Kinross Gold Corporation
KGC
recently inked a definitive deal with the Highland Gold Mining group of companies and its affiliates to sell 100% of its Russian assets for $680 million in cash.
Highland Gold is among the biggest gold mining companies in Russia. It operates several mines in the country, such as in the Chukotka and Khabarovsk regions, where the Kupol mine and Udinsk project are sited.
Per the transaction, Kinross will get $400 million in cash for the Kupol mine and the surrounding exploration licenses. The sum includes a payment of $100 million upon closing as well as additional payments of $150 million before the end of 2023, $100 million before the end of 2024 and $50 million before the end of 2025. Kinross will also get a total of $280 million in cash for the Udinsk project, which includes $80 million before the end of 2025, $100 million before the end of 2026 and $100 million before the end of 2027.
The deferred payments are protected by an extensive security package, including share pledges, financial guarantees and an escrow account. All payments under the deal are payable in U.S. dollars.
The deal is subject to the approval of the Russian government and the finalization of specific ancillary agreements.
Shares of KGC have declined 21.4% in the past year against an 11.1% increase of the
industry
.
Image Source: Zacks Investment Research
The company, in its fourth-quarter 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 and 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 123% 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 being 23.6%. ASIX has surged 77.9% in a year. The company sports a Zacks Rank #1.
Allegheny, currently sporting a Zacks Rank #1, has an expected earnings growth rate of 684.6% for the current year. The Zacks Consensus Estimate for ATI’s earnings for the current year has been revised 20% 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 24.9% over a year.
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