Provides Status Update on Late Filing of Financial Statements
TORONTO, April 28 /CNW/ - Kinross Gold Corporation (TSX-K; NYSE-KGC)
("Kinross" or the "Company") announced today that gold equivalent production
for the first quarter 2005 was 410,480 gold equivalent ounces.
"Production was about 6% ahead of plan for the first quarter, and costs
were in line with our plan", said Tye Burt, President and CEO of Kinross. "We
are on track to produce 1.6 million gold equivalent ounces and the full year
total cash cost forecast of $250 to $255 per ounce remains unchanged."
Slightly higher production and improved productivity from continuous
improvement programs are expected to help offset cost increases from fuel,
energy and other consumables, which are above plan.
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OPERATIONS UPDATE
First Quarter Production
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2005 2004
Mine (ounces gold equivalent) (ounces gold equivalent)
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Fort Knox 73,953 75,980
Round Mountain 95,393 94,984
Paracatu 40,609 24,340
Porcupine Joint Venture 52,891 51,867
La Coipa 34,024 40,549
Crixas 24,192 22,511
Refugio 2,947 2,731
Musselwhite 21,544 17,549
Kubaka 46,161 29,259
Kettle River 18,766 25,347
New Britannia - 6,707
Lupin - 5,187
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Total 410,480 397,011
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At Refugio, we have been commissioning the project in stages and we
expect to achieve a production rate of 40,000 tonnes per day in the second
quarter of 2005. The power supply from the local electrical utility is coming
up in phases with full power expected in the next few weeks. The total capital
cost of the expansion was reviewed in late March and stands at $134 million.
At Paracatu, we have been drilling exploration holes in the West of Rico
Creek target with 140-meter spacings on the holes, a density sufficient to
define resources. Further drilling will continue to define this target in
order to move it toward a proven and probable category, while other drills
will be focused on drilling in the pit and other step out targets. Assay
results have been returned on six drill holes so far, and the grade, hardness,
and metallurgy have all come back as expected. This drilling is needed to help
finalize the detailed capacity study for the mine and mill expansion at
Paracatu. The detailed capacity study will define the optimum economic
throughput rate. We have committed $19 million in capital to the expansion
program this year, and expect to have a final capital cost estimate in the
fourth quarter.
At Round Mountain, the final feasibility study on the pit expansion,
intended to extend mine life, will be completed in June and presented to the
joint venture partners for approval. The portal to drive a drift underground
will begin in June and is expected to reach the underground exploration target
in approximately 12 months.
Overall, the Porcupine Joint Venture had an excellent quarter with
production around 18% ahead of plan, partly as a result of a change in
accounting treatment. The Pamour pit development is well underway and
equipment from the Dome pit has been moved to Pamour for assembly.
Additionally, higher-grade mining from the Dome pit has allowed for Pamour ore
delivery to the mill to be deferred until later in the year. Permitting for
the Three Nations Lake diversion is well advanced.
The Puren deposit has been approved for development by the joint venture
partners at La Coipa, Chile. Puren is owned 65% by Mantos de Oro (MDO, a 50:50
joint venture with Placer Dome and Kinross) and 35% by Codelco of Chile. The
project is expected to extend mine life at La Coipa by about two years.
Kinross' share of capital expenditure is estimated to be approximately
$8 million. Ore is expected to be trucked 8 km to the MDO mill for processing
under a toll treatment arrangement.
Status Update on Late Filing of Financial Statements
Pursuant to the alternative information guidelines of the Ontario
Securities Commission ("OSC") Policy 57-603 and Canadian Securities
Administrators Staff Notice 57-301, Kinross will provide bi-weekly updates to
the market regarding the process relating to the preparation and filing of its
financial statements and related matters, until such time as Kinross is
current with its filing obligations under Canadian securities laws.
As previously disclosed, Kinross has not yet filed its financial
statements as a result of the review of the accounting treatment for the
goodwill associated with the TVX Gold/Echo Bay merger. Kinross and its
auditors are reviewing the models received from Standard and Poor's Corporate
Value Consultants, per the update press release dated April 15, 2005, and
assessing their impact on the financial statements. After initial review,
Kinross has determined that additional work is needed to refine the valuation
for exploration properties. When the review is complete the Company will
incorporate the results into its financial statements for 2003 and 2004 and
any affected interim statements. Upon completion of this process and the
related audits the Company will complete its regulatory filings. We are
issuing bi-weekly updates as to the status and timing which can be viewed on
our website at www.kinross.com. The next update is scheduled for the week of
May 9, 2005.
This press release includes certain "Forward-Looking Statements" within
the meaning of section 21E of the United States Securities Exchange Act of
1934, as amended. All statements, other than statements of historical fact,
included herein, including without limitation, statements regarding Kinross'
financial statements for its fiscal year ended December 31, 2003, potential
mineralization and reserves, exploration results and future plans and
objectives of Kinross Gold Corporation, are forward-looking statements that
involve various risks and uncertainties. There can be no assurance that such
statements will prove to be accurate and actual results and future events
could differ materially from those anticipated in such statements. Any
restatement of historical financial statements is dependant on the outcome of
the independent valuation of the acquired assets, and Kinross does not know
what that outcome will be. Other important factors that could cause actual
results to differ materially from Kinross' expectations are disclosed under
the heading "Risk Factors" and elsewhere in Kinross' documents filed from time
to time with the Canadian Securities Regulators, the United States Securities
and Exchange Commission and other regulatory authorities. All dollar amounts
are expressed in US dollars unless otherwise noted. Technical information
contained in this press release has been reviewed by Rod Cooper, Vice
President, Technical Services for Kinross, who is a "Qualified Person" under
National Instrument 43-101.
Total cash costs are a non-GAAP measure intended to provide investors
with information about the operating efficiency of current mining operations.
Management uses this measure for the same purpose and for monitoring
performance of its gold mining operations. Total cash costs per ounce is a
standard gold mining industry measure that was developed in conjunction with
the Gold Institute in an effort to provide a level of comparability among
precious metals producers. This measure differs from earnings determined in
accordance with Generally Accepted Accounting Principles ("GAAP") and should
not be considered in isolation or a substitute for measures of performance
determined in accordance with GAAP. Total cash costs may reflect adjustments
for items that are recurring such as change in inventory and site restoration
cost accruals. A reconciliation of total cash costs with operating costs per
the consolidated financial statements will be published by the Company once
its December 31, 2004 year end financial statements are available.
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