First quarter results for Kinross Gold Corporation (KGC) show Margins increase by 26%; revenue up 23%, Adjusted net earnings increase by 38%, the highlights are follows:
• Production(1) in the first quarter 2010 was 544,134 gold equivalent ounces, an increase of 3% over the same period last year. Consistent with previously stated guidance, the Company remains on track to produce approximately 2.2 million attributable gold equivalent ounces in 2010.
• Revenue for the quarter was $657.6 million, compared with $532.7 million in the first quarter of 2009, an increase of 23%. The average realized gold price for the quarter was $1,065 per ounce sold, compared with $897 per ounce sold in Q1 2009, an increase of 19%.
• Cost of sales per gold equivalent ounce(2) was $461 for Q1, an increase of 10% compared with Q1 2009. Cost of sales per gold ounce on a by-product basis was $417 in Q1. Cost of sales per gold equivalent ounce is expected to be approximately $460 - $490 for the full-year 2010, consistent with previously stated guidance.
• Kinross' attributable margin per ounce sold(3) was $604 in Q1, a year-over-year increase of 26%.
• Adjusted operating cash flow(4) in Q1 was $226.3 million, a 5% increase over Q1 2009. Adjusted operating cash flow4 per share in Q1 was $0.32 per share, consistent with the same period last year.
• Adjusted net earnings(4) were $97.4 million, or $0.14 per share, in Q1, compared with adjusted net earnings of $70.7 million, or $0.10 per share, for the same period last year, an increase of 38%. Reported net earnings were $110.6 million, or $0.16 per share in Q1, compared with reported net earnings of $76.5 million, or $0.11 per share, for Q1 2009.
• On April 26, 2010, Kinross announced that it had been successful in its bid to acquire control of Underworld Resources Inc. by way of a friendly acquisition. The Company now owns a total of 42,663,059 common shares of Underworld, representing approximately 81.6% of Underworld's common shares on a fully-diluted basis, and plans to acquire the balance during the third quarter.
• Pursuant to a private placement, Kinross has subscribed for 24 million common shares of Red Back Mining Inc. representing approximately 9.4% of Red Back's issued and outstanding common shares. The subscription price is CDN $25 per common share for an aggregate purchase price of CDN $600 million.
Tye Burt, President and CEO, made the following comments in relation to first quarter 2010 results:
"Kinross had a strong first quarter, with significant year-over-year increases in revenue, margins and adjusted net earnings. We are pleased with the progress being made at our Paracatu expansion plant, as its performance to date in 2010 continues to exceed plan.
"We continue to advance our organic growth projects at existing operations while making good progress at the major development projects. At Fruta del Norte in Ecuador, we have completed an 18,000 metre drilling program ahead of schedule, while at Lobo-Marte, we are advancing our drilling program and permitting activities.
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Not a lot to add to this news release other than so far so good, so we will watch and see what the market makes of it.
Kinross Gold Corporation trades on the TSX under the symbol of K, and on the NYSE under the symbol of KGC.
Have a good one.
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