Will Kinross Gold's Rising Costs Threaten Margins in FY26?
Kinross Gold Corporation KGC remains mired in headwinds from higher production costs. It saw a roughly 18% year-over-year rise in attributable production cost of sales per ounce to $1,289 in the fourth quarter, impacted by lower production and higher royalty costs stemming from increased gold prices.
All-in-sustaining costs (AISC), a key indicator of cost efficiency in mining, jumped roughly 21% year over year to $1,825 per gold equivalent ounce sold on an attributable basis and were also up from $1,622 in the prior quarter. For full-year 2025, Kinross’ AISC was $1,571, up from $1,388 in 2024. While a 56% increase in average realized gold prices led to a surge in fourth-quarter profits, the rise in unit costs underscores a spike in inflation.
KGC’s guidance indicates cost pressures in 2026. The company expects attributable production costs of sales per ounce to reach $1,360 (+/-5%) in 2026 due to higher royalty costs, inflationary impacts and planned mine sequencing. KinrossKGC-- sees attributable AISC to be $1,730 per ounce (+/-5%) in 2026, indicating a year-over-year increase partly due to inflationary impacts. Higher expected costs in 2026 signal margin compression risks.
Among its peers, Barrick Mining Corporation B faced cost pressure in the fourth quarter. Barrick’s total cash costs per ounce of gold and AISC increased around 15% and 9% year over year, respectively, in the quarter, and rose from the previous quarter as well. For 2026, BarrickB-- projects AISC in the range of $1,760-$1,950 per ounce, indicating a significant year-over-year increase at the midpoint. Cash costs per ounce are forecast to be $1,330-$1,470, up from $1,199 in 2025.
Agnico Eagle Mines Limited AEM is also exposed to higher production costs. In the fourth quarter, Agnico Eagle’s AISC was $1,517 per ounce, marking a roughly 10% increase from the prior quarter and a 15% year-over-year rise. Agnico Eagle’s total cash costs per ounce for gold were $1,089, 18% higher than $923 a year ago and up from $994 in the prior quarter. Agnico Eagle forecasts total cash costs per ounce in the range of $1,020 to $1,120 and AISC per ounce between $1,400 and $1,550 for 2026, suggesting a year-over-year increase at the midpoint of the respective ranges.
The Zacks Rundown for KGC
Kinross Gold’s shares have shot up 125.5% in the past year against the Mining – Gold industry’s rise of 94.5%, largely driven by the gold price rally.
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From a valuation standpoint, KGCKGC-- is currently trading at a forward 12-month earnings multiple of 9.92, a 12.4% discount to the industry average of 11.33X. It carries a Value Score of B.
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The Zacks Consensus Estimate for KGC’s 2026 and 2027 earnings implies a year-over-year rise of 50% and 0.7%, respectively. The EPS estimates for 2026 and 2027 have been trending higher over the past 60 days.
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KGC stock currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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