TORONTO – Kinross Gold Corp. (TSX:K) has reported a big drop in third-quarter net earnings amid falling gold prices and higher production costs.
The Toronto-based miner, which reports in U.S. dollars, said net income fell to US$49.9 million or four cents per share in the three months ended Sept. 30.
That was less than a quarter of the $226.2 million or 20 cents per share it earned in the same 2012 period.
Adjusted earnings were $54.4 million five cents per share, matching the average estimate of analysts as compiled by Thomson Reuters, but down from $251.9 million or 22 cents the previous year.
Revenue from metal sales slumped to $876.3 million from $1.109 billion.
Kinross said production rose to 680,580 gold equivalent ounces from 672,173 ounces in the year-earlier period but that the average realized gold price fell to $1,331 per ounce compared with $1,649 in the comparable period.
Cost of sales rose to $740 per gold equivalent ounce from $677.
CEO J. Paul Rollinson said that based on strong year-to-date production, Kinross was increasing its 2013 production guidance to between 2.6 million and 2.65 million gold equivalent ounces.
“We are maintaining our sharp focus on operating costs and expect to be at the low end of our guidance range for all-in sustaining costs and cost of sales,” Rollinson added in remarks accompanying the results, which were released after markets closed.
Meanwhile, he said the company continues to focus on reducing capital and other costs in a lower gold price environment, adding that the 2013 capital forecast has been reduced to $1.4 billion while it expects the 2014 forecast to be in the range of $800 million to $900 million.
“As we have all year, we remain focused on strong, consistent operational performance, reducing costs, capital discipline and ensuring balance sheet strength,” Rollinson said.
On the Toronto Stock Exchange, Kinross shares closed up four cents or 0.78 per cent Wednesday at $5.20.