Kinross Gold (TSX: K) reported second quarter revenue of $2.24 billion, down from $2.41 billion in the first quarter as a lower average realized gold price offset a small increase in ounces sold.
Reported net earnings landed at $844.2 million, or $0.71 per share, essentially flat against the $843 million and $0.70 per share booked in Q1. Adjusted net earnings eased to $847.8 million from $854.1 million, holding at $0.71 per share on a reduced share count.
Operating cash flow was little changed at $1.15 billion. Attributable free cash flow fell to $726.8 million from $837.5 million, ending a run of four consecutive quarterly records, while capital expenditures climbed to $411 million from $283.2 million on ramping development work at Curlew, Round Mountain Phase X, Redbird and Great Bear.
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Cash and equivalents rose to $2.7 billion from $2.2 billion and net cash reached $1.9 billion, against long term debt of $738.8 million and no maturities until 2033. Total liquidity sat near $4.4 billion.
Kinross repurchased $230 million in stock during the quarter, representing 7.9 million shares, and declared a quarterly dividend of $0.04.
Attributable production of 492,326 gold equivalent ounces was flat sequentially and 4% below a year earlier. Paracatu remained the largest contributor at 157,526 ounces and Tasiast rose to 133,311, while Round Mountain slid to 19,789 ounces from 26,200 as the mine strips Phase S. Higher-grade ore from that phase is expected in the back half.
Production cost of sales improved to $1,352 per equivalent ounce sold from $1,397, though all in sustaining cost rose to $1,821 from $1,732 on heavier sustaining capital. A realized gold price of $4,483 per ounce, down from $4,873, pulled margins to $3,131 per ounce from $3,476 despite the lower unit cash costs.
First half output of 984,889 attributable ounces puts Kinross at roughly 49% of its 2.0 million ounce guidance midpoint, with half-year cost of sales of $1,358 per ounce sitting on top of the $1,360 target. All-in sustaining cost is the laggard, as the half-year figure of $1,777 runs above the $1,730 midpoint and the Q2 number clears the top of the 5% tolerance band. Attributable capital spending of $685.1 million is 46% of the $1.5 billion full-year forecast.
Separately, a refresh of Lobo-Marte economics pegs average annual output at roughly 350,000 gold ounces at about $1,000 per ounce in all-in sustaining cost, carrying a $4.3 billion net present value and 26% internal rate of return at $4,100 gold. The Chilean environmental assessment remains in review.
Kinross Gold last traded at $32.86 on the TSX.
