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Kinross profit up on higher output, lower costs

People look on during the Kinross Gold annual general meeting for shareholders in Toronto, May 9, 2012.

Mark Blinch/REUTERS

Kinross Gold Corp. reported a 50-per-cent increase in its first-quarter profit compared with a year ago as production increased and costs fell.

The gold miner, which keeps its books in U.S. dollars, said Tuesday it earned $160.5-million (about $161.2-million Canadian) or 14 cents per share for the quarter ended March 31 compared with a profit of $105.7-million or nine cents per share a year ago.

Revenue was $1.06-billion, up from $1-billion.

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"Our continued focus on operational fundamentals contributed to solid results in the first quarter, as production was higher and cost of sales per ounce was lower than the same period last year," Kinross chief executive Paul Rollinson said in a statement.

"We are on target to meet our annual guidance for production and cost of sales at each of our regions, and company-wide."

Kinross produced 648,897 attributable gold equivalent ounces in the quarter and sold 645,252 attributable ounces. That compared with 604,247 attributable gold equivalent ounces produced a year ago and 621,680 attributable ounces sold in the first quarter of last year.

The cost per gold equivalent ounce of attributable production from continuing operations was $729, down from $738.

Last month, Kinross announced it was going ahead with a full feasibility study aimed at a $2.7-billion expansion of its Tasiast open pit gold mine in Mauritania.

Based on a pre-feasibility study, the company is now considering a 38,000-tonne per day mill at the mine, up from a 30,000-tonne facility under consideration earlier, it said.

The pre-feasibility study found that during the first five years of production, a 30,000 tonne-per-day mill would be expected to have average gold production of approximately 830,000 ounces per year, with average cash costs of about $500 per ounce, and average all-in sustaining costs of about $735 an ounce.

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