What Is the Geographic Exposure of Kinross Gold?



Kinross’s geographic exposure

In this article, we’ll talk about the geographic exposure of Kinross Gold (KGC). We’ll also see how operating in these regions impacts the company’s overall prospects.

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The Americas

Kinross Gold has three mine sites in North America: Fort Knox in Alaska, Round Mountain in Nevada, and Kettle River–Buckhorn in Washington. Its South American sites are the Paracatu mine in Brazil, as well as the La Coipa and Maricunga mines in the Maricunga mining district of northern Chile.

Over 50% of Kinross’s annual production is from the Americas region. However, the reserves at its US mines are depleting quickly.

North and South America offer one of the safest jurisdictions as far as mining investment is concerned. According to Behre Dolbear’s 2015 report on country rankings for mining investment, Canada was number one. The US, Chile, Mexico, and Peru were other favored mining investment destinations.

West Africa

Kinross has brownfield exploration at Tasiast in Mauritania, as well as mine exploration at the Chirano mine in Ghana. While Ghana is a safe jurisdiction, Mauritania is not as safe. In addition, it has issues regarding infrastructure development.

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Most of Kinross’s mining activities in Russia are close to the volcanic belt in the Russian Far East. Kupol and Dvoinoye are the two mines from where Kinross achieves ~30% of its total production.

Russia is a risky jurisdiction for mining given the political uncertainty amid increased tension with the West. There are risks of potential political sanctions or capital controls. This is one of the reasons that Kinross trades at a discount to its peers.

Global exposure

Globally, gold miners are trying hard to limit their exposure to safe jurisdictions. Newmont Mining (NEM) is doing portfolio optimization, wherein it is selling off non-core assets in other regions to increase its exposure to the Americas. Goldcorp (GG) has all of its mines in the Americas, and its assets are considered relatively safe.

The VanEck Vectors Gold Miners Index ETF (GDX) invests in the stocks mentioned above. Kinross Gold forms 3.2% of its holdings. The SPDR Gold Shares ETF (GLD) is a physical gold–backed ETF.


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