ABX Barrick Gold Corp. (BC) (delisted)

The Canadian mining company Kinross Gold Corporation (KGC) announced that it intends to purchase 625,000 units of Edgewater Exploration Ltd. in a private placement, for C$500,000.The private placement is subject to approval by the TSX Venture Exchange.

After the private placement goes through, Kinross would hold 8.9 million shares, constituting 12.7% of Edgewater's outstanding shares. Kinross intends to purchase the Edgewater units for investment purposes.

The company expects to produce between 2.6-million and 2.7-million ounces in 2011. By 2015, Kinross expects production to grow to 4.5-4.9 million ounces, as new projects start in 2013 and 2014. With new studies completed at Tasiast, FDN, Lobo-Marte, and Dvoinoye, Kinross is making significant and steady progress in advancing the projects that give the company the best growth profile among senior gold producers.

Edgewater is a junior exploration company engaged in exploring the Enchi project (90% owned by a Kinross subsidiary and under option to Edgewater) in Ghana and the Corcoesto project in Spain.

Kinross, a Canada-based gold mining company, currently owns ten operating mines in North and South America, Russia and Africa, including Vancouver-based Red Back bought in September for $7.1-billion, the Tasiast mine in Mauritania and the Chirano operation in Ghana.

In May 2011, the company reported record adjusted net income of $180.3 million or $0.16 per share in the first quarter of 2011, above last year’s $99.7 million or $0.14 per share, outpacing the Zacks Consensus Estimate of $0.14.

GAAP net earnings were $255.5 million or $0.23 per share in the first quarter of 2011 compared with $181.3 million, or $0.26 per share in the prior-year quarter.

Quarterly revenues leaped 42% to $937.0 million, driven by strong performance at all operations, new production from West Africa, and a robust gold price contribution. 

Gold production increased 18% year over year to 642,857 ounces in the first quarter of 2011 with an average realized gold price of $1,327 per ounce sold compared with $1,065 per ounce sold in the prior-year quarter.

The increase may be ascribed to the addition of output from the West African operations. Production cost per gold equivalent ounce was $543 versus $456 in the prior-year quarter. Production cost per ounce was lower than expected, despite upward pressure on input costs.

Kinross margin per ounce sold was a record $784 during the quarter, up 29% year over year.

Kinross Gold Corporation, like other gold producers, Barrick Gold Corporation (ABX) and Newmont Gold Mining (NEM), benefits from rising gold prices. Currently, Kinross Gold has a short-term (1 to 3 months) Zacks #3 Rank (Hold) and a long-term Neutral recommendation.

 
BARRICK GOLD CP (ABX): Free Stock Analysis Report
 
KINROSS GOLD (KGC): Free Stock Analysis Report
 
NEWMONT MINING (NEM): Free Stock Analysis Report
 
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