KGC's Low Leverage Edge: Is Bigger Shareholder Value Awaiting?

Kinross Gold Corporation KGC remains committed to improving its leverage profile, thanks to strong free cash flow generation. It repaid $800 million of debt during 2024 and the remaining $200 million of its term loan in the first quarter of 2025. Moreover, KGC improved its net debt position to around $100 million at the end of the second quarter from $540 million in the prior quarter. Kinross’ long-term debt-to-capitalization is 13.9%, below the Zacks Mining – Gold industry’s 14.9%. 

KGC ended second-quarter 2025 with robust liquidity of roughly $2.8 billion, including cash and cash equivalents of more than $1.1 billion. Second-quarter free cash flow surged roughly 87% year over year and 74% from the preceding quarter, driven by the strength in gold prices and strong operating performance.  

Kinross’ aggressive debt cut places it among the industry’s leanest leveraged names and positions it strongly alongside its peers. As gold prices remain supportive and strong cash flow generation continues, KGC is expected to maintain this sharp pace of deleveraging moving ahead. Kinross expects to return a significant amount of capital to its shareholders while strengthening its balance sheet with a goal to repay its $500 million 2027 notes.

Among KGC’s peers, Agnico Eagle Mines Limited AEM has also made impressive strides in fortifying its balance sheet, underscoring its commitment to financial discipline. Agnico Eagle remains focused on paying down debt using excess cash, with long-term debt reducing by $550 million sequentially to $595 million at the end of the second quarter. Agnico Eagle ended the quarter with a significant net cash position of $963 million, driven by the increase in cash position and reduction of debt.

Newmont Corporation NEM is balancing deleveraging with post-Newcrest acquisition integration and asset streamlining through strategic non-core divestments. Newmont retired $372 million of debt during the second quarter. Newmont ended the second quarter with net debt of $1,422 million, down from $3,221 million at the end of the prior quarter.

The Zacks Rundown for KGC

Kinross Gold’s shares have shot up 108.5% year to date against the industry’s rise of 72.2%, largely driven by the gold price rally.

From a valuation standpoint, KGC is currently trading at a forward 12-month earnings multiple of 13.86, a 3.3% premium to the industry average of 13.42X. It carries a Value Score of B.

The Zacks Consensus Estimate for KGC’s 2025 and 2026 earnings implies a year-over-year rise of 102.9% and 2.2%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.

KGC stock currently carries a Zacks Rank #1 (Strong Buy). 

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This article originally published on Zacks Investment Research (zacks.com).

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