Impelled by issues relating to the Russia-Ukraine war, Kinross divested its Russian assets, early in the quarter, and its Chirano mine sales later in April 2022, albeit still managed to stay within the range of its production target for Q1 2022.

The company reported attributable production for the three months— excluding assets going through the divestment process— of 409,857 ounces of gold-equivalent, following which it maintained its production guidance of 2.15 million ounces of gold.

This means Kinross would have to scale up production from its remaining mines, a plan which it expects to materials in the second half of the year, largely driven by increased production at Paracatu, Tasiast and La Coipa. Kinross set production guidance for 2023 and 2024 at 2.1 million and 2.3 million ounces of gold equivalent respectively.

With such a good turn in Kinross’ performance, the company’s CEO, J. Paul Rollinson indicated that “we are excited about the future for Kinross which includes a production profile that averages two million ounces a year to the end of the decade,” which are the Paracatu and Tasiast assets. The two assets account for more than half of the company’s production, and a world-class development project in Canada.

“With these pending divestments, and the close of the acquisition of Great Bear Resources, our overall portfolio has been re-balanced, with approximately 70% of our production now expected to be generated by our mines in the Americas, CEO, Paul Rollinson, said.

“We have maintained our guidance for our pro-forma portfolio, with a substantial production outlook of 2.15 million gold ounces in 2022, which is expected to grow to 2.3 million gold ounces in 2023. Going forward, we will prioritize balance sheet strength while also returning capital to our shareholders through dividends and our share buyback program.”
J. Paul Rollinson

Kinross’ Cost Rises

Kinross’ Q1 2022 attributable production cost of sales was $1,000 per ounce of gold equivalent and 2022 guidance was maintained at $830 per ounce of gold equivalent. Attributable all-in sustaining cost from continued operations was $1,245 in Q1 2022, compared with $1,051 in Q1 2021.

The company’s revenue in the first quarter from continuing operations was $768.0 million, in line with $768.7 million during Q1 2021. The company realized free cash flow from continuing operations, reflecting a net outflow of $1.1 million in Q1 2022, compared with a net outflow of $46.5 million for Q1 2021. Adjusted net earnings from continuing operations were 70.6 million, or $0.06 per share for Q1 2022, compared with $102.4 million, or $0.08 per share, for Q1 2021.

Regarding its discontinued Russian operations, Kinross reported net loss of $606.1 million in Q1 2022, which includes “an impairment charge of $671.0 million related to the re-measurement of the Russian operations to fair value less costs to sell.”

With particular consideration to its divested Ghana asset, Kinross registered 34,929 ounces of gold equivalent in Q1 2022, down from 43,894 ounces of gold equivalent, representing an output decline of 25.67%, owing to lower grades from underground mining.

In terms of meeting sustainability standards, Kinross ranked well among peers in major ESG rankings and ratings and maintained its top-tier governance record. The Company increased its S&P Global score, moving to the 94^th percentile for 2021, the highest ever ranking for Kinross, and maintained its “A” position with MSCI.

“We continued to deliver on our responsible mining goals, ranked well among our peers in major ESG ratings, and provided significant economic benefits to the host countries and communities in which we do business. We are committed to continuously improving our ESG performance, as indicated by our commitment to reduce greenhouse gas emission intensity by 30% by 2030.”
J. Paul Rollinson