Kinross Gold on track with robust Q1 production By Investing.com

In the first quarter of 2024, Kinross Gold Corporation (NYSE:) reported a solid performance with 527,000 ounces of gold produced, keeping the company on course to meet its annual target of 2.1 million ounces. The mining operations, including Tasiast, Paracatu, and La Coipa, have demonstrated strong margins and efficiency, with an all-in sustaining cost (ASIC) below $1,000 per ounce. Kinross Gold ended the quarter with substantial liquidity, having $407 million in cash and a total liquidity pool of around $2 billion.

Key Takeaways

• Kinross Gold’s Q1 production reached 527,000 ounces of gold.
• The company remains on track to hit its 2.1 million ounce guidance for the year.
• Strong operational performance resulted in an ASIC below $1,000 per ounce.
• Development at Round Mountain and the Manh Choh project is advancing, promising future production growth.
• A commitment to sustainability with an upcoming annual sustainability report.
• The company holds a strong financial position with $407 million in cash and $2 billion in total liquidity.

Company Outlook

• Kinross anticipates a production increase in the second half of the year.
• Expectations of stronger cash flows in the latter half due to seasonal tax payment patterns.
• A preliminary economic assessment (PEA) for the Great Bear project is slated for release in the second half of 2024.

Bearish Highlights

• The company noted inflationary pressures, expecting a 3-5% increase over average costs for 2023.
• Power costs in Alaska are rising due to higher carbon-generated plant costs.
• Some pressure on lime prices and power costs in Alaska is evident.

Bullish Highlights

• Kinross Gold expressed optimism regarding gold prices and potential for de-leveraging.
• The company’s investment-grade balance sheet and competitive dividend underscore a strong start to the year.
• Government relations in Mauritania are strong, with no expected changes to taxes or royalties following the upcoming elections.

Misses

• No specific misses were highlighted in the earnings call summary.

Q&A Highlights

• The company addressed trucking concerns at Manh Choh, confirming permitted and ongoing operations.
• Labor costs remain relatively flat, helping to mitigate some inflationary pressures.
• Kinross is in a favorable income tax position for 2024 and expects President Ghazouani to win re-election in Mauritania, ensuring stability in operations.

In conclusion, Kinross Gold’s first quarter of 2024 has set a positive tone for the year, with the company making headway on its operational and financial objectives. The focus on sustainability, project development, and prudent capital management positions Kinross well in the industry, even as it navigates the challenges of inflation and regional cost pressures. Investors and stakeholders can anticipate the company’s continued progress and detailed project updates in the coming months.

InvestingPro Insights

Kinross Gold Corporation (KGC) has not only shown a strong operational performance in the first quarter of 2024 but also stands out in the financial markets with several notable metrics and analyst insights. According to InvestingPro data, the company’s market capitalization is at $8.73 billion, reflecting its significant presence in the industry. The Price/Earnings (P/E) ratio, which is a key indicator of market expectations, is quite attractive at 19.67, suggesting that the stock could be undervalued relative to its earnings.

The company’s performance is further substantiated by its revenue growth in the last twelve months as of Q1 2024, which stands at an impressive 19.23%. This growth is a testament to Kinross Gold’s effective strategies and operational excellence. Additionally, the stock has experienced significant returns, with a one-week price total return of 8.4% and a three-month price total return of 38.37%, indicating strong recent performance in the market.

InvestingPro Tips highlight that Kinross Gold has a perfect Piotroski Score of 9, which is a strong indicator of the company’s financial health. Moreover, analysts have taken a positive stance on the company, with two analysts revising their earnings upwards for the upcoming period, signaling confidence in Kinross Gold’s future performance.

For investors seeking more in-depth analysis and additional insights on Kinross Gold, InvestingPro offers a wealth of tips and metrics. Currently, there are 13 more InvestingPro Tips available, providing a comprehensive view of the company’s financial health and stock performance potential. To access these valuable insights, visit https://www.investing.com/pro/KGC and use the exclusive coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a full suite of financial tools and expert analysis.

Full transcript – Kinross Gold (KGC) Q1 2024:

Operator: Thank you for standing by. My name is Shannon, I’ll be your conference operator today. At this time, I would like to welcome everyone to the Kinross Gold First Quarter 2024 Results Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to turn, the conference over to Chris Lichtenheldt, Vice President of Investor Relations. Please go ahead.

Chris Lichtenheldt: Thank you, and good morning. With us today, we have Paul Rollinson, CEO, and from the Kinross Senior Leadership Team, Andrea Freeborough, Claude Schimper, William Dunford, and Geoff Gold. For a complete discussion of the risks and uncertainties, which may lead to actual results differing from estimates contained in our forward-looking information, please refer to page two of this presentation. Our news release dated May 7, 2024. The MD&A for the period ended March 31, 2024, and our most recently filed AIF, all of which are available on our website. I will now turn the call over to Paul.

Paul Rollinson: Thanks, Chris, and thank you all for joining us. Today, I will discuss our first quarter results, provide high-level updates across our portfolio, highlight some of our ESG achievements, and confirm our outlook. I will then hand the call over to Andrea, Claude, and Will to provide more detail. Following our strong performance in 2023, our operations continue to perform very well, and we are generating significant cash flow. The strong gold price is far this year are providing a tailwind for our business, which continues to be underpinned by a focus on cost discipline, and margins. Our production in the first quarter was on-plan, delivering 527,000 ounces. Tasiast, Paracatu, and La Coipa contributed just over two-thirds of our production at strong margins, with an ASIC below $1,000 per ounce. Our U.S. operations also performed well in the first quarter, delivering on-plan and remain on track for their full-year targets. Turning now to our development activities in the first quarter. At Round Mountain, the Life of Mine Extension Strategy that we announced last year is advancing well. We are making significant progress at Phase S and with our underground opportunities at Phase X and Gold Hill. I was recently at Round Mountain and was very impressed by the progress at Phase X where we have completed approximately 1.8 kilometers of underground development. In Alaska, the Manh Choh project is proceeding well and is on schedule to contribute to production in early Q3. Transportation of ore to Fort Knox continues to ramp up, and the mill modifications remain on track. At Great Bear, we continue to make excellent progress across several work streams. We had a highly productive few months with nearly 38,000 meters of drilling completed. As outlined in yesterday’s press release, drilling continues to return significant results extending beyond our year-end resource update. In addition to drilling, other areas of the project such as permitting and engineering for the advanced exploration decline are progressing well as our technical studies permitting and engineering work on the main project. We are on track to release our results from the ongoing work in the form of a PEA in the second-half of the year. I want to provide some additional context around the level of study we plan to release. The PEA will provide a more fulsome view of the project, including both the open pit and underground resource. Publishing a PEA allows us to include some of the underground inferred resources. This will provide better visibility into our anticipated path forward for both underground and open pit mining. While it will be a PEA level study, we are putting substantial effort into our capital and operating cost estimates to provide additional confidence on the ASIC and margins. It is also important to note that our PEA will incorporate a subset of the ounces in our measure indicated and inferred resources. It will not include the deeper mineralization that we will not yet have drilled sufficiently to bring into the inferred resources. Our deep drilling has shown that the mineralization continues to depth well below the current resource in attractive woods and grades. As we continue drilling out the underground and commence underground drilling from the AEX decline, we expect the ounces in the mine plan to continue to grow. On permitting for the main project, the detailed project description was submitted to the Impact Assessment Agency of Canada in Q1. The federal impact assessment is underway and We expect to file our impact statement in the first-half of next year. Turning to sustainability. Our longstanding annual sustainability report will be published later this month. This report, which is in its 16th edition, will provide…