Kinross Gold Corporation (KGC) announced that it has completed the earlier announced sale of all of its interest in Aurelian Resources Inc. and the Fruta del Norte project in Ecuador to Fortress Minerals Corp., a member of the Lundin Group of Companies. The sale was completed for a consideration of $240 million, comprising $150 million in cash and $90 million in Fortress common shares.
On completion of the sale, Kinross received 26,156,250 common shares of Fortress, issued at a price of C$4.00 per share, resulting in the former owning about 25.8% of Fortress' outstanding shares. The sale was subject to certain approvals by the Government of Ecuador, which have been granted.
With the sale, Kinross can focus on its strategic priorities thereby strengthening its balance sheet. Also the company’s equity position in Fortress could provide it with an opportunity to gain from the project's development.
Kinross released its third-quarter 2014 results in November. The company posted adjusted earnings of $70.1 million or 6 cents per share in the quarter, up nearly 29% from adjusted earnings of $54.4 million or 5 cents per share in the year-ago quarter, aided by an increase in gold sales. Earnings per share surpassed the Zacks Consensus Estimate of 3 cents.
On a reported basis, Kinross posted net loss of $4.3 million, or a breakeven in the quarter, compared with net earnings of $46.9 million, or 4 cents per share posted in the prior-year quarter. Net loss in the third quarter of 2014 resulted from higher delayed non-cash income tax expense in Chile, partly offset by higher revenues.
Revenues increased roughly 8% year over year to $945.7 million in the reported quarter due to higher gold equivalent ounces sold from Russia. Sales came ahead of the Zacks Consensus Estimate of $840 million.
Kinross currently carries a Zacks Rank #3 (Hold).
Other stocks in the mining space worth considering include Banro Corporation (BAA), Lake Shore Gold Corp. (LSG) and MAG Silver Corp. (MVG), all carrying a Zacks Rank #2 (Buy).
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