CIBC Ups Kinross Gold Target, Sees $2.80 Share Price

CIBC’s David Haughton maintained a Sector Performer rating for Kinross Gold Corporation (USA) KGC, while raising the price target from $2.35 to $2.80.

The company reported robust operating results for 4Q, with production of 624K GEO at cash costs of $688 per GEO, beating the CIBC estimate of 597K GEO at cash costs of $707 per GEO. The production beat was mainly driven by strong throughput and grades at Round Mountain, Paracatu, Kupol and Tasiast, Haughton said.

Adjusted Q4 losses of $0.06 per share were higher than the CIBC and consensus estimates of a loss of $0.04 per share. The shortfall was mainly due to higher depreciation and exploration costs.

Kinross Gold announced its 2016 production guidance at 2.7-2.9M GEO, in-line with CIBC expectations, and reflecting higher output levels y/y. The company’s cash costs in 2016 have been projected to be in the range of $675-$735 per GEO, representing a y/y decline and broadly in-line with CIBC expectations.

“The solid finish of 2015 and positive 2016 outlook should be well received by the market. Nonetheless, the forecast steep production decline in the longer horizon could continue to overshadow the positive operating track record of delivering consistent performance,” Haughton wrote.

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Posted In: Analyst ColorPrice TargetReiterationAnalyst RatingsCIBCDavid Haughton
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