free cash flowhttps://seekingalpha.com/pr/16484306-kinross-reports-2016-first-quarter-results
2016 first quarter highlights:
-- Production(1): 687,463 gold equivalent ounces (Au eq. oz.), compared with 629,360 Au eq. oz. in Q1 2015. -- Revenue: $782.6 million, compared with $781.4 million in Q1 2015. -- Production cost of sales(2): $694 per Au eq. oz., compared with $709 in Q1 2015. -- All-in sustaining cost(2): $963 per Au eq. oz. sold, compared with $964 in Q1 2015. All-in sustaining cost per gold ounce (Au oz.) sold on a by- product basis was $957 in Q1 2016, compared with $957 in Q1 2015. -- Adjusted operating cash flow(2): $202.6 million, or $0.17 per share, compared with $214.8 million, or $0.19 per share, in Q1 2015. -- Adjusted net earnings(2,3): $1.4 million, or $0.00 per share, compared with adjusted net earnings of $15.3 million, or $0.01 per share, in Q1 2015. -- Reported net loss(3): $13.9 million, or $0.01 per share, compared with a loss of $6.7 million, or $0.01 per share, in Q1 2015. -- Outlook: Kinross expects to be within its 2016 forecast guidance for production (2.7 - 2.9 million Au eq. oz.), production cost of sales ($675 - $735 per Au eq. oz.) and all-in sustaining cost ($890 - $990 per Au eq. oz.). Capital expenditures guidance was increased to $755 million to reflect the additional $160 million expected to be spent on the Tasiast Phase One expansion. -- Tasiast Phase One expansion: Kinross is proceeding with the Tasiast Phase One expansion, which is expected to nearly double production and reduce production cost of sales per ounce by half, at a manageable capital cost. -- Nevada asset acquisition: Kinross closed the acquisition of Bald Mountain and 50% of Round Mountain on January 11, 2016 for $610 million, to be reduced by $22 million as a result of a working capital adjustment finalized subsequent to March 31, 2016. -- Development projects: The Bald Mountain exploration program is progressing well and the Russia development projects - Moroshka near Kupol and September Northeast near Dvoinoye - are advancing as planned. -- Equity financing: The Company completed a public equity offering on March 18, 2016 for net proceeds of $275.7 million to further strengthen the Company's balance sheet.
CEO Commentary
J. Paul Rollinson, President and CEO, made the following comments in relation to 2016 first quarter results:
"Kinross is off to a strong start to the year, generating solid free cash flow as our portfolio of mines continued to deliver consistent operational results in the first quarter. All-in sustaining cost is trending lower, production is higher compared with the previous quarter and year, and we are once again on track to meet our annual guidance at each of our regions and company-wide.
"We also significantly clarified our path to the future on two major fronts. At Tasiast, we are moving ahead with the Phase One expansion, which is expected to nearly double production, while reducing cost of sales significantly, at a manageable capital cost. At the same time, we completed a pre-feasibility study for a potential Phase Two expansion that would transform the operation into our largest mine, with one of the lowest costs. With the acquisition of our Nevada-based assets now complete, we are more confident in Bald Mountain's clear upside potential and expect to convert a substantial amount of the site's estimated mineral resources into mineral reserves.
"We have strongly underlined our value proposition as a large, pure gold producer. We are well levered to the gold price and have an outstanding operating record, a strong balance sheet, and attractive low-risk development projects."