Kinross Gold Corporation · TSX:K
Kinross Gold — Denver Gold Forum 2004
34 slides from Kinross Gold's conference presentation, Sep 28, 2004
Slide 1: Dedicated to being world class – Denver Gold Forum
dedicated to being world class Denver Gold Forum September 28, 2004 Robert M. Buchan President & Chief Executive Officer
Slide 2: Forward Looking Statement
Forward Looking Statement Certain statements set forth in this presentation constitute "forward looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties and other factors that may cause the actual resul
Slide 3: Why Kinross?
Why Kinross? • Very liquid senior gold producer • Strong balance sheet • Total cash costs similar to other senior gold producers • No gold hedging • Experienced management team • Part of S&P TSX 60, S&P TSX Capped Gold Index, XAU Index, HUI Index challenging opportunities require innovative strategi
Slide 4: Kinross at a Glance
Kinross at a Glance Key Facts Key Attributes • Senior gold producer, • Excellent spread of 2004 gold equivalent geopolitical risk production of 1.7 million • Modern, low cost asset ozs @ $230 total cash base cost • Exciting pipeline of • ~3,600 employees in 6 development projects countries and explo
Slide 5: Highly liquid, undervalued stock
Highly liquid, undervalued stock 3.5 3.0 Glamis P rice / N A V 2.5 Newmont 2.0 Placer Meridian Barrick Goldcorp Cambior 1.5 Kinross 1.0 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% 0.8% 0.9% 1.0% Liquidity challenging opportunities require innovative strategies
Slide 6: Kinross Today
Kinross Today Kinross is now a major gold producer, focused in the Americas Concerns addressed: ¾ Financial leverage – strong balance sheet challenging opportunities require innovative strategies
Slide 7: Balance Sheet (at December 31, 1999)
Balance Sheet (at December 31, 1999) Assets Liabilities $ millions $ millions Cash 113.9 Current liabilities 50.5 Other working capital 101.2 Property, plant and equipment 632.6 Total debt 397.7 Other long term assets 34.7 Site restoration costs 58.5 Future Taxes 7.3 Common Shareholders Equity 368.4
Slide 8: Balance Sheet (at June 30, 2004)
Balance Sheet (at June 30, 2004) Assets Liabilities $ millions $ millions Cash 189.0 Current liabilities 79.6 Other working capital 182.7 Property, plant and equipment 778.8 Total debt 31.5 Goodwill 918.0 Site restoration costs 128.4 Other long term assets 51.7 Future taxes 52.4 Common shareholders
Slide 9: From Net Debt to Net Cash
From Net Debt to Net Cash 200 100 $ millions 0 ~$478M -100 -200 -300 E 98 99 00 01 02 03 04 Estimated 19 19 20 20 20 20 20 net cash at year end 2004 challenging opportunities require innovative strategies
Slide 10: Kinross Today
Kinross Today Kinross is now a major gold producer, focused in the Americas Concerns addressed: ¾ Financial leverage – strong balance sheet 9 ¾ Cash costs – comparable to other North American seniors challenging opportunities require innovative strategies
Slide 11: Total Cash Costs
Total Cash Costs How Kinross has improved relative to other producers over time? 400 350 Total Cash Costs 2000 Total Cash Costs 2004E 300 250 US dollars 200 150 100 50 0 Newmont Harmony Anglo Agnico Eagle Placer Kinross Glamis Goldcorp Meridian Cambior Barrick challenging opportunities require innov
Slide 12: Kinross Today
Kinross Today Kinross is now a major gold producer, focused in the Americas Concerns addressed: ¾ Financial leverage – strong balance sheet 9 ¾ Cash costs – comparable to other North American seniors 9 ¾ Deliver on production and cost targets challenging opportunities require innovative strategies
Slide 13: Deliverables…
Deliverables… 600 Production - Budget Production - Actual 500 000s gold equivalent ounces 400 300 200 100 0 Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004 Q3 2004E Q4 2004E challenging opportunities require innovative strategies
Slide 14: Kinross Today
Kinross Today Kinross is now a major gold producer, focused in the Americas Concerns addressed: ¾ Financial leverage – strong balance sheet 9 ¾ Cash costs – comparable to other North American seniors 9 ¾ Deliver on production and cost targets 9 ¾ Reserve life – increasing year over year challenging
Slide 15: Price / NAV multiple
Low Price/NAV due to short mine life? Source: Merrill Lynch 20 3.5 Reserve mine life 18 Price/NAV 3 16 2.5 14 Price / NAV multiple 12 2 Years 10 1.5 8 6 1 4 0.5 2 0 0 Harmony Barrick Agnico Placer Glamis Anglo Meridian Newmont GoldCorp Kinross Cambior Eagle challenging opportunities require innovati
Slide 16: Reserve Replacement - 2003
Reserve Replacement - 2003 16 14.1 2.7 13.2 (1.8) 12 Millions of ounces 8 4 0 31-Dec-02 Depletion New Discoveries 31-Dec-03 challenging opportunities require innovative strategies
Slide 17: Reserve Replacement – 2004E
Reserve Replacement – 2004E 16 0.8 0.5 16.0 (2.1) 2.7 14.1 12 Millions of ounces 8 4 0 31-Dec-03 Depletion New Acquisitions Gold Price 31-Dec-04E ($325) Discoveries ($350) challenging opportunities require innovative strategies
Slide 18: Reserve Growth (excluding production)
Reserve Growth (excluding production) Estimated New 2P Reserves To Be Added in 2004 Gurupi Buckhorn Fort Knox Kubaka PJV Round Mtn La Coipa Musselwhite Crixas Blanket Lupin Kettle River 0 200 400 600 800 1000 1200 1400 1600 Reserve Ounces (000's) challenging opportunities require innovative strategi
Slide 19: Reserve Growth 2005
Reserve Growth 2005 ¾ Round Mountain ¾ Fort Knox ¾ Kettle River ¾ Paracatu challenging opportunities require innovative strategies
Slide 20: Round Mountain Area
Round Mountain Area 0 0.5 1 Mile Deep Vein Target N $350 Pit Outline Mt. Jefferson Caldera Margin Target Gold Hill Mine South Gold Hill Target Mt. Jefferson Caldera Mt Jefferson Caldera Margin Fault Dry Canyon Caldera Margin Fault t ul Fa nt ro eF ng Ra Dry Canyon Caldera Jefferson District Round Mo
Slide 21: Gold Hill – Exploration Concepts
Gold Hill – Exploration Concepts A A’ Current Reserve Pit Sinter Basins Midas-style veins Ca neral Mi lde iza ra Ma ion Sediment hosted r gi 1000 t n gold Resource > 0.006 opt Au Mt Jefferson Resource is open towards the Caldera Margin South-West and at Depth 0 1000
Slide 22: Round Mountain / Gold Hill
Round Mountain / Gold Hill Deep HG Feeder Target S325 Pit Outline Mt Jefferson Caldera Margin Target Mt. Jefferson Caldera East Surprise Target Quaternary Cover South Gold Hill Target Completed drilling Q2 Proposed drilling Caldera boundary Fault half mile
Slide 23: Round Mountain Pit Expansion
Round Mountain Pit Expansion Ultimate Pit Current Pit Crest Potential Pit Expansion 1000’
Slide 24: Fort Knox Drill Targets
Fort Knox Drill Targets SECTION 10,600 E A Looking West A' South North Cu r re FFC-04-716 U nt lt im Pi t 65 feet @ 0.316 OPT Au at 35 feet @ 0.273 OPT Au e Pi t Pit Expansion Target 5ft @ 0.16 OPT Au 5ft @ 0.09 OPT Au 5ft @ 0.18 OPT Au 5ft @ 0.45 OPT Au 5ft @ 0.20 OPT Au 5ft @ 0.33 OPT Au 5ft @ 0.1
Slide 25: Kettle River – North Emanuel Creek
Kettle River – North Emanuel Creek 5000 E 6000 E 5500 E 4500 E EMANUEL NORTH 2004 EXPLORATION DRILLING PLAN MAP SURFACE DRILL SITES ENS04-01 thru ENS04-08 14.0’ / 0.351 47500 N 11.0’ / 2.905 EXPLANATION 10.5’ / 0.599 198.3’ / 0.905 Mineralized Zone – 45’ / 0.234 Surface Projection 2004 Drill Hole Tr
Slide 26: Paracatu, Cross Section
Paracatu, Cross Section Looking N30°W 240° 060° 900m surface WATER TABLE 700m CURRENT PIT LIMIT (369Mt) SAG EXPANSION (161Mt) Hydrothermally Altered Ore Zone 350-400 Mt TARGET Phyllite 500m Existing drill hole Lower Pyrrhotite Ore Horizon B2 Calha Ore 1000 metres As >2,500 ppm challenging opportunit
Slide 27: Kinross Today
Kinross Today Kinross is now a major gold producer, focused in the Americas Concerns addressed: ¾ Financial leverage – strong balance sheet 9 ¾ Cash costs – comparable to other North American seniors 9 ¾ Deliver on production and cost targets 9 ¾ Reserve life – increasing year over year 9 challengin
Slide 28: Current Project Pipeline
Current Project Pipeline Exploration Pre-feasibility Feasibility Construction Production Refugio Pamour Birkachan Paracatu Exp. Puren Gurupi Gold Hill PQ Deeps Measured & Indicated Resources Proven & Probable Reserves Emanuel North Progress January 03 to September 04 New Discovery Forquilha Sul Pend
Slide 29: Cash Flow Supporting Capex
Cash Flow Supporting Capex 200 Cash flow Capex 160 Millions US dollars 120 80 40 0 1997 1999 2000 2001 2002 2003 2004E challenging opportunities require innovative strategies
Slide 30: 2004 Capex Summary Project
2004 Capex Summary 50 45 40 35 Project Millions US dollars 30 Sustaining 25 20 15 10 5 0 Refugio Fort Knox Porcupine Kubaka Round Other Mountain challenging opportunities require innovative strategies
Slide 31: 2004 Capex
2004 Capex Fort Knox • Investment - $74 million over three years to complete pit laybacks on phase 5 and phase 6 of mine plan • Liberates 1.4 million oz of gold to be produced in 2005 – 2009 timeframe Porcupine • Investment $33 million spread over 2004 – 2005 to bring Pamour mine into operation • En
Slide 32: 2004 Capex
2004 Capex Refugio • $56 million (Kinross’ share) to retrofit and restart plant that has been idle since 2001 • Produce 210,000 to 230,000 oz/year (100% basis) @ $220 to $240 challenging opportunities require innovative strategies
Slide 33: Summary
Summary • Strong balance sheet • Total cash costs similar to other senior gold producers • Meet or exceed production targets • Reserve concern being addressed challenging opportunities require innovative strategies
Slide 34: Dedicated to being world class
dedicated to being world class Shares outstanding: 345.6 million KGC: NYSE K: TSX K.U: TSX (US dollar trading symbol) K.WT: TSX www.kinross.com Kinross Gold Corporation 40 King Street West, 52nd Floor Scotia Plaza Toronto, ON M5H 3Y2 416-365-5123 416-363-6622 866-561-3636 info@kinross.com