Kinross Gold Corporation · TSX:K
Kinross Gold — Raymond James Texas Gold Investor Forum 2018
55 slides from Kinross Gold's conference presentation, November 2018
Slide 1: Delivering Value.
November 2018 Delivering Value. Kinross Gold Corporation
Slide 2: Cautionary Statement on Forward-Looking Information
Cautionary Statement on Forward-Looking Information All statements, other than statements of historical fact, contained or incorporated by reference in or made in giving this presentation and responses to questions, including but not limited to any information as to the future performance of Kinross
Slide 3: Kinross Value Proposition
Kinross Value Proposition Operational Excellence Financial Strength & Flexibility Diverse portfolio of operating mines consistently Maintaining strong balance sheet continues to meeting or outperforming operational targets be a priority objective Repaid over $1.0 billion of debt 6 Met or exceeded ov
Slide 4: Enterprise Value Versus Production
Compelling Relative Value November 2018 Enterprise Value Versus Production Market capitalization does not reflect significant scale of production and history of achieving guidance Enterprise Value(i) Net Debt to Historical Production (Moz)(iii) Consensus Production Estimates (Moz) (US$M) EBITDA(ii)
Slide 5: Operational Excellence
Operational Excellence We remain focused on operational excellence, building a culture of continuous improvement, innovation and disciplined cost management 5
Slide 6: Diversified Portfolio of Assets
Operational Excellence November 2018 Diversified Portfolio of Assets 60% of 2018E gold equivalent production expected from mines located in the Americas Dvoinoye, Russia Kupol, Russia Fort Knox, USA Bald Mountain, USA Round Mountain, USA Tasiast, Mauritania 2018E Gold Equivalent Production(1,2) 20%
Slide 7: On Track to Meet 2018 Guidance
Operational Excellence November 2018 On Track to Meet 2018 Guidance Continued track record of meeting our operational targets • Overall portfolio delivered strong results; on track to meet 2018 guidance targets • Commissioning of Tasiast Phase One complete; temporary operational challenges during Q3
Slide 8: Year-to-Date Operating Highlights
Operational Excellence November 2018 Year-to-Date Operating Highlights Overall portfolio has performed well in the first nine months of 2018 Paracatu, Brazil Bald Mountain, USA Round Mountain, USA Production Production Production 375,941 237,435 288,886 (Au. Eq. oz.) (Au. Eq. oz.) (Au. Eq. oz.) Cost
Slide 9: 2018E Production and Costs
Operational Excellence November 2018 2018E Production and Costs(1) Kinross Total(2) Regional Guidance 2018E Unit Costs ($ per gold equivalent ounce) 2.5 million Americas Cost of sales(3) $730/oz. (+/- 5%) (+/- 5%) 1.51 million 2018E Gold Equivalent Production (ounces) (+/- 5%) All-in sustaining cost
Slide 10: Strong Balance Sheet & Financial Flexibility
Strong Balance Sheet & Financial Flexibility With strong cash flow and no debt maturities until 2021, we have the financial strength and flexibility to fund our pipeline of development projects 10
Slide 11: Solid Financial Position
Strong Balance Sheet & Financial Flexibility November 2018 Solid Financial Position Strong position to finance organic development projects with existing liquidity and cash flow generation Strategic investments to add value to our Liquidity Position portfolio ($ billion) • Completed the Phase One ex
Slide 12: 2018E Capital Expenditures Outlook
Strong Balance Sheet & Financial Flexibility November 2018 2018E Capital Expenditures Outlook(1) Leveraging strong financial position to invest in development projects and our future Capital Expenditures • Maintaining 2018 capital expenditures Sustaining Non-sustaining guidance of $1,075 million (+/
Slide 13: Manageable Debt Profile
Strong Balance Sheet & Financial Flexibility November 2018 Manageable Debt Profile No debt maturities prior to 2021 Debt Schedule Debt Ratings Agency Rating $500 $500 $500 S&P BBB- (Stable) Moody’s Ba1 (Stable) Fitch BBB- (Stable) $ millions Interest Rates $250 Senior Notes due 2021 5.125% Senior No
Slide 14: Development Projects
Development Projects We have a portfolio of development projects that we are progressing, as well as a pipeline of future opportunities that we are focused on advancing 14
Slide 15: Projects & Future Opportunities
Development Projects November 2018 Projects & Future Opportunities Portfolio of development projects and future opportunities progressing well Tasiast Phase One Round Mountain Phase W Bald Mountain Vantage Complex Expected to extend mining until Initiates production in the South Area Commissioning c
Slide 16: Tasiast Phase One Commissioning Complete
Development Projects November 2018 Tasiast Phase One Commissioning Complete Following a successful ramp-up of the new SAG mill, Tasiast delivered record monthly production in October Q3 Performance • Ramp-up of the new SAG mill proceeded very well, and commissioning is complete • Ramp-up in mining r
Slide 17: Tasiast Phase One Project Financing Update
Development Projects November 2018 Tasiast Phase One Project Financing Update Project financing has progressed, with strong interest from multilateral organizations and commercial banks • Targeting approximately $300 million in financing • Have now signed mandate letter with IFC, a division of the W
Slide 18: Tasiast Update
Development Projects November 2018 Tasiast Update Kinross has continued to advance discussions with Government of Mauritania regarding our activities in the country • Has included: meeting with the Minister of Petroleum, Energy and Mines who is overseeing the process on behalf of the government; and
Slide 19: Round Mountain Phase W Overview
Development Projects November 2018 Round Mountain Phase W Overview The Phase W project is expected to extend mining by 5 years at one of Kinross’ top performing mines located in one of the world’s best mining jurisdictions 19
Slide 20: Phase W Feasibility Study Results
Development Projects November 2018 Phase W Feasibility Study Results Project expected to generate a 13% IRR at an assumed gold price of $1,200 per ounce Current mine plan + Phase W Estimates Average annual production (2018-2024) 341,000 gold ounces Production cost of sales (2018-2024) $765 per gold
Slide 21: Round Mountain Phase W
Development Projects November 2018 Round Mountain Phase W The Phase W project is progressing well; on schedule and on budget • Detailed engineering for all major infrastructure is now complete • Pre-stripping is proceeding well; expect to encounter initial Phase W ore in mid-2019 • Construction of t
Slide 22: Fort Knox Gilmore
Development Projects November 2018 Fort Knox Gilmore Gilmore project expected to extend mine life to 2030 and strengthen long-term U.S. production profile 22
Slide 23: Gilmore Feasibility Study Results
Development Projects November 2018 Gilmore Feasibility Study Results Project expected to generate a 17% IRR at an assumed gold price of $1,200 per ounce Current mine plan + Gilmore estimates Average annual production (2018-2027) 245,000 gold ounces Production cost of sales (2018-2027) $735 per gold
Slide 24: Fort Knox Gilmore
Development Projects November 2018 Fort Knox Gilmore Initial production from Gilmore is expected in early 2020 • Project includes: The first two phases of a potential multi-phase layback of the Fort Knox pit; and Construction of a new heap leach pad • Engineering is now essentially complete • Pr
Slide 25: Realizing Bald Mountain's Potential
Development Projects November 2018 Realizing Bald Mountain’s Potential 2016: Doubled reserve estimates(4) 2017: Doubled production & lowered costs • Added 1.2 million ounces, doubling the reserve estimate before depletion 300000 1200 $1,182 282,715 2.1 250000 1000 Proven and Probable Reserves (Moz.)
Slide 26: Bald Mountain Vantage Complex
Development Projects November 2018 Bald Mountain Vantage Complex Vantage Complex project in the South Area of Bald Mountain is proceeding well; on schedule and on budget • Stripping and stacking of economic but previously leached ore on the new heap leach pad has commenced • Engineering is complete
Slide 27: Bald Mountain Exploration Highlights
Development Projects November 2018 Bald Mountain Exploration Highlights Kinross envisions Bald Mountain as a long-life asset with significant upside potential and mineral resource growth North Area • Drilling has mainly been focused on the North Area of the property • Analyzing results from drilling
Slide 28: Russia Satellite Deposits
Development Projects November 2018 Russia Satellite Deposits Development of satellite deposits which are expected to contribute high-grade ore feed to the Kupol mill Moroshka Dvoinoye Zone 1 • Located 4km east of the Kupol mill • Development of Dvoinoye Zone 1 continues on schedule • Project is now
Slide 29: Chile Projects
Development Projects November 2018 Chile Projects We are evaluating the potential for a return to production in Chile La Coipa Restart Project • Initiated a feasibility study on the Phase 7 deposit Expected to be complete in H2 2019 Lobo Marte Project • Located 80km from La Coipa • Measured & indi
Slide 30: Kupol Exploration Highlights
Exploration Highlights November 2018 Kupol Exploration Highlights Initial results for potential mineral resource additions to extend mine life have been promising • We continue to explore the main Kupol vein and mineralization to the north and south along the main trend North Extension – drilling
Slide 31: 1-Year Mine Life Extension in Russia
Exploration Highlights November 2018 1-Year Mine Life Extension in Russia Continuing our track record of adding reserves to offset depletion at Kupol and Dvoinoye (4) Cumulative Production (Au eq.) Proven and Probable Reserves (Au eq.) 6.9 2.3 2017 • Estimated mill production extended to 6.3 2.6 201
Slide 32: Compelling Relative Value
Compelling Relative Value Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities 32
Slide 33: 2018E Production & All-In Sustaining Cost
Compelling Relative Value November 2018 2018E Production & All-In Sustaining Cost 2018E Production 2018E All-In Sustaining Cost (million ounces) ($ per ounce) $1,200 5.0 $1,000 4.0 $800 3.0 $600 2.0 $400 1.0 $200 0.0 $0 Gold Fields Gold Fields Newmont AngloGold Goldcorp AngloGold Goldcorp Barrick Ki
Slide 34: Balance Sheet Strength
Compelling Relative Value November 2018 Balance Sheet Strength Net debt to EBITDA ratio of 1.2x as at September 30, 2018 3.0 Net Debt to EBITDA (LTM) 2.5 1.6 1.4 1.3 1.2 1.0 0.4 -0.9 Yamana Goldcorp Agnico AngloGold Barrick Kinross Gold Fields Newmont IAMGold Source: Company reports; Bloomberg – net
Slide 35: 2018E Metrics
Compelling Relative Value November 2018 2018E Metrics Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities EV / 2018E EBITDA P / 2018E Operating CF 12.4 13.4 8.9 8.5 9.1 8.1 7.1 7.4 6.1 4.7 4.5 5.0 4.0 4.5 3.7 4
Slide 36: Appendix
KINROSS | 25 oa
Slide 37: Currency & Oil Sensitivities
Appendix November 2018 Currency & Oil Sensitivities 2018 Budget Assumptions(1) 2018 Sensitivities (net of hedges)(1) Change from Estimated impact 2018 Budget Current Spot(i) Assumptions to cost of sales Gold US$1,200/oz. $1,221/oz. FX 10% US$15/oz. Russian rouble 10% US$12/oz.(ii) Oil US$55/bbl. $50
Slide 38: Fuel & Currency Hedges
Appendix November 2018 Fuel & Currency Hedges Managing exposure to fluctuations in foreign currency and input commodity prices • Overall 2018 FX exposures ~55% hedged at favourable rates compared to current spot prices • Continue to monitor our FX and oil exposures and look for opportunities to esta
Slide 39: Fort Knox, USA (100%)
Americas November 2018 Fort Knox, USA (100%) Proceeding with Gilmore project, which is expected to extend mine life to 2030 • Successfully operating one of the world’s Operating Results(3) few cold weather heap leaches 2016 2017 • Estimated mine life: mill – 2020; mining – 2027; leaching – 2030 Prod
Slide 40: Summary of Feasibility Study Results
Fort Knox Gilmore November 2018 Summary of Feasibility Study Results Operating Estimates (current mine plan + Gilmore) Incremental Gilmore Estimates(i) Timeline Operational Metric Estimate Estimate Average annual tonnes mined 60 million Strip ratio 1.2 Strip ratio 1.2 Life of mine ore processed 183
Slide 41: Round Mountain, USA (100%)
Americas November 2018 Round Mountain, USA (100%) Strong cash flow generator with Phase W project extending mine life to 2027 • Phase W is expected to generate solid Operating Results(3) returns and extend mining 2016 2017 • Estimated mine life: 2024 (mining); 2027 (stockpile milling / residual leac
Slide 42: Summary of Feasibility Study Results
Round Mountain Phase W November 2018 Summary of Feasibility Study Results Operating Estimates (current mine plan + Phase W) Standalone Phase W Estimates Timeline Operational Metric Estimate Estimate Strip ratio 2.9 Life of mine production 1.5 million ounces Average grade processed 0.7 grams per tonn
Slide 43: Bald Mountain, USA (100%)
Americas November 2018 Bald Mountain, USA (100%) Forecasting strong near-term cash flow with significant upside potential • Large estimated mineral resource base with Operating Results(3) multiple sources of potential mineral reserve 2016 2017 additions • Successfully doubled production & lowered Pr
Slide 44: Paracatu, Brazil (100%)
Americas November 2018 Paracatu, Brazil (100%) Large gold mine with a long mine life that extends to 2032 • Paracatu is among the world’s largest gold Operating Results(3) operations with annual throughput of ~60Mt 2016 2017 • Cornerstone asset in Kinross’ portfolio Production • Estimated mine life:
Slide 45: Acquisition of Power Plants in Brazil
Americas November 2018 Acquisition of Power Plants in Brazil(i) Expected to reduce Paracatu’s cost of sales by ~$80/oz. Transaction Overview over the life of mine • Kinross acquired two • Lowers operating costs by eliminating ~70% of future power hydro power plants in purchases Summary Brazil from a
Slide 46: Overview of Acquired Power Plants
Americas November 2018 Overview of Acquired Power Plants Location • Both are located on the Claro River in the State of Goias, approximately 660km west of Paracatu • No additional infrastructure is required to provide power to the mine site • Combined installed capacity of 155 MW • Expected to meet
Slide 47: La Coipa Restart Project PFS Results
Americas November 2018 La Coipa Restart Project PFS Results (2015) Project expected to generate a 20% IRR at an assumed gold price of $1,200 per ounce • The pre-feasibility study estimates a 5.5 year mine life, following receipt of permits and commencement of stripping Processing expected to comme
Slide 48: Kupol-Dvoinoye (100%)
Russia November 2018 Kupol-Dvoinoye (100%) Our Russian mines are a model for successfully operating in a remote location • High-grade, low-cost underground mines Operating Results(3) supported by 1 mill 2016 2017 • Estimated mine life: 2022 Production 734,143 580,451 (Au. Eq. oz.) Production cost of
Slide 49: Foreign Investment in Russia
Russia November 2018 Foreign Investment in Russia The world’s leading companies are Foreign Investment Advisory Council invested in Russia • Chaired by the Russian Prime Minister, includes CEOs from over 50 international companies 49
Slide 50: Tasiast, Mauritania (100%)
West Africa November 2018 Tasiast, Mauritania (100%) Operating mine with a large gold resource located in a prospective district • Phase One expected to increase production Operating Results(3) from current levels while significantly 2016 2017 reducing costs Production • Construction complete; commi
Slide 51: Summary of Feasibility Study Results
Tasiast Expansion Project November 2018 Summary of Feasibility Study Results Operating Estimates (Phase One & Two combined) Standalone Phase Two Estimates Timeline Operational Metric Estimate Estimate Total tonnes mined 438 million Initial capital $590 million Strip ratio 6.4 2020-2024 Average CIL g
Slide 52: Mauritania Highlights
Appendix November 2018 Mauritania Highlights Kinross has successfully operated in Mauritania since 2010 • Democratic republic that gained independence Country Statistics in 1960 (2017 estimates unless otherwise indicated) • Mining-friendly jurisdiction: Population 3.7M Well-developed, competitive
Slide 53: Chirano, Ghana (90%)
West Africa November 2018 Chirano, Ghana (90%) Cost reduction achieved at Chirano by transitioning to self-perform • Chirano is an underground operation Operating Results(2,3) located in southwestern Ghana 2016 2017 • Estimated mine life: 2020 Production 190,759 221,424 (Au. Eq. oz.) Production cost
Slide 54: Endnotes
Appendix November 2018 Endnotes 1) For more information regarding Kinross’ production, cost, overhead expense and capital expenditures outlook for 2018, please refer to the news releases dated February 14, 2018 and November 7, 2018, both of which are available on our website at www.kinross.com. Kinr
Slide 55: KINROSS
KINROSS 25 YEARS
Kinross Gold — Raymond James Texas Gold Investor Forum 2018 on 6ix