Kinross reports strong 2020 third-quarter results
Kinross Gold Corporation, in its results for the third quarter ended 30 September 2020, said it produced 603,312 attributable gold equivalent ounces (Au eq. oz.) in Q3 2020, compared with 608,033 Au eq. oz. in Q3 2019. The slight decrease was largely due to lower production at Paracatu, Maricunga and Kupol, largely offset by increases at Fort Knox and Bald Mountain.
The average realized gold price in Q3 2020 increased 30% to $1,908 per ounce, compared with $1,467 per ounce in Q3 2019.
Revenue from metal sales increased by 29% to $1,131.3 million in Q3 2020, compared with $877.1 million during the same period in 2019.
Kinross is a Canadian-based gold mining company with mines and projects in Brazil, Canada, Chile, Ghana, Mauritania, Russia and the United States employing approximately 9,000 people worldwide.
J. Paul Rollinson, President and CEO, made the following comments in relation to 2020 third-quarter results: “Kinross delivered another strong quarter, generating robust free cash flow and a significant increase in earnings. Our mines continued to perform well as our global teams have effectively managed the operational challenges caused by the COVID-19 pandemic. As a result, we are well on track to meet our annual guidance for production and costs for the ninth consecutive year.
“In September, we were pleased to announce an expected 20% increase in production over the next three years to 2.9 million gold equivalent ounces, along with plans for a quarterly dividend to return capital to our shareholders. We also provided a long-term production outlook which forecasts Kinross producing an average of 2.5 million gold equivalent ounces annually through to 2029.
“Our robust financial position, diverse operating portfolio, attractive project pipeline and successful track record of exploration and project development provides a strong foundation from which to continue building value well into the future.”
Production cost of sales per Au eq. oz. was $737 for Q3 2020 and was in line with $735 for Q3 2019. Production cost of sales per Au oz. on a by-product basis decreased to $707 in Q3 2020, compared with $716 in Q3 2019, based on Q3 2020 attributable gold sales of 573,173 ounces and attributable silver sales of 1,210,707 ounces.
Kinross’ attributable margin per Au eq. oz. sold increased by 60% to $1,171 for Q3 2020, compared with the Q3 2019 margin of $732, and significantly outpacing the year-over-year 30% increase in average realized gold price.
All-in sustaining cost per Au eq. oz. sold decreased to $958 in Q3 2020, compared with $1,028 in Q3 2019. All-in sustaining cost per Au oz. sold on a by-product basis decreased to $934 in Q3 2020, compared with $1,016 in Q3 2019. The decrease in all-in sustaining cost was primarily a result of lower capital expenditures.
Adjusted operating cash flow for Q3 2020 increased by 86% to $549.6 million, compared with $295.4 million for Q3 2019, primarily due to the increase in margins. Net operating cash flow increased by 135% to $544.1 million for Q3 2020, compared with $231.7 million for Q3 2019.
Adjusted net earnings2 nearly tripled to $310.2 million, or $0.25 per share, for Q3 2020, compared with $104.0 million, or $0.08 per share, for Q3 2019, primarily due to the increase in margins.
Reported net earnings nearly quadrupled to $240.7 million, or $0.19 per share, for Q3 2020, compared with $60.9 million, or $0.05 per share, for Q3 2019.
Capital expenditures were $212.1 million for Q3 2020, compared with $242.6 million for Q3 2019, primarily due to decreases in spending at Bald Mountain and Tasiast.