(KGC) Kinross Gold Invests in Edgewater Exploration

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

Zacks Investment Research

About vitalstocks

This is a sample profile field. Vitalstocks is the operating company for Stockbloghub. This will place the picture of the author or company in the profile. Here is another extra line of information.


Powered by Facebook Comments

Similar Posts: | | | | | | Basic Materials | Gold

RSS feeds: ABX | Barrick Gold Corporation | KGC | Kinross Gold Corporation | NEM | Newmont Mining Corporation | Basic Materials | Gold |

Other Posts by | RSS Feed for this author