Kinross Gold’s Balance Sheet at the End of Q2 2018



Liquidity position

Kinross Gold’s (KGC) liquidity position at the end of the second quarter wasn’t much different than it was at the end of the first quarter. It ended the second quarter with cash and cash equivalents of $918.7 million. In addition to cash, it had an available credit facility of $1.56 billion, which takes the company’s total liquidity to $2.5 billion.

Investors should note that this liquidity position is more significant since the company doesn’t have any debt maturity until 2021. That should help it invest in future development opportunities.

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Financially flexible to advance growth projects

In its Q2 2018 earnings call, Kinross Gold’s management sounded upbeat about the company’s strong financial position. After its Q2 2018 results, it closed the acquisition of two power plants in Brazil for $254 million. Its CFO Tom Giardini said that given the company’s strong financial position, it funded the transaction with cash while it looks for “a future debt financing for the acquisition.”

KGC has the financial strength and flexibility to invest in the future as it executes on five projects and advances three additional development opportunities. Its strong cash flow generation should enable it to pursue these growth opportunities. In Q2 2018, it generated $232 million in adjusted operating cash flow, which is roughly in line with the same period last year.

KGC had a trailing net-debt-to-EBITDA ratio of ~0.7x.

Its peers (RING) (GDXJ) Newmont Mining (NEM) and Barrick Gold (ABX) have reduced their debts considerably over the past few years. Goldcorp (GG) and Agnico Eagle Mines (AEM) have lower financial leverages than their senior gold peers (GDX).


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