The Canadian mining company Kinross Gold Corporation (KGC) has installed and commissioned a third ball mill at its Paracatu project in Brazil, increasing the throughput capacity at the operation.
According to Kinross, the mill was started without cost or time overruns, and is currently operating at about 60% of the ore-feed rate capacity. It should ramp up to 100% in the third quarter of 2011.
The company added the third mill, and is planning a fourth, to help improve throughput at Paracatu as mining moves into harder sections of the ore body. The fourth ball mill is expected to start in the first half of 2012.
Kinross' South America region remains on target to produce an expected 1.0 million to 1.07 million gold equivalent ounces in 2011.
Kinross has ten operating mines in North and South America, Russia and Africa, after it bought Vancouver-based Red Back in September for $7.1-billion, adding the Tasiast mine in Mauritania and the Chirano operation in Ghana.
The company expects to produce between 2.6-million and 2.7-million ounces in 2011. By 2015, Kinross expects production to grow to 4.5-4.9 million ounces, as new projects start in 2013 and 2014. With new studies completed at Tasiast, FDN, Lobo-Marte, and Dvoinoye, Kinross is making significant and steady progress in advancing the projects that give the company the best growth profile among senior gold producers.
In May 2011, reported record adjusted net income of $180.3 million or $0.16 per share in the first quarter of 2011, above last year’s $99.7 million or $0.14 per share, outpacing the Zacks Consensus Estimate of $0.14.
GAAP net earnings were $255.5 million or $0.23 per share in the first quarter of 2011 compared with $181.3 million, or $0.26 per share in the prior-year quarter.
Quarterly revenues leaped 42% to $937.0 million, driven by strong performance at all operations, new production from West Africa, and a robust gold price contribution.
Gold production increased 18% year over year to 642,857 ounces in the first quarter of 2011 with an average realized gold price of $1,327 per ounce sold compared with $1,065 per ounce sold in the prior-year quarter.
The increase was mainly due to the addition of output from the West Africa operations. Production cost per gold equivalent ounce was $543 versus $456 in the prior-year quarter. Production costs per ounce were lower than expected, despite upward pressure on input costs.
Kinross margin per ounce sold was a record $784 during the quarter, up 29% year over year.
Kinross Gold Corporation, like other gold producers, Barrick Gold Corporation (ABX) and Newmont Gold Mining (NEM), benefits from rising gold prices. Currently, Kinross Gold has a short-term (1 to 3 months) Zacks #3 Rank (Hold) and a long-term Neutral recommendation.
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KINROSS GOLD (KGC): Free Stock Analysis Report
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