Kinross on track for 2018 production and costs

Kupol operation in Russia. Photo by Kinross Gold

Kinross Gold (TSE: K) has released its third quarter results, which indicate company achieved solid production and generated a positive cash flow. The company has operations in Nevada, Brazil, Ghana and Russia and they all performed well, said the company.

On the production side, the company produced 586,260 gold equivalent oz. in Q3 2018, compared to 653,993 oz. in the same quarter in 2017. The production cost of sales per gold ounce equivalent rose to $777 (U.S. dollars) in Q3 2018, compared to $662 a year earlier. Kinross said the added costs were mainly due to the high cost of sales from the Fort Knox, Tasiast and Kupol mines. The average realized gold price in Q3 2018 was $1,209 per oz., compared to $1,283 per oz. in Q3 2017.

This year’s drop in the price of gold pulled down Kinross’s numbers in several important areas. Revenue from metal sales was $753.9 million (compared to $828.0 million) on the sale of 618,463 gold equivalent oz. sold.

The all-in sustaining cost rose slightly to $1,049 per oz. (compared to $ $937), and that, too, cut into earnings and cash flow. For Q3 2018, the company had an adjusted operating cash flow of $143.2 million (compared to $320.8 million) and an adjusted net loss of $48.4 million or $0.04 per share (compared to adjusted net earnings of $84.1 million or $0.07 per share).

The future for Kinross looks bright. The company expects to produce 2.5 million oz. of gold equivalent at a production cost of sales of $730 per oz. and all-in sustaining cost of $975 per oz. sold on both a gold equivalent and by-product basis for 2018. Total capital expenditures are forecast to be approximately $1.1 billion.

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