Kinross Gold Review

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Kinross Gold is a mining company that has been established since 1993. Rather than purchasing precious metals directly from them, you can purchase shares of the company stock. These pay profit dividends, but they have more risks than basic precious metals investment.

But how do you know whether Kinross is a legitimate corporation? What are the risks of investing in company shares, and how does it compare to other mining outfits? We've taken a look at the most important information to know before you start.

  • Product Type: Precious Metals
  • Owner: Robert Buchan
  • Rating: 2.5/5

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History of the Company

Kinross Gold Review

Kinross Gold was created in 1993 when three existing companies merged. The combined resources and expertise of these companies allowed Kinross to own royalties and a stake in two different mines. One of the mines was located in British Columbia and the other in Nevada.

The company is headquartered in Toronto and registered in Canada. As of June of 1993, the company began to be traded on the NASDAQ and the Toronto Stock Exchange. The following year, it became available on the New York Stock Exchange. The company has continued being publicly traded through these avenues since then.

The first developed project by the company was a gold mine located in Alaska. Today, that mine is operated by a subsidiary of the company called Fairbanks Gold Mining. Though the mine had been prospected nearly a century before, no company actually began mining it until 1996. Today, that mine produces more than 200,000 gold ounces annually.

A company subsidiary merged with a company called Amax Gold to create Kinam Gold. This was the largest subsidiary that the company owned. As the companies merged, Kinross received ownership of the Maricunga gold mine located in Chile.

In 1999, Hollinger Mines was located. In 2006, they sold this property to Goldcorp, and it was closed in 2019.

The company continued to have several high profile acquisitions and mergers throughout the early 2000s. They created the Porcupine Joint Venture with the company Placer Dome, which included nearly equal shares in the mine. Kinross then merged with two other major companies and retained its original name in 2003.

This major merger allowed the company to access more mining operations. They purchased a larger stake in some of their operations later in the decade.

Kinross Gold Review

The company bought the Crown Resources Corporation in 2006. This let Kinross own Buckhorn Mountain and all of the facilities surrounding it that processed minerals.

In 2007, the company was part of a major asset trading deal with Goldcorp. Kinross surrendered its stake in the Porcupine Joint Venture and their Musselwhite mine. In exchange, they were given $200 million in liquid funds and the part of the La Coipa mine that Goldcorp owned.

Kinross purchased more than 90% of the shares in the company Red Back Mining in 2010, which allowed it access to that company's African gold mines. They then acquired several more mining stakes and purchase agreements.

In the mid-2010's, Kinross was one of the biggest producers of silver on the entire planet. They were producing over 9 million silver ounces annually. As of 2015, it was estimated that the company had over 33 million ounces of gold. They produced over 2.5 million gold ounces in that same year.

Current Company Mines

Kinross Gold Review

The company has acquired and sold multiple mines over the years, largely through mergers and asset purchases. Currently, they have about seven mining operations in effect. The locations are spread across West Africa, Russia, South America, and North America.

About sixty percent of the company's gold is sourced to mines in Brazil and the US. Meanwhile, all of the mines in West Africa and Russia create about twenty percent of the production.

Fort Knox

Kinross Gold Review

Fort Knox is an Alaskan gold mine that has several facilities, including storage and a mill. The mine itself was originally expected to run dry in 2021.

However, the company invested $100 million in expanding it, which means that the mine should produce ore until 2027. This expansion is expected to yield around 1.5 million ounces of gold.

Round Mountain

Kinross Gold Review

The Round Mountain mine has been operating since 2003 in Nevada. At first, Kinross owned only a small stake in the company. But then they purchased the 50% stake that Barrick Gold had in 2016, resulting in them being the principal controlling interest for the mine.

In 2015, the mine yielded almost 200,000 ounces of gold. In 2017, there was an expansion project announced by the company. This expansion is meant to increase the mine's lifespan and to allow for an extra 1.5 million ounces of gold to be mined.

The company also has a stake in another Nevada mine called Bald Mountain.

Paracatu

Kinross Gold Review

The Paracatu mine is a Brazilian open pit mine. It comes with processing plants, tailing facilities, and mining infrastructure. Kinross became an owner of 49% of the mine in 2003 during one of their mergers, and then they purchased the remaining 51% for a complete stake in the mine.

This mine is the biggest employer in the region. It has produced more than 450,000 ounces of gold in a fiscal year.

Tasiast

Kinross Gold Review

The Tasiast mine is located in Mauritania in West Africa. This mine has been the subject of some controversy for the company.

The mine was forced to stop operating briefly in 2016 because the government alleged that there were invalid work permits. This caused the mine to have a total operating loss of more than $100 million in that year.

Kinross acquired the company in 2010. But for five years after that, they reported that the asset was impaired. That meant that its market value was significantly lower than the value that the owner had listed.

Kinross also expanded the mine through a few different ventures in 2016 and 2017. The goal of the expansion was to increase the lifespan of the mine and the amount of gold production. Impact studies indicated that the mine would probably produce over 800,000 ounces of the gold annually for at least five years.

There was a class action lawsuit filed against Kinross with regards to the Tasiast mine in 2012. The lawsuit contained allegations that the company had falsely inflated the reported value of this mine. These kinds of false statements could be used to mislead investors.

This lawsuit was eventually settled in 2015. Kinross made settlement payments to the complainants in total of $40 million.

Sustainability

Kinross Gold Review

The company says that it has an active commitment to responsible mining with sustainable methods. There are more than 9,000 employees of the company globally. Their goal is to create value to the community while they manage their mining operations.

The company also says that they integrate corporate responsibility into every aspect of their strategy. They have strict ethical standards and claim to be invested in human rights. The mines operate using the principles outlined by the World Gold Council with regards to responsible gold mining.

In addition, the company states that they are responsible for managing risks. These include social and environmental risks. They have a Safety and Sustainability Policy that abides by the principle of "do no harm."

The company has participated with the United Nations Global Compact for years. Every year, they once again reaffirm that they are operating according to the ten principles outlined in this compact. They publish information about the different risk factors in their projects, along with the work they've done to mitigate those risks.

There is a complex system in place for evaluating how well the company is adhering to its corporate responsibility principles. They prioritize safety, community, environment, and health. Ten components are outlined in the company's sustainability policy. When measuring the impact of their corporate responsibility, they have individual factors used to evaluate every one of these components.

Is Kinross Gold a Scam?

Kinross Gold Review

Kinross Gold is not a scam. This company has been mining gold and silver since 1993. It has shares available for public purchase on both the Toronto and New York Stock Exchanges. There are seven current mining operations going on, as well as a huge variety of non-operating mines.

As with any publicly traded company, Kinross Gold is required to publish financial information with a high level of transparency. You can look at their projections and actual data to find out how valuable they are to investors.

There are several considerations that must be taken into account when you decide whether to invest in the company, though. Despite not being a scam, they might not be the best option for your cash.

Stocks are a traditional asset, and purchasing them is a good way to be involved in the precious metals industry without investing in actual precious metals. But the price of your stock is tied more to the company's performance than to the precious metals themselves. When you own precious metals, their value is the same across the market.

If you are certain that you want to purchase shares of a mining corporation, the question is then whether Kinross Gold is the best option. Unfortunately, this doesn't seem to be the case. The company underperformed for their investors in terms of their projections recently, and there are other publicly traded mining companies that have done much better.

All in all, though, there's no denying that they have a high level of financial transparency. They also have the benefit of spreading their operation out amongst several mines, which means that their profits won't suffer horribly if any one mine becomes unusable.

Pros & Cons of Kinross Gold

Pros

  • Stocks pay dividends as you share in the company's profits.
  • A way of involving yourself in precious metals investing while still holding traditional assets.
  • The company has seven current operations and tons of past operations, with a long overall history.

Cons

  • Stocks are more volatile and subject to more variables than precious metals, so you might lose your investment.
  • This company underperformed for investors recently when compared to other mining companies traded publicly.
  • There are environmental concerns regarding the safety and sustainability of the mining industry in general.

Final Thoughts

Kinross Gold is a large mining company that has been operating out of Canada since 1993. They currently have seven large operations, and there have been multiple other mines operated throughout the years. The company's long history and large expanse makes it a favorite of investors.

There are benefits and drawbacks to buying shares of a precious metals company. Stocks don't have the same stability as precious metals themselves, and they are based more on company performance than on the value of their assets. You need to make sure that the companies that you invest with perform well.

Kinross Gold has been reported to underperform for investors recently. By comparison, the profits for a variety of other similar large mining corporations have soared. The lack of performance might be a combination of poor projections and unforeseen circumstances, but it doesn't bode well for the company.

If you want stable investments that perform well during times of economic turmoil, we recommend investing in precious metals themselves. And if you do want to buy shares in a mining corporation, it's possible that Kinross Gold isn't the best option.

Overall, we believe that there is a better option when it comes to your investment.

The above company is our top recommendation after doing extensive research. Feel free to keep doing your own research, or you can visit Kinross Gold below!

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