Kinross Reports Q3 Results, Announces Closure of Denver Office

Kinross Gold Corp. (TSX:K,NYSE:KGC) announced its results for the third quarter of 2015, commenting that it produced 680,679 gold equivalent ounces, down from 693,818 in the year-ago quarter.
The company also said that as part of its efforts to reduce costs, it has reduced corporate headcount costs by 23 percent, and will be shutting down its office in Denver. The headcount reduction is in addition to the 222 Tasiast employees cut in September.
Other highlights are as follows:

• Revenue: $809.4 million, compared with $945.7 million in Q3 2014.
• Production cost of sales(2) : $668 per Au eq. oz., compared with $698 in Q3 2014.
• All-in sustaining cost(2): $941 per Au eq. oz. sold, compared with $919 in Q3 2014. All-in sustaining cost per gold ounce (Au oz.) sold on a by-product basis was $936 in Q3 2015, compared with $911 in Q3 2014.
• Adjusted operating cash flow(2): $206.6 million, or $0.18 per share, compared with $324.1 million, or $0.28 per share, in Q3 2014.
• Adjusted net earnings/loss(2)(3): Loss of $23.9 million, or $0.02 per share, compared with adjusted earnings of $70.1 million, or $0.06 per share, in Q3 2014.
• Reported net earnings/loss(3): Loss of $52.7 million, or $0.05 per share, compared with a loss of $4.3 million, or $0.00 per share, in Q3 2014.
• Balance sheet strength: Reduced net debt(4) to $949.2 million, repaid the remaining balance on the Kupol loan and ended the quarter with cash and cash equivalents of $1,024.8 million.
• Outlook: Kinross expects to be within its updated 2015 guidance range for production (2.5-2.6 million Au eq. oz.), all-in sustaining cost ($975-$1,025 per Au eq. oz.) and cost of sales ($690-$730 per Au eq. oz.). The Company expects to be below its updated capital expenditure guidance ($650 million) and below its overhead guidance ($205 million), which excludes one-time restructuring charges.

J. Paul Rollinson, CEO of Kinross, commented:

Kinross is keenly aware of the need to remain proactive in the current gold price environment and in recent months we have taken decisive action to reduce headcount at the corporate level, and at our Tasiast mine. The reductions are expected to result in a combined annualized savings of approximately $30 million. Driving down costs, preserving balance sheet strength and advancing growth opportunities will continue to be priorities going forward.
It is with these three priorities in mind that we continue to explore financially prudent alternatives to realizing Tasiast’s significant growth potential. We are encouraged by the early-stage engineering work completed to date on a potential two-phased expansion which would optimize the current operation in the near term while reducing the overall capital cost of a larger expansion. During the quarter, Kinross also completed a pre-feasibility study for La Coipa, and based on the promising results, plans to move forward with additional study work.

Click here to read the full Kinross Gold Corp. (TSX:K,NYSE:KGC) press release.