Kinross Gold reports big 3Q09 loss due to problems at Paracatu and Kupol

Issues at the expansion of the Paracatu mine and lower grade and ground stability problems at Kupol clobbered Kinross Gold's 3Q09 results.

RENO, NV - 

Despite a 26% increase in gold equivalent production during the first nine months of this year, Kinross Gold sustained a net loss of $21.6 million or negative three cents per share during the third quarter.

Gold equivalent ounce (GEO) production also declined 3% during the third quarter of this year to 537,000 ounces.  Production for the first nine months of this year was reported at 1,624,807 gold equivalent ounces.

In a statement published with the third -quarter 2009 financial results released Monday, Kinross CEO Tye Burt said, "While revenue and cash flow before changes in working capital were higher than in the previous year, we are disappointed by other aspects of our results in the third quarter, as they are below our expectations."

"Challenges at our Paracatu expansion project have a significant impact on our overall production and cost per ounce in the quarter, and we have reduced our overall 2009 production guidance by approximately 6%," he said. "We are working diligently to bring performance and production at Paracatu closer to plants design levels by improving flotation and blending mill feed with softer ore, as well as exploring options to increase grinding capacity."

At Kinross's Chilean operations, GEO was down 9% year-over-year, while GEO increased 51% year-over-year at Brazilian gold mines as the Paracatu expansion continued to ramp up. U.S. operations yielded a 7% year-over-year increase in GEO as heap leaching began at the Fort Knox gold mine in Alaska.

In Russia, third-quarter production at the Kupol mine was negatively impacted by ground stability issues and lower grade, which dropped GEO production year-over-year by 5%.

As previously announced Kinross has lowered its production guidance slightly and now expects to produce 2.2 million GEO this year. The company currently expects its 2010 GEO production to be similar to this year's revised forecast.

FINANCIALS

For the third quarter of this year, Kinross reported a net loss of $21.6 million or negative 3-cents per share, compared to a net income of $64.7 million or 10-cents/sh for the third quarter-2008.

For the first nine months of this year, Kinross reported a net income of $74.3 million or 11-cents per share, less than half the income of $161.6 million or 26-cents/sh reported during the same period of 2008.

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