RECORD EARNINGSKinross Gold Achieves Record Fourth Quarter and Full-Year Results
Full-year revenue increases to $906 million and earnings per share to $0.47, production ahead of target and operating cash flow more than doubles
TORONTO, ONTARIO--(CCNMatthews - Feb. 21, 2007) - Kinross Gold Corporation (TSX:K)(NYSE:KGC) ("Kinross", "Kinross Gold" or the "Company"), today announced its unaudited results for the fourth quarter and year ended December 31, 2006.
(This news release contains forward looking information that is subject to risk factors and assumptions as set out in our Cautionary Statement on Forward-Looking Information located on page 11 of this news release. All dollar amounts in this release are expressed in U.S. dollars, unless otherwise noted)
Highlights
- Gold equivalent production was 362,028 ounces in the fourth quarter of 2006 and 1,476,329 ounces for the full year, both above target.
- Revenue was $231.4 million in the fourth quarter, a 22 percent increase over the same period last year, and the average gold price realized was $615 per ounce of gold sold. Full-year revenue was a record $905.6 million, a 25 percent increase over the same period last year, and the average gold price realized was $604 per ounce of gold sold.
- Cost of sales per ounce(1) was $317 in the fourth quarter on sales of 375,684 gold equivalent ounces, and $319 for the full-year on sales of 1,510,836 gold equivalent ounces.
- Net earnings for the fourth quarter were $41.0 million or $0.11 per share (diluted), compared to a net loss of $154.3 million or $0.45 per share in the same period last year. Net earnings for the full-year were a record $165.8 million or $0.47 per share (diluted), compared with a net loss of $216.0 million in the same period last year. Net earnings in the fourth quarter were reduced by $0.01 per share (diluted) as a result of the impairment of certain long-term investments, partially offset by a gain on asset sales.
- Cash flow from operating activities was $91.2 million in the fourth quarter and $292.0 million for the full-year compared to $23.8 million and $133.7 million for the comparable periods in 2005. The cash position was $154.1 million at December 31, 2006 compared to $97.6 million at December 31, 2005 and total debt was $89.9 million at December 31, 2006 compared to $159.3 million at December 31, 2005.
- Capital expenditures were $65.3 million in the fourth quarter and $202.9 million for the full-year.
- Proven and Probable Mineral Reserves at December 31, 2006 increased by 3.1 million ounces of gold, net of 2006 production, to 27.9 million ounces, a 13 percent increase over year end 2005. These amounts do not include the effects of the Bema acquisition.
- Production(2) for 2007 is expected to be approximately 1.5 million gold equivalent ounces at a cost of sales per ounce(1)(2) in the range of $320 to $330. Beyond 2007, gold equivalent production(2) is expected to grow to 1.6 to 1.7 million ounces in 2008 and 1.8 to 1.9 million ounces in 2009. These amounts do not include the effects of the Bema acquisition.
- The Bema Gold acquisition will close on February 27, 2007, subject to customary closing conditions.
(1) Cost of sales per ounce is calculated by dividing cost of sales as per the financial statements by the number of gold equivalent ounces sold.
(2) Please refer to the risk factors and assumptions set out in our Cautionary Statement on Forward-Looking Information on page 11 of this news release for information related to risks and uncertainties associated with guidance presented in this release.
This past year has been outstanding for Kinross and I am proud of the performance our employees have delivered," said Tye Burt, President and CEO of Kinross. "This quarter, and indeed 2006, has seen record revenues, cash flow and earnings for the Company. The Kinross team has been completely focused in the drive to meet and exceed our targets."
"Positive financial results were accompanied by the significant increase in our gold reserves year-over-year. This is due to additions from exploration and soon will be supplemented through the planned acquisition of Bema Gold," said Burt. "Kinross' disciplined strategy is paying off for investors."
"Looking through 2007 and beyond, we will be executing our production and cash flow growth plan as we integrate the Bema acquisition. Kinross has the best growth metrics among the major gold producers as projects like the Paracatu mine expansion in Brazil, Buckhorn mine in Washington State and Kupol mine in Russia are completed. We will also be driving to complete our plan to optimize value at Cerro Casale in Chile. The Kinross team is wholly-committed to building high-quality, low-cost gold production in a balanced geographic portfolio, all for the benefit of shareholders."