Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Kinross Gold Corporation (USA) (KGC) Rises on Asset Sale

Kinross Gold Corporation (USA) (NYSE:KGC) shares are up 1% in morning trading after the company announced that it has agreed to sell its 100% interest in the Quebrada Seca exploration project and 25% interest in the Cerro Casale project to Goldcorp Inc. (USA) (NYSE:GG) for the following:

1) $260 million in cash,

2) $40 million in cash, payable following a construction decision for Cerro Casale, and

3) a 1.25% royalty from Goldcorp based on 25% of gross revenues from all metals sold at Cerro Casale and Quebrada Seca, with Kinross foregoing the first US$10 million.

In addition, Goldcorp, the buyer of both assets, has agreed to assume a $20 million payment obligation due to Barrick Gold under the existing Cerro Casale shareholders agreement. Kinross sold the two assets to further strengthen its balance sheet and to fund organic development projects. The deals are expected to close in Q2 of 2017.

With the rally today, the market is giving the thumbs up to management’s decision to deleverage a bit. In the long run, Kinross Gold Corporation (USA) (NYSE:KGC)’s fortunes still depend on where gold prices go, and given that the Federal Reserve has implied only two more interest rate hikes in 2017, there is potential for the yellow metal to show more upside. Gold prices could potentially rise further if the current tame inflation in the U.S. shows signs of accelerating meaningfully, or if the various geopolitical problems around the world get worse.

Follow Kinross Gold Corp (NYSE:KGC)
Trade (NYSE:KGC) Now!

What Does The Smart Money Sentiment Say?

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

According to our data, some smart money funds left Kinross in the fourth quarter but the collective ownership remained strong. Of the 742 elite funds we track, 23 funds owned $457.65 million of Kinross Gold Corporation (USA) (NYSE:KGC) and accounted for 11.80% of the float on December 31, down from 26 funds and $633.5 million respectively on September 30. Although Crispin Odey‘s Odey Asset Management Group cut its stake by 36% to 23.2 million shares, David Iben‘s Kopernik Global Investors

Disclosure:None

gold-296115_1280