Kinross Gold Corporation

Kinross Gold Corporation (Canada, TSX:K; NYSE:KGC) mines in Canada, USA and Brazil and has projects in Russia. The company plans to produce 1,5 million gold equivalent ounces in 2007 at a cost of $320 to $330/oz. This does not include the impact of the Bema acquisition. In May 2007 the company forecasted its gold output will rise 60 per cent by 2009, with 40 per cent produced for less than $200 (U.S.) an ounce.
The company's Bema Gold Corporation acquisition — which brought with it the open-pit Kupol gold project in northeastern Russia — is powering up its cash flow and will help Kinross with low-cost production.
Kinross, the fourth-largest primary gold producer in North America, expects to produce 1,7 million ounces in 2007, but expects to boost that to about 2,1 million ounces in 2008, and to about 2,6 or 2,7 million in 2009.
As of December 31, 2006, Kinross’s total proven and probable mineral reserves amounted to 27,9 million ounces of gold. Reserves increased at seven properties. Measured and indicated mineral resources at year end increased to 8 million ounces of gold, compared to 6,1 million ounces at year end 2005. Silver reserves at the end of 2006 were reported at 27,8 million ounces, using a price of $7 an ounce. Gold reserves were estimated at a price of $475/oz while resources were estimated at a $525/oz price. Kinross Gold and Goldcorp announced on 26 September, 2007, that they had entered into a binding agreement, which allows Goldcorp to acquire Kinross's 49% share of the Porcupine gold mine in northeastern Ontario, and Kinross's 39% share of the Musselwhite gold mine in northwestern Ontario. The swap increases Goldcorp's reserves by 5.6 million oz at an estimated acquisition cost of $37/oz.
Meanwhile, Kinross will gain Goldcorp's stake in the La Coipa silver-gold mine in Chile and $200 million in cash.

Kinross expects '08 output to rise 20% as new mines come onstream

Canadian gold-miner Kinross Gold expects ouput to rise by about 20% this year, to between 1,9-million and 2-million ounces, as production is boosted by new mines in Russia and the US, as well as an expansion in Brazil.

“We expect to bring all three of our new, lower-cost development projects into production on schedule...setting the stage for expected production of 2,5-million to 2,6-million ounces in 2009, a 60% increase over 2007 production," president and CEO Tye Burt said on Friday.

In 2007, Kinross produced some 1,6-million gold-equivalent ounces, in line with its own forecasts. The company includes silver production as gold-equivalent output.

The miner said that it expected to report 2007 costs at the high end of, or slightly above, forecasts of between $355/oz and $365/oz.

Costs were expected to average between $365 and $375 in 2008, but would decrease over the year, to between $325/oz and $335/oz in the fourth quarter.

"We expect our costs to decrease significantly over the course of 2008, especially in the fourth quarter, as the new projects reach full production,” Burt said.

Kinross said that production from the new projects in 2008 would more than compensate for a slight decline in output from existing operations, which it attributed to a recent asset swap with fellow Canadian Goldcorp and lower grades being milled at its Fort Knox and Round Mountain operations.

Gold miners around the world are racing to bring development projects into production to capitalise on record gold prices.

Kinross plans to start commissioning the Kupol (Russia) and Buckhorn (US) mines this year, and is also on track to complete an expansion project at its Paracatu mine, in Brazil.

The project will increase gold production at Paracatu from some 175 000 oz last year to between 305 000 oz and 335 000 oz in 2008.

The Kupol mine is expected to contribute as much as 390 000 oz to group output this year, while the Buckhorn project, which is scheduled to start production in October, will add between 25 000 oz and 30 000 oz, the company said.

Kinross is Canada's third-largest miner by market capitalisation, after world-number-one Barrick Gold and Goldcorp.

The group expects capital expenditure for 2008 to reach some $600-million, including $190-million for Paracatu, $100-million for Kupol, and $27-million for Buckhorn.

Kinross shares fell 5,5% on Friday morning, to C$20,26 a share by 11:28 EST. The S&P/TSX Global Gold Index was down 2,25% by the same time.

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