Why Kinross Is Anticipating a Fall in Production for 2017
Kinross Gold (KGC) produced 746,291 GEOs (gold equivalent ounces) in 4Q16. That represents a 20.0% YoY (year-over-year) rise and a sequential rise of 9.0%.
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The YoY rise is mainly attributable to the acquisition of Bald Mountain and Round Mountain during the period.
Kinross produced 2.8 million ounces in 2016. That was within the company’s guidance range and an improvement of 7.5% YoY.
The Americas region contributed 60.0% to Kinross Gold’s total production in 2016. Production in the region rose 22.0% YoY due to acquisitions. Production was also higher sequentially due to increased production at Paracatu and Bald Mountain.
The Russian region outperformed its production and cost guidance for 2016. Combined production at the Kupol and Dvoinoye mines was lower than 2015. But that was expected due to lower grades at Dvoinoye.
The West African region was in its production range for the year. It came despite temporary stoppages at Tasiast and the transition to the underground deposit at Chirano.
Kinross Gold has guided for production of 2.5 million–2.7 million ounces for 2017. The company mentioned in its press release that it is consistent with its average production over the last five years. However, it will be lower than the company’s actual production of 2.8 million ounces in 2016. The fall is due to the suspension of mining activities at Maricunga and anticipated lower grades at its Russian operations.
In the next part, we’ll take a look at Kinross Gold’s costs in 2016 and its outlook for 2017.