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Kinross Gold Corporation Message Board

  • investora2z investora2z May 2, 2013 7:48 AM Flag

    Analysts are bearish

    These gloomy times are being used by Kinross to acquire gold / silver assets which are available at a discount to their potential. It is like buying fundamentally strong shares in a beaten down market. As soon as the sentiments change, these stocks are the first to rebound. Kinross recently increased its stake in Revolution Resources (TSE:RV) at $0.07 per share. The stake is now nearly 10% and it is expected that investments like these will improve KGC's strategic position in the business. In addition, it will obviously benefit from the associated capital appreciation when RV starts production. Pershing Gold (PGLC) is another company which can be looked at for strategic and financial gains. Coeur d'Alene Mines (CDE) bought a stake in Pershing Gold recently. Pershing is about to start production in 2014 and is currently available at valuations which are even below those for early development stage companies. Acquisition of such assets will be good utilization of the cash available with Kinross, and it should be on the lookout for similar assets which may be closer the strategic requirements. Acquisitions within US are obviously better than the ones in politically unstable environments. The recent setback for Kinross, related to its properties in Mauritania and Ghana, should make it a little more cautious in making such investments. It had to bear $3.2 billion impairment charge recently and that started the downtrend for the stock. Now the stock is at less than half its peak value of $11 in October 2012 and is trading around recent lows. It has interests in the largest gold project in Ecuador with reserves estimated at 6.7 million ounces of gold and 9.0 million ounces of silver (Fruta del Nortel project). Such exposures have made the analysts a little cautious about the future of the company, and price targets have been lowered.

2.90+0.33(+12.84%)Feb 11 4:00 PMEST