Kinross Gold Suspends Russia Operations

Kinross Gold Corporation (NYSE: KGC) announced Wednesday plans to suspend operations at its Kupol mine in Russia. The company is also in the process of suspending all activities at its Udinsk development project in the country, according to BofA Securities.

The Kinross Gold Analyst: Michael Jalonen maintained a Buy rating for Kinross Gold, while reducing the price target from $8.50 to $7.50

The Kinross Gold Thesis: Russia’s Kupol mine was expected to produce 350,000 gold equivalent ounces (GEOs) in 2022, representing 13% of the company’s total GEO output, Jalonen said in the note.

“The start-up of Udinsk in 2025 would sustain a +300,000 GEO production rate for the Russian asset base,” he added.

“Due to the great uncertainty in the Ukraine and how long government sanctions will be in place, we remove the Russian assets from our model,” the analyst wrote.

He reduced the GEO forecast for 2022 and 2023 from 2.66 million to 2.36 million and from 2.80 million to 2.45 million, respectively. The analyst also lowered the free cash flow estimates for these years from $877 million to $780 million and from $1.30 billion to $1.23 billion, respectively.

KGC Price Action: Shares of Kinross Gold had declined by 4.77% to $5.20 at the time of publication Thursday.

Photo: Csaba Nagy via Pixabay