Kinross Gold (KGC) could generate a 57% rise in gold production over the next five years if it decides to pursue new mines and expansions currently under consideration, according to a recent report from Bloomberg. Tye Burt, Kinross’s CEO, stated that the company could add approximately 1.3 million ounces of gold if it proceeds with the construction of three new mines and the expansion of three current operations. Mr. Burt went on to say that the company was eyeing acquisitions, and that he would not rule out a transaction similar in size to the companys $3.5 billion purchase of Bema Gold in 2007.

Burt’s comments with respect to acquisitions fueled speculation about possible candidates that would make a good fit with Kinross. There are numerous small- and mid-cap gold miners that could be attractive targets for Kinross, especially given the continued outperformance of the gold price relative to other asset classes over the past several years. Profit margins are expected to rise for gold miners over the next 6 to 12 months. From a valuation perspective, in many cases, small-cap gold miners trade at 2%-5% on a per ounce basis what the market values an ounce of gold for the large producers.

Kinross’s three new mines being considered include the Cerro Casale project in Chile, the Lobo Marte project in Chile, and the Fruta del Norte deposit in Ecuador. The three current operations being considered for expansion include the Maricunga operations in Chile, the La Coipa operations in Chile, and the Paracatu mine in Brazil. The total cost for the new projects is projected to be approximately $3 billion.

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 morning trading shares of KGC were down $0.13 to $21.43 while the gold price was up $4.07 to $996.85 per ounce.