Kinross reports solid Q1 earnings, agrees to settle class action suit – by Peter Koven (National Post – May 6, 2015)

The National Post is Canada’s second largest national paper.

TORONTO – Kinross Gold Corp. reported solid earnings on Tuesday, beating analyst estimates in the first quarter even though most of its competitors failed to meet them.

The Toronto-based miner also announced it has agreed to pay $12.5 million to settle a Canadian class action lawsuit, eliminating a time-consuming headache. The legal action was tied to the company’s statements about the Tasiast expansion project in Mauritania, which did not live up to its original expectations.

In March, Kinross reached a US$33 million settlement of a similar class action suit out of the United States. Chief executive Paul Rollinson noted that there is no cost to Kinross, as the money is paid out through directors and officers insurance. The company made no admission of guilt in either case.

“When settling these things, it’s really a call on time and cost and energy efficiency,” he said in in an interview.

For the quarter, Kinross reported adjusted earnings of US$15.3 million, or a penny a share, beating the average analyst estimate of zero cents. That makes 11 consecutive quarters in which the company has met or exceeded its guidance. Kinross also maintained its full-year production and cost forecasts.

“It was a good solid start to the year,” Rollinson said.

He has put a focus on operational performance since becoming CEO in mid-2012, and that has paid off in good quarterly results. But the stock has still been a relatively poor performer in a rough gold market.

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