Kinross Gold Corp President and Chief Executive Officer Tye Burt speaks during the annual general meeting of shareholders in Toronto May 5, 2010.Mike Cassese/Reuters
Kinross Gold Corp. says updated drill results from one of its newly purchased mines in Africa proves its risky move to buy Red Back Mining Inc. is paying off.
"It is all the things we believed it would be and then some," Kinross chief executive officer Tye Burt said in an interview on Wednesday.
He pointed to a scoping study for the expansion project at Tasiast, in Mauritania, considered the company's "crown jewel," which shows average annual production of approximately 1.5-million ounces for the first eight years, based on a 16-year life for the expanded project. That's up from previous estimates of about one million ounces.
The update came alongside a report of record quarterly and annual revenues amid rising gold prices.
However, Toronto-based Kinross said fourth-quarter profit fell compared with a year earlier, largely due to higher exploration spending.
Kinoss earned $210.3-million (U.S.) or 18 cents per diluted share for the quarter ended Dec. 31, down from $235.6-million or 34 cents per diluted share a year ago. Sales in the quarter totalled $920.4-million, up from $699-million.
Excluding one-time items, Kinross said its adjusted earnings were $144.7-million or 13 cents per share - down from $148.6-million, or 21 cents per share in the fourth quarter of 2009.
The average analyst estimate had been for a adjusted profit of 14 cents per share according to Thomson Reuters.
The average realized gold price was $1,333 per ounce, up from $1,094; Kinross produced 676,635 ounces, up from 613,858 ounces in the last three months of 2009.
The cost per gold-equivalent ounce was $551 for the quarter, up from $437 a year ago. Kinross attributed $13 of the increase to costs associated with its acquisition of Red Back.
Kinross has said it will aim to have a new mill at Tasiast up and running by late 2013, which is expected to increase the mine's processing capacity from 10,000 tonnes per day currently to 60,000 tonnes per day.
With files from The Canadian Press