(Toronto) Kinross Gold said Monday it has improved its share buyback program after holding what it described as “constructive” discussions with activist investor Elliott Investment Management.
Posted at 12:01
Toronto-based miner says it will repurchase 300 million shares by year-end, and allocate 75% of its excess silver reserves to repurchase its own shares in 2023 and 2024 .
When a company buys back its shares, it spreads its profits over a smaller number of stocks thereafter, which increases its earnings per share, a key ratio in the valuation of a company.
Kinross, whose stock has retreated nearly 40% this year, says the overhaul to its share buyback program will protect its balance sheet and its ability to continue investing in its business.
Kinross chief executive J. Paul Rollinson said Elliott’s endorsement of the buyback program reinforces the notion that its shares offer the market “a compelling investment opportunity.”
Mark Cicirelli, a portfolio manager for Elliott, pointed out that Kinross’ stock had traded at a significant discount to its peers and the value of its assets, and that the buyback program was “a major step in narrowing this gap and in realizing the upside potential of its stock”.
Company in this dispatch: (TSX: K)