Kinross Gold Corporation (USA) (KGC): Keep an Eye on This Gold Play

Goldcorp Inc. (USA) (NYSE:GG), is one of the world’s fastest growing gold producers engaged in the exploration, development, and acquisition of precious metal properties in the entire American Continent.

The company delivered a consistent operational performance during the first quarter of 2013 relative to the previous fiscal year, as it reported a total revenue of around $1 billion.

The net earnings during the quarter stood at $309 million. The operating cash flow for the quarter dropped marginally to $400 million as compared to $480 million during the same quarter last year.

The all-in cash cost of production was maintained at $710 per ounce. Goldcorp Inc. (USA) (NYSE:GG) sold 595,100 ounces of gold during the first quarter relative to 545,700 ounces of gold in the same quarter last year.

In the wake of recent volatility in the price of gold, the company has reviewed its capital expenses and other operating costs to meet the declining prices.

The financial position of the company looks strong with cash reserves of $ 1.4 billion. With strong fundamentals, the company is set on the path of accelerated growth with committed capital spending of $ 2.8 billion on its upcoming projects in Argentina, Quebec, and Ontario during 2013. However, in the near-term, it must control costs in order to counter falling prices.

Final word

Kinross Gold Corporation (USA) (NYSE:KGC), with a market capitalization of $ 6.64 billion, is a lucrative investment option for people seeking to invest in the gold mining industry.

However, the recent developments relating to suspension of the company’s Fruta Del Norte project situated in Ecuador is a severe blow for the company, as the decision will lead to Kinross Gold Corporation (USA) (NYSE:KGC) paying a charge of $720 million against its earnings in the upcoming quarter.

Despite all the havoc in the gold market, the developments in production capacity through Tasiast and Fort Knox mines allows me to sustain an optimistic view on its stock. With its forward P/E pegged at 11.78, which is well below the current level of 13.98, the stock is certainly a hold, at least for now.

The article Keep an Eye on This Gold Play originally appeared on Fool.com and is written by Ashit Gulati.

Ashit Gulati and Equity Dimensions have no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Ashit is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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