Kinross says key projects on target

NEW YORK (Reuters) - Kinross Gold Corp (K.TO) expects three key production projects in Russia, Brazil and the United States to meet their start-up dates and budgets, the Canadian gold miner's chief executive said on Tuesday.

"We are on track for the timing of those start-ups, and on track for budget, so quite focused on delivering those projects," CEO Tye Burt told the Reuters Global Mining Summit.

Kinross, which has a market capitalization of almost $15 billion, is expanding its Paracatu gold mine in Brazil, where the start-up is expected for this July.

Production from its Buckhorn deposit in Washington state is set for October, and output from its Kupol mine in far eastern Russia is scheduled to come onstream in May.

The projects are a key part of Kinross' plan to boost annual gold production by 60 percent to some 2.5 million to 2.6 million ounces through 2009, from 1.6 million ounces in 2007, while reducing the company's average cost of sales.

In a telephone interview, Burt noted that Kinross' gold reserves have grown through acquisitions and expansions from 5 million ounces in 2002 to 47 million ounces.

"Unlike our peers, we are not facing production slowdown or production decline in the next few years. So we don't have the same necessity to make deals," he said.

Like his peers, however, Burt is bullish on the outlook for gold prices, which were at about $974 an ounce at midday on Tuesday, though he declined to make a specific price projection for the precious metal.

"We have what I'd call a perfect storm for gold prices today," Burt said.

"We have a world where the U.S. dollar is going to stay weaker, I believe, where demand will continue to grow and where supply for new gold is quite constrained. All that boils down to a long-term bull market for gold."

JUNIOR VALUATIONS ATTRACTIVE

While his focus is on adding lower-cost production and applying strategies such as the hedging of currencies and fuel prices, Burt plans to spend $50 million on exploration this year and keep an eye out for deals with promising juniors.

Kinross shares were up some 4 percent at midday on Tuesday. They advanced 92 Canadian cents to C$25 on the Toronto Stock Exchange and 96 cents to $25.10 on the New York Stock Exchange.

The shares have risen more than 70 percent over the past six months with the surge in gold prices.

While stock prices of many big gold producers have tracked the surge in gold prices, the global liquidity squeeze has constrained financing options for juniors and depressed their market values, Burt said. That gap in valuations offers buying opportunities.

"Our focus today will be on delivering on the operations and the projects, but we're always looking at the junior sector -- nothing particular on our radar screen to buy tomorrow or next week, but continuing to watch carefully," he said.

Burt acknowledged that as Kinross is widely held, it could be vulnerable to a takeover, but he expects analysts to rate the stock upward as the company's cash flow rises with its mine output.

"We don't comment on rumors of takeover, but we have excellent relationships with all the other majors and nothing particular to speak to right now," he said.

(For summit blog: summitnotebook.reuters.com/)

(Reporting by Robert Melnbardis, editing by Matthew Lewis)