How Kinross’s Financial Position Looks Compared to Peers


May. 29 2019, Updated 3:55 p.m. ET

Liquidity position

Kinross Gold’s (KGC) liquidity position at the end of the first quarter of 2019 was $1.8 billion, out of which cash and cash equivalents were $406.9 million and the available credit was $1,417.2 million. Kinross’s cash was $349 million at the end of the fourth quarter. It does not have any debt maturities until 2021. Kinross’s net debt at the end of Q1 was $1.46 million.

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FCF generation

Kinross has been generating negative free cash flow (or FCF) for the last few quarters, mainly due to its higher capex. In Q1, it generated negative FCF of $13.2 million. The company is advancing a project financing of $300 million for Tasiast, which it expects to complete in the second half of the year.

Kinross generated $230 million in adjusted operating cash flow in Q1 2019 compared to $364 million in Q1 2018. This, in large part, is due to lower realized gold prices (GLD) during the current quarter as compared to the same quarter last year. During Q1 2019, realized gold prices averaged $1,304 per ounce compared to $1,330 per ounce in Q1 2018.


The net-debt-to-forward-EBITDA ratio indicates the number of years it would take for a company to repay its debt. Among Kinross’s peers (GDX), Newmont Goldcorp (NEM) has the lowest ratio of 0.21x at the end of Q1, which indicates a high debt-repayment capability for the miner from its forward earnings. Barrick Gold’s (GOLD) debt repayment ratio was 1.0x. Kinross Gold (KGC) and Agnico Eagle Mines (AEM) have ratios of 1.3x and 1.6x, respectively. While these are on the weaker side as far as peers are concerned, overall, this ratio does not imply anything to be concerned about.

You can read A Look at These Gold Miners’ Financial Health after Q1 Results for more analysis of gold miners’ financial position.


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