Already a Bloomberg.com user?
Sign in with the same account.
Kinross Gold Corp., Canada’s third- largest producer of the metal, took a $3.09 billion writedown on its Tasiast mine in Mauritania after it revised an expansion plan and industry capital and operating costs increased.
The company reported the impairment charge in its fourth- quarter earnings statement yesterday after the close of trading. Kinross took a $2.49 billion writedown on the same project in the year-earlier period. It acquired the mine as part of its C$8 billion ($7.99 billion) purchase of Red Back Mining Inc. in 2010.
“The impairment is a snapshot in time, it doesn’t necessarily reflect our view of the long-term potential of what this asset can be,” Chief Executive Officer J. Paul Rollinson said in an interview. “We believe this asset will be a core long-term asset for the company going forward.”
Kinross rose 5.4 percent to C$8.34 in Toronto, the biggest gain in three months. The company’s fourth-quarter net loss widened to $2.99 billion, or $2.62 a share, from $2.79 billion, or $2.45, a year earlier. Earnings excluding the Tasiast writedown and other one-time items were 24 cents, beating the 21-cent average of 21 analysts’ estimates compiled by Bloomberg.
Sales rose to $1.19 billion from $919.8 billion, beating the $1.17 billion average of eight estimates. Output increased 16 percent to 724,510 so-called gold-equivalent ounces, which includes silver production. The average of six estimates was for 635,900 equivalent ounces.
Rollinson, who was replaced Tye Burt as CEO Aug. 1, is seeking to lower production costs. They rose 8 percent in the fourth quarter to an average of $686 per ounce of gold from $635 a year earlier. The company forecast 2013 capital spending of $1.6 billion, compared with $1.92 billion last year.
“When I took over in August our capex for the year was advertised at $2.2 billion,” Rollinson said. “We’ve come into the 2013 budget with a very disciplined eye on our spending.”
Barrick Gold Corp. and Goldcorp Inc., Canada’s two biggest gold producers ranked by market capitalization and sales, are scheduled to report fourth-quarter earnings today.
To contact the reporter on this story: Liezel Hill in Toronto at email@example.com
To contact the editor responsible for this story: Liezel Hill at firstname.lastname@example.org