Kinross(US:KGC)2025-11-05 14:00Financial Data and Key Metrics Changes - In Q3 2025, the company produced 504,000 ounces of gold at a cost of sales of $1,145 per ounce, resulting in record free cash flow of nearly $700 million for the quarter and over $1.7 billion year to date [11][18] - Adjusted earnings were $0.44 per share, with adjusted operating cash flow of $845 million [17] - The company ended the quarter with approximately $1.7 billion in cash and $3.4 billion in total liquidity, improving by over $600 million from the prior quarter [18] Business Line Data and Key Metrics Changes - At Paracatu, production was 150,000 ounces at a cost of sales of $933 per ounce, remaining on track to meet guidance [24] - Tasiast delivered budgeted production of 121,000 ounces at a cost of sales of $889 per ounce, with strong mill performance [25] - Le Coipa produced 58,000 ounces at a cost of sales of $1,199 per ounce, with expectations for stronger production in the final quarter [26] - US operations collectively delivered 175,000 ounces at a cost of sales of $1,469 per ounce, on track to meet full year guidance [28] Market Data and Key Metrics Changes - The average realized gold price was $3,458 per ounce, delivering margins of over $2,300 per ounce [17] - All-in sustaining costs increased due to higher gold prices impacting royalties and sustaining capital expenditures [17] Company Strategy and Development Direction - The company is committed to strengthening its balance sheet through debt repayment and enhancing shareholder returns, planning to increase capital returns beyond the minimum $650 million for the year [12][21] - The operational focus includes rigorous financial discipline, strong margins, and cash flow to support returns for shareholders [16] - The company is advancing several projects, including Curlew, Great Bear, and Lobo Marte, to enhance production profiles in the long term [31][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full year production targets, with operations on track for the fourth quarter [16] - The company anticipates higher tax payments in 2026 due to increased gold prices, impacting cash flow [22] - Management highlighted the importance of maintaining a strong production profile and generating significant free cash flow [43] Other Important Information - The company received a positive credit outlook from S&P during the quarter, reflecting its financial strength [18] - The company has returned over $500 million to shareholders in 2025, marking strong progress against its capital return commitment [21] Q&A Session Summary Question: Cost reduction efforts compared to peers - Management confirmed ongoing initiatives globally to improve productivity and cost management, including contractor partnerships and labor efficiency training [46][47] Question: Capital returns and balance sheet position - Management indicated a focus on returning capital while also considering reinvestment opportunities, with guidance updates expected in the new year [51][54] Question: Tax payable accrual and working capital reversal - Management expects significant tax payments in Q1 2026, with approximately $400 million in total tax payments accrued for that quarter [55] Question: Permitting timeline at Great Bear - Management clarified that the AEX permits are not on the critical path for the main project timeline, with no expected delays for the main project [56][57] Question: Capital allocation strategy for next year - Management stated that while there is no specific formula for capital allocation, there is a strong preference for share buybacks, with a focus on maintaining a healthy return of capital [78][81]