Despite losses, Kinross hikes dividend by a third
Kinross Gold (TSX:K) lost $2.78 billion in the fourth quarter, having been forced to writedown the value of its Tasiast project in Africa. The loss amounted to $2.4 billion and was in connection to the company’s 2010 acquisition of Red Back Mining and its Tasiast Mine for $7.1 billion, of which $4.6 billion was recorded as goodwill.
The full-year picture wasn’t any better for Kinross, with the firm going into the red for a $2 billion net loss, versus earnings of $759 million in 2010.
Kinross also posted record production and revenues last year, however, and shareholders were awarded a 33% raise on Wednesday when the company hiked its dividend from 6 cents to 8 cents a share.
Gold production in Q4 was down 5% from the same period in 2010, but full-year production of 2.61 million gold-equivalent ounces was in line with guidance and a 12% increase over full-year 2010.
Revenue for the quarter was $943 million, a 3% increase over the fourth quarter in 2010, while full-year revenue increased by a whopping 31% to a record $3.94 billion.
The markets were unmoved by the results, with Kinross closing at $10.35.
In January Kinross Gold (K.TO) erased 19.46% of its value, with shares dropping to $10.65 a share, after it disclosed that it will take “. . . a material non-cash accounting charge, primarily relating to the goodwill recorded for the Tasiast mine in connection with the 2010 Red Back acquisition.”