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Investing.com -- On March 27, 2025, Moody’s Ratings revised the rating outlook for Kinross Gold (NYSE:KGC) Corporation, a Toronto-based mining company, to positive from stable. Simultaneously, Moody’s affirmed the company’s senior unsecured notes ratings at Baa3.
Moody’s Vice President, Senior Analyst Jamie Koutsoukis stated that the positive outlook change reflects Kinross’ debt reduction and the expectation that the company will maintain an annual production of approximately 2 million ounces while keeping low leverage and conservative financial policies.
Kinross is projected to maintain stable production of approximately 2 million ounces annually through the end of the decade. This forecast is based on several factors including life extensions at existing operations such as Bald Mountain, La Coipa, and Round Mountain through open pit and underground development, advancing growth projects like Great Bear and Curlew, and evaluating further opportunities within its project pipeline to support the 2 million ounce production target.
The Baa3 senior unsecured rating for Kinross benefits from good scale, an expectation of a stable production profile, low leverage, and conservative financial policies. However, the rating is constrained by a concentration of operating earnings and cash flow from two sites, Tasiast in Mauritania and Paracatu in Brazil, the geopolitical risk of its Tasiast mine, and sensitivity to gold price volatility.
Kinross possesses excellent liquidity, with about $2.5 billion of total sources and negligible uses through to March 2026. These sources include $612 million in cash at the end of 2024, approximately $400 million of free cash flow in the next four quarters, and nearly full availability on its $1.5 billion revolving credit facility, which matures in October 2029. Kinross does not have any significant maturities until its $500 million notes are due in July 2027.
The positive outlook assumes that Kinross will maintain its production profile at approximately 2 million ounces annually, funded from its internal cash flow, and that the company will continue its conservative financial policies.
The ratings could be upgraded if Kinross demonstrates diversified cash flow across several mines, maintains adjusted debt/EBITDA below 2x, and cash flow from operations minus dividends/adjusted debt is above 40% on a sustained basis. To achieve an upgrade, Kinross would also need to demonstrate a clear strategy for funding its future development projects and commitment to maintaining a conservative financial profile with a low level of debt.
Conversely, the ratings could be downgraded if Kinross’s adjusted debt/EBITDA exceeds 2.5x or cash flow from operations minus dividends/adjusted debt falls below 30% on a sustained basis. Downward rating pressure could also occur if operating performance deteriorates, such that production and unit costs weaken significantly from current levels.
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