Three largest producing mines – Paracatu, Kupol and Tasiast – achieve lowest costs in portfolio
On track to meet production and cost of sales guidance
First gold produced at both Round Mountain Phase W and Bald Mountain Vantage Complex projects
TORONTO, July 31, 2019 (GLOBE NEWSWIRE) -- Kinross Gold Corporation (TSX: K, NYSE: KGC) today announced its results for the second-quarter ended June 30, 2019.
(This news release contains forward-looking information about expected future events and financial and operating performance of the Company. We refer to the risks and assumptions set out in our Cautionary Statement on Forward-Looking Information located on page 19 of this release. All dollar amounts are expressed in U.S. dollars, unless otherwise noted.)
2019 second-quarter highlights:
Q2 2019 results First half 2019 results 2019 guidance
Gold equivalent production 1
(ounces) 648,251 1,254,282 2.5 million
Production cost of sales 2
($ per Au eq. oz.) $663 $672
All-in sustaining cost 2
($ per Au eq. oz.) $925 $925
Capital expenditures $276.7 million $541.5 million $1,050 million
• On track to meet 2019 annual guidance for production, cost of sales per ounce, all-in sustaining cost per ounce and capital expenditures.
• Operating cash flow of $333.0 million and adjusted operating cash flow2 of $287.7 million for Q2 2019.
• Reported net earnings 3 of $71.5 million, or $0.06 per share, and adjusted net earnings2,3 of $79.6 million, or $0.06 per share for Q2 2019.
• Cash and cash equivalents of $475.4 million and total liquidity of approximately $1.9 billion at June 30, 2019, with no debt maturities until 2021.
Operations and development projects highlights:
•Three largest producing mines – Paracatu, Kupol-Dvoinoye and Tasiast – representing 63% of total company production, achieve lowest costs in portfolio for Q2 2019 and the first half of the year.
• Round Mountain Phase W and Bald Mountain Vantage Complex projects achieve major milestone and produce first gold.
• Paracatu continues to deliver record performance, surpassing its peak quarterly production in first quarter of 2019 and maintaining its lowest costs since 2010.
•Sustained strong performance at Tasiast as mill throughput continues to outperform. The Company expects to announce results of the evaluation of low-capital alternative approaches to increase throughput in mid-September.
J. Paul Rollinson, President and CEO, made the following comments in relation to 2019 second-quarter results:
“In the second quarter we delivered excellent operating and financial results, as our portfolio of mines increased production and lowered costs compared with the previous quarter and year. We generated robust cash flow, improved our margins, and maintained our strong liquidity position. We remain on track to meet our annual production and cost outlook for 2019 following a strong first half of the year.
“The performance of our largest producing assets bolstered our results as Paracatu, Kupol and Tasiast, which represent more than 60% of our production, delivered the lowest costs in our portfolio during the quarter and in the first half of the year. Paracatu continues to outperform, surpassing its first quarter production record and maintaining its lowest costs since 2010.
“Our Nevada development projects – Round Mountain Phase W and Bald Mountain Vantage Complex – achieved a major milestone as both produced their first gold bars. At Tasiast, our evaluation of alternative approaches to increase throughput at a significantly lower capital cost is making good progress, and we expect to announce results in mid-September.”
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Kinross to acquire high-quality development project with a large estimated resource.
High-grade, open-pit, heap leach project expected to be a large, low-cost operation
Builds upon 24 years of experience and success operating in Russia
(This news release contains forward-looking information about expected future events and performance of the Company. We refer to the risks and assumptions set out in our Cautionary Statement on Forward-Looking Information located on page 5 of this release. All dollar amounts are expressed in U.S. dollars, unless otherwise noted.)
TORONTO, July 31, 2019 (GLOBE NEWSWIRE) -- Kinross Gold Corporation (TSX:K; NYSE: KGC) (“Kinross”) is pleased to announce an agreement with N-Mining Limited (“N-Mining”) to acquire Chulbatkan, a high-quality, heap leach development project with significant upside potential and low relative execution risk, for total fixed consideration of $283 million, including approximately $113 million in cash and approximately $170 million in Kinross shares. In addition, N-Mining will have the right to economic participation equivalent to a 1.5% net smelter return (NSR) payment and contingent consideration linked to future reserve additions.
Strategic rationale for acquisition:
• H igh-quality development project with strong upside potential ?Large, high-grade, near-surface resource with potential to support a low-cost, low-strip, high-return, open-pit, heap leach operation.
?Estimated indicated resource of approximately 3.9 million ounces of gold and estimated inferred resource of 80,000 ounces of gold1.
?Highly continuous mineralization remains open along strike and at depth with potential for additional high-grade structures within the resource. Multiple promising satellite targets within the under-explored ~120 sq. km license.
?Exploration and mining license in place until the end of 2037.
• Leverages operating expertise ?Project’s favourable leach characteristics a clear strategic fit with Kinross’ world-class, cold climate heap leach expertise, with features similar to the Company’s Fort Knox mine in Alaska.
• Builds on existing regional platform ?Expected to strengthen Russia region’s long-term production and cash flow. Kinross has 24 years of operational success in-country, having operated four mines, including developing Kupol and Dvoinoye, two low-cost mines, on budget and on schedule.
• Aligns with project pipeline and capital priorities ?Expect to conduct a comprehensive exploration program, complete pre-feasibility and feasibility studies within the next three years, and targeting a two-year construction period. This initial timing complements existing Kupol and Dvoinoye operations and Company’s broader project plans.
• Maintains strong liquidity position through a mix of cash and shares ?Cash and share transaction, and timing of payments, maintains Kinross’ strong liquidity.
“Chulbatkan is an exciting high-quality development project with significant upside potential and low relative execution risk located in a country where we have had extensive experience and success, and maintain a strategic and competitive operating advantage,” said J. Paul Rollinson, President and Chief Executive Officer. “This acquisition is an excellent fit for Kinross as it enables us to leverage our expertise as a world-class cold climate heap leach operator. With a large estimated mineral resource, Chulbatkan has the potential to be a significant low-cost, low-strip, high-return operation that will strengthen our longer-term production and cash-flow profile. It is an excellent complement to our existing operations at Kupol and Dvoinoye, both of which remain prospective in their own right.”
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