Kinross Gold Q1 profit up

(Reuters) - Kinross Gold Corp's K.TO first-quarter profit rose 44 percent on higher gold prices, but fell short of estimates, and the Canadian miner said it would buy a 9.4 percent stake in Red Back Mining RBI.TO for C$600 million ($585.9 million).

Kinross said it would subscribe to 24 million shares of Red Back Mining for C$25 per share through a private placement.

The company, which operates in the Americas and Russia, also increased its 2010 capital expenditures by $40 million to $590 million and its exploration budget by $79 million to $97 million.

For the quarter ended March 31, the company earned $110.6 million, or 16 cents a share, compared with $76.5 million, or 11 cents a share a year ago.

Adjusted earnings per share was 14 Canadian cents per share.

Analysts on average were expecting a profit of 17 cents a share, before exceptional items.

Revenue rose 23 percent to $657.6, buoyed by stronger gold prices, and a 3 percent rise in production to 544,134 gold equivalent ounces.

Kinross said it expects to produce about 2.2 million gold equivalent ounces in 2010.

By 2015, it sees production above 3 million ounces.

Shares of the company closed at C$19.05 Tuesday on the Toronto Stock Exchange.

Reporting by Abhiram Nandakumar in Bangalore; Editing by Don Sebastian