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Is KGC Facing Margin Risks From Higher Unit Costs in 2026?
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Key Takeaways
Kinross reported a 33% year-over-year rise in production costs and 28% increase in AISC in Q1.
KGC expects 2026 production costs of $1,360 per ounce due to inflation and mine sequencing.
KGC projects 2026 AISC of $1,730 per ounce, up from $1,571 per ounce in 2025.
Kinross Gold Corporation (KGC - Free Report) topped earnings and revenue estimates in the first quarter of 2026 on gold pricing strength, but remains mired in headwinds from higher production costs. Its attributable production cost of sales per gold equivalent ounce was $1,380 in the first quarter, up 33% from the prior-year quarter’s levels. The rise was partly due to higher royalty costs stemming from increased gold prices.
All-in-sustaining costs (AISC), a key indicator of cost efficiency in mining, jumped roughly 28% year over year to $1,732 per gold equivalent ounce sold on an attributable basis. While a 71% rise in average realized gold prices led to a surge in first-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. Kinross expects AISC to be $1,730 per ounce (+/-5%) in 2026, indicating a year-over-year increase from $1,571 per ounce in 2025, partly due to inflationary impacts. AISC is expected to be impacted by cost inflation from elevated crude oil prices. Higher expected costs in 2026 signal margin compression risks.
Among its peers, Barrick Mining Corporation (B - Free Report) saw a 4% year-over-year decline in AISC in the first quarter, reaching $1,708 per ounce. It, however, rose 8% sequentially. For 2026, Barrick projects AISC in the range of $1,760-$1,950 per ounce, indicating a significant year-over-year increase at the midpoint compared with $1,637 in 2025. Barrick forecasts cash costs per ounce to be $1,330-$1,470, up from $1,199 in 2025.
Agnico Eagle Mines Limited (AEM - Free Report) is also exposed to higher production costs. Agnico Eagle's AISC was $1,483 per ounce in the first quarter, marking a roughly 26% year-over-year rise. AEM’s total cash costs per ounce for gold were $1,093, 22% higher than $895 a year ago, impacted by higher royalty costs and lower production. AEM 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 95% in the past year against the Mining – Gold industry’s rise of 66.2%, largely driven by the gold price rally.
Image Source: Zacks Investment Research
From a valuation standpoint, KGC is currently trading at a forward 12-month earnings multiple of 9.71, a 7.5% discount to the industry average of 10.5X. It carries a Value Score of B.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for KGC’s 2026 and 2027 earnings implies a year-over-year rise of 58.7% and a decline of 0.7%, respectively. The EPS estimates for 2026 and 2027 have been trending higher over the past 60 days.
Image Source: Zacks Investment Research
KGC stock currently carries a Zacks Rank #3 (Hold).
View the Zacks #1 Rank List
Image: Bigstock
Is KGC Facing Margin Risks From Higher Unit Costs in 2026?
Key Takeaways
Kinross Gold Corporation (KGC - Free Report) topped earnings and revenue estimates in the first quarter of 2026 on gold pricing strength, but remains mired in headwinds from higher production costs. Its attributable production cost of sales per gold equivalent ounce was $1,380 in the first quarter, up 33% from the prior-year quarter’s levels. The rise was partly due to higher royalty costs stemming from increased gold prices.
All-in-sustaining costs (AISC), a key indicator of cost efficiency in mining, jumped roughly 28% year over year to $1,732 per gold equivalent ounce sold on an attributable basis. While a 71% rise in average realized gold prices led to a surge in first-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. Kinross expects AISC to be $1,730 per ounce (+/-5%) in 2026, indicating a year-over-year increase from $1,571 per ounce in 2025, partly due to inflationary impacts. AISC is expected to be impacted by cost inflation from elevated crude oil prices. Higher expected costs in 2026 signal margin compression risks.
Among its peers, Barrick Mining Corporation (B - Free Report) saw a 4% year-over-year decline in AISC in the first quarter, reaching $1,708 per ounce. It, however, rose 8% sequentially. For 2026, Barrick projects AISC in the range of $1,760-$1,950 per ounce, indicating a significant year-over-year increase at the midpoint compared with $1,637 in 2025. Barrick forecasts cash costs per ounce to be $1,330-$1,470, up from $1,199 in 2025.
Agnico Eagle Mines Limited (AEM - Free Report) is also exposed to higher production costs. Agnico Eagle's AISC was $1,483 per ounce in the first quarter, marking a roughly 26% year-over-year rise. AEM’s total cash costs per ounce for gold were $1,093, 22% higher than $895 a year ago, impacted by higher royalty costs and lower production. AEM 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 95% in the past year against the Mining – Gold industry’s rise of 66.2%, largely driven by the gold price rally.
From a valuation standpoint, KGC is currently trading at a forward 12-month earnings multiple of 9.71, a 7.5% discount to the industry average of 10.5X. It carries a Value Score of B.
The Zacks Consensus Estimate for KGC’s 2026 and 2027 earnings implies a year-over-year rise of 58.7% and a decline of 0.7%, respectively. The EPS estimates for 2026 and 2027 have been trending higher over the past 60 days.
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.