During Q3 Kinross reduced corporate headcount costs by 23%. The company will close its Denver office. It also let go of 222 Tasiast employees in September. Kinross pegs the annual savings from the layoffs at about $30 million.
Kinross highlighted the following:
- Production: 680,679 gold equivalent ounces (Au eq. oz.), compared with 693,818 ounces in Q3 2014.
- All-in sustaining cost: $941 per Au eq. oz. sold, compared with $919 in Q3 2014. All-in sustaining cost per gold ounce (Au oz.) sold on a by-product basis was $936 in Q3 2015, compared with $911 in Q3 2014.
- Adjusted operating cash flow: $206.6 million, or $0.18 per share, compared with $324.1 million, or $0.28 per share, in Q3 2014.
- Adjusted net earnings/loss: Loss of $23.9 million, or $0.02 per share, compared with adjusted earnings of $70.1 million, or $0.06 per share, in Q3 2014.
- Reported net earnings/loss: Loss of $52.7 million, or $0.05 per share, compared with a loss of $4.3 million, or $0.00 per share, in Q3 2014.
- Balance sheet strength: Reduced net debt4 to $949.2 million, repaid the remaining balance on the Kupol loan and ended the quarter with cash and cash equivalents of $1,024.8 million.
- Outlook: Kinross expects to be within its updated 2015 guidance range for production (2.5-2.6 million Au eq. oz.), all-in sustaining cost ($975-$1,025 per Au eq. oz.) and cost of sales ($690-$730 per Au eq. oz.). The Company expects to be below its updated capital expenditure guidance ($650 million) and below its overhead guidance ($205 million), which excludes one-time restructuring charges.
- Tasiast expansion update: Kinross is completing early-stage engineering work on a potential two-phased expansion that would add incremental grinding capacity to Tasiast’s existing comminution circuit. A feasibility study of the initial Phase One expansion, which would increase mill throughput capacity from the current 8,000 t/d to 12,000 t/d, is expected to be completed in Q1 2016. Phase Two could further increase throughput capacity up to as much as 38,000 t/d.
- La Coipa pre-feasibility study (PFS) update: Results of the La Coipa PFS study estimate production of approximately 1.03 million Au eq. oz., average cost of sales per Au eq. oz. of $674 and average all-in cost per Au eq. oz.5 of $767. The project is expected to generate a 20% IRR at a gold price of $1,200/oz
