Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Kinross Gold Corp. will buy back $300 million in shares following talks with Elliott Investment Management, which was previously not listed as a holder of the miner’s stock.
The Toronto-based company said Monday it will repurchase the shares over the remainder of this year and will allocate 75% of its excess cash for more buybacks in 2023 and 2024. Kinross said Paul Singer’s Elliott supports the “enhanced” buyback program, along with other shareholders.
Shares of Kinross surged as much as 8.3% in Toronto, the biggest intraday jump since mid January. The stock was up 6.5% to C$4.62 at 10:10 a.m.
“Management met with Elliott a number of times to discuss its views on capital allocation and value creation,” Chief Executive J. Paul Rollinson said in the statement. “This enhanced buyback program is affordable, enables us to sustain our dividend and is a responsible allocation of capital that does not compromise our balance sheet or our ability to fund our business and advance our impressive pipeline of growth projects.”
The announcement comes as the world’s gold producers converge this week at the Denver Gold Forum in Colorado, the largest conference for the industry. Elliott said in the statement that Kinross trades at a “significant” discount to its peers and to the value of its assets. Elliott said the new buyback plan will help close that gap.
(By Joe Deaux)
Comments