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Kinross’s Balance Sheet: Strong Enough to Support Growth Projects

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Liquidity position

At the end of 3Q16, Kinross Gold (KGC) had $756.0 million in cash and cash equivalents and $2.2 billion in total liquidity. During the quarter, the company extended the maturities on its $1.5 billion revolving credit facility and $500.0 million term loan by one year to August 2021 and August 2020, respectively.

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Balance sheet strength

During the third quarter, Kinross Gold repaid $250.0 million of senior notes. With this, the company now doesn’t have any debt maturity before 2020. This brings the total debt repaid by the company in the last four years to $1.0 billion.

Flexibility to advance growth projects

Kinross Gold’s balance sheet strength gives the company a lot of flexibility to move ahead with its growth projects. In its 3Q16 earnings call, Kinross Gold’s CEO (chief executive officer) Paul Rollinson said that with this level of liquidity, the company is “well positioned to advance a number of exciting organic growth opportunities including the Tasiast expansion, Bald Mountain and other projects that meet our investment hurdles and strategic priorities.”

Peers Barrick Gold (ABX) and Newmont Mining (NEM) have debt reduction as a top priority to weather the current gold price volatility. Goldcorp (GG) still has lower financial leverage than its senior gold peers (GDX).

Barrick Gold makes up 5.6% of the VanEck Vectors Gold Miners ETF (GDX). The SPDR Gold Shares (GLD) also has exposure to gold prices.

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