Kinross Gold Earnings: Strong Driven by Higher Sales Volumes and Gold Prices

We retain our fair value estimate for no-moat Kinross of USD 5.20 per share after its strong second-quarter 2023 result. Adjusted net profit after tax was about USD 170 million, or USD 0.14 (CAD 0.19) per share. Adjusted EBITDA of about USD 480 million was roughly double last year and 19% above our estimate, driven by higher sales volumes and average gold prices along with lower unit cash costs. We continue to forecast sales of around 2.1 million gold equivalent ounces, or GEO, in 2023, 9% more than 2022, driven by higher production at Kinross’ Tasiast mine in Mauritania and a full year of production from its La Coipa mine in Chile. Increased production likely partially offsets headwinds from inflation and our forecast unit cash costs of about USD 980 per GEO in 2023, up 4%, is also unchanged. Along with 8% higher assumed gold prices compared with 2022, our forecast EBITDA of about USD 1.6 billion in 2023 is roughly 30% higher than last year.