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Kinross Gold profit drops although revenues rise

'Our global exploration effort continues to bear fruit,' says Kinross Gold CEO Tye Burt. REUTERS/Mike Cassese


Kinross Gold Corp. reported a drop in third-quarter profit but the big Toronto gold company generated record revenues as it increased its output around the world.

The company said late Wednesday its profit fell to $212.6-million (U.S.), or 19 cents a share, from $540.9-million, or 71 cents, a year ago.

Last year's profits contained significant one-time gains.

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Revenue jumped 45 per cent to nearly $1.1-billion.

Meanwhile production rose 13 per cent to 647,983 gold-equivalent ounces.

Kinross Gold, which keeps its books in U.S. dollars, said adjusted earnings rose 134 per cent to $273.4-million or 24 cents a share.

The average analyst estimate was for a profit of 23 cents per share and revenue of $1.09-billion, according to data compiled by Thomson Reuters.

Kinross is a Canadian-based gold producer with mines and projects in Canada, the United States, Brazil, Chile, Ecuador, Russia, Ghana, and Mauritania, where it is developing the Tasiast mine.

"We made significant progress in the quarter advancing our industry-leading growth program," said Tye Burt, president and CEO of the gold miner.

"Our drilling campaign at Tasiast continues both to confirm our confidence in the resource and indicate potential further expansions to our previous model. Meanwhile, our global exploration effort continues to bear fruit, with the discovery of an important new area of mineralization close to the surface at La Coipa in Chile."

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The company has made a pair investments in junior exploration companies in recent weeks including the acquisition of a stake in White Bear Resources Inc. and Revolution Resources Corp.

Kinross invested $235,000 in White Bear for shares and warrants that if fully exercised will give it an 18.1-per-cent stake. The senior gold miner also invested $3-million in Revolution Resources for shares and warrants that if fully exercised will see it take a 13.1-per-cent stake.

Kinross grew significantly last year with its $7.1-billion merger with Red Back, whose two key projects were the Tasiast mine in Mauritania and the Chirano Gold Mine in Ghana.

In April, Kinross struck a $350-million deal to acquire full control of the Kupol gold mine in Russia from the Russian regional government – the Chukotka Autonomous Okrug.

The mine in the Chukotka region of far eastern Russia is expected to generate about 17 per cent of Kinross's gold output this year.

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