Is Kinross (TSX:K) stock a buy as it sells Russian assets?

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 Is Kinross (TSX:K) stock a buy as it sells Russian assets?


  • Kinross has divested all of its Russian interests.
  • Kinross' pro-forma portfolio outlook for 2022 is unchanged.
  • Kinross' metal sales amounted to US$ 768 million in Q1 2022.

Kinross Gold Corporation (TSX:K) said on June 15 that it has completed selling its Russian assets for US$ 340 million in cash. The gold exploring company said in a statement that it has received US$ 300 million in its corporate account and will get another US$ 40 million deferred payment in June 2023.

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The previously negotiated total value for the transaction, as revealed on April 5, 2022, was US$ 680 million, which comprised a payment of US$ 100 million upon completion, with the remaining $580 million due in annual instalments from 2023 through 2027.

Following a review by the newly constituted Russian Sub-commission on Foreign Investment Control, which approved the transaction for a purchase price not exceeding $340 million, the parties reduced the transaction consideration.

Kinross has divested all of its Russian interests and has no further commitments or liabilities in the nation due to the sale's clearance and execution.

Should you consider exploring Kinross (TSX:K) stock?

Investors seem to have responded positively to the latest development, as evidenced by the increase in share price. On June 15, the K stock was up by 0.6 per cent at 10:30 AM EST, trading at C$ 5.29 per share.

The company said in its first-quarter results that Tasiast set a new high for output in the first quarter of 2022, with the 24k project on track. Kinross Gold owns and operates the Tasiast gold mine in Mauritania, an open-pit gold mine.

Kinross' metal sales amounted to US$ 768 million in Q1 2022, down from US$ 768.7 million. Meanwhile, the net income attributable to shareholders increased to US$ 82.3 million from US$ 76.2 million in Q1 2021.

Bottom line

Kinross' pro-forma portfolio outlook for 2022 was unchanged after the company excluded its properties from Russia and Ghana owing to pending divestitures. To reflect current prices, the company has updated its gold and oil pricing assumptions for cost of sales and all-in sustaining cost forecast.

If investors are looking to beat inflation by buying gold, they may also consider exploring gold stocks. However, they must note that stock markets are risky, and it is important to evaluate the risks before purchasing equities.

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Please note, the above content constitutes a very preliminary observation or view based on digital trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.


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