"Based in Toronto, Kinross Gold (NYSE: KGC) has been in business since 1993 and is now the third-largest primary gold producer in North America in terms of reserves," notes Gordon Pape who has added the stock to his buy list.

The editor of Internet Wealth Builder sees strong upside potential, noting, "There are several reasons we like the prospects for Kinross at this time." Here is his review.

"The company operates nine mines in several countries including the United States, Brazil, Chile, and Russia, and has three new projects in the works which are scheduled to come on stream over the next two years. Overall, management estimates that production will increase more than 60% in the next two years, from 1.6 million ounce of gold in 2007 to 2.6 - 2.7 million ounces in 2009.

"The company also has a declining cost profile. Kinross says it expects its cost per ounce to drop as the new projects come on stream, making it unique among senior gold producers.

"The company also has a no-hedging policy. The company has not hedged any of its production through forward sales. This means it is enjoying the full benefit of the recent surge in the price of bullion.

"Finally, the stock is undervalued. Kinross shares have made a big move in recent months, rising 122%. But even at this level, however, the stock appears to be undervalued in relation to such peers as Barrick and Goldcorp.

"Further, in a recent research report RBC Capital Markets speculated that this could result in the company becoming a takeover target. RBC analyst Stephen Walker and associate Ryan Dolan estimate that the company's earnings per share will almost triple this year, from an estimated 34c in fiscal 2007 to 94c a share in 2008.

"The analyst looks for another big move in 2009, with earnings per share reaching $1.39 (figures in U.S. dollars). They have a target price of $24.50 on the stock but say that a successful ramp-up of the Kupol Project and the $470 million expansion at the Paracatu mine in Brazil would suggest a target of $31 or higher."

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