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Kinross reports 2021 third-quarter results

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Kinross reports 2021 third-quarter results

 

 

 

 

 

Tasiast mill has re-started and Company on track for strong production growth over next two years

 

 

Kinross Gold Corporation (TSX: K) (NYSE: KGC) announced its results for the third-quarter ended September 30, 2021.

 

(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 pages 20 to 21. All dollar amounts are expressed in U.S. dollars, unless otherwise noted.)

 

2021 third-quarter highlights:

 

  Q3 2021 results First nine months
2021 results
2021 guidance
(+/- 5%)
Gold equivalent production1
(ounces)
483,060 1,579,928 2.1 million
Production cost of sales1, 2
($ per Au eq. oz.)
$870 $816 $830
All-in sustaining cost1, 2
($ per Au eq. oz.)
$1,225 $1,084 $1,110
Capital expenditures $231.0 million $640.6 million $900 million

 

  • Kinross is on track to meet its revised production guidance of 2.1 million Au eq. oz. (+/- 5%) and continues to expect production to increase in 2022 and 2023 to 2.7 million and 2.9 million Au eq. oz. (+/- 5%), respectively. The Company is also on track to meet its revised 2021 cost of sales and all-in sustaining cost guidance, and its capital expenditures guidance.
  • Attributable margins3 of $920 per Au eq. oz. sold in Q3 2021.
  • Adjusted operating cash flow2 of $190.5 million, operating cash flow of $269.9 million and free cash flow2 of $38.9 million in Q3 2021.
  • Reported net loss4 of $44.9 million, or $0.04 per share, and adjusted net earnings2 of $90.2 million, or $0.07 per share, in Q3 2021.
  • Cash and cash equivalents of $586.1 million, with total liquidity of approximately $2.1 billion, at September 30, 2021.
  • The Tasiast mill has re-started at costs lower than original estimates. The mill is on track to ramp up and reach throughput of 21,000 tonnes per day by the end of Q1 2022.
  • The La Coipa Restart and Tasiast 24k projects remain on schedule to be completed in mid-2022 and mid-2023, respectively.
  • The Udinsk pre-feasibility and Lobo-Marte feasibility project studies were completed and reaffirmed the Company’s views of both projects as attractive, high-quality assets that can significantly contribute to Kinross’ future production profile at low costs.
  • Kinross’ Board of Directors declared a quarterly dividend of $0.03 per common share.
  • As of November 10, 2021, Kinross had repurchased and cancelled 8.6 million of its common shares for $50.0 million as part of its share buyback program.

 

CEO Commentary:

  1. Paul Rollinson, President and CEO, made the following comments in relation to 2021 third-quarter results:

 

“During the third quarter, our portfolio of mines performed well and we are on track to meet our revised production and cost guidance for the year. We maintained our balance sheet strength while enhancing shareholder returns, as we initiated our share buyback program in addition to declaring our quarterly dividend.

 

“We are pleased to announce that the Tasiast mill has now re-started at costs below original estimates and is ramping back up. We expect that, in December, the mill will achieve sustained throughput levels comparable to the first half of the year. The mill is also on track to reach 21,000 tonnes per day throughput by the end of Q1 2022.

 

“Our development projects made good progress during the quarter, with La Coipa on track to start production in mid-2022 and Tasiast 24k on schedule to be completed in mid-2023. We also completed studies for our Udinsk project in Russia and Lobo-Marte project in Chile which reaffirmed our views of both projects’ strong potential to be significant value generators as large, low cost producers with attractive returns.

 

“Kinross remains on track to grow its production to 2.7 million ounces next year, and then to 2.9 million ounces in 2023, and is in excellent position to continue delivering value to its shareholders.”

 

Financial results

 

Summary of financial and operating results

 

      Three months ended     Nine months ended  
      September 30,     September 30,  
(unaudited, in millions of U.S. dollars, except ounces, per share amounts, and per ounce amounts)     2021     2020     2021     2020  
Operating Highlights                           
Total gold equivalent ounces(a)                          
Produced(c)     486,819     607,744     1,591,939     1,755,363  
Sold(c)     481,959     593,218     1,586,028     1,738,379  
                           
Attributable gold equivalent ounces(a)                           
Produced(c)     483,060     603,312     1,579,928     1,742,616  
Sold(c)     478,459     588,559     1,574,362     1,725,778  
                           
Financial Highlights                           
Metal sales   $ 862.5   $ 1,131.3   $ 2,849.9   $ 3,018.3  
Production cost of sales   $ 421.0   $ 439.4   $ 1,300.9   $ 1,289.2  
Depreciation, depletion and amortization   $ 208.8   $ 204.8   $ 641.6   $ 608.3  
Reversal of impairment charge   $ –    $   $ –    $ 48.3  
Operating earnings   $ 72.9   $ 393.4   $ 509.1   $ 907.1  
Net (loss) earnings attributable to common shareholders   $ (44.9 ) $ 240.7   $ 223.9   $ 559.1  
Basic (loss) earnings per share attributable to common shareholders   $ (0.04 ) $ 0.19   $ 0.18   $ 0.44  
Diluted (loss) earnings per share attributable to common shareholders   $ (0.04 ) $ 0.19   $ 0.18   $ 0.44  
Adjusted net earnings attributable to common shareholders(b)   $ 90.2   $ 310.2   $ 439.5   $ 631.7  
Adjusted net earnings per share(b)   $ 0.07   $ 0.25   $ 0.35   $ 0.50  
Net cash flow provided from operating activities   $ 269.9   $ 544.1   $ 937.9   $ 1,276.5  
Adjusted operating cash flow(b)   $ 190.5   $ 549.6   $ 953.9   $ 1,385.1  
Capital expenditures(d)    $ 231.0   $ 212.1   $ 640.6   $ 617.8  
Free cash flow(b)   $ 38.9   $ 332.0   $ 297.3   $ 658.7  
Average realized gold price per ounce(b)   $ 1,790   $ 1,908   $ 1,797   $ 1,736  
Consolidated production cost of sales per equivalent ounce(c) sold(b)   $ 874   $ 741   $ 820   $ 742  
Attributable(a) production cost of sales per equivalent ounce(c) sold(b)   $ 870   $ 737   $ 816   $ 738  
Attributable(a) production cost of sales per ounce sold on a by-product basis(b)   $ 836   $ 707   $ 787   $ 717  
Attributable(a) all-in sustaining cost per ounce sold on a by-product basis(b)   $ 1,205   $ 934   $ 1,062   $ 962  
Attributable(a) all-in sustaining cost per equivalent ounce(c) sold(b)   $ 1,225   $ 958   $ 1,084   $ 978  
Attributable(a) all-in cost per ounce sold on a by-product basis(b)   $ 1,543   $ 1,226   $ 1,388   $ 1,226  
Attributable(a) all-in cost per equivalent ounce(c) sold(b)   $ 1,552   $ 1,243   $ 1,400   $ 1,237  

 

(a) “Total” includes 100% of Chirano production. “Attributable” includes Kinross’ share of Chirano (90%) production and costs, and Manh Choh (70%) costs.
(b) The definition and reconciliation of these non-GAAP financial measures is included on pages 13 to 19.
(c) “Gold equivalent ounces” include silver ounces produced and sold converted to a gold equivalent based on a ratio of the average spot market prices for the commodities for each period. The ratio for the third quarter of 2021 was 73.45:1 (third quarter of 2020 – 78.68:1). The ratio for the first nine months of 2021 was 69.90:1 (first nine months of 2020 – 90.15:1).
(d) “Capital expenditures” is as reported as “Additions to property, plant and equipment” on the interim condensed consolidated statement of cash flows.

 

 

The following operating and financial results are based on 2021 third-quarter gold equivalent production. Production and cost measures are on an attributable basis:

 

Production1: Kinross produced 483,060 Au eq. oz. in Q3 2021, compared with 603,312 Au eq. oz. in Q3 2020, primarily due to lower production at Tasiast as a result of the suspension of milling operations after the mill fire in June 2021.

 

Average realized gold price2: The average realized gold price decreased 6% to $1,790 per ounce compared with $1,908 per ounce for Q3 2020.

 

Revenue: Revenue was $862.5 million in Q3 2021, a decrease compared with $1,131.3 million in Q3 2020, mainly due to a decrease in gold equivalent ounces sold primarily as a result of lower production, and lower average realized gold price.

 

Production cost of sales12: Production cost of sales per Au eq. oz. was $870 in Q3 2021, compared with $737 per Au eq. oz. in Q3 2020, mainly due to higher costs at Kupol and Round Mountain.

 

Production cost of sales per Au oz. on a by-product basis was $836 in Q3 2021, compared with $707 per Au oz. in Q3 2020, based on attributable gold sales of 461,113 and attributable silver sales of 1,274,141 ounces.

 

Margins3: Kinross’ attributable margin per Au eq. oz. was $920 for Q3 2021, which decreased compared with the Q3 2020 margin of $1,171 per Au eq. oz.

 

All-in sustaining cost1, 2: All-in sustaining cost per Au eq. oz. was $1,225 for Q3 2021, compared with $958 per Au eq. oz. in Q3 2020, primarily due to the decrease in ounces sold.

 

Operating cash flow: Adjusted operating cash flow2 was $190.5 million in Q3 2021, which decreased compared with $549.6 million in Q3 2020, mainly due to the decrease in revenue.

 

Net operating cash flow was $269.9 million for Q3 2021, compared with $544.1 million in Q3 2020, primarily due to the decrease in operating earnings.

 

Free cash flow2Free cash flow was $38.9 million in Q3 2021, compared with $332.0 million for Q3 2020, mainly due to lower net operating cash flow.

 

Earnings: Adjusted net earnings2 were $90.2 million, or $0.07 per share, for Q3 2021, compared with $310.2 million, or $0.25 per share, for Q3 2020, primarily due to the decrease in revenue.

 

The temporary suspension of milling operations at Tasiast was a main contributor to the year-over-year decrease in operating earnings, resulting in a reported net loss4 of $44.9 million, or $0.04 per share, for Q3 2021, compared with reported net earnings of $240.7 million, or $0.19 per share, for Q3 2020.

 

Capital expenditures: Capital expenditures increased to $231.0 million in Q3 2021 compared to $212.1 million in Q3 2020, primarily due to increased expenditures for development activities at La Coipa, the feasibility study at Lobo-Marte, the pre-feasibility study at Udinsk, and an increase in capital stripping at Tasiast. These increases were partially offset by reduced capital stripping at Bald Mountain and Round Mountain.

 

Balance sheet strength

 

As of September 30, 2021, Kinross had cash and cash equivalents of $586.1 million, compared with $675.6 million at June 30, 2021. The decrease during the quarter was mainly due to capital expenditures and the return of capital in the form of dividends and share buybacks, partially offset by operating cash flows.

 

The Company had additional available credit of $1,563.3 million as of September 30, 2021, for total liquidity of approximately $2.1 billion.

 

Share buyback update and dividend

 

Kinross continues to enhance shareholder returns through its share buyback and quarterly dividend programs.

 

On July 28, 2021, Kinross received approval from the Toronto Stock Exchange to establish a normal course issuer bid program to purchase up to 63,096,676 of its common shares (representing 5% of the Company’s issued and outstanding common shares as at July 27, 2021), during the period starting on August 3, 2021 and ending on August 2, 2022.

 

As of November 10, 2021, Kinross had repurchased and cancelled 8.6 million of its common shares for $50.0 million.

 

As part of its continuing quarterly dividend program, the Company’s Board of Directors declared a dividend of $0.03 per common share payable on December 15, 2021 to shareholders of record as of December 1, 2021.

 

Tasiast mill re-start update

 

Kinross has made excellent progress re-starting the Tasiast mill after the fire on June 15, 2021. The new trommel has been installed and mechanical testing at pre-incident throughput levels has been successful. The mill is now ramping up and is processing lower grade stockpile during this phase. In December, the mill is expected to achieve sustained throughput levels comparable to the first half of the year and the site is expected to produce approximately 15,000 Au eq. oz. during Q4 2021.

 

Mill re-start costs were approximately $20 million, which were below the previously lowered $35 million estimate disclosed in July 2021.

 

See the following link, or view below, a video of the mill re-start:

https://youtu.be/YGgkJnWP-cc

 

 

Operating results

 

The Company’s global operations continue to prioritize health and safety, while mitigating potential operational impacts related to the ongoing COVID-19 pandemic.

 

Mine-by-mine summaries for 2021 third-quarter operating results may be found on pages 8 and 12. Highlights include the following:

 

Americas

 

At Paracatu, production was impacted by temporary grade variability encountered during the quarter. Production decreased compared with Q2 2021 mainly due to timing of ounces processed through the mill, which was partially offset by higher mill throughput. Year-over-year, production was higher primarily due to an increase in throughput and recovery, partially offset by lower grades and timing of ounces processed. Cost of sales per ounce sold was higher quarter-over-quarter mainly due to lower production and increased year-over-year due to higher operating waste mined, power costs and inflationary pressures on consumables.

 

Fort Knox performed well during the quarter, with production increasing and cost of sales per ounce sold decreasing compared with Q2 2021. The quarter-over-quarter production increase was primarily due to more ounces recovered from the heap leach pads and higher mill grades and throughput, while cost of sales per ounce was down mainly as a result of lower operating waste mined and higher production. Both production and cost of sales per ounce were in line year-over-year.

 

At Bald Mountain, production was higher quarter-over-quarter as the operation mined through the carbonaceous material encountered in Q2 2021 and ounces recovered from the Vantage heap leach pad increased. Production also increased year-over-year due to higher recoveries from the site’s heap leach pads. Mining activities were completed in the Vantage pit in August 2021 and activities were focused in the North Area by the end of the quarter. Cost of sales per ounce sold decreased quarter-over-quarter due to higher production, which was partially offset by higher reagent and maintenance costs. Cost of sales per ounce sold increased year-over-year mainly due to higher operating waste mined and higher production taxes, which was partially offset by increased production.

 

At Round Mountain, production was lower compared with Q2 2021 and Q3 2020 mainly as a result of deferred mining activities in the north wall of the Phase W area after wall instability was detected in Q1 2021. The movement of waste material at the top of the pit to stabilize the wall was completed during the quarter and resulted in unplanned gold recoveries. Cost of sales per ounce sold was higher compared with the previous quarter mainly due to lower production, higher operating waste mined, and higher energy and reagent costs. Higher taxes also contributed to an increase in cost of sales per ounce compared with the previous year. The mine optimization program is on schedule to be completed in Q2 2022.

 

Russia

 

At Kupol and Dvoinoye, production was consistent with the previous quarter, and lower year-over-year mainly due to the planned processing of lower-grade stockpiles at Dvoinoye. Cost of sales per ounce sold increased quarter-over-quarter and year-over-year mainly due to higher mining costs.

 

West Africa

 

At Tasiast, production was lower quarter-over-quarter and year-over-year due to the suspension of milling as a result of the mill fire on June 15, 2021. Cost of sales per ounce sold was higher for both comparable periods due to lower production. The mill is now ramping up and is expected to return to sustained pre-incident throughput levels in December 2021.

At Chirano, production was slightly lower quarter-over-quarter mainly due to timing of ounces processed through the mill and lower year-over-year primarily due to lower grades, which were partially offset by higher throughput at the mill. Cost of sales per ounce sold increased quarter-over-quarter mainly due to lower production and increased year-over-year mainly due to higher contractor and power costs.

 

Development projects

 

Udinsk and Lobo-Marte studies

 

For information regarding the completed pre-feasibility study for the Udinsk project in Russia and feasibility study for the Lobo-Marte project in Chile, see the news release here: https://www.kinross.com/Kinross-issues-results-of-Udinsk-and-Lobo-Marte-project-studies

 

The results of the studies reaffirm the projects’ potential as significant open pit mines with large production profiles, low costs and attractive returns that are highly leveraged to the gold price. The projects can potentially add a combined 6.7 million Au oz. to Kinross’ future production profile and represent a total of 9.7 million Au oz. of the Company’s current probable mineral reserve estimates.

 

Both projects are located in jurisdictions where Kinross has extensive and successful operational experience. The projects have rigorous project plans in place that take into account local environmental considerations, and include robust local community outreach and engagement.

 

Tasiast 24k

 

The Tasiast 24k project is advancing well and is on schedule to reach throughput of 21,000 tonnes per day by the end of Q1 2022, and then 24,000 tonnes per day by mid-2023. The first phase of the project is 96% complete and planning for commissioning is well-advanced. The first tests of the power plant have been successful, commissioning is progressing well, and the plant is on schedule to be operational by year-end.

 

Alaska projects

 

At the 70%-owned Manh Choh project, feasibility study work is proceeding well, with community engagement and permitting activities also advancing. The study is on schedule to be completed by the end of 2022 and production is expected to commence in 2024.

 

Mining activities have now commenced at the Gil satellite pits, which are located approximately 13 kilometres east of Fort Knox. The first blast at the site occurred in September and first production is expected before year-end. The Company plans to haul Gil ore to the Fort Knox mill for processing using the mine’s existing road network.

 

La Coipa

 

The La Coipa Restart project continues to advance well and is on budget and on schedule to commence production in mid-2022, with pre-stripping progressing as planned. Plant refurbishments are approximately 60% complete and mine road construction is now approximately 85% complete. The Company continues to study potential mine life extensions by incorporating adjacent deposits into La Coipa’s mine plans and expects to provide an update in Q1 2022.

 

Company Guidance

The following section of the news release represents forward-looking information and users are cautioned that actual results may vary. Refer to the risks and assumptions contained in the Cautionary Statement on Forward-Looking Information on pages 20 to 21.

 

The Company is on track to meet its revised 2021 production guidance of 2.1 million Au eq. oz. (+/- 5%). Kinross continues to expect annual production to increase to 2.7 million Au eq. oz. (+/- 5%) in 2022 and 2.9 million Au eq. oz. (+/- 5%) in 2023.

 

The Company expects to meet its revised 2021 production cost of sales guidance of $830 per Au eq. oz. (+/- 5%) and all-in sustaining cost guidance of $1,110 per Au eq. oz. (+/- 5%).

 

Kinross remains on track to meet its 2021 capital expenditures guidance of $900 million (+/- 5%).

 

About Kinross Gold Corporation

 

Kinross is a Canadian-based senior gold mining company with mines and projects in the United States, Brazil, Russia, Mauritania, Chile and Ghana. Our focus is on delivering value based on the core principles of operational excellence, balance sheet strength, disciplined growth and responsible mining. Kinross maintains listings on the Toronto Stock Exchange and the New York Stock Exchange

 

Review of operations

 

                                                 
Three months ended September 30, (unaudited)     Gold equivalent ounces                                
  Produced   Sold   Production cost of
sales 
($millions)
    Production cost of
sales/equivalent ounce sold 
  2021   2020     2021     2020       2021     2020       2021     2020  
                                                 
Fort Knox 71,336   72,705     71,482     73,267     $ 67.7   $ 69.5     $ 947   $ 949  
Round Mountain 63,242   76,039     61,405     72,717       60.8     49.7       990     683  
Bald Mountain 55,559   49,339     52,874     37,492       48.8     32.1       923     856  
Paracatu 134,425   131,000     133,924     128,782       103.7     96.6       774     750  
Maricunga   3,132     655     4,442       0.5     1.0       763     225  
Americas Total  324,562   332,215     320,340     316,700       281.5     248.9       879     786  
                                                 
Kupol 120,822   128,144     121,798     126,637       81.8     69.2       672     546  
Russia Total  120,822   128,144     121,798     126,637       81.8     69.2       672     546  
                                                 
Tasiast 3,847   103,065     4,822     103,295       8.3     65.2       1,721     631  
Chirano (100%) 37,588   44,320     34,999     46,586       49.4     56.1       1,411     1,204  
West Africa Total 41,435   147,385     39,821     149,881       57.7     121.3       1,449     809  
                                                 
Operations Total 486,819   607,744     481,959     593,218       421.0     439.4       874     741  
Less Chirano non-controlling interest (10%) (3,759 ) (4,432 )   (3,500 )   (4,659 )     (4.9 )   (5.6 )              
Attributable Total 483,060   603,312     478,459     588,559     $ 416.1   $ 433.8     $ 870   $ 737  
                                                 
   

 

                                             
 
                                                 
Nine months ended September 30, (unaudited)     Gold equivalent ounces                                
  Produced   Sold   Production cost of
sales 
($millions)
    Production cost of
sales/equivalent ounce sold 
  2021   2020     2021     2020       2021     2020       2021     2020  
                                                 
Fort Knox 190,453   180,402     189,206     180,500     $ 193.1   $ 200.2     $ 1,021   $ 1,109  
Round Mountain 205,456   234,855     207,218     229,519       184.1     157.4       888     686  
Bald Mountain 143,854   139,795     142,507     129,462       127.4     110.5       894     854  
Paracatu 411,891   394,217     404,209     390,625       295.2     267.7       730     685  
Maricunga   3,132     1,966     6,912       1.4     2.6       712     376  
Americas Total  951,654   952,401     945,106     937,018       801.2     738.4       848     788  
                                                 
Kupol 364,929   380,012     365,075     379,432       231.0     225.4       633     594  
Russia Total  364,929   380,012     365,075     379,432       231.0     225.4       633     594  
                                                 
Tasiast 155,249   295,481     159,187     295,924       112.8     174.9       709     591  
Chirano (100%) 120,107   127,469     116,660     126,005       155.9     150.5       1,336     1,194  
West Africa Total 275,356   422,950     275,847     421,929       268.7     325.4       974     771  
                                                 
Operations Total 1,591,939   1,755,363     1,586,028     1,738,379       1,300.9     1,289.2       820     742  
Less Chirano non-controlling interest (10%) (12,011 ) (12,747 )   (11,666 )   (12,601 )     (15.6 )   (15.0 )              
Attributable Total 1,579,928   1,742,616     1,574,362     1,725,778     $ 1,285.3   $ 1,274.2     $ 816   $ 738  

 

 

 

Interim condensed consolidated balance sheets

 

(unaudited, expressed in millions of U.S. dollars, except share amounts)              
               
    As at  
    September 30,       December 31,  
    2021       2020  
               
Assets              
Current assets              
Cash and cash equivalents $ 586.1     $ 1,210.9  
Restricted cash   11.5       13.7  
Accounts receivable and other assets   202.1       122.3  
Current income tax recoverable   6.5       29.9  
Inventories   1,156.1       1,072.9  
    1,962.3       2,449.7  
Non-current assets              
Property, plant and equipment   7,620.4       7,653.5  
Goodwill   158.8       158.8  
Long-term investments   86.3       113.0  
Investment in joint venture   17.8       18.3  
Other long-term assets   559.7       537.2  
Deferred tax assets   5.9       2.7  
Total assets $ 10,411.2     $ 10,933.2  
               
Liabilities              
Current liabilities              
Accounts payable and accrued liabilities $ 482.4     $ 479.2  
Current income tax payable   142.3       114.5  
Current portion of long-term debt and credit facilities   30.0       499.7  
Current portion of provisions   85.0       63.8  
Other current liabilities   31.8       49.7  
Deferred payment obligation         141.5  
    771.5       1,348.4  
Non-current liabilities              
Long-term debt and credit facilities   1,398.7       1,424.2  
Provisions   855.5       861.1  
Long-term lease liabilities   39.6       46.3  
Other long-term liabilities   119.8       102.4  
Deferred tax liabilities   476.9       487.8  
Total liabilities $ 3,662.0     $ 4,270.2  
               
Equity              
Common shareholders’ equity              
Common share capital $ 4,471.8     $ 4,473.7  
Contributed surplus   10,686.2       10,709.0  
Accumulated deficit   (8,452.1 )     (8,562.5 )
Accumulated other comprehensive income (loss)   (24.9 )     (23.7 )
Total common shareholders’ equity   6,681.0       6,596.5  
Non-controlling interests   68.2       66.5  
Total equity   6,749.2       6,663.0  
Total liabilities and equity $ 10,411.2     $ 10,933.2  
               
Common shares               
Authorized   Unlimited       Unlimited  
Issued and outstanding   1,256,648,138       1,258,320,461  
               

 

 

 

Interim condensed consolidated statements of operations

 

(unaudited, expressed in millions of U.S. dollars, except share and per share amounts)                    
    Three months ended     Nine months ended  
    September 30,     September 30,     September 30,     September 30,  
    2021     2020     2021     2020  
Revenue                        
Metal sales $ 862.5   $ 1,131.3   $ 2,849.9   $ 3,018.3  
                         
Cost of sales                        
Production cost of sales   421.0     439.4     1,300.9     1,289.2  
Depreciation, depletion and amortization   208.8     204.8     641.6     608.3  
Reversal of impairment charge               (48.3 )
Total cost of sales   629.8     644.2     1,942.5     1,849.2  
Gross profit   232.7     487.1     907.4     1,169.1  
Other operating expense   94.0     43.6     207.7     118.4  
Exploration and business development   36.6     24.8     96.0     61.8  
General and administrative   29.2     25.3     94.6     81.8  
Operating earnings   72.9     393.4     509.1     907.1  
Other income (expense) – net   3.6     (3.4 )   (9.0 )   5.2  
Finance income   1.7     0.8     5.2     3.8  
Finance expense   (19.4 )   (27.4 )   (58.7 )   (85.9 )
Earnings before tax   58.8     363.4     446.6     830.2  
Income tax expense – net   (104.7 )   (121.8 )   (224.9 )   (269.3 )
Net (loss) earnings  $ (45.9 ) $ 241.6   $ 221.7   $ 560.9  
Net (loss) earnings attributable to:                        
Non-controlling interests $ (1.0 ) $ 0.9   $ (2.2 ) $ 1.8  
Common shareholders $ (44.9 ) $ 240.7   $ 223.9   $ 559.1  
                         
(Loss) earnings per share attributable to common shareholders                        
Basic $ (0.04 ) $ 0.19   $ 0.18   $ 0.44  
Diluted $ (0.04 ) $ 0.19   $ 0.18   $ 0.44  
                         
Weighted average number of common shares outstanding
(millions)
                       
Basic   1,261.2     1,258.1     1,260.6     1,256.8  
Diluted   1,261.2     1,269.0     1,269.2     1,267.6  

 

 

 

Interim condensed consolidated statements of cash flows

 

(unaudited, expressed in millions of U.S. dollars)                        
    Three months ended     Nine months ended  
    September 30,     September 30,     September 30,     September 30,  
    2021     2020     2021     2020  
Net inflow (outflow) of cash related to the following activities:                        
Operating:                        
Net (loss) earnings $ (45.9 ) $ 241.6   $ 221.7   $ 560.9  
Adjustments to reconcile net (loss) earnings to net cash provided from operating activities:                        
Depreciation, depletion and amortization   208.8     204.8     641.6     608.3  
Reversal of impairment charge               (48.3 )
Share-based compensation expense   2.4     3.1     8.4     10.4  
Finance expense   19.4     27.4     58.7     85.9  
Deferred tax (recovery) expense   (6.8 )   63.4     (23.6 )   175.9  
Foreign exchange (gains) losses and other   12.6     9.3     47.1     (8.0 )
Changes in operating assets and liabilities:                        
Accounts receivable and other assets   (5.1 )   (40.9 )   (29.4 )   (168.6 )
Inventories   (10.4 )   (13.0 )   (18.1 )   26.3  
Accounts payable and accrued liabilities   120.4     78.4     224.3     190.6  
Cash flow provided from operating activities   295.4     574.1     1,130.7     1,433.4  
Income taxes paid   (25.5 )   (30.0 )   (192.8 )   (156.9 )
Net cash flow provided from operating activities   269.9     544.1     937.9     1,276.5  
Investing:                        
Additions to property, plant and equipment   (231.0 )   (212.1 )   (640.6 )   (617.8 )
Interest paid capitalized to property, plant and equipment   (14.8 )   (16.9 )   (46.5 )   (43.0 )
Acquisitions       (122.5 )   (141.5 )   (250.8 )
Net (additions to) proceeds from the sale of long-term investments and other assets   (12.4 )   2.4     (28.9 )   (0.9 )
Net proceeds from the sale of property, plant and equipment   0.4     1.1     1.0     3.3  
Decrease (increase) in restricted cash – net   0.5     0.2     2.2     (22.9 )
Interest received and other – net   (1.7 )   0.7     (0.3 )   2.4  
Net cash flow used in investing activities   (259.0 )   (347.1 )   (854.6 )   (929.7 )
Financing:                        
Proceeds from drawdown of debt               950.0  
Repayment of debt       (750.0 )   (500.0 )   (850.0 )
Interest paid   (20.0 )   (34.1 )   (46.9 )   (63.1 )
Payment of lease liabilities   (8.5 )   (4.0 )   (24.1 )   (13.5 )
Dividends paid to common shareholders   (37.8 )       (113.5 )    
Repurchase and cancellation of shares   (31.8 )       (31.8 )    
Other – net   (1.0 )   1.0     7.9     (3.6 )
Net cash flow (used in) provided from financing activities   (99.1 )   (787.1 )   (708.4 )   19.8  
Effect of exchange rate changes on cash and cash equivalents   (1.3 )   (3.5 )   0.3     (8.2 )
(Decrease) increase in cash and cash equivalents   (89.5 )   (593.6 )   (624.8 )   358.4  
Cash and cash equivalents, beginning of period   675.6     1,527.1     1,210.9     575.1  
Cash and cash equivalents, end of period $ 586.1   $ 933.5   $ 586.1   $ 933.5  

 

 

 

 

 Operating Summary                                    
  Mine Period Ownership Tonnes Ore
Mined
 (a)
Ore
Processed
(Milled) 
(a) 
Ore
Processed
(Heap Leach) 
(a)
 Grade (Mill)   Grade (Heap Leach)  Recovery (b)(h) Gold Eq Production (e) Gold Eq Sales (e)   Production
cost of
sales
  Production
cost of
sales/oz
  Cap Ex (g)   DD&A
      (%) (‘000 tonnes) (‘000 tonnes) (‘000 tonnes) (g/t) (g/t) (%) (ounces) (ounces)   ($ millions)   ($/ounce)   ($ millions)   ($ millions)
Americas Fort Knox Q3 2021 100 8,024 2,221 6,395 0.77 0.20 82% 71,336 71,482 $ 67.7 $ 947 $ 37.4 $ 29.7
Q2 2021 100 9,560 1,939 7,864 0.70 0.22 81% 63,302 62,163 $ 67.7 $ 1,089 $ 18.7 $ 26.7
Q1 2021 100 8,174 1,751 7,396 0.57 0.20 80% 55,815 55,561 $ 57.7 $ 1,038 $ 25.4 $ 22.5
Q4 2020 100 8,456 2,583 7,021 0.61 0.20 80% 57,523 57,849 $ 51.1 $ 883 $ 46.0 $ 23.2
Q3 2020 100 7,202 2,664 5,497 0.67 0.19 83% 72,705 73,267 $ 69.5 $ 949 $ 39.7 $ 27.9
Round Mountain Q3 2021 100 1,531 915 4,442 0.63 0.29 76% 63,242 61,405 $ 60.8 $ 990 $ 23.7 $ 16.3
Q2 2021 100 2,551 1,133 2,552 0.54 0.38 76% 67,928 71,935 $ 60.2 $ 837 $ 20.2 $ 17.4
Q1 2021 100 3,843 976 4,019 0.70 0.46 81% 74,286 73,878 $ 63.1 $ 854 $ 31.3 $ 17.0
Q4 2020 100 6,542 988 6,315 0.92 0.50 83% 89,422 89,709 $ 62.2 $ 693 $ 41.2 $ 15.2
Q3 2020 100 6,085 972 5,884 0.79 0.39 83% 76,039 72,717 $ 49.7 $ 683 $ 39.2 $ 11.6
Bald Mountain Q3 2021 100 5,941 5,941 0.46 nm 55,559 52,874 $ 48.8 $ 923 $ 7.7 $ 59.4
Q2 2021 100 5,875 5,875 0.57 nm 36,887 41,383 $ 41.6 $ 1,005 $ 5.2 $ 39.1
Q1 2021 100 2,025 2,025 0.48 nm 51,408 48,250 $ 37.0 $ 767 $ 8.9 $ 40.2
Q4 2020 100 6,076 6,076 0.42 nm 51,487 57,087 $ 45.4 $ 795 $ 19.3 $ 44.3
Q3 2020 100 4,922 4,922 0.56 nm 49,339 37,492 $ 32.1 $ 856 $ 23.4 $ 27.1
Paracatu Q3 2021 100 14,107 15,085 0.37 76% 134,425 133,924 $ 103.7 $ 774 $ 30.0 $ 44.5
Q2 2021 100 12,624 14,138 0.37 76% 150,919 143,474 $ 108.7 $ 758 $ 27.5 $ 50.7
Q1 2021 100 12,612 15,372 0.38 75% 126,547 126,811 $ 82.8 $ 653 $ 20.8 $ 37.7
Q4 2020 100 12,611 12,655 0.51 77% 148,218 150,881 $ 91.2 $ 604 $ 61.6 $ 58.2
Q3 2020 100 12,468 13,673 0.38 74% 131,000 128,782 $ 96.6 $ 750 $ 27.2 $ 42.4
Maricunga Q3 2021 100 nm 655 $ 0.5 $ 763 $ $ 0.3
Q2 2021 100 nm 580 $ 0.4 $ 690 $ $ 0.1
Q1 2021 100 nm 731 $ 0.5 $ 684 $ $ 0.1
Q4 2020 100 nm 414 2,035 $ 1.1 $ 541 $ $ 0.1
Q3 2020 100 nm 3,132 4,442 $ 1.0 $ 225 $ $ 0.2
Russia Kupol (c)(d)(f) Q3 2021 100 316 425 8.29 96% 120,822 121,798 $ 81.8 $ 672 $ 5.4 $ 18.3
Q2 2021 100 319 424 8.43 95% 121,855 121,124 $ 74.5 $ 615 $ 5.5 $ 16.9
Q1 2021 100 312 418 8.71 94% 122,252 122,153 $ 74.7 $ 612 $ 6.8 $ 18.2
Q4 2020 100 293 432 9.24 95% 130,731 131,541 $ 79.1 $ 601 $ 15.1 $ 31.0
Q3 2020 100 365 430 8.99 95% 128,144 126,637 $ 69.2 $ 546 $ 6.1 $ 27.0
West Africa Tasiast Q3 2021 100 822 0% 3,847 4,822 $ 8.3 $ 1,721 $ 68.1 $ 21.3
Q2 2021 100 818 1,161 1.67 95% 62,438 70,695 $ 53.2 $ 753 $ 70.2 $ 54.2
Q1 2021 100 843 1,504 1.85 96% 88,964 83,670 $ 51.3 $ 613 $ 68.6 $ 48.3
Q4 2020 100 1,206 1,470 2.48 94% 111,028 107,865 $ 60.8 $ 564 $ 65.0 $ 46.5
Q3 2020 100 1,338 1,244 2.78 94% 103,065 103,295 $ 65.2 $ 631 $ 50.0 $ 50.2
Chirano – 100%  Q3 2021 100 802 881 1.54 87% 37,588 34,999 $ 49.4 $ 1,411 $ 9.3 $ 17.0
Q2 2021 100 933 862 1.54 88% 38,625 40,517 $ 53.7 $ 1,325 $ 12.8 $ 19.0
Q1 2021 100 735 821 1.81 88% 43,894 41,144 $ 52.8 $ 1,283 $ 10.1 $ 21.2
Q4 2020 100 915 801 1.75 88% 39,121 40,202 $ 45.6 $ 1,134 $ 11.3 $ 13.1
Q3 2020 100 768 815 1.87 88% 44,320 46,586 $ 56.1 $ 1,204 $ 5.0 $ 16.1
Chirano – 90% Q3 2021 90 802 881 1.54 87% 33,829 31,499 $ 44.5 $ 1,411 $ 8.4 $ 15.3
Q2 2021 90 933 862 1.54 88% 34,762 36,465 $ 48.3 $ 1,325 $ 11.5 $ 17.1
Q1 2021 90 735 821 1.81 88% 39,505 37,030 $ 47.5 $ 1,283 $ 9.1 $ 19.1
Q4 2020 90 915 801 1.75 88% 35,209 36,182 $ 41.0 $ 1,134 $ 10.2 $ 11.8
Q3 2020 90 768 815 1.87 88% 39,888 41,927 $ 50.5 $ 1,204 $ 4.5 $ 14.5

 

(a) Tonnes of ore mined and processed represent 100% Kinross for all periods presented.
(b) Due to the nature of heap leach operations, recovery rates at Maricunga and Bald Mountain cannot be accurately measured on a quarterly basis. Recovery rates at Fort Knox, Round Mountain and Tasiast represent mill recovery only.
(c) The Kupol segment includes the Kupol and Dvoinoye mines. Mining activities were completed at Dvoinoye in the fourth quarter of 2020.
(d) Kupol silver grade and recovery were as follows: Q3 2021: 72.71 g/t, 87%; Q2 2021: 77.19 g/t, 85%; Q1 2021: 69.95 g/t, 83%; Q4 2020: 65.05 g/t, 84%; Q3 2020: 74.19 g/t, 88%.
(e) Gold equivalent ounces include silver ounces produced and sold converted to a gold equivalent based on the ratio of the average spot market prices for the commodities for each period. The ratios for the quarters presented are as follows: Q3 2021: 73.45:1; Q2 2021: 68.05:1; Q1 2021: 68.33:1; Q4 2020: 77.02:1; Q3 2020: 78.68:1.
(f) Dvoinoye tonnes of ore processed and grade were as follows: Q3 2021: 111,060, 6.21 g/t; Q2 2021: 103,607, 7.33 g/t; Q1 2021: 109,559, 6.56 g/t; Q4 2020: 115,998, 9.25 g/t; Q3 2020: 115,054, 9.44 g/t.
(g) “Capital expenditures” is as reported as “Additions to property, plant and equipment” on the interim condensed consolidated statement of cash flows.
(h) “nm” means not meaningful.

 

Posted November 11, 2021

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