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Kinross Gold posts Q4 net loss of US$740M; revenue falls to US$877M

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TORONTO - Kinross Gold Corp. (TSX:K) has reported another big fourth-quarter and full-year net loss as the gold miner face lower bullion prices and higher costs as well as heavy impairment charges.

The Toronto-based miner says its net loss for the three months ended Dec. 31 was US$740 million or 65 cents per share.

The loss included an after-tax non-cash impairment charge of US$544.8 million, primarily comprised of property, plant and equipment at Maricunga.

Still, that was an improvement over the year-earlier period when Kinross posted a net loss of just under US$2.99 billion or $2.62 per share.

Quarterly revenue fell to US$877.1 million from $1.19 billion as the average realized gold price fell to US$1,268 per ounce from US$1,707 in the year-earlier period and both production and sales slumped.

The adjusted net loss was US$25.1 million or two cents per share, compared with adjusted earnings of $280.5 million or 25 cents per share in the comparable 2012 period.

Production from continuing operations fell to 646,234 gold equivalent ounces, mainly due to the suspension of mining at La Coipa and scheduled maintenance at several other sites.

However, full-year production was a record 2,631,092 attributable ounces, exceeding original guidance and within the company's updated guidance issued in November.

Full-year revenue dropped to US$3.78 billion from $4,31 billion, while the reported net loss was $3.01 billion or $2.64 per share, compared with a net loss of $2.54 billion or $2.24 per share in 2012. The full-year loss included an after-tax non-cash impairment charge of $2.29 billion.

Meanwhile, Kinross reduced its estimates of proven and probable mineral reserve by a third to 39.7 million ounces of gold at year-end.

That was down from 59.6 million ounces at year-end 2012, reflecting divesture of Fruta del Norte, depletion, and the company's adoption of a fully-loaded costing methodology for estimating year-end mineral reserves.

Kinross noted in a release that the new methodology has resulted in a 14 per cent increase in overall gold grade in the estimated mineral reserves.

"Part of our quality over quantity strategy in 2013 included a rigorous mine plan optimization program, which applied a fully-loaded costing methodology to all of our operating sites in preparing our year-end mineral reserves estimates," CEO J. Paul Rollinson said.

"The result is a reduction in proven and probable mineral reserves, primarily at Paracatu, but an increase in the value of our reserves, with higher grades and greater near-term cash flow expected at operations across the company."

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