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Kitco February 11, 2016 02:01:30 AM

Kinross Reports 4Q Loss But Expects Record Production In 2016

Paul Ploumis
ScrapMonster Author
Kinross Gold Corp. posted a loss for the fourth quarter on an impairment charge, lower production and weaker gold prices.

Kinross Reports 4Q Loss But Expects Record Production In 2016

(Kitco News) - Kinross Gold Corp. (TSX: K; NYSE: KGC) posted a loss for the fourth quarter on an impairment charge, lower production and weaker gold prices, although the company is forecasting record output and lower all-in sustaining costs for 2016.

The company late Wednesday listed a net loss for the October-December period of $841.9 million, or 73 cents per share, compared with a loss of $1.47 billion, or $1.29, in the same period of 2014. For the last quarter, the loss included a non-cash, after-tax impairment charge of $430.2 million for property, plant and equipment, plus a write-down of inventory and other assets of $235 million.

After adjustments, the loss was $68.8 million, or 6 cents per share, compared with an adjusted loss of $6 million, or a penny, in the fourth quarter of 2014.

For the most recent quarter, Kinross reported output of 623,716 gold-equivalent ounces, down from 672,051 ounces in the same period a year ago. Still, the company said this was at the high end of guidance. The decline was due mainly to temporary curtailment of milling operations at Paracatu in response to a lack of rainfall in southeastern Brazil and lower mill grades at Chirano, Kinross said.

This, combined with a lower average realized gold price of $1,108 versus $1,201 for the year-ago quarter, contributed to lower revenue of $706.2 million from $791.3 million. All-in sustaining costs were $991 per gold-equivalent ounce, down from $1,006.

For full-year 2015, output was 2.59 million gold-equivalent ounces, compared to 2.71 million for 2014. The company, which has purchased two gold mines in Nevada from Barrick Gold Corp., projected 2016 production to hit a record of somewhere between 2.7 million and 2.9 million gold-equivalent ounces, with all-in sustaining costs of $890 to $990, compared to AISC of $975 for 2015.

“We finished the year (2015) at the high end of our production guidance and the low end of our guidance for all-in sustaining costs while recording the lowest cost of sales since 2011,” said J. Paul Rollinson, president and chief executive officer.

He later added, “Our outlook remains strong for 2016, with record production and lower all-in sustaining cost of sales forecasts. We remain focused on reducing costs and delivering against our targets to maintain our excellent track record and build value for our shareholders.”

For full-year 2015, Kinross listed a net loss of $$984.5 million, or 86 cents per share, compared with a loss of $1.4 billion, or $1.22, in 2014. The adjusted net loss last year was $91 million, or 8 cents per share, compared with $131.1 million, or 11 cents, for 2014.

Meanwhile, officials said Kinross is finalizing studies on a two-phased expansion plan to realize growth potential at the Tasiast mine in Mauritania. The first phase contemplates adding incremental grinding capacity to increase mill throughput, while the second considers further increasing this capacity with installation of additional milling, leaching, thickening and refinery capacity.

The company said it expects to complete and provide results of the feasibility study for the first phase, as well as the pre-feasibility study for the second phase, in late March.

Courtesy: Kitco News

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