Kinross reports loss on charge; suspends dividend
TORONTO (Reuters) - Kinross Gold Corp (K.TO: Quote) slid to a quarterly loss on Wednesday as it took a big non-cash charge linked to the recent decline in the price of gold and suspended its semi-annual dividend.
The gold miner also deferred a decision on the expansion of its Tasiast mill in Mauritania to 2015 at the earliest, citing the lower gold price. It still expects to complete a feasibility study in early 2014.
"Balance sheet strength and liquidity remain key priorities," said Chief Executive J. Paul Rollinson on the decision to suspend the dividend, in a statement.
Kinross said future decisions on the dividend would be based on market conditions, balance sheet strength, operating performance and cost reductions.
Gold miners have announced billions in writedowns over the last two years, as ill-advised deals, underperforming assets and the plunging gold price wreak havoc on their books.
Spot gold has fallen sharply this year, from above $1,600 an ounce to a near 3-year low of about $1,180 in late June. The precious metal was trading at about $1,322 on Wednesday.
Kinross' gold production rose from a year earlier, but revenue slipped as the miner's average realized gold price at continuing operations fell to $1,394 per ounce, from $1,568 a year earlier. All-in sustaining costs rose to $1,072 an ounce, from $970 an ounce.
Kinross' net loss for the second quarter was $2.48 billion, or $2.17 a share, compared with earnings of $113.9 million, or 10 cents a share, a year earlier.
The company took a $2.29 billion after-tax, non-cash impairment charge which it said was largely due to the lower gold price, including a $1.33 billion charge linked to the carrying value of Tasiast. Continued...