Kinross' share price hit a near two-year low in recent days. 

Kinross operates the high-quality, low-cost Kupol mine in the Chukotka region in the far east of Russia. The mine is guided to produce 350,000 ounces gold-equivalent in 2022 at a cost of sales of US$870/oz AuEq. That would account for 13% of Kinross' total 2022 guidance of 2.65 million ounces AuEq. 

The company also has the Udinsk project in Khabarovsk Krai, which is in the feasibility-study stage. 

BMO analyst Jackie Przybylowski noted that Kinross is operating Kupol with "strong contingencies", including stockpiles of key inputs. 

"It also has a relatively low cash balance within Russia at present," Przybylowski said. She pointed to the company's move to pay out dividends of over US$110 million at the end of 2021 and that Kinross started 2022 with just the cash to cover its working capital needs.   

"In the near term, maintaining operations is important to ensure the long-term viability of the regional business. Kinross has a responsibility to the community; it maintains employment of its circa-2,000 workers and numerous stakeholders in country," she added. 

The comments follow BMO sitting down with Kinross CEO Paul Rollinson, CFO Andrea Freeborough and others from the company at the 2022 BMO Global Metals & Mining Conference in Hollywood, Florida. 

The Russian conflict in Ukraine is continuing to evolve, which brings increased uncertainty for Kinross' operations in the region. 

"We see increased risks to the sale of gold in-country if international sanctions limit the ability of Russian domestic banks to purchase Kinross-produced gold," Przybylowski said. 

"If gold were to accumulate at site for a prolonged period, Kinross could see a shortage of working capital, which could affect short-term operations," she added. 

There is also the possibility of Kinross slowing or halting the development of the Udinsk project, which is being funded by cash generated from Kupol, she said. 

Kinross traded on the Toronto Stock Exchange at C$6.62 on March 2, having bounced back by 5% from an almost two-year low of C$6.32 the day before. On February 19 - two days before Russia officially recognised two self-proclaimed states in the Donbas and sent in troops - Kinross was trading at C$7.42. 

Przybylowski said that Russia represented 11% of BMO's Kinross net asset value - Kupol accounted for 5% and Udinsk 6%.