Kinross narrows loss (August 03, 2001)

The losses of Kinross Gold (K-T) shrank in the recent second quarter, thanks to increased production and lower cash costs at all of its primary operations.

During the three months ended June 30, the company lost US$6 million (or 3 per share) on mining revenue of US$70.7 million, compared with a year-ago loss of US$10.8 million (5 per share) on US$66.4 million in revenue. Cash flow from operations climbed US$5.3 million to US$15.3 million.

For the first half of the year, the company’s loss amounted to US$10.9 million (5 per share) on US$134.8 million, compared with a loss of US$18.6 million (7 per share) on US$136.4 million a year earlier.

Second-quarter attributable gold-equivalent production totalled 233,722 oz., up from 228,086 oz. the previous year. Total cash costs fell to US$191 per oz. from US$212. Year-to-date production totalled 453,401 equivalent ounces, up from a year-ago 416,977 oz. First-half cash costs averaged US$191 per oz.. This was US$23 better than the previous year.

The company realized an average price of US$296 for second-quarter production, down from US$310 per oz. in the same period of 2000. The first half’s average price realized was US$287 per oz., down from US$305 per oz.

On the exploration front, drilling programs continued at the high-grade Birkachan deposit in Russia, the True North satellite deposit in Alaska and the Goose Lake deposit in Nunavut.

Diamond and reverse-circulation drilling at True North is focussing on the conversion of resources to reserves and outlining the limits of mineralization. A recently completed interim reserve calculation added 144,000 oz. gold to the 611,000 oz. of probable reserves from year-end 2000.

Encouraging drilling results have also been coming in from the newly identified West Zeppelin zone. Kinross expects to add more reserve ounces at True North by year-end.

In Russia, four drills are working on defining the depth and strike extensions of multiple, high-grade, epithermal veins within a very large, altered and mineralized zone measuring about 2.5 km long, 150-200 metres wide and at least 350 metres deep. Drilling has cut high-grade veins returning up to 31 grams gold per tonne.

Summer drilling on the South Extension of the Main zone at Goose Lake has extended the deposit to at least 600 metres along strike and to depths of at least 300 metres. Better intercepts include:

• 7 metres grading 38.6 grams gold;
• 2 metres grading 52.3 grams gold;
• 9.3 metres grading 17.5 grams gold; and
• 3 metres grading 21.7 grams gold.