Kinross Gold Corporation
KGC
, post its disclosure on Mar 2, 2022, has been developing a transition plan to divest its Russian assets. It has now announced an update in relation to its business in the country.
Kinross has received a number of unsolicited proposals related to its Russian business. It is currently negotiating with a third-party mining company regarding a potential sale of 100% of its assets in the country. The approval of the Russian government will be required for any sale or change of control.
Kinross’ Russian subsidiaries are continuing to operate during the transition period as part of the exclusivity agreement and in order to properly maintain assets awaiting a change of control. Kinross will also continue to manage and reduce the environmental impacts of its operations. This includes supervision of monitoring systems and transporting industrial materials, which are not allowed to remain at the port in order to maintain safety and regulatory compliance, to the Kupol mine. Kinross will also continue to prioritize the well being of its more than 2,000 employees in Russia as it develops its transition plan.
While the transition plan is being finalized, the parent company will not benefit financially from the operations. The current activities will be financed through its Russian resources only, with no additional investment needed from the parent company.
Kinross plans to treat its Russian business as an asset held for sale from an accounting perspective until the completion of a change of control.
Shares of KGC have declined 13.7% in the past year against a 17% increase of the
industry
.
Image Source: Zacks Investment Research
The company’s attributable gold equivalent ounces produced in the fourth quarter of 2021 totaled 487,621, down 21.9% year over year. The downside was primarily due to lower production at Tasiast and Round Mountain.
The company, in its fourth-quarter earnings call, stated that it expects to produce 2.65 million (+/- 5%) gold equivalent ounces for 2022. KGC anticipates production cost of sales of $830 per gold equivalent ounce.
All-in sustaining cost per ounce for 2022 is projected at $1,130. Capital expenditures are predicted at around $1,050 million (+/- 5%) for this year.
In 2023 as well as 2024, the company expects capital expenditures to be $1 billion, in line with the 2022 level.
Kinross Gold Corporation Price and Consensus
Kinross Gold Corporation price-consensus-chart
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Kinross Gold Corporation Quote
Zacks Rank & Key Picks
Kinross currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the basic materials space are
The Mosaic Company
MOS
,
AdvanSix Inc.
ASIX
and
Allegheny Technologies Incorporated
ATI
.
Mosaic has a projected earnings growth rate of 125% for the current year. The Zacks Consensus Estimate for MOS’ current-year earnings has been revised 33.3% upward in the past 60 days.
Mosaic’s earnings beat the Zacks Consensus Estimate in three of the last four quarters while missing once. It delivered a trailing four-quarter earnings surprise of roughly 3.7%, on average. MOS has rallied around 103.9% in a year and currently sports a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here.
AdvanSix has a projected earnings growth rate of 64.8% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 58% upward in the past 60 days.
AdvanSix’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average surprise being 23.6%. ASIX has surged 96.2% in a year. The company sports a Zacks Rank #1.
Allegheny, currently sporting a Zacks Rank #1, has an expected earnings growth rate of 661.5% for the current year. The Zacks Consensus Estimate for ATI’s earnings for the current year has been revised 45.6% upward in the past 60 days.
Allegheny’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 127.2%. ATI has rallied around 25.8% over a year.
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