TORONTO (Reuters) - Kinross Gold Corp (K.TO), squeezed by slumping prices and production declines, expects to shake off a money-losing 2015 with record output and lower costs this year, the world’s fifth-largest producer by output said on Wednesday.
Chief Executive Paul Rollinson said the Toronto-based miner is “running a tight ship” that reflects a disciplined approach to capital, operations and acquisitions.
Kinross expects record 2016 production of 2.7 million to 2.9 million ounces of equivalent gold at an all-in sustaining cost of $890 to $990 an ounce. Capital expenditure is forecast at approximately $595 million.
In 2015, the company produced 2.59 million ounces, at the high end of its forecast of 2.5 million to 2.6 million ounces, at an all-in cost of $975 per ounce.
Rollinson said he’s not relying on a recent rally in gold prices to continue. “The gold price has been great in the last couple of weeks, but it’s a volatile world out there,” he said in an interview.
Gold XAU= on Wednesday hovered below a 7-1/2 month high of $1,200 an ounce, touched on Monday, as investor appetite for safe-haven assets are fed by sliding stock markets and global economic worries. The spot price on Wednesday was $1,196.91 an ounce.
Kinross continues to mull a two-step expansion of its Mauritania mine, Tasiast, and expects to report in late March the costs for a second phase of development, Rollinson said.
The company estimated proven and probable mineral reserves at 34 million ounces of gold at year-end, and said additions largely offset depletion during the year.
In its fourth quarter, Kinross recorded an adjusted loss of $68.8 million, or 6 cents a share, compared with an adjusted loss of $6 million, or 1 cent a share, in the same period the previous year.
Analysts had expected an adjusted loss of 4.8 cents a share, according to Thomson Reuters I/B/E/S.
During the quarter, Kinross produced 623,716 equivalent ounces of gold at its 10 mines in North and South America, Africa and Russia, at an all-in sustaining cost of $991 per ounce.
That was down from 672,051 ounces in the same period the previous year due to low rainfall at its Paracatu mine in Brazil, when production costs were $1,006.
Reporting by Susan Taylor; Editing by G Crosse and Alan Crosby