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Kinross Gold Corporation (TSE:K NYSE:KGC) on Wednesday announced third quarter results that came in ahead of expectations giving a boost to the share price of the Canadian miner.
In after hours trade in New York, the $5.7 billion company was trading 2.8% for the better, building on gains enjoyed ahead of the results.
Kinross produced 680,580 gold equivalent ounces during the quarter ended September, up slightly from the 672,173 ounces of output in Q3 2012.
With an average realized gold price of $1,331 per ounce compared with $1,649 per ounce last year, revenue came in much below last year’s tally: $876.3 million, compared with $1.1 billion although the top line number was better than the $760 million expected by analysts.
The Toronto-based company fell victim to rising costs in the industry with production cost of sales climbing to $740 per ounce, compared with $677 last year.
Measured on an all-in sustaining cost basis, the cost increases were more modest at $1,069 per ounce in the most recent quarter compared to $1,021 in 2012.
Earnings of $54.4 million or $0.05 per share was way off last year’s haul of $251.9 million, or $0.22 per share, but also beat estimates of only $0.02 a share.
The company also lifted its 2013 forecast guidance for production to 2.6 – 2.65 million ounces from 2.4 – 2.6 million ounces previously.
Kinross was also upbeat about reigning in costs going forward: The company expects to be at the lower end of both its production cost of sales guidance of $740 – $790 per ounce and its 2013 all-in sustaining cost forecast guidance of $1,100 – $1,200 per ounce.
Kinross has identified some 50 million in additional capital savings for the year on top of the $150 million in savings previously announced, and now expects its 2013 capital expenditures to be approximately $1.4 billion.
Next year the company will cut capex further, targeting outlays of $800 – $900 million.
The massive Tasiast project in Mauritania, the reason behind much of Kinross’ $2.4 billion in asset writedowns in the previous quarter results, easibility study remains on schedule for expected completion in Q1 2014 the company said.
Commercial production at the Dvoinoye mine in Russia started in October and is expected to contribute 235,000-300,000 ounces to the company’s annual output.
