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This $3 Stock Could Deliver Gains During A World-Wide Recession

This $3 Stock Could Deliver Gains During A World-Wide Recession

Kinross Gold (NYSE: KGC) reported earnings last month and since that time, shares have outperformed the S&P 500.

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  • Kinross Gold Corporation, engages in the acquisition, exploration, and development of gold properties in the United States, the Russian Federation, Brazil, Chile, Ghana, and Mauritania.

    It is also involved in the reclamation of gold mining properties; and production and sale of silver. As of December 31, 2018, its proven and probable mineral reserves included approximately 25.5 million ounces of gold, as well as 53.9 million ounces of silver.

    ZACKS summarized the results of the company’s earnings report:

    “Kinross incurred net loss of $27.7 million or 2 cents per share in fourth-quarter 2018, against net profit of $217.6 million or 17 cents in the year-ago quarter.

    Barring one-time items, adjusted earnings came in at a penny per share, which beat the Zacks Consensus Estimate of breakeven earnings.

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  • Revenues from metal sales totaled $786.5 million, which declined 2.9% year over year.Kinross stated that it has attained cost, production and capital guidance for seventh consecutive year. Also, after successful completion of the Tasiast Phase One expansion, the mine achieved record production in the fourth quarter. The mine’s throughput and recoveries exceeded the company’s expectations.”

    Paul Rollinson, President and CEO, commented:

    “Kinross once again delivered on its commitments in 2018, as we met our production, cost and capital guidance for the seventh consecutive year.

    Our portfolio of mines produced solid results, with standout performances from Paracatu and Bald Mountain, both of which delivered record annual production. Following successful completion of the Tasiast Phase One expansion, the mine achieved record production in the fourth quarter, with throughput and recoveries exceeding expectations.

    Kinross also generated approximately $790 million in operating cash flow and maintained its strong balance sheet, with $1.9 billion in liquidity and no debt maturities until 2021.”

    Rollinson continued: “We expect to deliver another strong year in 2019, producing approximately 2.5 million gold equivalent ounces at costs similar to 2018.

    Our development projects are proceeding well, and we look forward to a number of milestones this year, including: the start of commissioning of the Bald Mountain Vantage Complex processing circuit and completion of the Lobo-Marte scoping study in the first quarter; the start of commissioning of the Round Mountain Phase W processing circuit in the second quarter; and, the completion of the La Coipa Restart feasibility study and the start of stripping at Fort Knox Gilmore in the third quarter.”

    Some experts believe a world-wide recession is on the horizon. Therefore, there could be a surge in demand for gold in 2019 as a hedge against global financial risks.

    KGC daily chart

    KGC should be considered a buy if momentum continues.

    Look for an entry at $3.64 with a price target of at least $4.91 based on the pattern in the chart.

     

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