Can Kinross Gold's Profits Keep Shining Amid Higher Costs?

Core Insights - Kinross Gold Corporation (KGC) experienced a 17% year-over-year increase in attributable production cost of sales per ounce, reaching $1,145 in Q3, primarily due to higher royalty costs linked to rising gold prices [1] - All-in-sustaining costs (AISC) rose nearly 20% year-over-year to $1,622 per gold equivalent ounce sold, up from $1,493 in the previous quarter, indicating inflationary pressures [1] - Despite a 40% increase in average realized gold prices, which boosted Q3 profits, the rise in unit costs highlights ongoing inflation challenges [7] Cost Guidance and Projections - KGC's guidance suggests continued cost pressures through 2025, with expected full-year AISC per gold equivalent ounce around $1,500 (+/- 5%) and production cash costs approximately $1,120 (+/- 5%) per ounce [2] - The company anticipates that AISC will be at the higher end of its guidance due to increased sustaining capital, with Q4 AISC expected to rise sequentially [2][7] - The consensus estimate for Q4 AISC is approximately $1,823 per gold equivalent ounce sold, reflecting a 12% sequential and 21% year-over-year increase [3] Peer Comparison - Barrick Mining Corporation reported a 3% increase in cash costs per ounce of gold and a 2% rise in AISC year-over-year in Q3, with AISC at $1,538 [4] - Newmont Corporation reduced its Q3 AISC to $1,566 per ounce, a 3% decrease from the prior year, attributed to lower costs applicable to sales and administrative expenses [5] Stock Performance and Valuation - KGC's shares surged 141.9% over the past six months, outperforming the Mining – Gold industry, which rose 95.8%, largely driven by the rally in gold prices [6] - KGC is currently trading at a forward 12-month earnings multiple of 16.18, slightly below the industry average of 16.38 [9] - The Zacks Consensus Estimate indicates a significant year-over-year earnings rise of 154.4% for 2025 and 36.1% for 2026, with EPS estimates trending higher over the past 60 days [10]