Kinross Gold: Still A Store Of Value

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Gold miner Kinross Gold (KGC) reported mixed Q2 earnings on July 28. EPS of $0.12 matched estimates, but revenue fell 0.6% to $1 billion, just under the $1.03 billion number analysts were expecting.

The company remains on track to meet 2021 production guidance. KGC is in the process of expanding its mining projects and increasing production by 20% over the next couple of years — a substantial achievement. Management confirmed it's on track to increase production to around 2.1 million equivalent gold ounces for 2021. And production will continue to increase to around 2.9 million equivalent gold ounces in 2023.

It raised its all-in sustaining cost (AISC) to $830–1,110 — higher than previous guidance of $790–1,025. But, while you never want to see rising expenses, it's normal for costs to move higher as a miner expands production. Once increased production is underway, the company can work to lower costs and increase margins.

We're in KGC at a great price. And though we're down about 10% on our position, the environment for higher gold prices is perfect right now. All over the world, governments are printing record amounts of money — devaluing each dollar in circulation and driving inflation higher. Gold is a great, time-tested store of value. Action we may suggest to take: Buy Kinross Gold up to $8.50 per share.

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