If you've ever paid the food bill that feeds a growing teen, then you know that growth requires substantial investment.
Kinross reported adjusted net earnings of $55.8 million for the second quarter, for a 17% increase over the 2007 period. Revenue was up even as production declined thanks to a 39% increase in Kinross' margin per ounce ($437, for the curious).
Oil prices, currency conversions, and growing pains caused production costs to rise 34%, from $348 per ounce a year earlier to $466 per ounce. Kinross raised 2008 cost guidance to about $435 per ounce, but it looks to the ramp-up of three new projects to provide some relief in 2009.
Fools take note: When using cost metrics to compare gold mining companies, take care to ensure costs are calculated the same way. The $466 reported by Kinross and the $440 reported by Newmont Mining
For the Fool willing to see this miner through some growing pains, I believe Kinross has been eating its spinach.
Fool contributor Christopher Barker captains yachts and writes about stocks. He can also be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He owns shares of Agnico-Eagle, Kinross Gold, and Yamana Gold. The Motley Fool has a disclosure policy.