, we see strong potential to supplement that production with high-grade contributions from Phase X and Gold Hill, which we continue to explore and study.
“Kinross is delivering on its ESG commitments. In that regard, we’re excited that our 34MW solar power plant at Tasiast is on schedule to deliver power by the end of the year. This, combined with other elements of our Climate Strategy, means Kinross is well on track to meet our goal of a 30% reduction in greenhouse gas emissions by 2030.”
Summary of financial and operating results
| Three months ended | Nine months ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| (unaudited, in millions of U.S. dollars, except ounces, per share amounts, and per ounce amounts) | 2023 | 2022 | 2023 | 2022 | ||||||||||
| Operating Highlights | ||||||||||||||
| Total gold equivalent ounces from continuing operations(a),(b) | ||||||||||||||
| Produced | 585,449 | 529,155 | 1,606,507 | 1,361,554 | ||||||||||
| Sold | 571,248 | 494,413 | 1,614,547 | 1,307,219 | ||||||||||
| Financial Highlights from Continuing Operations(a) | ||||||||||||||
| Metal sales | $ | 1,102.4 | $ | 856.5 | $ | 3,124.0 | $ | 2,378.9 | ||||||
| Production cost of sales | $ | 520.6 | $ | 465.3 | $ | 1,502.4 | $ | 1,279.2 | ||||||
| Depreciation, depletion and amortization | $ | 263.9 | $ | 185.1 | $ | 715.1 | $ | 532.1 | ||||||
| Operating earnings | $ | 226.2 | $ | 111.3 | $ | 607.9 | $ | 277.8 | ||||||
| Net earnings from continuing operations attributable to common shareholders | $ | 109.7 | $ | 65.9 | $ | 350.9 | $ | 137.9 | ||||||
| Basic earnings per share from continuing operations attributable to common shareholders | $ | 0.09 | $ | 0.05 | $ | 0.29 | $ | 0.11 | ||||||
| Diluted earnings per share from continuing operations attributable to common shareholders | $ | 0.09 | $ | 0.05 | $ | 0.28 | $ | 0.11 | ||||||
| Adjusted net earnings from continuing operations attributable to common shareholders(c) | $ | 144.6 | $ | 68.7 | $ | 399.8 | $ | 174.9 | ||||||
| Adjusted net earnings from continuing operations per share(c) | $ | 0.12 | $ | 0.05 | $ | 0.33 | $ | 0.14 | ||||||
| Net cash flow of continuing operations provided from operating activities | $ | 406.8 | $ | 173.2 | $ | 1,194.4 | $ | 528.2 | ||||||
| Adjusted operating cash flow from continuing operations(c) | $ | 470.6 | $ | 259.4 | $ | 1,262.5 | $ | 760.4 | ||||||
| Capital expenditures from continuing operations(d) | $ | 283.9 | $ | 197.3 | $ | 787.0 | $ | 447.4 | ||||||
| Free cash flow from continuing operations(c) | $ | 122.9 | $ | (24.1 | ) | $ | 407.4 | $ | 80.8 | |||||
| Average realized gold price per ounce from continuing operations(e) | $ | 1,929 | $ | 1,732 | $ | 1,935 | $ | 1,821 | ||||||
| Production cost of sales from continuing operations per equivalent ounce(b) sold(f) | $ | 911 | $ | 941 | $ | 931 | $ | 979 | ||||||
| Production cost of sales from continuing operations per ounce sold on a by-product basis(c) | $ | 860 | $ | 919 | $ | 876 | $ | 966 | ||||||
| All-in sustaining cost from continuing operations per ounce sold on a by-product basis(c) | $ | 1,264 | $ | 1,269 | $ | 1,269 | $ | 1,279 | ||||||
| All-in sustaining cost from continuing operations per equivalent ounce(b) sold(c) | $ | 1,296 | $ | 1,282 | $ | 1,303 | $ | 1,287 | ||||||
| Attributable all-in cost(g) from continuing operations per ounce sold on a by-product basis(c) | $ | 1,561 | $ | 1,555 | $ | 1,590 | $ | 1,543 | ||||||
| Attributable all-in cost(g) from continuing operations per equivalent ounce(b) sold(c) | $ | 1,579 | $ | 1,560 | $ | 1,608 | $ | 1,547 | ||||||
The following operating and financial results are based on third-quarter gold equivalent production:
Production: Kinross produced 585,449 Au eq. oz. in Q3 2023 from continuing operations, compared with 529,155 Au eq. oz. in Q3 2022. The 11% year-over-year increase was primarily attributable to higher mill grades, recovery and throughput at Tasiast, higher production at La Coipa due to the ramp-up of operations in 2022, and higher production at Paracatu due to higher throughput and timing of ounces processed.
Average realized gold price: The average realized gold price from continuing operations in Q3 2023 was $1,929 per ounce, compared with $1,732 per ounce in Q3 2022.
Revenue: During the third quarter, revenue from continuing operations increased to $1,102.4 million, compared with $856.5 million during Q3 2022. The 29% increase is due to an increase in gold equivalent ounces sold and an increase in average realized gold price.
Production cost of sales: Production cost of sales1 from continuing operations per Au eq. oz. sold decreased to $911 for the quarter, compared with $941 in Q3 2022. The 12% decrease was primarily due to the ramp-up of production at La Coipa, which continued to be the lowest cost operation in Q3 2023.
Production cost of sales from continuing operations per Au oz. sold2 on a by-product basis decreased to $860 in Q3 2023, compared with $919 in Q3 2022, based on gold sales of 544,199 ounces and silver sales of 2,213,044 ounces.
IBF4
