Tags: Kinross | Chief | Gold | Consolidation

Kinross Chief: Gold's Drop May Spur Consolidation

Wednesday, 09 Oct 2013 08:47 PM

Gold’s decline may drive an increase in consolidation among companies that produce and explore for the metal, Kinross Gold Corp.’s chief executive officer said.

“You may see some consolidation within the industry around balance-sheet strength and margin and free cashflow and quality assets that need funding,” Paul Rollinson said Wednesday in a telephone interview from Russia, where he’s visiting the company’s new Dvoinoye mine. “You may see a gold price-driven wave of M&A activity.”

Gold is poised for its first annual decline in 13 years after slipping into a bear market in April. Producers have responded by cutting spending plans, reducing dividends and trying to sell less profitable assets.

Kinross, the third-largest Canada-based gold miner, doesn’t need to sell assets or make acquisitions, Rollinson said. The company, which suspended dividend payments in July, is focused on maintaining balance-sheet strength, operating its mines well and being disciplined in spending, he said.

Kinross achieved commercial production at Dvoinoye in eastern Russia this month, the company said today in a statement. Kinross expects the mine will produce 235,000 to 300,000 ounces of gold equivalent, a metric that includes silver output, in its first three full years of production.

“It’s nice to be opening up a mine in this tough environment,” Rollinson said in the interview. “It’s on time and on budget even though it’s a pretty challenging, remote location.”

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Gold's decline may drive an increase in consolidation among companies that produce and explore for the metal, Kinross Gold Corp.'s chief executive officer said.
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2013-47-09
Wednesday, 09 Oct 2013 08:47 PM
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