| Is There an Upside on Costs for Kinross’s Russia Operations? | |
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Kinross is Looking Forward to New Mine Projects after 3Q15 (Continued from Prior Part) Lowest-cost mines
Kinross Gold’s (KGC) mines in Russia are among the lowest cost and the highest grade in its entire portfolio. The Kupol deposit is located in the Chukotka Autonomous Okrug of the Far East region of the Russian Federation. The Dvoinoye mine is located 100 kilometers from the Kupol mine. Dvoinoye is Kinross’s newest and lowest-cost gold and silver (SLV) mine. Commercial production at Dvoinoye began on October 1, 2013.
Continued strong performance
Kinross Gold’s Russia operations showed continued strong performance in 3Q15. Its gold production increased by 5% year-over-year (or YoY) to 190,000 ounces. This resulted partly from higher ore grades, which were 3% higher in 3Q15. This is according to the plan of mining higher grade material from the Dvoinoye mine.
The gold shipments were higher than gold production due to the timing of shipments. For the nine months ending September 30, however, the gold production decreased slightly YoY, mainly due to the less favorable gold equivalent ratio.
Lower unit costs
The production cost of sales declined by 5% YoY in 3Q15. The production cost of $469 per ounce was the lowest since Dvoinoye operations commenced in 2013. This improvement in costs is due to higher grades from Dvoinoye, decreased labor costs, favorable exchange rates, and lower reagent and diesel costs. Any further decline in the Russian ruble could lead to still lower costs going forward from this division.
However, this strong growth trend in production and reduction in costs is not an experience unique to Kinross in 3Q15. Kinross’s peers, such as Barrick Gold Corporation (ABX), Goldcorp (GG), Newmont Mining (NEM), and Agnico-Eagle Mines (AEM), also reported strong production and lower costs in their latest quarterly reports. Newmont Mining (NEM) makes up 6.1% of the holdings of the Market Vectors Gold Miners ETF (GDX).
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Kinross Gold Corporation
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PRODUCER |
CODE : K.TO |
ISIN : CA4969024047 |
CUSIP : 496902404 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Kinross Gold is a gold producing company based in Canada. Kinross Gold produces gold, silver in Brazil, in Canada, in Chile, in Ghana, in Mauritania, in Russia and in USA, develops copper, gold and silver in Chile, and holds various exploration projects in Chile, in Ecuador and in Russia. Its main assets in production are ROUND MOUNTAIN in USA, MORRO DO OURO, CRIXÁS and PARACATU in Brazil, REFUGIO MINE (VERDE AND PANCHO), FORT KNOX, MARICUNGA and LA COIPA in Chile, PORCUPINE and MUSSELWHITE in Canada, CHIRANO in Ghana, TASIAST in Mauritania and KUPOL in Russia, its main assets in development are KETTLE RIVER, GOLD HILL and CERRO CASALE in Chile and its main exploration properties are RUSSIAN MOUNTAIN, HORN MOUNTAIN and KUBAKA MINE - BIRKACHAN in Russia, AHAFO NORTH, BIBIANI NORTH, BOLE, BOLE - BOLGATANGA, AKYEM, GIL, ENCHI and GOLDBANKS - KINROSS in Ghana, HAMMOND REEF in Canada, FRUTA DEL NORTE in Ecuador and LOBO-MARTE in Chile. Kinross Gold is listed in Canada, in Germany and in United States of America. Its market capitalisation is CA$ 11.5 billions as of today (US$ 8.4 billions, € 7.8 billions). Its stock quote reached its lowest recent point on October 27, 2000 at CA$ 1.43, and its highest recent level on December 13, 2002 at CA$ 9.99. Kinross Gold has 1 246 749 952 shares outstanding. |