Outperforming peers in 1Q17
During Kinross’s 4Q16 earnings call, its management sounded confident about realizing Bald Mountain’s full potential. Management said that the company had already added 1.0 million ounces to Bald Mountain’s gold reserves, which was ahead of its scheduled completion at the end of 1Q17.
Kinross is on track to double Bald Mountain’s production and reduce its unit costs in 2017. It’ll be interesting to hear updates on its progress year-to-date.
You might recall that Kinross decided to do the Tasiast expansion in two phases in order to lower its risk. A feasibility study of Phase Two is currently underway and is expected to be completed by the end of 3Q17. This phase, which is expected to increase throughput to 30,000 tons per day, will require a further investment of $620.0 million.
Kinross is expected to make a decision on Phase Two by the end of 2017. A favorable decision on this project could go a long way toward rerating Kinross stock’s multiple and narrowing its valuation gap compared to its peers’.
In the next article, we’ll look at Yamana Gold’s (AUY) key expectations for its 1Q17 results.