Is Kinross Gold Financially Flexible Enough to Advance Its Project Pipeline?
At the end of 1Q17, Kinross Gold (KGC) had $819.0 million in cash and cash equivalents and $2.3 billion in total liquidity. After considering the sale of the Cerro Casale and Quebrada Seca divestments, Kinross’s cash position is $1.1 billion, with a liquidity position of ~$2.5 billion.
Kinross has no maturities until 2020, which brings the total debt repaid by the company in the past four years to $1.0 billion.
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Financially flexible to advance growth projects
The strength of Kinross Gold’s balance sheet gives the company a lot of flexibility to move forward with its growth projects. Its liquidity and expected cash flow should be sufficient to fund its operations, capital expenditure, and exploration expenditure.
In its 1Q17 earnings call, Kinross CEO (chief executive officer) Paul Rollinson sounded very upbeat about the company’s strong financial position. While highlighting its strong liquidity and balance sheet position, Rollinson said that all of it “gives us the financial flexibility to invest in our strategic priorities and development projects.”
Peers Barrick Gold (ABX) and Newmont Mining (NEM) have had impressive success reducing their high debt loads over the past few years. Goldcorp (GG) still has a lower financial leverage than its senior gold peers (GDX).
Continue to the next part for a discussion of Kinross’s analyst recommendations.