Kinross Gold Corporation · TSX:K
Kinross Gold — Q3 2012 Earnings Presentation
20 slides from Kinross Gold's earnings presentation, Nov 8, 2012
Slide 1: Kinross Gold Corporation Q3 2012 Results Conference Call & Webcast
November 8 KINROSS GOLD CORPORATION 2012 Q3 2012 Results Conference Call & Webcast 11 www.kinross.com
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, including any information as to the future performance of Kinross, constitute “forward looking statements” with
Slide 3: J. Paul Rollinson, Chief Executive Officer
J. PAUL ROLLINSON CHIEF EXECUTIVE OFFICER 33 www.kinross.com
Slide 4: Operating Results Highlights
THIRD QUARTER 2012 OPERATING RESULTS HIGHLIGHTS • Kinross is on track to deliver 2012 full-year production and cost of sales guidance GOLD EQUIVALENT PRODUCTION(1) PRODUCTION COST OF SALES(2) 672,173 $740 632,772 $725 588,358 $677 $ per ounces Ounces Q1 2012 Q2 2012 Q3 2012 Q1 2012 Q2 2012 Q3 2012 (
Slide 5: Financial Results Highlights
THIRD QUARTER 2012 FINANCIAL RESULTS HIGHLIGHTS REVENUE ADJUSTED CASH FLOW(3) ADJUSTED NET EARNINGS(3) +7% +5% -7% $1,110 $434 $269 $1,041 $413 $250 US$ millions $0.24/sh $0.22/sh $0.38/sh $0.36/sh Q3 2011 Q3 2012 Q3 2011 Q3 2012 Q3 2011 Q3 2012 (3) From continuing operations. Refer to endnote #3. 5
Slide 6: The Kinross Way Forward
RENEWED FOCUS ON OPTIMIZING OUR ASSETS THE KINROSS WAY FORWARD • 7 key areas form the basis of The Kinross Way Forward: • Prioritizing cash flow 1. MINE PLAN OPTIMIZATION • Optimizing pushback widths, mine sequencing • Exploiting zero / low-capex productivity improvements 2. CONTINUOUS IMPROVEMENT •
Slide 7: Sources of Potential Value Opportunities
THE KINROSS WAY FORWARD SOURCES OF POTENTIAL VALUE OPPORTUNITIES Potential impact High Medium Low NORTH SOUTH WEST RUSSIA AMERICA AMERICA AFRICA 1. Mine plan optimization 2. Continuous improvement 3. Cost management & labour productivity 4. Capital efficiency 5. Supply chain management 6. Energy man
Slide 8: Update on Projects
THIRD QUARTER 2012 UPDATE ON PROJECTS DVOINOYE • Project continues to advance on schedule • Expect to deliver first ore to the nearby Kupol mill in the second half of 2013 TASIAST EXPANSION PROJECT • Overall average recovery rate of approximately 60% confirms that heap leaching is not an economicall
Slide 9: Brant Hinze, President & Chief Operating Officer
BRANT HINZE PRESIDENT & CHIEF OPERATING OFFICER 99 www.kinross.com
Slide 10: Operating Results
THIRD QUARTER 2012 OPERATING RESULTS Production (oz. Au eq.) Production cost of sales(2) ($/oz. Au eq.) Q3 2012 YTD Q3 2012 Q3 2012 YTD Q3 2012 Fort Knox 106,698 240,366 $648 $737 Round Mountain 53,205 151,110 $605 $698 Kettle River – Buckhorn 43,942 122,545 $470 $487 North America total: 203,845 51
Slide 11: Dvoinoye Continues on Schedule
RUSSIA DVOINOYE CONTINUES ON SCHEDULE • Underground development 52% complete Continues to progress ahead of plan • Surface infrastructure construction 45% complete Site infrastructure development • All-season road progressing well • All necessary permits for current scope of underground developmen
Slide 12: Update on Tasiast Optimization
MAURITANIA UPDATE ON TASIAST OPTIMIZATION HEAP LEACH TESTING • Gold recovery rates averaged approximately 60% • Concluded that heap leaching does not provide an economically attractive alternative to CIL milling and that investment in fine crush heap leaching is not currently justified PRE-FEASIBILI
Slide 13: Other Development Projects
SOUTH AMERICA OTHER DEVELOPMENT PROJECTS FRUTA DEL NORTE • Continue to advance our optimization studies in parallel with government negotiations • Exploring alternative processing scenarios for the project Opportunities include potential for gravity float leach May result in lower capital expend
Slide 14: Encouraging Results Year-to-Date
2012 EXPLORATION PROGRAM ENCOURAGING RESULTS YEAR-TO-DATE Q3 2012 TASIAST EXPLORATION TASIAST DISTRICT • Accelerated drill program in the district outside of the main orebody • Encountered a number of new targets and positive follow-up drill results at C67 & C68 CHIRANO • Drilling under the open pit
Slide 15: Paul Barry, Executive Vice-President & Chief Financial Officer
PAUL BARRY EXECUTIVE VICE-PRESIDENT & CHIEF FINANCIAL OFFICER 1515 www.kinross.com
Slide 16: Financial Results
THIRD QUARTER 2012 FINANCIAL RESULTS Realized Margin(2,4) (in millions, except ounces and per share amounts) Q3 2011 Q3 2012 % Gold Price -5% Change $1,649/oz $972/oz Gold equivalent production(1) 632,432 672,173 6% (ounces) Gold equivalent sales(1) 646,923 665,251 3% (ounces) Revenue $1,041.0 $1,10
Slide 17: Maintaining a Strong Balance Sheet
THIRD QUARTER 2012 MAINTAINING A STRONG BALANCE SHEET • Closed a new US$1.0 billion 3-year term loan on August 17, 2012: Cost-effective funding: LIBOR plus 1.70% Effectively pre-funds the repayment of senior convertible notes which may be required in March 2013 • Increased existing US$1.2 billio
Slide 18: 2012 Production & Cost Outlook
THIRD QUARTER 2012 2012 PRODUCTION & COST OUTLOOK(5) • Identified $200 million in cost savings, reducing expected 2012 capital expenditures to $2.0 billion from $2.2 billion • Expect to be toward the high end of both production and cost guidance ranges: Gold Production(1) % of Total Production Cost
Slide 19: Endnotes
ENDNOTES 1) Unless otherwise noted, gold equivalent production, gold equivalent ounces sold and production cost of sales figures in this presentation are based on Kinross’ 90% share of Chirano production, and do not include production from Crixas, due to the sale of Kinross’ 50% ownership completed
Slide 20: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 York Street, 17th Floor │Toronto, ON │ M5J 2V5 www.kinross.com 2020 www.kinross.com