Toronto, Ontario - KINROSS GOLD CORPORATION (TSE-K; NYSE-KGC) announced today that results for the three months and year ended December 31, 1997 are as follows:
Toronto, Ontario
Toronto, Ontario - KINROSS GOLD CORPORATION (TSE-K; NYSE-KGC) announced today that results for the three months and year ended December 31, 1997 are as follows:
Financial Tables
All results are expressed in United States Dollars unless otherwise stated.
Kinross is pleased to provide the following detail regarding the Company's significantly improved operating performance in the fourth quarter, 1997. Although the average spot price of gold in the fourth quarter was $307 per ounce compared to $324 in the third quarter, operating income for the fourth quarter improved to $3,383,000 compared to an operating loss of $769,000 in the third quarter. This improvement was a result of record quarterly gold equivalent production of 145,204 ounces at a cash operating cost of $226 per gold equivalent ounce. Despite lower gold prices, operating cash flow before changes in non-cash working capital improved to $8,621,000 in the fourth quarter compared to $7,305,000 in the third quarter. The operating results validate the position stated in the third quarter interim statement that Kinross is a low cost gold producer and is financially strong.
However, in light of the current low gold price, the Company's annual review of carrying values for its mining assets has resulted in the decision to write-down a number of its non-producing and/or depleting assets. Specifically, during the fourth quarter the Company provided additional write-downs totaling $44,718,000 against the carrying values of the Goldbanks project $22,500,000, the Q.R. mine $13,516,000, certain exploration assets $6,600,000, and various other assets totaling $2,102,000. The life of mine analysis for producing mines was performed using an undiscounted cash flow and a $350 per ounce gold price assumption. In addition, in the fourth quarter the Company wrote down certain investments in junior companies by $7,385,000 and recorded a foreign exchange loss of $2,500,000 on the disposal of the Golden Kopje mine. As previously announced in the 1997 second quarter interim statement, the Company provided for a $35,719,000 pre-tax write-down ($24,000,000 after tax) of the Macassa mine as a result of the series of rockbursts in April.
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