While its margins may be falling in the current gold environment, that apparently is not stopping Kinross Gold (TSX: K) from returning further cash to its shareholders in the form of buybacks. The firm last night indicated that the Toronto Stock Exchange has approved its request to amend its normal course issuer bid.
The amendment will see the company increase the potential share buyback conducted this year from 5% of the firms outstanding shares to that of 10%. In terms of shares, it increases the buyback program from 65.0 million to 114.0 million shares, under the program that is slated to run from August 3, 2022, through to August 2, 2023.
To date, the current program has seen the company repurchase 14.7 million shares through to September 27, an average price for which was not provided.
When first announced, the company indicated that it would commit to spending $300 million over the remainder of 2022 on the firms buyback program, while 75% of excess cash is to be used in 2023 and 2024, while maintaining its quarterly dividend. The changes follow discussions with Elliott Investment Management, an activist shareholder in the company.
“Our Board of Directors and management team believe that 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,” said CEO J Paul Robinson at the time of announcement.
The amended buyback program comes at a time when gold has fallen to trade in the area of $1,665, and amid the firm selling off both its Russian assets as a result of geopolitical unrest, as well as its assets in Ghana. The company also recorded a net loss last quarter of US$9.3 million.
Kinross Gold last traded at $4.93 on the TSX.
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As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.