Kinross 2009 Production Increases by 22%, Revenue by 49%
Margins up 22%, adjusted operating cash flow up 48%
Kinross agrees to sell 25% of Cerro Casale to Barrick for $475 million
Press Release Source: Kinross Gold Corporation On Wednesday February 17, 2010, 7:51 pm EST
TORONTO, ONTARIO--(Marketwire - 02/17/10) - For more information, please see Kinross' year-end 2009 Financial Statements and MD&A at http://www.kinross.com/.
Kinross Gold Corporation (TSX:K - News)(NYSE:KGC - News) today announced its results for the fourth quarter and year ended December 31, 2009.
(This news release contains forward looking information that is subject to the risks and assumptions set out in our Cautionary Statements on Forward-Looking Information located on page 8 of this news release. All dollar amounts in this news release are expressed in U.S. dollars, unless otherwise noted.)
Highlights
- Production(1) in the fourth quarter 2009 was a record 613,858 gold equivalent ounces, an increase of 12% over the same period last year. For full-year 2009, gold equivalent production was 2,238,665 ounces, in line with previously-announced guidance, and a 22% increase over 2008.
- Revenue for the quarter was a record $699.0 million, compared with $484.4 million in the fourth quarter of 2008, an increase of 44%, with an average realized gold price of $1,094 per ounce sold compared with $794 per ounce sold in Q4 2008. Full-year 2009 revenue was $2,412.1 million, a 49% increase over full-year 2008. The average realized gold price for the full year was $967 compared with $857 per ounce sold for full-year 2008.
- Cost of sales per gold equivalent ounce(2) was $437 for Q4, an increase of 17% compared with Q4 2008. Cost of sales per ounce for full-year 2009 was $437, in line with previously-stated guidance, compared with $421 for full-year 2008. Cost of sales per gold ounce on a by-product basis was $383 in Q4 and $388 for the full-year 2009. Kinross' attributable margin per ounce sold(3) was a record $657 in Q4, a year-over-year increase of 57%. The attributable margin per ounce sold for full-year 2009 was $530, a 22% increase over 2008.
- Adjusted operating cash flow(4) in Q4 was $292.2 million, a 21% increase over Q4 2008, and $937.2 million for the full year, a 48% increase over full-year 2008. Adjusted operating cash flow per share in Q4 was $0.42 per share, a 14% increase over Q4 2008, and $1.36 for full-year 2009, a 35% increase over full-year 2008.
- Adjusted net earnings(4) were $148.6 million, or $0.21 per share, in Q4, compared with earnings of $56.8 million, or $0.09 per share for the same period last year. Adjusted net earnings for the full-year 2009 were $304.9 million, or $0.44 per share, compared with $243.8 million, or $0.39 per share for full-year 2008. Reported net earnings were $235.6 million, or $0.34 per share in Q4, compared with a net loss of $968.8 million, or $1.47 per share, for Q4 2008. Full year reported net earnings were $309.9 million, or $0.45 per share, compared with a net loss of $807.2 million, or $1.28 per share for full-year 2008.
- Kinross has entered into an agreement with Barrick Gold Corporation to sell one-half of its 50% interest in the Cerro Casale project in Chile to Barrick for a total value of $475 million, comprising $455 million in cash, plus the assumption by Barrick of a $20 million contingent obligation.
- The Board of Directors declared a dividend of $0.05 per share payable on March 31, 2010 to shareholders of record on March 24, 2010.
(1) Unless otherwise stated, production figures in this release are based on Kinross' share of Kupol production (75%).
(2) Cost of sales per ounce is a non-GAAP measure and is defined as cost of sales as per the financial statements divided by the number of gold equivalent ounces sold, both reduced for Kupol sales attributable to a third-party 25% shareholder.
(3) Attributable margin per ounce sold is a non-GAAP measure and is defined as average realized gold price per ounce less attributable cost of sales per gold equivalent ounce sold.
(4) Reconciliation of non-GAAP financial measures is located on pages 9 and 10 of this news release.
CEO commentary
Tye Burt, President and CEO, made the following comments in relation to fourth quarter and full-year 2009 results.
"Kinross finished 2009 strongly with record production, margins, and revenue for both the quarter and the full year. Margins averaged $530 per ounce in 2009, an increase of 22% year-over-year, compared with a 13% year-over-year increase in the average gold price. Adjusted operating cash flow in 2009 was $937.2 million, an increase of 48% over 2008, while adjusted operating cash flow per share was $1.36, up by 35% over 2008.
"We have increased our focus on operational excellence by advancing the Kinross Way, including implementing company-wide processes for Continuous Improvement and standardizing best practices. We have also added depth and strength to our corporate and regional management teams, and introduced a new corporate organizational structure to help execute effectively our operational and growth strategies.
"We continue to make adjustments to our asset portfolio to improve shareholder value, such as the acquisition of Dvoinoye near our Kupol mine in Russia, which expands our presence in this rapidly growing new district. We also announced the sale of half of our share of Cerro Casale, which scales the project to a more optimal size within our portfolio, and generates immediate cash proceeds.
"Looking ahead, Kinross' strategy is based on performance from a core set of strong assets, organic growth from existing operations, medium-term increases in production from new development projects, and ongoing optimization of our asset portfolio."
