Kinross (KGC) Generates Mixed Reaction from Billionaires

With John Paulson selling some of his stake in Kinross and George Soros adding to his position, it underscores the fickleness of the stock and it relative underperformance in relationship to physical gold.

Kinross had a decent quarter, and generate revenue of $920.4 million, a record for the company. They also generated $3 billion in revenue for full year 2010.

Costs related to exploration at Tasiast dragged earnings down for the fourth quarter, dropping to $144.7 million, or 13 cents a share; down 38 percent from the same quarter the year before. Tasiast came with its acquisition of Red Back Mining.

For 2010 Kinross produced 676,635 ounces of gold at $551 an ounce, and for the full year, gold production reached 2.3 million ounces at $508 an ounce. The gold miner was able to sell gold for $1,333 an ounce in the quarter, generating strong margins.

Guidance was for 2011 production to reach 2.5 million to 2.6 million ounces of gold at a cost range of $565 to $610 an ounce.

Now as to why Soros increased his position in Kinross when it has been underperforming, it could be the Tasiast mine. On its conference call the company pointed out production at the mine could average 1.5 million ounces annually by 2014 at a cost of about $500 an ounce. The company also believes gold reserves could be significantly higher than original estimates.

He also could be thinking the stock could be ready to break out, which is quite possible after a disappointing year.

Kinross continues to pay out a semi-annual dividend of 5 cents a share.

Kinross closed Thursday at $16.64, losing $0.35, or 2.06 percent.