Kinross(KGC) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q4 2024, the company produced just over 500,000 ounces of gold, contributing to a full-year production of over 2.1 million ounces, which met market commitments [6][7] - The company generated record free cash flow of more than $1.03 billion, more than doubling from the prior year, driven by strong operating margins that increased by 37$1,021 per ounce, with all-in sustaining costs at $1,388 per ounce, both in line with guidance [25][31] Business Line Data and Key Metrics Changes - Tasiast and Paracatu, the two largest assets, accounted for approximately 1.2 million ounces, over half of the total production [8] - Tasiast delivered record annual throughput and production of 622,000 ounces at a cost of sales of$681 per ounce, while Paracatu produced 529,000 ounces at a cost of sales of $1,039 per ounce [9][38] - La Coipa met its full-year production guidance with 246,000 ounces, while U.S. operations produced 731,000 ounces at a cost of sales of$1,313 per ounce [41][42] Market Data and Key Metrics Changes - The company revised its gold price assumptions to $1,600 per ounce for reserves and$2,000 per ounce for resources, reflecting a stronger gold price environment [15][46] - The company expects production to remain stable at around 2 million ounces through 2027, supported by future production from its project pipeline [17][18] Company Strategy and Development Direction - The company is focused on maintaining strong margins and disciplined capital allocation, prioritizing debt repayment and planning for share buybacks in the current gold price environment [19][29] - The company is advancing several projects, including Great Bear and Red Bird, which are expected to extend production and enhance the overall resource base [11][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's operational and financial health, highlighting a strong production profile and significant free cash flow generation [68] - The company is committed to responsible mining and sustainability, with plans to publish a detailed sustainability report [20][21] Other Important Information - The company has fully repaid its $1 billion term loan and is well-positioned for additional capital returns to shareholders [28][29] - The company plans to initiate a share buyback program later in the year, contingent on maintaining strong cash flow [19][29] Q&A Session Summary Question: Inquiry about Tasiast operation downtime - Management confirmed a downtime of about 4 to 5 days for maintenance, but production throughput remained on target [72] Question: Exploration and resource reporting at Round Mountain - Management clarified that there are currently no underground reserves at Phase X, but infill drilling is expected to yield an initial underground resource by year-end [83] Question: Share buyback timing and conditions - Management indicated that share buybacks would be considered after Q1 cash outflows, with a focus on maintaining a strong balance sheet [95][96] Question: Tax guidance and implications - Management explained that increased tax guidance is due to becoming income taxable in Mauritania and higher gold prices impacting tax obligations in Brazil and Chile [109][110] Question: Capital allocation and cash balance considerations - Management stated that they aim to maintain a healthy cash balance while considering future capital returns and potential debt repayments [120][121]