Kinross Gold Corp.’s adjusted net earnings for the first quarter totaled $87.6 million, or 7 cents per share, and production was up over the first quarter of last year at 466,022 gold equivalent ounces, but major snowfalls at Bald Mountain Mine in Nevada impacted production there.
The adjusted net earnings compared with $68.8 million, or 5 cents per share, in the 2022 quarter, and Kinross reported net earnings without adjustments at $90.2 million, or 7 cents per share, compared with $81.3 million, or 6 cents per share, in last year’s first quarter.
“Kinross delivered a strong first quarter with contributions from all our sites resulting in a 23% increase in year-over-year production. Tasiast, La Coipa and Paractu delivered strong production, margins and cash flow, including two record production months and record grades at Tasiast,” said J. Paul Rollinson, president and chief executive officer of the company.
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He said in the May 10 earnings call that Kinross is “on track to achieve our 2.1 million production guidance for this year,” with production in the first quarter making up 22% of that guidance.
In Nevada, Bald Mountain in White Pine County produced 33,828 gold equivalent ounces in the first quarter, down from 36,071 ounces in the first quarter of 2022, and Kinross said the production was lower because of fewer tons placed on the heap leach pads and lower ore grades.
The company also stated that the unprecedented winter snowfall had an impact on mining and stacking activities, however, the mine achieved quarterly production targets and made strong progress catching up on mining activities in April.
Round Mountain Mine in Nye County produced 58,832 gold equivalent ounces in the first quarter, up from 45,319 ounces in the 2022 quarter because of an increase in ounces recovered from the heap leach pads, according to the company.
Costs are up at Round Mountain mainly due to inflationary cost pressures on power and reagent costs, maintenance supplies and lower capital development, with the production cost of sales at $1,657 per ounce in the first quarter at Round Mountain, compared with $1,114 per ounce in last year’s quarter.
All-in sustaining costs for Kinross operations totaled $1,321 per ounce in the quarter, compared with $1,231 per ounce in the 2022 quarter. Cost guidance for 2023 includes an all-in sustaining cost of $1,320 per ounce, compared with $1,271 per ounce sold last year.
Executive Vice President and Chief Financial Officer Andrea Freeborough said in the May 10 earnings call that the company is factoring in 5% inflation to cost guidance for this year, and “as of today, we believe this is a reasonable estimate.”
Exploration continued in the quarter, including the start of construction of the decline at Phase X for underground exploration at Round Mountain. Kinross said delineation drilling is expected to start in early 2024, and the company is advancing studies and permitting for a potential underground mine at Phase X in parallel with the underground development to advance the project toward production.
“At Round Mountain, we are continuing to focus on underground higher-margin opportunities at Phase X and Gold Hill,” Ned Jalil, senior vice president and chief technical officer for Kinross, said in the earnings call.
Talking about Phase X, he said that “our preliminary view is that this has the potential to be a higher productivity, lower cost operation,” and said permitting is progressing at Gold Hill for an underground exploration drift.
“Stepping back to look at the big package, the transition from open pit to underground mining at Round Mountain presents an opportunity to mine higher-margin ounces through the end of this decade and into the next,” Jalil said.
Gold Hill is northeast of the Round Mountain operations.
