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Kinross' (KGC) Unit Inks $300M Definitive Loan Agreement

Kinross Gold Corporation KGC has announced that its fully-owned subsidiary — Tasiast Mauritanie Limited S.A. — has inked a definitive loan agreement worth up to $300 million for its operations in Mauritania. The company will receive support from a multilateral lender (International Financial Corporation), an export credit agency (Export Development Canada) and two international banks (ING Bank and Societe Generale) for its Tasiast operation.

The loan has a tenure of 8 years that matures in December 2027 and is non-recourse to Kinross. It has a floating interest rate of LIBOR plus 4.38%. Per the loan agreement, the initial drawdown is expected in early 2020, which is subject to customary conditions.

Per management, Tasiast has been achieving strong performance since the completion of its initial expansion. The company believes that the deal will contribute to the long-term success of Tasiast.

Notably, this is the largest investment made by IFC in Mauritania, which is in line with its strategy to support private sector development in Africa.

Kinross ended the third quarter of 2019 with cash and cash equivalents of $358 million, down 23.8% year over year. Adjusted operating cash flow jumped 100.7% year over year to $295.4 million. Long-term debt amounted to $1,836.8 million at the end of the third quarter.

Shares of Kinross have rallied 36.6% in the past year compared with the industry’s 43.5% surge.



In November, Kinross stated that it is on track to attain the production target of 2.5 million (+/- 5%) gold equivalent ounces for 2019. All-in sustaining costs are expected to be $995 (+/- 5%) per gold equivalent ounce.

The company also expects to meet the lower end of its 2019 production cost of sales guidance of $730 (+/- 5%) gold equivalent ounces and the higher end of its 2019 capital expenditure projection of $1,050 million (+/- 5%).

Zacks Rank & Key Picks

Kinross currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Kirkland Lake Gold Ltd KL, Impala Platinum Holdings Ltd IMPUY and Polymetal International plc AUCOY, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kirkland Lake Gold has an expected earnings growth rate of 97.1% for 2019. The company’s shares have surged 67% in the past year.

Impala Platinum Holdings has projected earnings growth rate of 255.2% for fiscal 2020. The company’s shares have skyrocketed 324% in a year.

Polymetal International has an estimated earnings growth rate of 40.5% for the current year. Its shares have returned 39.5% in the past year.

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