S&P Global Ratings revised its outlook on Kinross Gold Corp. to positive from stable and affirmed its BB+ long-term corporate credit rating.
The Toronto-based miner's issue-level rating on its senior unsecured notes was also affirmed at BB+, the rating agency said Sept. 26.
"We estimate Kinross will generate an adjusted debt-to-EBITDA ratio below 2x area over this period, but account for potential downside to gold prices or higher-than-expected capital expenditures related to growth projects," S&P said.
The outlook revision reflects the agency's belief that the gold producer is well-positioned to manage a period of higher CapEx over the next two years following the increase in S&P's estimate of the company's earnings, cash flow and liquidity.
The increase also reflects the upward revision to S&P's gold price assumptions, which will help the company to generate positive free cash flow and stronger-than-expected core credit measures.
The outlook also incorporates the risks associated with the company's capital-intensive, phase-one expansion of the Tasiast mine in Mauritania.
S&P considers Kinross Gold's liquidity to be strong.
"We expect that in the next 12 months, sources of funds will exceed uses by more than 1.5x, and that this measure will remain above 1.0x in the subsequent 12 months."
S&P Global Ratings and SNL Metals & Mining, an offering of S&P Global Market Intelligence, are both owned by S&P Global Inc.