Kinross Gold cuts more cost on falling earnings

KinrossGold

(Reuters) – Kinross Gold Corp said it is making further slashes to its worker figures and capital spending. The Toronto-based gold miner reported a steep fall in third-quarter earnings, due to lower gold price.

The business, one of the world’s 10 large-scale gold producers, said it had identified about $20 million in expected annual money savings, primarily from laying off employees.

Kinross and other gold miners have pledged to slash costs as they grapple with falling earnings caused by a steep downturn in the gold price over the past year, as well as rising mine development charges. Gold prices, selling at $1,272 on Wednesday, have dropped 24% this year.

Company spokesman Steve Mitchell said, Kinross is chopping around 1,000 occupations this year, many of them as a part of already declared cost-cutting plans. Most of the job cuts have currently been applied.

Kinross last month said it was chopping 300 jobs in Spain and Africa’s Mauritania. The company employs about 9,000 persons.

Kinross said that it will merge its North and South American regions into a new Americas region to save money, closing Nevada, Reno offices and “downsizing” its administrative offices in Brazil and Chile.

Kinross head executive Paul Rollinson said in an announcement, “We extend our aim on decreasing capital and other costs in a lower gold price environment”.

The miner has furthermore identified a farther $50 million in capital savings for 2013, other than the $150 million it announced before. The business now anticipates its 2013 capital expending to be about $1.4 billion.

Kinross said it anticipates its 2014 capital expenditures to be sharply lower – in the variety of $800 million to 900 million.

Kinross earnings fell to $46.9 million or 4 cents a share, in the three months to end-September. Compared with profits quarter-on-quarter of $226.2 million, or 20 cents a share, in the identical quarter a year previous.

Modified net profits from extending operations was 5 cents a share, down from 22 cents a year before.

Analysts, on mean, anticipated profits of 4 cents a share, according to Thomson Reuters I/B/E/S.

Kinross advanced its 2013 production forecast slightly to a variety of 2.6 to 2.65 million gold equivalent ounces from a preceding outlook of 2.4 to 2.6 million gold matching ounces.

Kinross’ total ascribed gold matching output in the quarter edged higher to 680,580 ounces from 672,173 ounces a year before.

The miner’s average recognized gold cost at continuing operations fell to $1,331 per ounce from $1,649 a year previous.

Kinross’ all-in maintaining charges on a by-product cornerstone rose to $1,069 an ounce from $1,021 a year before, partially due to smaller shiny income and increased production charges.

The gold miner said it expects to be at the lower end of its 2013 all-in maintaining cost outlook of $1,100 to $1,200 per ounce traded.

Kinross took a $2.29 billion after-tax, non-cash impairment charge last quarter. The company said it was mostly due to the lower gold price, encompassing a $1.33 billion connected to the carrying value of its Tasiast gold mine in Mauritania.

Kinross’ stock, in line with other large gold producers, is down 50 % this year.