Kinross Gold Explained

Kinross Gold Corporation
Type:Public
Traded As:
Foundation:1993
Founder:Robert Buchan
Location City:Toronto, Ontario
Key People:J. Paul Rollinson, CEO [1]
Industry:Metals and Mining
Products:Gold, Silver
Revenue:US$3.279 billion (2021)
Operating Income:US$464 million (2021)
Net Income:US$221 million (2021)

Kinross Gold Corporation is a Canadian-based gold and silver mining company founded in 1993 and headquartered in Toronto, Ontario, Canada. Kinross currently operates six active gold mines, and was ranked fifth of the "10 Top Gold-mining Companies" of 2019 by InvestingNews.[2] The company's mines are located in Brazil, Mauritania, and the United States. It trades under the KGC ticker in the New York Stock Exchange, and under K in the Toronto Stock Exchange.

Operations

Kinross Gold operates mines in North and South America, and West Africa. In 2022, 58% of Kinross gold production was expected to come from the Americas.[3]

AssetCountryKinross stakeType of mineGold equivalent production, 2021[4] 2021 reserves
Fort Knox Gold Mine100%open-pit mine264,283 oz2,467 koz
Round Mountain Gold Mine100%open-pit mine257,005 oz3,037 koz
Bald Mountain mine100%open-pit mine204,890 oz798 koz
Paracatu mine100%open-pit mine550,560 oz7,273 koz
Tasiast Gold Mine100%open-pit mine170,502 oz6,404 koz
Chirano Gold Mine90% (the remaining 10% is held by the Government of Ghana)open-pit mine154,668 oz890 koz

Fort Knox

This property includes a mill, tailings storage, heap leach facility, the Gil project, and the True North open pit mine, which is closed and under monitoring.[5] Expected to run out of ore in 2021, the mine's life has been extended to 2030 following a $100 million expansion investment announced in 2018, increasing life-of-mine production by about 1.5 million gold equivalent ounces.[6]

Round Mountain

The Round Mountain Gold Mine is located in Nye County, Nevada and has operated by Kinross since 2003. They purchased the remaining outstanding interest in the company from Barrick Gold in 2016.[7] [8] [9]

Bald Mountain

Located in White Pine County, Nevada, the Bald Mountain mine is operated by subsidiary KG Mining (Bald Mountain) Inc.[10]

Paracatu

The open-pit Paracatu gold mine, located in northwest Minas Gerais, Brazil.[11] [12]

Tasiast

Kinross acquired the Tasiast mine (located in Mauritania) in 2010, expanding the operation twice by 2017.[13] [14] [15]

In 2012, securities class action lawsuits launched in the U.S. and Canada, alleging Kinross Gold overstated the value of Tasiast mine in its financial statements, misrepresented some of the mine's project expansion schedules, and made other false statements.[16] [17] In 2015, the parties reached no-fault settlement agreements which included payments by Kinross totaling approximately $US 40 million.

In June 2016, due to "government allegations of invalid work permits" for expatriate employees, the mine suspended operations, resuming them in August that same year.[18] [19] [20]

In May 2020, there was a short strike by unionized employees at the mine, which was suspended at the request of the Mauritanian government.[21] A month later, Kinross reached an agreement in principle with the government, which included revalued royalties.[22]

Chirano

Kinross holds 90% ownership of the Chirano gold mine, with the remainder held by the Government of Ghana. In April 2022, Kinross announced plans to sell its 90% ownership for US$225-million to Asante Gold Corp.[23]

History

Founding and early years

Kinross Gold Corporation was founded in 1993, following the amalgamation of three companies: Plexus Resources Corporation, CMP Resources and numbered company 1021105 Ontario Corp., resulting in the new company owning a stake and royalties in a mining property in Fallon, Nevada and the QR Mine in British Columbia.[24] On June 1, 1993, Kinross was listed on the Toronto Stock Exchange and NASDAQ, then on the New York Stock Exchange in 1994.[25] Kinross' first project – now operated by its subsidiary Fairbanks Gold Mining – was the Fort Knox Gold Mine, an open-pit mining operation in Alaska. The area, including surrounding deposits, was prospected as early as 1913, but no mining took place until 1996. The mine currently produces over 200,000 ounces of gold a year.[26] In 1998, a wholly owned subsidiary of Kinross merged with Amax Gold, forming Kinam Gold, the company's largest subsidiary.[27] effectively transferring ownership of the mine back to Kinross, along with Maricunga Gold Mine in Chile, as part of the merger.[28]

1999 – 2006

Kinross acquired Hollinger Mines in 1999 as part of a land package prior to the bankruptcy of Royal Oak Mines (later sold to Goldcorp in 2006). Also that year, Kinross acquired LA Teko Resources Ltd. through its wholly owned subsidiary, LT Acquisition Inc. division.[29] [30] In July 2002, Kinross and Placer Dome combined their assets in Timmins, Ontario and formed the Porcupine Joint Venture (51% Placer Dome, 49% Kinross).[31] In January 2003 Kinross TVX Gold and Echo Bay Mines shareholders approved a $3-billion merger, combining the three companies, while retaining the name Kinross Gold.[32] [33] The TVX merger resulted in Kinross' stake in the La Coipa open pit mine, the remainder being purchased from Goldcorp in 2007.

In 2006, Kinross bought Crown Resources Corporation, which gave it ownership of the mineral resource Buckhorn Mountain (later Buckhorn Gold Mine) and the associated mineral processing facilities.[34] [35]

2007 – present

In 2007, Kinross traded assets with Goldcorp; Kinross received $200 million and the remaining portion of the La Coipa Gold Mine it had acquired with the TVX merger, in exchange for giving up its 49% of the Porcupine Joint Venture and 31.9% of the Musselwhite mine.[36] In 2010, Kinross purchased 91% of Red Back Mining for $7.1 billion.[37] The purchase brought with it the two gold mines in Africa (Chirano and Tasiast).[38] Also that year, Kinross acquired the Dvoinoye deposit and the property in Vodorazdelnaya, about 90km (60miles) north of Kinross’ Kupol operation. In 2011, Kinross entered into a share purchase agreement with the State Unitary Enterprise of the Chukotka Autonomous Okrug, whereby it held 100% of the Kupol mine and exploration licenses. Kinross sold its interest in the Crixás mine to AngloGold Ashanti in 2012.[39] [40]

In December 2017, Kinross acquired mineral rights to Gilmore, or Parcel G, a 709-acre tract adjacent to its Fort Knox Gold Mine, about 25 miles northeast of Fairbanks, Alaska. Estimates of the land valued it as containing 2.1 million ounces of gold.[41]

In December 2021, Kinross offered to acquire Great Bear Resources for $29 per share, or about $1.8 billion, giving it ownership of a gold mining prospect in Red Lake, Ontario, Canada.[42] Kinross shares dropped 9% after it announced the buyout bid.[43] The deal to acquire Great Bear closed on February 24, 2022. [44]

Non-operating, discontinued and divested mines

Financial Performance

Gold production

Annual gold production (thousands of ounces) was:

Gold reserves

Kinross' proven and probable gold reserves were 32.6 million ounces as of December 31, 2021.

Assets

Kinross Gold's total assets decreased significantly in recent years, from $US 16.39 billion in 2010 to $US 7.73 billion in 2015.[69] [70]

Other

Kinross suspended dividend payments in 2013.[71] It started paying again in 2020, and that year, also announced a share buyback program.[72] In 2015 in the wake of declining gold prices, Kinross closed their office in Denver and eliminated 110 corporate positions in Denver, Chile, Spain, and Toronto.[73] In 2016, Standard & Poor's lowered Kinross' credit rating to junk bond status, largely based on the share of their production that came from mines in Russia, which the agency saw as a significant risk.[74] In 2017, Moody's Investors Service assigned a Ba1 rating to Kinross, "primarily driven by the company's good scale (2.78 million gold-equivalent ounces (GEO) as of March 2017 LTM), low leverage (1.7x LTM adjusted Debt/EBITDA), and very good liquidity (SGL-1).[75]

On March 2, 2020, Moody's announced it had upgraded Kinross's credit rating to investment grade.[76] Their senior unsecured notes rating was upgraded to Ba1, with a stable outlook. Kinross currently holds investment grade ratings from Moody's, S&P Global Ratings, and Fitch Ratings.[77]

Corporate responsibility

In 2015, Kinross achieved an A− ranking in Maclean's magazine's annual assessment of socially responsible companies, the highest ranking of any Canadian mining company.[78] [79] For Kinross' cooperation with an environmental group in Washington state, and for five out of eight mines being in compliance with the International Cyanide Management Code (as of May 2013, the Company had eight of its nine mines in compliance with the International Cyanide Management Code),[80] Kinross was recognized as one of Canada's Top 50 Most Responsible Corporations by Maclean's magazine and Jantzi Research in 2009.[81] [82] Through a $1 million donation by Kinross in 2010, the University of Guelph created a new chair as part of its BetterPlanet Project. Said Chair is named the Kinross Chair in Environmental Governance, and is held by a "succession of experts".[83] Also with the university, Kinross provided $100 thousand towards its Fight Against Hunger.[84] [85] In 2010, Kinross committed to contribute $10 million over a three-year period towards developing a mining school in Mauritania. The following year, it committed $2.5 million to build and equip a medical emergency centre in that country.[86] [87] In 2013, Kinross was named to the Dow Jones Sustainability World Index for the third consecutive year, as well as the DJSI North American Index, the Ethibel Excellence Investment Register, and the Ethical Global Equity and ECPI Global Carbon Indices. For the fifth consecutive year, the company was named to the Jantzi Social Index, and as one of Canada's Best 50 Corporate Citizens by Corporate Knights magazine for the fourth year.[88]

In 2021, Kinross was ranked no. 22 out of 120 oil, gas, and mining companies involved in resource extraction north of the Arctic Circle in the Arctic Environmental Responsibility Index (AERI).[89]

Carbon footprint

Kinross Gold reported Total CO2e emissions (Direct + Indirect) for the twelve months ending 31 December 2020 at 1,631 Kt (+19/+1.2% y-o-y).[90] There have been not any significant reductions in emissions in recent years. In May 2021, Kinross committed to reaching net-zero greenhouse gas emissions by 2050.[91]

See also

External links

Notes and References

  1. Web site: Jamasmie. Cecilia. Kinross Gold's CFO leaves, two months after CEO replaced. Mining. 10 October 2012 . 23 September 2016.
  2. https://investingnews.com/daily/resource-investing/precious-metals-investing/gold-investing/top-gold-mining-companies/ Pistilli, Melissa
  3. News: Friedman . Gabriel . 2022-04-06 . Kinross finds buyer for Kupol mine complex in what analyst calls 'messy exit' from Russia . en . Financial Post . 2022-05-24.
  4. Web site: 16 February 2022 . Kinross reports 2021 fourth-quarter and full year results . 28 March 2022 . Kinross Gold.
  5. Web site: Kinross Gold Corp (KGC). dead. https://web.archive.org/web/20100223052050/http://www.reuters.com/finance/stocks/companyProfile?rpc=66&symbol=KGC. 23 February 2010. 31 August 2011. Reuters.
  6. Web site: 12 June 2018. Kinross going ahead with expansion of Alaska gold mine. 14 June 2018. Mining.com. en.
  7. Book: Committee on Hardrock Mining on Federal Lands. Hardrock Mining on Federal Lands. Board on Earth Sciences and Resources. Commission on Geosciences, Environment and Resources. Division on Earth and Life Studies, National Research Council. 3 December 1999. National Academies Press. 978-0-309-06596-2. 136–.
  8. News: Harding. Adella. 7 July 2010. BLM OKs Round Mountain expansion. Elko Daily Free Press. 31 August 2011.
  9. News: Harding. Adella. 22 Aug 2010. Appeals filed against Round Mountain. Elko Daily Free Press. 31 August 2011.
  10. Web site: Jamasmie. Cecilia. Kinross eyes expansions at its new gold mines in Nevada. 23 September 2016. Mining. 29 June 2016 .
  11. Book: Canadian and American Mines Handbook. Business Information Group. 2005. 978-0-919336-63-6.
  12. Web site: Metso to supply grinding equipment to Kinross Gold's Paracatu in Brazil. 23 September 2016. International Mining. 3 January 2011 .
  13. Book: Geological Survey. Minerals Yearbook - Area Reports: International Review: 2011, Africa and the Middle East. 1 December 2013. Government Printing Office. 978-1-4113-3669-8. 30–.
  14. Web site: Kinross's scaled-down expansion plan at Tasiast. 25 September 2016. The Northern Miner.
  15. http://www.miningweekly.com/print-version/kinross-to-proceed-with-tasiast-phase-2-round-mountain-expansion-projects-2017-09-18 Lazenby, Henry
  16. See page MDA 36 on 2015 Kinross Gold Annual Report http://s2.q4cdn.com/496390694/files/doc_financials/annual/2016/2015-Kinross-Gold-Annual-Report.pdf
  17. Paragraphs 4 and 158 of the court decision - Bayens v Kinross - Ontario Superior Court - http://www.canlii.org/en/on/onsc/doc/2013/2013onsc6864/2013onsc6864.html?autocompleteStr=bayens&autocompletePos=3
  18. Web site: Jasmamie. Cecilia. Kinross Gold suspends work at Tasiast mine in Mauritania, shares dive. 23 September 2016. Mining. 20 June 2016 .
  19. Web site: Gilroy. Annie. How Kinross Gold's Recent Operational Updates Affect Its Future. 23 September 2016. Market Realist. 29 August 2016 .
  20. Web site: Jasmamie. Cecilia. Kinross Gold workers strike at Tasiast mine in Mauritania, shares plummet. 23 September 2016. Mining. 24 May 2016 .
  21. News: 2020-06-15 . Kinross Gold resolves Mauritania disputes and secures expansion . en . Reuters . 2022-06-10.
  22. Web site: 2021-07-21 . Canada's Kinross and Mauritania finally come to an agreement…without Tasiast Sud . 2022-06-10 . The Africa Report.com . en-US.
  23. News: McGee . Niall . 2022-04-25 . Toronto-based Kinross Gold to exit Ghana mine in US$225-million deal . en-CA . The Globe and Mail . 2022-04-25.
  24. News: Shareholders back merger forming Kinross Gold. 2 September 2011. Deseret News. 31 May 1993.
  25. Web site: Gilroy. Annie. Must Know: An Overview of Kinross Gold Corp.. Market Realist. 16 October 2015 . 23 September 2016.
  26. Web site: Fort Knox Mine gold output hits new low. 2021-08-16. North of 60 Mining News.
  27. Web site: Fort Knox, Alaska, USA. Kinross Gold. 27 August 2011. 20 January 2018. https://web.archive.org/web/20180120182149/http://kinross.com/operations/operation-fort-knox-alaska-usa.aspx. dead.
  28. Scales. Marilyn. How to Get Gold Out of Fort Knox. Canadian Mining Journal. June 2003. 31 August 2011.
  29. Book: Canadian Mines Handbook. 2001. Southam Mining Group.
  30. https://documents.tips/documents/goldcorp-hollinger-mine-closure-plan.html AMEC Earth & Environmental
  31. News: Vieira. Paul. Placer Dome, Kinross to join forces in Ontario gold operation: Kinross gains mill access. National Post. 12 April 2002. FP7.
  32. Web site: CZERNOWALOW. MARTIN. Newmont increases dividend. Mining Weekly. 17 September 2016.
  33. News: COMPANY NEWS Kinross, Echo Bay, TVX Delay Merger. 2 September 2011. Canadian Mining Journal. 20 November 2002.
  34. Book: Okanogan and Wenatchee National Forests (N.F.), Buckhorn Access Project: Environmental Impact Statement. 2007. 19–.
  35. News: Leng Yeong. Cheng. Kinross Has Record $65.6 Million Profit on Gold Rally (Update4). https://web.archive.org/web/20121106124539/http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aVfXPahtN8A4&refer=canada. dead. 6 November 2012. 2 September 2011. Bloomberg. 4 August 2006.
  36. News: Analysts see Goldcorp, Kinross asset swap gains. 2 September 2011. Bloomberg. 26 Sep 2007.
  37. Book: The Globe and Mail. The Lunch. 29 June 2012. Booktango. 978-1-4689-0835-0. 104–.
  38. News: In Canada, a Merger for Miners of Gold. The New York Times (AP). August 2, 2010. August 2, 2010.
  39. Web site: Kinross unloads stake in Crixas for US$220 million. Canadian Mining Journal. 24 September 2016. 2012-05-30.
  40. Web site: Kinross Gold Acquires Red Back Mining for $7.3B. Lexpert. 23 September 2016.
  41. http://www.newsminer.com/news/alaska_news/kinross-acquires-gilmore-tract-west-of-fort-knox/article_fb503ec0-df91-11e7-a00d-5be3e07abfea.html Wood, Robin
  42. News: . December 8, 2021 . Kinross to buy Great Bear for $1.42 billion . Mining.com .
  43. News: . December 9, 2021 . TSX slips as energy stocks weigh, Kinross slides on $1.8 billion bid for Great Bear . Reuters. .
  44. https://www.kinross.com/news-and-investors/news-releases/press-release-details/2022/Kinross-completes-acquisition-of-Great-Bear-Resources/default.aspx
  45. https://mining-atlas.com/operation/Julietta-Gold-Silver-Mine.php Mining Atlas
  46. Web site: Major Mines & Projects Kettle River-Buckhorn Mine . miningdataonline.com . 25 June 2021.
  47. News: Brock Hires. Buckhorn mine scheduled to close by April. 30 March 2017. Omak Chronicle. February 28, 2017. en.
  48. http://www.nasdaq.com/press-release/kinross-gold-trout-unlimited-and-rocky-mountain-elk-foundation-partner-to-protect-wildlife-habitat-20170817-00529 Marketwired
  49. Book: Usa Ibp Usa. Chile Mineral & Mining Sector Investment and Business Guide Volume 1 Strategic Information and Regulations. November 2009. Int'l Business Publications. 978-1-4330-0664-7. 63–.
  50. Web site: Russell. Simon. Exeter Resource Corporation: Big Gold Discovery in Northern Chile. GoldSeek. 25 September 2016.
  51. Web site: Estudio para reactivar Cerro Casale finaliza sin éxito y Barrick lo saca de su portafolio. Minería Chilena. 31 March 2015 . 25 September 2016.
  52. Web site: Kinross Gold Completes Sale of Cerro Casale Interest. Market Wired. 9 June 2017 . 9 June 2017. en.
  53. Web site: Mitchell. Steve. Kinross agrees to sale of Crixás interest for $220 million. Kinross Gold. 17 September 2016.
  54. Web site: Jamasmie. Cecilia. Lundin Gold getting closer to developing Fruta del Norte in Ecuador. Mining. 17 June 2016 . 23 September 2016.
  55. News: Gill. Nathan. Kinross Reaches Preliminary Agreement for Ecuador Mine. Bloomberg.com. 6 December 2011 . Bloomberg. 23 September 2016.
  56. News: Alvaro. Mercedes. Kinross to Sell Interest in Ecuador's Fruta del Norte Gold Mine to Fortress. Wall Street Journal. 22 October 2014 . 23 September 2016.
  57. News: Tilak. John. O'Brien. Rosalba. Exclusive: Kinross to retreat from Chile, puts unit on the block. Reuters. 18 August 2016 . Reuters. 24 September 2016.
  58. Web site: Webb . Mariaan . 2020-02-13 . Kinross pulls trigger on La Coipa restart project . 2022-05-26 . Mining Weekly.
  59. Web site: 2008 Kinross Gold Annual Report. www.Kinross.com. Kinross Gold Corporation. 9 September 2016. 34. en.
  60. Web site: 2009 Kinross Gold Annual Report. www.Kinross.com. Kinross Gold Corpo ration. 9 September 2016. 58. en.
  61. Web site: Mitrovic . Tijana . 2020-07-15 . Kinross Gold reports pre-feasibility results for its Lobo-Marte gold project . 2022-05-26 . CIM Magazine.
  62. News: George. Vishaka. Kinross suspends operations at Chile mine, lays off 300 workers. Reuters. 25 August 2016 . 23 September 2016.
  63. Web site: Jasmamie. Cecilia. Kinross Gold halts Maricunga mine in Chile, lays off 300 workers. Mining. 26 August 2016 . 23 September 2016.
  64. Web site: 2016 Kinross Gold Financial Statements. Kinross Gold. 34. en.
  65. Web site: Canadian miner Kinross Gold selling 100% of Russian assets as it exits country Globalnews.ca . 2022-04-05 . Global News . en-US.
  66. Web site: Friedman . Gabriel . Kinross finds buyer for Kupol mine complex in what analyst calls 'messy exit' from Russia . Financial Post . 4 May 2022 . en . 6 April 2022.
  67. Web site: 2015 Kinross Gold Annual Report. Kinross.com. 19 February 2018. 7. en.
  68. Web site: Kinross reports 2017 fourth-quarter and full-year results. February 14, 2018. Kinross.com. Kinross Gold. en. 19 February 2018.
  69. See page 110 of 2010 Annual Report - http://fb.kinross.com/media/213502/2010%20annual%20report.pdf
  70. Web site: 2015 Annual Report. Kinross Gold Corporation. 4 January 2017. en.
  71. See page MDA14 2013 financial statements - http://s2.q4cdn.com/496390694/files/doc_financials/annual/2013/kinross-2013-annual-report.pdf
  72. Web site: Webb . Mariaan . 29 July 2021 . Kinross unveils share buyback plan, lowers Tasiast restart costs . 21 April 2022 . Mining Weekly.
  73. News: Ian. McGugan. Kinross to shut down Denver office, cut 110 corporate jobs. 12 March 2016. The Globe and Mail. 10 November 2015.
  74. News: Kinross Gold's credit rating cut to junk . The Globe and Mail. Bochove . Danielle. 18 February 2016.
  75. News: Moody's assigns Ba1 rating to Kinross Gold Corporation's new senior unsecured notes . Moody's Investor Service. Moody's . Staff. 28 June 2017.
  76. Web site: Form 6-K KINROSS GOLD CORP For: Mar 03 . 2022-05-27 . www.streetinsider.com.
  77. Web site: Mining Weekly - Moody's upgrades Kinross rating to investment grade . 2022-05-27 . Engineering News . en.
  78. Web site: What does it take to be a responsible miner?. Mining Global. 25 September 2016.
  79. Web site: GOLD: Maclean's names Kinross top socially responsible mining company. Canadian Mining Journal. 16 June 2015 . 27 September 2016.
  80. News: 2012 CR Data Supplement. Kinross Gold Corporation. dead. https://web.archive.org/web/20130808224759/http://www.kinross.com/media/247031/2012%20kinross%20cr%20data%20supplement.pdf. 2013-08-08.
  81. News: Jantzi-Macleans 50 Most Socially Responsible Corporations 2009. 27 August 2011. Maclean's. June 18, 2009.
  82. Web site: CSR ABROAD – Anti-Corruption and Bribery. Natural Resources Canada. 23 September 2016.
  83. Web site: Kinross Chair in Environmental Governance. University of Guelph. 23 September 2016.
  84. Web site: Kinross fights hunger crisis in Mauritania. Viewpoint Mining. 23 September 2016.
  85. Web site: McManus. Deaglan. Garvie. Drew. O’Brien. Padraic. Feeding corporate responsibility. The Ontarion. 13 September 2013 . 23 September 2016.
  86. News: Reguly. Eric. Kinross CEO Tye Burt: Staking his claim, and his reputation. The Globe and Mail. 25 February 2011 . 23 September 2016.
  87. News: Crossland. James. Kinross Gold takes its ethical standards seriously. The Guardian. 27 May 2015 . 23 September 2016.
  88. Web site: 2016 Best 50 results. Corporate Knights. 24 September 2016.
  89. Overland, I., Bourmistrov, A., Dale, B., Irlbacher‐Fox, S., Juraev, J., Podgaiskii, E., Stammler, F., Tsani, S., Vakulchuk, R. and Wilson, E.C. 2021. The Arctic Environmental Responsibility Index: A method to rank heterogenous extractive industry companies for governance purposes. Business Strategy and the Environment. 30, 1623–1643. https://onlinelibrary.wiley.com/doi/10.1002/bse.2698
  90. Web site: Kinross Gold's Sustainability Report for 2020Q4 . https://web.archive.org/web/20210729180111/https://s2.q4cdn.com/496390694/files/doc_downloads/sustainability/2020/Kinross-Gold-2020-Sustainability-Report.pdf . July 29, 2021 . Alt URL
  91. Web site: 2021-05-12. Kinross aims for carbon neutrality by 2050. 2022-01-28. MINING.COM. en-US.

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