Kinross Gold earns US$195.7 million in Q2 2020

Golden mine Kupol, Kinross Gold. In several minutes the golden streamlet will harden in heavy ingots of gold, and this will be the end of the gold-mining process.

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Kinross Gold Corp. [K-TSX; KGC-NYSE] reported production and financial results for the second quarter ended June 30, 2020. All dollar amounts are US$, unless otherwise noted.

Production was 571,978 attributable gold equivalent ounces (AuEq. oz.) and sales totalled 584,477 AuEq. oz. All Kinross mines continued production during the quarter, as the company’s comprehensive COVID-19 response plans mitigated operational risk and continued to help protect the health and safety of employees and host communities.

Kinross’ three largest producing mines – Paracatu, Kupol and Tasiast – delivered 63% of total production and were the lowest cost mines in the portfolio, with an average cost of sales of $596 per AuEq. oz.

Reported net earnings and adjusted net earnings both more than doubled to $195.7 million, or $0.16 per share, and $194.0 million, or $0.15 per share, respectively, compared with Q2 2019.

Operating cash flow of $432.8 million and adjusted operating cash flow of $416.9 million, a 30% and 45% increase, respectively, compared with Q2 2019.

Production cost of sales of $725 per AuEq. oz. and all-in sustaining cost of $984 per AuEq. oz. sold, both of which are within the company’s original annual 2020 guidance range.

Attributable margin per AuEq. oz. sold increased 53% to $987 per AuEq. oz. compared with Q2 2019, outpacing the 31% increase in average realized gold price to $1,712 per Au oz. compared with Q2 2019.

Cash and cash equivalents were $1,527.1 million and total liquidity of $2.3 billion at June 30, 2020, as both improved quarter-over-quarter. The company also further improved its debt metrics, including its net debt to EBITDA ratio, and has no debt maturities until September 2021.

While the company withdrew its full-year guidance as a precautionary measure given the global uncertainties caused by the pandemic, production, cost of sales per ounce, all-in sustaining cost per ounce and capital expenditures are on track to meet Kinross’ original 2020 guidance.

On June 15, 2020, Kinross announced an agreement in principle with the Government of Mauritania to enhance the parties’ partnership. On July 15, 2020, Kinross announced the results of the Lobo-Marte Project pre-feasibility study in Chile, which added 6.4 million gold ounces to its mineral reserve estimates and increased its reserve life index by approximately 2.5 years.

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