Recently, Canadian gold miner Kinross Gold (TSE:K) invested a slug of cash in junior miner Aurion Resources (TSE:AU). It joined in on a funding round for Aurion that raised just over C$9 million. And the move was met with some accord from its own investors, who sent shares up nearly 3.5% in Thursday morning’s trading.
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So why did Kinross invest in Aurion? Basically, the move gives Kinross indirect exposure to the Finnish gold market. Aurion is planning to put that C$9 million to work going after gold deposits in Finland. So far, the results have been pretty impressive. Aurion stock has returned 24.22% on a year-over-year basis, and going back to 2019, it’s come back with 77.23%.
In fact, reports note that the current lineup of Aurion projects is expected to return roughly the equivalent of two million ounces of gold per year through 2026. At current prices, that’s around $4.8 billion dollars worth of gold. For an investment of C$9 million, that is definitely impressive, no matter how you slice it.
Building on Solid Numbers
The Aurion investment is likely to pay out pretty well for Kinross, but Kinross also has its own operations to consider. And those are looking pretty healthy, based on the latest earnings report the company issued.
Kinross recently met production targets, bringing in 535,000 ounces of gold, with a cost of sales of around $1,000 per ounce. With gold at $2,400 an ounce or so based on the latest spot prices, that puts net income somewhere around $749 million. And, for those still concerned about Environmental, Social, and Governance (ESG) investing, there’s good news here too: Kinross recently rolled out a fourth annual climate report, which makes it clear it is out to lower its greenhouse gas emissions as part of operations.
Is Kinross Gold a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TSE:K stock based on eight Buys, three Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 72.48% rally in its share price over the past year, the average TSE:K price target of C$14.05 per share implies 21.3% upside potential.
