Kinross Gold (KGC) produced 671,956 GEOs (gold equivalent ounces) in 1Q17, which represents a 2.3% YoY (year-over-year) decline and a sequential drop of 10.0%.
The YoY decline is mainly due to lower production at Kupol in Russia and the curtailment of production at the Maricunga mine in Chile. The lower production from Kinross’s Russian operations was as expected, however, due to anticipated lower grades.
Notably, production was suspended at the Maricunga mine, given water curtailment orders. These anticipated declines were partially offset by higher production at Bald Mountain, Tasiast, and Chirano.
The Americas region contributed 60.0% to Kinross Gold’s total production in 2016. Production in the region rose 1.0% YoY. Production at the Kettle River-Buckhorn and Paracatu mines offset strong increments at Kinross’s other operations in the Americas.
Production at the company’s Russian region was 25.5% lower YoY. This was due to lower grades at the Kupol and Dvionoye mines, which the company anticipated.
The West African region’s production grew by 37.5% YoY in 1Q17 mainly due to stronger production at the Tasiast and Chirano mines.
Kinross Gold maintained its guided production of 2.5 million–2.7 million ounces for 2017, which is consistent with its average production over the past 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 the Maricunga mine and anticipated lower grades at its Russian operations.
In the next part, we’ll see which projects could offer an upside to Kinross’s production in the medium term and long term.