The recently completed merger with Amax Gold has provided a dramatic boost in revenue for Kinross Gold (K-T), as well as a larger stable of mines to manage. With gold prices at near-record lows, the Toronto-based company is carrying out a detailed review of all mines to identify areas that might improve their operating performance and profitability.
Kinross reported production of 276,113 oz. gold in the first half of 1998, which includes 169,646 oz. in the quarter ended June 30. This compares with 195,550 oz. produced in the first half of 1997, including 103,158 oz. in last year’s second quarter.
Factoring in silver production, Kinross’s stable of mines turned out 307,375 gold-equivalent ounces in the first six months of this year. Cash operating costs fell to US$219 per equivalent ounce from US$280 per equivalent ounce in the first half of 1997.
The strong operating performance was attributed to the positive impact of a lower Canadian dollar and improved production at the Hoyle Pond gold mine in Ontario, as well as a pillar-recovery program and improvements in underground mining at the Macassa mine, also in Ontario.
However, owing to mechanical failures of the overland conveyor system, production at the joint-venture Refugio mine in Chile was described as “significantly below plan, at higher-than-expected cash operating costs” (US$368 per oz.).
Kinross posted a net loss of US$3.3 million on revenue of US$64 million in the latest quarter, compared with a loss of US$24.4 million on revenue of US$47.3 million a year earlier.
The net loss for the 1998 first half was US$2.6 million on revenue of US$106.6 million, compared with a loss of US$27.4 million on revenue of US$90.6 million in the first half of last year. (Results in 1997 reflect an after-tax writedown of US$24 million as a result of a series of rockbursts at the Macassa mine.)
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