(Reuters) - Kinross Gold Corp (K.TO) said on Wednesday it will make further cuts to its employee numbers and capital spending as the Toronto-based gold miner reported a steep drop in third-quarter earnings hurt by weaker gold prices.
The company, which is one of the world’s 10 biggest gold producers, said it has identified around $20 million in expected annual cash savings, primarily from laying off an unspecified number of employees.
Kinross and other gold miners have promised to slash costs as they grapple with tumbling profits caused by a steep decline in the gold price over the past year, as well as soaring mine development costs. Gold prices, trading at $1,272 on Wednesday, have fallen 24 percent this year.
As part of its cost-cutting drive, Kinross will chop around 1,000 jobs overall at operations around the world, company spokesman Steve Mitchell said. Some of those cuts have already been announced, including a reduction of 300 jobs in Mauritania and in Spain. Kinross employs around 9,000 people.
To save money, Kinross will merge its North and South American regions into a new Americas region, close its Reno, Nevada office and “downsize” its administrative offices in Chile and Brazil.
“We continue our focus on reducing capital and other costs in a lower gold price environment,” Kinross Paul Rollinson said in a statement.
The miner has also identified a further $50 million in capital savings for 2013, on top of the $150 million it announced previously. The company now expects its 2013 capital spending to be about $1.4 billion.
Kinross said it expects its 2014 capital expenditures to be sharply lower - in the range of $800 million to 900 million.
Earnings at Kinross fell to $46.9 million, or 4 cents a share, in the three months to end-September on the back of weaker gold prices compared with earnings of $226.2 million, or 20 cents a share, in the same quarter a year earlier.
Adjusted net earnings from continuing operations was 5 cents a share, down from 22 cents a year ago.
Analysts, on average, expected earnings of 4 cents a share, according to Thomson Reuters I/B/E/S.
Kinross increased its 2013 production forecast slightly to a range of 2.6 to 2.65 million gold equivalent ounces from a previous forecast of 2.4 to 2.6 million gold equivalent ounces.
Kinross’ total attributable gold equivalent production in the quarter edged higher to 680,580 ounces from 672,173 ounces a year ago.
The miner’s average realized gold price at continuing operations fell to $1,331 per ounce from $1,649 a year earlier.
Kinross’ all-in sustaining costs on a by-product rose to $1,069 an ounce from $1,021 a year ago, partly due to lower silver revenue and increased production costs.
Kinross said it expects to be at the lower end of its 2013 all-in sustaining cost forecast of $1,100 to $1,200 per ounce sold.
Last quarter, Kinross 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 its Tasiast gold mine in Mauritania.
Kinross’ stock is down 50 percent this year, in line with other large gold producers.
Reporting by Nicole Mordant in Vancouver; Editing by Bernard Orr