With 2006 gold production and cash costs of 1.44 million oz and $305-$315/oz respectively, an intriguing growth project pipeline, a straightforward balance sheet, an asset base focused on the Americas, and continuing reserve growth, Kinross presents a solid picture.

It sure wasn't always this way. In fact when I first recommended the stock here, some industry experts thought I had gone loco. The date was Friday October 21, 2005. The stock price was US$6.50. In early Sept 2006, the share price hit a high of $15.39.

So, I ask you, "Who's loco?"

Geez, I love it when a plan comes together. (lol)

At the Denver Gold Forum on Sept 25, Tye Burt, Kinross President & CEO, provided a solid report. He highlighted Kinross's four-point plan to enhance net asset value (NAV) and cash flow per share (CFPS).

The highlights (according to one Wall street analyst) are: (i) growth from the core (Paracatu expansion, Round Mountain layback/underground, and Buckhorn), (ii) building blocks for the future (including a regionally streamlined approach), (iii) best people (strengthened management), and (iv) new opportunities (Crown deal closes and Round Mountain underground).

Kinross has several key development projects that will likely drive growth for the next several years. According to the company:

"The $470 million expansion at Paracatu may more than triple throughput and also triple production to 557,000 oz for the first five years after completion in late 2008. Kinross anticipates first production from the Buckhorn project in 2Q/07, producing 200,000 oz per annum. These projects are forecast to boost company production to between 1.8-1.9 million oz by 2009."

According to one Wall Street analyst:

"We estimate Kinross will earn US$0.16/sh in 3Q06, below an adjusted US$0.18/sh in 2Q06. Consensus estimates currently are US$0.12/sh. The modest sequential earnings decrease is attributable to the decrease in gold price and lower gold sales with Kubaka shuttered.

Our US$18.00 target price and Buy 2 rating remain unchanged. Our target price remains predicated on a 1.5x multiple to our operating NAV estimate of US$11.74/sh (at US$750/oz LT gold) less net debt of US$0.58/sh.

I go along with this target because of my belief that $GOLD will trade at an average of US$750 for the next several years, which omits any consideration of the prospects of a major financial accident happening that would send $GOLD shooting over US$1,000.

For readers who are interested in Kinross Gold as a top-tier goldminer with solid profit growth potential, I urge you to review their presentation at the recent Denver Gold Forum. Kinross

Kinross Gold [GICS 15]
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