Kinross Gold mulls sale of Americas mines

Equipment in the pit at Kinross Gold's Tasiast gold mine in Mauritania. Credit: Kinross Gold.

Canadian miner Kinross Gold (TSX: K; NYSE: KGC) is said to be studying a sale of its gold mines in North and South America and moving its primary stock listing to London in a bid to increase the company’s value.

The Toronto-based gold producer is also considering doubling down on its portfolio of assets in Russia and West Africa, The Globe and Mail reported, citing three unnamed sources familiar with the matter.

Kinross believes that selling its mines in the Americas and relocating its African and Russian business to London would make the remaining parts of the company more valuable than if all the assets were kept inside one business unit, the article said.

The company, which will issue its first dividend in seven years this week, believes the time for the overhaul is “most favourable” as gold prices have surged to a record, according to the news report.

Analysts agree that Kinross’ valuation has room for improvement. The stock’s current price of US$9.17 (in pre-market trading) is still well below the close to US$25 highs it hit back in 2008.

With a market capitalization of US$11.46 billion, Kinross is worth less than many of its peers, including Kirkland Lake Gold (TSX: KL; NYSE: KL) at US$13.6 billion and Agnico Eagle Mines (TSX: AEM; NYSE: AEM) at US$19.5 billion.

Kinross is one of the world’s top-ten gold producers and has four mines in the Americas. In the U.S., it owns Round Mountain and Bald Mountain, both in Nevada, as well as Fort Knox, in Alaska. It also operates Paracatu, in Brazil, which is the South American country’s biggest gold mine.

The sale of those assets could bring billions into the company’s coffers and it’s likely to attract interest from top miners.

The company recently announced it planned to boost output to 2.9 million oz. gold-equivalent over the next three years.

It said it could achieve the goal by extending the life of mines and executing on projects already under its previous three-year capital expenditure plan. The company is using a $1,200 per oz. gold price for its mine plans.

Kinross is scheduled to release financial and operating results for the third quarter on Nov. 4, after market close.

Company officials were not immediately available to comment on the report.

— This article first appeared in, part of Glacier Resource Innovation Group.


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