Multi-million ounce gold miner, Kinross Gold (KGC), released financial and operating results for the third quarter of 2009. The company reported adjusted net earnings of $1.7 million, or $0.00 per share, compared to $83.4 million, or $0.13 per share for the comparable period in 2008. Earnings included foreign exchange losses, a non-cash item, as well as other non-recurring and/or non-cash items, without which Kinross Gold would have had a loss of $21.5 million, or $0.03 per share. As of September 30, 2009 the company had cash, cash equivalents, and short-term investments of $533.6 million and debt of $758.2 million.
During the quarter Kinross Gold sold 608,574 gold ounces, a 3.1% increase over third quarter 2008, at a realized gold price of $956 per ounce. The company produced 537,440 ounces of gold, a 3% decrease from third quarter 2008, and incurred cash costs of $446 per ounce of gold, a 14% increase over third quarter 2008. As previously announced on October 26, KGC lowered its full year 2009 production guidance due to lower production at its Paracatu gold mine, located in Paracatu, Minas Gerais State, Brazil. The company’s new full year 2009 guidance consists of 2.2 million gold equivalent ounces at an average cost of $435 to $450 per ounce, from its previous guidance of 2.3 to 2.4 million gold equivalent ounces at an average cost of $390 to $420 per ounce of gold.
Tye Burt, the company’s President and CEO, stated “While revenue and cash flow before changes in working capital were higher than the previous year, we are disappointed by other aspects of our results for the third quarter, as they are below our expectations. Challenges at our Paracatu expansion project had a significant impact on our overall production and cost per ounce in the quarter, and we have reduced our overall 2009 production guidance by approximately 6%. We are working diligently to bring performance and production at Paracatu closer to plant design levels by improving flotation and blending mill feed with softer ore, as well as exploring options to increase grinding capacity. Our cash flow per share from operations before changes in working capital remained strong, at $0.29, while our margin per ounce sold was up by 9% year-over-year. Comparing the first nine months of 2009 to 2008, production was up by 26%, and cash flow per share before changes in working capital increased by 45%. At the Fort Knox project, we began heap leaching in the third quarter and produced first gold on schedule. We are advancing our development projects at Lobo-Marte, Fruta del Norte, and Cerro Casale, and have moved to a feasibility study for our Maricunga expansion project, focused on increasing mine production by 50%.”
Kinross Gold is a Canadian-based gold mining company with mines and projects in the United States, Brazil, Chile, Ecuador and Russia, employing approximately 5,500 people worldwide. In afternoon trading shares of KGC were down $0.39 to $17.90 while the gold price rose $24.10 to a new all-time high of $1,083.79 per ounce.
