Why Shares in This Leading Mining Stock Soared 21% in May

why shares in this leading mining stock soared 21% in may

Safety helmets and gloves hang from a rack on a mining site.

Gold prices continue to climb in this time of uncertainty. And that included the month of May, with many gold stocks seeing a rise in share price. However, not all of them climbed as high as Kinross Gold (TSX:K). Shares of the gold miner soared 21% in the month of May alone. So, let’s look at what happened and whether the stock will keep it up.

Earnings are up

Part of the climb came after Kinross stock reported first-quarter earnings that demonstrated more strength for the gold stock. Kinross reported a 19% increase in reported net earnings to US$107.0 million for the first quarter (Q1) of 2024 compared to the same period in 2023. Furthermore, its margins increased by 20% to US$1,088 per gold equivalent in Q1 2024, indicating they’re controlling costs effectively while gold prices remain favourable.

Kinross stock also reported positive cash flow. The company’s adjusted operating cash flow increased to US$424.9 million compared to US$358.2 million in Q1 2023, demonstrating healthy cash generation from their operations.

Add to this that production was well on track. Kinross stock produced 527,399 gold equivalent ounces  in Q1 2024, which is in line with their 2024 production guidance of approximately 2.1 million gold equivalent ounces. Overall, it was a strong quarter, but more is underway.

Project developments

There was also strong news in the quarter about the company’s existing mines. This included significant progress at its Great Bear Project, which was acquired back in February of 2022.

Kinross stock conducted extensive drilling in 2022, exceeding 250 kilometres. This data, combined with previous drilling by Great Bear, helped establish an initial mineral resource estimate for the project in February 2023.

Now, Kinross stock sees this project as a central piece of their future, with the potential to be a large, long-life mine due to the promising gold deposit. Back in 2023, Kinross aimed to define deeper mineralization and explore new areas around the property. They’re also working on permits for an advanced exploration program that could involve an underground tunnel to access deeper parts of the deposit for further analysis.

All this to say, Kinross stock is targeting a potential start sometime this year, adding even more gold to the company’s reserves.

Bottom line

So, with all this recent growth, should investors consider buying Kinross stock right now? There are a few items to consider here, as always. Since Kinross mines and sells gold, its stock price tends to move in the same direction as the overall price of gold. If you believe gold prices will continue to rise, Kinross could be a good way to benefit from that trend.

Furthermore, Kinross stock still looks valuable. It trades at 22.88 times earnings, which is in line with fair value, and 1.65 times book value. So, there is certainly room to grow for the company. What’s more, production growth cannot be overlooked. The Great Bear project has the potential to become a major mine for Kinross, significantly increasing their production in the future.

However, the price of gold can be volatile. So, a significant drop could negatively impact the stock. What’s more, there could always be unexpected events at mines, and there is no guarantee as to when Great Bear might be up and running. So, as always, make sure you consider all factors and your risk tolerance before diving into a stock.

Should you invest $1,000 in Kinross Gold right now?

Before you buy stock in Kinross Gold, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Kinross Gold wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $18,271.97!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 32 percentage points since 2013*.

See the 10 stocks * Returns as of 5/21/24

More reading

    Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

    OTHER NEWS

    4 hrs ago

    Cowboys head coach Mike McCarthy 'getting fed up' with owner Jerry Jones: report

    4 hrs ago

    Who Should Steelers Hope Wins Training Camp QB Battle?

    4 hrs ago

    Goaltender's dad talks up the Oilers' chances of lifting the Stanley Cup

    4 hrs ago

    Phillies turn rare 1-3-5 triple play against Tigers, 1st since 1929

    4 hrs ago

    Discount Burger Check? Chiefs' Reid Shares Hilarious Commercial Story

    4 hrs ago

    'Devastating loss': Digital lending library, Internet Archive, removes 500,000 books after being sued by publishers

    4 hrs ago

    Iga Swiatek vs Coco Gauff vs Aryna Sabalenka vs Elena Rybakina: WTA ‘Big 4’ state of play ahead of Wimbledon

    4 hrs ago

    Would a Toronto byelection loss spell doom for Trudeau?

    4 hrs ago

    BlackSuit ransomware gang blamed for ongoing car dealership outages

    4 hrs ago

    'Unreal' injury-time equaliser saves football powerhouse

    4 hrs ago

    Nigel Farage accused of cosying up to the Kremlin by former NATO boss

    4 hrs ago

    Dagestan, in southern Russia, has a history of violence. Why does it keeps happening?

    4 hrs ago

    Marines revive a World War II airfield on Peleliu in Pacific pivot

    4 hrs ago

    Fortnite Brings Tilted Towers and Other Fan Favorite Locations, But With a Twist

    4 hrs ago

    Shadow of the Erdtree Puts the Cherry on Top of Elden Rings Main Strength

    4 hrs ago

    Anger erupts as Albo's governor-general is awarded payrise

    4 hrs ago

    Charo Makes Rare Public Appearance at Project Angel Food Event: 'Life Is Beautiful' (Exclusive)

    4 hrs ago

    Boozed-up England fans sing '10 German bombers' chant in Cologne

    4 hrs ago

    Show Respect: ‘Boys are surprised we talk about this, it’s become normalised’

    4 hrs ago

    After clash with prosecutor, judge reserves ruling on restricting Trump’s rhetoric about agents’ classified documents search

    4 hrs ago

    Peter Dutton’s nuclear plan ‘doesn’t deliver’ any ‘energy price decrease’ until 2040

    4 hrs ago

    Where to watch Netherlands vs. Austria live stream, TV channel, lineups, prediction for Euro 2024 match

    4 hrs ago

    China lunar probe to return to Earth with samples

    4 hrs ago

    Report: Knicks’ OG Anunoby declines player option, enters unrestricted free agency

    4 hrs ago

    Saints offensive line ranked 19th in the NFL

    4 hrs ago

    Senators acquire goaltender Linus Ullmark from Bruins

    4 hrs ago

    Why Qld feels like home for the Blues

    4 hrs ago

    Seahawks waive 3 undrafted free agents, make UFL champ signing official

    4 hrs ago

    Andrew Scott Frantically Runs to Hear Taylor Swift's ‘Style' at 'Eras Tour'

    4 hrs ago

    England’s Test series v New Zealand: Date, kick-off time and TV channel

    4 hrs ago

    Bills' McDermott Says Von Miller Has ‘Something to Prove’

    4 hrs ago

    US prosecutors want Boeing to face criminal charges

    4 hrs ago

    Finance Minister Michael McGrath set to become Ireland's new EU Commissioner

    4 hrs ago

    Red-hot Cardinals get huge boost in return of star catcher

    4 hrs ago

    How police use the mail to spy on you: 60,000 cases in last decade with little pushback

    4 hrs ago

    These 3 Republicans are Trump’s most likely VP picks

    4 hrs ago

    Roy Jones Jr. announces his son, DeAndre, died by suicide

    4 hrs ago

    Luxury Gyms, Like Equinox and Life Time, Are Taking Over Big Retail Spaces

    4 hrs ago

    Automobili Pininfarina PURA Vision wins prestigious Red Dot Award: Design Concept 2024

    4 hrs ago

    Pop legend Robbie Williams wears his AFL jersey to see if he still gets recognised in London - with some very surprising results