Kinross Gold Corporation · TSX:K
Kinross Gold — Sprott Securities 2007 Conference
43 slides from Kinross Gold's conference presentation, Jan 17, 2007
Slide 1: Delivering Disciplined Growth
Delivering Disciplined GROWTH January 2007
Slide 2: Cautionary Statement
Cautionary Statement All statements, other that statements of historical fact, contained or incorporated by reference in this presentation, including any information as to the future financial or operating performance of Kinross constitute "forward-looking statements" within the meaning of certain s
Slide 3: Tye W. Burt and Clive T. Johnson
Tye W. Burt Clive T. Johnson President & CEO Chairman, President & CEO Kinross Gold Corporation Bema Gold Corporation 3
Slide 4: Acquisition Terms
Acquisition Terms Structure: Plan of Arrangement Tax-free share for share exchange (Cdn) Exchange Ratio: 0.4447 of a Kinross share for each Bema share C$6.67 per share(1) (1) Consideration Premium of 26% to the 20-day volume weighted average price Offered: of Bema shares Transaction value of C$3.2 B
Slide 5: Strategic Rationale
Strategic Rationale Significant increase to Mineral Reserve and Resource base 68% increase to Kinross’ 2005 reported gold reserves 38% increase to Kinross’ 2005 reported gold resources Kupol is a world class growth project Reserves: 4.4 million ounces of gold, 54 million ounces of silver Fully finan
Slide 6: Strategic Rationale continued…
Strategic Rationale continued… Consolidates ownership of Refugio in Chile Kinross operated; consistent production since restart in late 2005 Cerro Casale Strategic asset: Chile, globally Immediate synergies and accretion to NAV Cash flow and earnings accretive in 2009 and beyond 6
Slide 7: Value for Bema Shareholders
Value for Bema Shareholders Attractive premium 26% premium to Bema’s 20-day weighted trading price on TSX Greater upside in stronger pro forma entity Bema shareholders will own approximately 40% of pro forma Kinross (diluted*) Balanced asset portfolio Reserves: Chile 39%, Brazil 37%, North America 1
Slide 8: Exploration Alliance
Exploration Alliance Kinross to participate in private exploration venture with Clive Johnson and team Accomplished exploration and development team Will have $15 million in assets Kinross to own 9.9% with right to increase to 19.9% Russian exploration focus Exploration alliance in Chukotka Kinross
Slide 9: Kinross: A Major Gold Producer
Kinross: A Major Gold Producer 2006 estimated: Gold equivalent production – 1.46 million ounces Cost of sales1 – est. $320 per ounce ~3,500 employees in 4 countries Straight-forward balance sheet Simple debt structure No gold hedging Continuing reserve growth 24.7 million ounces at Dec. 31/05 ($400/
Slide 10: Four-Point Plan
Four-Point Plan OBJECTIVE: ENHANCE NET ASSET VALUE AND CASH FLOW PER SHARE GROWTH FROM BUILDING BLOCKS BEST NEW THE CORE FOR THE FUTURE PEOPLE OPPORTUNITIES Regionally Strengthened Paracatu Round Mountain streamlined management team expansion underground approach & board Round Mountain Implementing
Slide 11: Kinross - Third Quarter 2006
Kinross - Third Quarter 2006 Revenue of $223.6 million Gold equivalent production was 365,555 ounces (full year 2006 production expected to exceed original estimate of 1.44 mm gold equivalent ounces by approx. 20,000 – 30,000 ounces) Cost of sales1 of $321 per ounce on 359,827 gold equivalent ounces
Slide 12: Refining Portfolio
Refining Portfolio NON-CORE ASSETS SOLD George/Goose Lake Aquarius E-Crete Blanket Norseman Katanga New Britannia (in process) Equity positions Lupin (in process) NEW INVESTMENTS Brett Resources X-Cal Verena Minerals 12
Slide 13: Complementary Asset Base
Complementary Asset Base Kupol (75%) Chukotka, Russia (Open pit, U/G) Fort Knox (100%) Alaska, USA (Open pit) Julietta (90%) Magadan, Russia (U/G) Musselwhite (32%) Ontario, Canada (U/G) Kettle River (100%) Washington, USA (U/G) Porcupine (49%) Round Mountain (50%) Ontario, Canada (Open pit, U/G) Ne
Slide 14: Superior Growth Profile
Superior Growth Profile PRO FORMA PRODUCTION 2006E-2009E (M Au Eq.oz) Kinross Bema 56% 2.8 2.3 0.9 1.8 0.6 1.8 0.3 0.3 1.9 1.5 1.7 1.5 2006E 2007E 2008E 2009E Source: Available street research consensus. 14
Slide 15: Superior Growth Profile
Superior Growth Profile PRODUCTION GROWTH 2006-2009 56% 53% 47% 36% 18% 14% 11% 2% Barrick Newmont Polyus AngloGold Gold Fields Harmony Goldcorp Kinross (to 2010) + Bema 1. Source: Company filings and guidance, investor presentations and available street research estimates at November 3, 2006. 2. Go
Slide 16: Exceptional Reserves & Resources
Exceptional Reserves & Resources MINERAL RESERVES AND RESOURCES*(1) +68% Proven and Probable Gold Reserves (M oz Au) +38% Measured and Indicated Gold Resources 50.0 8.4 30.8 6.1 19.2 41.6 2.3 24.7 16.9 Kinross Bema New Kinross * M ounces Au equivalent at Dec 31, 2005 & subsequent news releases (1) C
Slide 17: Balanced Geographic Diversification
Balanced Geographic Diversification 2005 RESERVES(1) KINROSS PRE-TRANSACTION PRO FORMA KINROSS North America North 27% Chile America Chile 16% 39% 10% Brazil 63% Brazil Russia 37% 8% (1) Company filings and subsequent new releases (Petrex reserves and resources excluded from Bema). For disclosure on
Slide 18: Balanced Geographic Diversification
Balanced Geographic Diversification 2009E PRO FORMA PRODUCTION (1) Brazil 28% North America 45% Russia 17% Chile 10% (1) Source: Kinross and estimated LOM annual production of 550K oz Au for Kupol from Bema corporate presentations. 18
Slide 19: Expanded Project Pipeline
Expanded Project Pipeline EXPLORATION PRE-FEASIBILITY FEASIBILITY CONSTRUCTION PRODUCTION Kupol Paracatu Expansion Buckhorn: Kettle River Cerro Casale Pancho: Refugio Fort Knox Heap Leach Gold Hill: Round Mountain Ladera Farellon: La Coipa Round Mountain U/G Gurupi Monte do Carmo (Verena) Patrocinio
Slide 20: Competitive Cost Profile
Competitive Cost Profile 2006 ESTIMATED COST OF SALES (US$/oz Au) $414 $359 $329 $300 $300 $285 $264 $120 Harmony Gold Fields Kinross Newmont AngloGold Barrick Polyus Goldcorp + Bema 2009E COST 2009E PRODUCTION MINE (US$/oz Au eq.) Ounces (%) Kupol Approx. $130 Approx. 413,000 (2) 15% Paracatu Expan
Slide 21: Attractively Priced Reserves
Attractively Priced Reserves MARKET CAP PER OUNCE OF MINERAL RESERVES $443 $350 $197 $198 $175 $180 $135 $94 Harmony Gold Fields Kinross + Barrick AngloGold Newmont Polyus Goldcorp Bema Source: Available street research as at November 6, 2006 and closing prices at January 16, 2007. 21
Slide 22: Pro Forma Financial Metrics
Pro Forma Financial Metrics (all dollar amounts in US dollars) KINROSS BEMA NEW KINROSS (1) (1) (2) Shares Outstanding (millions) 362 482 594 Market Capitalization(3) $4.4 $2.6 Est. $7.0 (billions) (4) Debt (millions) $88 $266 $354 (5) (6) Cash (millions) $135 $182 approx. $350 Committed Production
Slide 23: Four Point Plan in Action
Four Point Plan in Action Growth from core assets in key regions: Buckhorn in 2007 Paracatu expansion in 2008 Kupol in 2008 Strengthened team in Russia Building blocks for further expansion Exciting exploration and development upside in four key regions 23
Slide 24: A Great New Company
A Great New Company Est. US$7.0B market cap company with industry leading growth profile 56% growth in production 2006 to 2009 World-class, low-risk, geographically-diversified asset base Mineral Reserves and Resources Approx. 50 million oz of gold (approx. 80 million oz of silver; 2.9 billion lbs o
Slide 25: A Great New Company continued…
A Great New Company continued… Excellent projects under construction – Paracatu, Kupol, Buckhorn District exploration opportunity pipeline: Chile, Russia Strong financial position to fund project pipeline Pro forma cash balance of approx. $350 million Declining cost profile Experienced management te
Slide 26: Relative Performance
Kinross Outperforms 1.50 1.30 Relative Performance +19% 1.10 +14% 0.90 -17% 0.70 Jan-06 Mar-06 Oct-06 Feb-06 May-06 Jun-06 Jul-06 Jan-07 Nov-06 Dec-06 Sep-06 Apr-06 Aug-06 Major North American Gold Producers (Average) Kinross Gold Price Major North American Gold Producers include: Barrick and Newmon
Slide 27: Kinross and Bema contact and share information
KINROSS GOLD CORPORATION BEMA GOLD CORPORATION 40 King Street West, 52nd Floor, 3100 – 595 Burrard Street Scotia Plaza, Toronto, ON M5H 3Y2 Vancouver, BC V7X 1J1 Tel: 416-365-5123 Fax: 604-681-8209 Fax: 416-363-6622 Toll Free: 800-316-8855 Toll Free: 866-561-3636 info@kinross.com investor@bemagold.c
Slide 28: Delivering Disciplined Growth
Delivering Disciplined GROWTH January 2007
Slide 29: Appendices
Appendices
Slide 30: Complementary Asset Base
Complementary Asset Base Zaldivar El Salvador Porterillos El Penon Agua de Falda Esperanza La Coipa Cominor JV Siete Hermanas La Isla Soledad INA Escondido La Pepa Volcan Pantanillo Refugio ENT Cacique Santa Cecilia Quebrada ARG Cerro Casale Pascua Lama La Coipa (50%) Chile (Open Pit) Cerro Casale (
Slide 31: Complementary Asset Base
Complementary Asset Base Kupol (75%) Magadan, Russia (Open pit, U/G) Julietta (90%) Russia (U/G) Kupol Julietta Operating Properties Development Properties
Slide 32: Complementary Asset Base
Complementary Asset Base Patrocinio BRAZIL Gurupi Monte do Carmo Brasilia Belt Crixas Paracatu Crixas (50%) Brazil (U/G) Paracatu (100%) Brazil (Open pit) Operating Properties Exploration/Development Properties
Slide 33: Complementary Asset Base
Complementary Asset Base CANA DA Kettle River Kettle River (100%) Washington, USA (U/G) USA Jenny Hill Project Kings Canyon Project Round Mountain (50%) Nevada, USA (Open Pit) Round Mountain Operating Properties Exploration/Development Properties
Slide 34: Complementary Asset Base
Complementary Asset Base Fort Knox (100%) Alaska, USA (Open pit) ALASKA Fort Knox Operating Properties Development Properties
Slide 35: Complementary Asset Base
Complementary Asset Base ONTARIO Musselwhite Musselwhite (32%) Ontario, Canada (U/G) Porcupine (49%) Porcupine Ontario, Canada (Open pit, U/G) Operating Properties Development Properties
Slide 36: Paracatu, Brazil
Paracatu, Brazil Ownership: 100% (Kinross) Reserves: 15,210,000 gold ozs (as at Dec. 31, 2005) $470 million expansion project approved to triple Highlights: throughput and reduce costs; expansion will contribute 2008 and beyond Q3 2006 Operating Results Production: 43,649 gold eq. ozs Cost of sales:
Slide 37: Round Mountain, USA
Round Mountain, USA Ownership: 50% (Kinross operated) Reserves: 2,338,000 gold ozs (as at Dec. 31, 2005) Pre-stripping commenced for a pit layback, ore from layback expected to contribute in late 2006 Highlights: Exploration drilling on underground began in Q3/06 Q3 2006 Operating Results Production
Slide 38: Refugio, Chile
Refugio, Chile Ownership: 50% (Kinross operated) Reserves: 2,158,000 gold ozs (as at Dec. 31, 2005) Restart is complete, producing as planned Highlights: Drilling commenced on nearby Pancho deposit Q3 2006 Operating Results Production: 29,883 gold eq. ozs Cost of sales: $ 327 / oz YTD 2006 Operating
Slide 39: Musselwhite, Canada
Musselwhite, Canada Ownership: 32% Kinross Reserves: 639,000 gold ozs (as at Dec. 31, 2005) Q3 2006 Operating Results Production: 18,031 gold eq. ozs Cost of sales: $ 463 / oz YTD 2006 Operating Results Production: 51,830 gold eq. ozs Cost of sales: $ 435 / oz 39
Slide 40: Fort Knox, USA
Fort Knox, USA Ownership: 100% (Kinross) Reserves: 1,953,000 gold ozs (as at Dec. 31, 2005) Highlights: Heap leach scenario being evaluated Q3 2006 Operating Results Production: 81,348 gold eq. ozs Cost of sales: $ 281 / oz YTD 2006 Operating Results Production: 260,462 gold eq. ozs Cost of sales: $
Slide 41: Porcupine JV, Canada
Porcupine JV, Canada Ownership: 49% Kinross Reserves: 1,653,000 gold ozs (as at Dec. 31, 2005) Highlights: Pamour pit now contributing to production Q3 2006 Operating Results Production: 42,869 gold eq. ozs Cost of sales: $ 346 / oz YTD 2006 Operating Results Production: 112,714 gold eq. ozs Cost of
Slide 42: La Coipa, Chile
La Coipa, Chile Ownership: 50% Kinross Reserves: 397,000 gold ozs (as at Dec. 31, 2005) 24,389,000 silver ozs (as at Dec. 31, 2005) Highlights: Puren deposit pre-strip underway for contribution in Q3/06 Q3 2006 Operating Results Production: 28,233 gold eq. ozs Cost of sales: $ 398 / oz YTD 2006 Oper
Slide 43: Crixas, Brazil
Crixas, Brazil Ownership: 50% Kinross Reserves: 379,000 gold ozs (as at Dec. 31, 2005) Q3 2006 Operating Results Production: 24,063 gold ozs Cost of sales: $ 171 / oz YTD 2006 Operating Results Production: 72,608 gold ozs Cost of sales: $ 187 / oz 43