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Kinross axes staff, Denver office; Fort Knox shines

Kinross Gold Corp. Nov. 10 reported that its global operations produced 680,679 gold-equivalent ounces during the third quarter of 2015.

This is down slightly from the third quarter of last year, due to heavy rains hampering production at its Maricunga Mine in Chile.

The company said strong production at its Fort Knox Mine in Alaska, Kupol-Dvoinoye operation in Russia and Round Mountain Mine in Nevada helped offset some of this loss.

In terms of operational excellence, we saw very strong performance from Fort Knox, Paracatu and Kupol," said Kinross CEO Paul Rollison.

Fort Knox produced 115,258 ounces of gold during the third quarter, a 10 percent increase over output during the same period in 2014 and fairly consistent with the previous quarter.

Cost of sales for Fort Knox production during the third quarter was US$556/oz., which is US$247 lower comparable costs a year earlier.

"Fort Knox, with strong production and lower power costs, delivered the mine's lowest cost of sales in two years," Kinross COO Warwick Morley-Jepson told investors and analysts Nov. 10.

Through the first nine months of 2015, the open-pit mine near Fairbanks has produced 313,992 oz. of gold.

The cost of sales across all of Kinross' operations was US$668 per gold-equivalent ounce, which is a slight decrease from the US$698 per gold-equivalent oz. a year ago.

Kinross expects to produce 2.5 million-2.6 million gold-equivalent oz. at an all-in sustaining cost of US$975-US$1,025 per gold-equivalent oz. and cost of sales US$690-US$730 per gold-equivalent oz. in 2015.

As part of the company's cost-reduction efforts, Kinross said it has reduced corporate headcount costs by 23 percent and is closing its Denver office.

"We are also closing our Denver office, which was the headquarters of our Americas region, while Toronto, where we reduced headcount by 15 percent, is absorbing the regional responsibilities for our U.S. operations," Rollison explained.

Mining News has received unconfirmed reports that the latest staff reduction includes some personnel at the Fort Knox Mine.

This headcount reduction is in addition to the September departure of 222 employees of Kinross' Tasiast operation in Africa.

Kinross reported an adjusted net loss of US$23.9 million (US5 cents per share) for the third quarter 2015, compared with adjusted net earnings of US$70.1 million (US6 cents per share) for the same period last year.

The company reduced its net debt to US$949.2 million, repaid the remaining balance on the Kupol loan and ended the quarter with US$1.02 billion in cash and cash equivalents.

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Shane Lasley, Publisher

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Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.


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