May 6, 2008 / 9:54 PM / in 10 years

UPDATE 1-Kinross Gold profit rises as prices offset output

(Adds details. In U.S. dollars unless noted)

TORONTO, May 6 (Reuters) - Kinross Gold K.TO said on Tuesday its first-quarter profit rose 3.5 percent as soaring gold prices made up for weaker production.

Kinross earned a net $70.9 million in the quarter, up from $68.5 million in the year-earlier quarter. On a per-share basis, profit fell to 11 cents from 15 cents, as the number of shares outstanding increased.

The gold producer also announced it had begun processing ore at its massive low-cost Kupol mine in Russia, one of three mines expected to open this year for Kinross.

Analysts polled by Reuters had expected, on average, a profit of 13 cents a share, before exceptional items.

Revenue climbed 34 percent to $330.2 million as realized gold prices averaged $929 during the quarter, well up from $650 an ounce in the year-before period.

Gold-equivalent production in the quarter slid to 331,784 ounces from 389,394 ounces in the same period a year before, due to operational issues at some mines.

Cash costs per ounce were $455, up from $328 a year earlier.

Kinross reiterated that it expects to produce between 1.9 million and 2.0 million ounces this year. It sees output of 2.5 million to 2.6 million ounces in 2009.

In addition to Kupol, the company’s Paracatu expansion in Brazil should begin producing in July, while the Buckhorn mine in Washington state should come on line in October. (Reporting by Cameron French; Editing by Peter Galloway)

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