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Kinross gold production slipped in the fourth quarter of 2021. A fire at Tasiast and a pit wall issue at Round Mountain weighed on results. The company reported adjusted net income of $335.1 million, or 27 cents per share. That matched the same figure from the fourth quarter of 2020.
Full-Year 2021 Earnings Decline
For the full year, adjusted net earnings fell to $541.3 million, or 43 cents per share. That’s down from $966.8 million in 2020. Kinross also recorded a $106.1 million write-down at Bald Mountain in White Pine County. The write-down followed a lower estimate of recoverable ounces from the Vantage heap leach pad. The company had encountered carbonaceous ore there that resists leaching.
Kinross lost $2.7 million in the fourth quarter. That’s a steep drop from the $783 million profit it posted the previous quarter. Reported net earnings for the full year came in at $221.2 million, or 18 cents per share. In 2020, that figure was $1.342.4 billion, or $1.07 per share.
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Gold Prices and Share Performance
The average realized gold price came in at $1,797 per ounce for both the fourth quarter and full year 2021. That’s down from $1,875 per ounce in the fourth quarter of 2020. It’s still up from an average of $1,774 per ounce across all of 2020. Kinross shares traded at $5.81, down 5 cents on the day.
Kinross Gold Production and Costs
Reduced output at Round Mountain and Tasiast in Mauritania pulled down fourth-quarter production. Output fell from 624,032 gold equivalent ounces in the prior quarter. Kinross produced 2.068 million gold equivalent ounces for the full year. That’s down from 2.367 million ounces in 2020.
All-in sustaining costs rose sharply. The company reported $1,312 per gold equivalent ounce for the fourth quarter. That’s up from $1,013 in the prior quarter. Full-year costs reached $1,138 per ounce, up from $987 the previous year.
Kinross fell short of its 2021 guidance of 2.1 million ounces. The company produced 2.07 million ounces instead. Still, the Toronto-based company forecasts gold equivalent production of 2.65 million ounces this year.
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Kinross’s Outlook and Reserve Growth
“Our long-term production profile remains solid,” said J. Paul Rollinson. He’s president and chief executive officer of Kinross. He made the comment in a post-market earnings announcement on Feb. 16. Rollinson pointed to planned production of 2.6 million ounces in 2024. He also cited an annual average of at least 2.5 million ounces through the rest of the decade. He noted that Kinross grew its mineral reserve estimates by 2.7 million ounces. Reserves reached 32.6 million gold equivalent ounces by year-end 2021.
Proven and probable mineral reserves grew on two fronts. Round Mountain in Nye County added a net 792,000 ounces. Udinsk in Russia added 3 million ounces.
Tomory said the company now expects to finish optimization studies in the second half of the year. Earlier plans had targeted the first half. He called the situation at Round Mountain a “silver lining.” Kinross now has, in his words, “inventory in front of us to push my life out into the 2030s.” By year-end, the company had converted 938,000 gold ounces at Phase S to reserves.
Kinross plans to spend $16 million this year on subsurface drift construction and surface research. The work will happen at Gold Hill, north of Round Mountain, and across the broader Round Mountain district.
Round Mountain and Bald Mountain Production Details
Round Mountain produced 51,549 gold equivalent ounces in the fourth quarter of 2021. That’s down from 89,422 ounces in the same period of 2020. For the full year, the mine produced 257,005 ounces. In 2020, it produced 342,277 ounces.
Bald Mountain fared better. Output rose over 2020 thanks to the timing of ounces recovered from heap leach pads. Still, production fell short of plan because of the carbonaceous material found at Vantage. The mine produced 61,036 gold equivalent ounces in the fourth quarter. That’s up from 51,487 ounces a year earlier. Full-year output reached 204,890 ounces, up from 191,282 ounces in 2020.
Rollinson spoke at a Feb. 17 webinar. He said Kinross donated $1 million to a relief fund the Ghanaian government established. The fund followed last month’s truck explosion.
