Kinross Gold (TSX:K) is up more than 100% in the past year. Investors who missed the rally are wondering if Kinross stock is still undervalued and good to buy right for a self-directed Registered Retirement Savings Plan (RRSP) to get exposure to rising gold prices.
Kinross gold share price
Kinross Gold trades near $26.50 at the time of writing compared to $13 in December and less than $7 per share in early 2024.
The massive rally in the past 18 months is a relief for long-term Kinross shareholders and a big win for contrarian investors who bought the stock when it was below $4 in 2022 before the start of the recovery.
Soaring gold prices have put a new tailwind behind the entire gold sector after some challenging years when the price of the metal fell and rising production costs hammered profits. During the last boom in the sector in 2010, Kinross and other major players went on a buying binge, paying premium prices for assets while loading up their balance sheets with debt. Gold rose from US$800 per ounce in 2008 to more than US$1,700 per ounce in 2012. It then went into a steady decline, falling below US$1,100 in 2015.
Kinross paid $7.1 billion in 2010 to acquire Red Bank Mining, but subsequently had to write down the majority of the value of the deal while being stuck with the large debt load taken on to complete the purchase. The Tasiast mine in Mauritania, which was supposed to be the crown jewel of the Red Back deal, didn’t turn out to be the gem that it was pitched to be for the company, but it is finally delivering on some of its original potential. It is the second-highest producing mine for Kinross in the first half of 2025.
Kinross investors watched the share price fall from $24 in 2008 to as low as $2 at one point in 2015. Changes in management and monetization of non-core assets across the portfolio, combined with a rebound in gold prices, enable the company to shore up its balance sheet.
The price of gold has increased from US$1,200 in 2018 to the current price near US$3,400 per ounce. The surge is driving high margins for Kinross across its portfolio of mines at a time when investments over the past few years are starting to deliver anticipated output gains. In the second-quarter (Q2) 2025 earnings report, Kinross said it sold 519,391 ounces of gold in the quarter compared to 505,122 ounces in the same period last year. Adjusted net earnings in the quarter came in at US$541 million compared to $174.7 million in Q2 2024.
Management is using excess cash to buy back at least US$500 million in stock this year. The board is also paying an annualized dividend of US$0.12 per share.
Time to buy Kinross?
Gold bulls who think the rally in the precious metal is going to continue for several years should probably hang on to the stock. Kinross has finally recovered from its big blunders of 15 years ago and is positioned well to benefit from the current market conditions.
A quick look at the historical trends, however, would suggest that it might be prudent for investors who bought the stock at much lower levels to book some profits.
