UPDATE 1-Kinross adjusted earnings fall; production jumps

Tue May 7, 2013 5:53pm EDT
 
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TORONTO May 7 (Reuters) - Canada's Kinross Gold Corp reported slightly lower adjusted first quarter earnings on Tuesday as its margins slipped, even as revenue edged higher.

Gold production from continuing operations rose 10 percent to 648,897 ounces, boosted by increases at the Tasiast mine in Mauritania and Fort Knox, in Alaska.

On a by-product basis, Kinross's production cost of sales rose to $674 per ounce from $655 a year earlier, but other cost metrics, including all-in sustaining costs, improved.

Kinross said in February it was reviewing how it uses contractors, as well as its production at higher-cost projects, as it looks to bring down operating costs.

Tasiast produced some 62,757 ounces in the quarter, up from 37,634 ounces a year earlier. Kinross is reworking an expansion plan for the mine as it looks to clamp down on capital spending and risk.

The scaled-back, 38,000 tonne-per-day mill expansion at the West African mine is now expected to cost around $2.7 billion, with a feasibility study set to wrap up in early 2014.

Net earnings for the quarter to March 31 rose to $160.5 million, or 14 cents a share, from $99.6 million, or 9 cents a share, a year earlier. Revenue rose to $1.06 billion from $1.01 billion.

Excluding a tax charge in the earlier quarter and other items, adjusted earnings fell to $170.5 million, or 15 cents a share, from $196.1 million, or 17 cents a share.

Analysts, on average, had been expecting earnings of 13 cents a share, according to Thomson Reuters I/B/E/S.