Kinross Gold Corporation · TSX:K
Kinross Gold — Q3 2009 Earnings Presentation
20 slides from Kinross Gold's earnings presentation, Nov 3, 2009
Slide 1: Delivering Disciplined Growth
Delivering Disciplined Growth Delivering g Disciplined p Growth Third Quarter 2009 Conference Call & Webcast – November 3, 2009
Slide 2: Speakers
Speakers Tye y Burt Thom Boehlert Tim Baker President & CEO Executive Vice-President Executive Vice-President & CFO & COO THIRD QUARTER 2009 RESULTS 2 CONFERENCE CALL & WEBCAST
Slide 3: 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 this presentation, including any information as to the future financial or operating performance of Kinross, constitute “forward-looking information
Slide 4: Q3 2009 Results
Q3 2009 Results (in millions, except ounces and per share Q3'09 Q3'08 % Change amounts) • YTD cas cash flow o from o operations per share Gold equivalent production increased 45% (1) 537,440 551,510 -3% (ounces) • Margin g g growth continued Gold G ld equivalent i l t sales l (1) 554,232 533,614 4%
Slide 5: Growing margins and cash flow per share
Growing margins and cash flow per share Cash flow per share (before changes in Cost of sales margin ($/oz.)(4) working capital)(2,3) $0.93 $492 $487 $451 $447 $0.64 $0.29 $0.29 2008 2009 2008 2009 2008 2009 2008 2009 Three months ended Nine months ended Three months ended Nine months ended September
Slide 6: Kinross Margins Expanding
Kinross Margins Expanding 2002 – Q3’09: • Average realized gold price: +203% Kinross’ attributable cost of sales margin(4): +360% • Kinross 360% $492 $478 $ $481 $436 ales Margin ($/oz.) Up 360% $329 $279 Cost of Sa $161 $ $170 $135 $107 2002 2003 2004 2005 2006 2007 2008 Q1'09 Q Q2'09 Q Q3'09 Q (4)
Slide 7: Organic Growth Opportunities
Organic Growth Opportunities Maricunga, Chile - Expansion o Scoping study completed late 2008 o Feasibility study expected in first half of 2010 o Concept is to increase capacity of existing crushing plant and construction of new primary crusher o Potential to increase ore processed by 50% Round Mou
Slide 8: Current mines: expansion projects
Current mines: expansion projects Lobo-Marte, Chile • Pre- feasibility expected to be completed by year end • Drill program 80% complete • EIA in progress Fruta del Norte, Ecuador • Environmental studies, infrastructure and training programs ongoing • Working to obtain final authorization to recomme
Slide 9: Thom Boehlert
Thom Boehlert Executive Vice-President and Chief Financial Officer 9
Slide 10: Ounces Sold & Cost of Sales
Ounces Sold & Cost of Sales • Average realized price up 12% - $956/oz. Ounces Sold Cost of Sales (US$/oz.)(5) 608,574 $464 590,522 $406 554,232 533,614 Q3'08 Q3'09 Q3'08 Q3'09 C t Category 2 (5) Refer to endnote #5. THIRD QUARTER 2009 RESULTS 10 CONFERENCE CALL & WEBCAST
Slide 11: Q3'09 Financial Results
Q3’09 Financial Results (in US$ millions, except per share items) Net earnings (loss) $ (21.5) / ($0.03)/sh Adjusting non non-operating operating items: Foreign exchange losses $ 35.0 Non-hedged derivatives losses(gains) $ 1.5 Losses (gains) on sle of assets and investments - net $ 1.0 Litigation re
Slide 12: Tax Provision
Tax Provision E i Earnings b before f ttaxes and d other th ititems $ 89.1 89 1 Income and mining taxes expense - net $ 89.1 Tax expense on foreign exchange gain $ (58.6) $ 30.5 Adjusted effective tax rate in Q3'09 34.3% THIRD QUARTER 2009 RESULTS 12 CONFERENCE CALL & WEBCAST
Slide 13: Q3 2009 Results
Q3 2009 Results (in millions, except ounces and per share Q3'09 Q3'08 % Change amounts) • Debt D bt reduced d dbby $95 $95.6 6 Gold equivalent production mm in Q3 (1) 537,440 551,510 -3% (ounces) • Net debt - $224.6 mm Gold G ld equivalent i l t sales l (1) 554,232 533,614 4% (ounces) • Cash: $533.6
Slide 14: 2009 Guidance
2009 Guidance Production and Costs(6) 2009e Production Cost of Sales Country Ounces (000s) % of 2009e (US$/oz.) Chile 450 - 500 23% $425 - $460 Brazil 420 - 440 20% $645 - $670 Russia 675 – 725 33% $265 - $290 USA 625 – 680 31% $440 - $490 Total : 2.2 mm ounces $435 - $450 Other 2009e (mm) Capital e
Slide 15: Tim Baker
Tim Baker Executive Vice-President and Chief Operating Officer 15
Slide 16: Q3 2009 Operating Results
Q3 2009 Operating Results Gold equivalent production Cost of Sales (5) Ounces (US$/oz.) Fort Knox 60,629 $591 USA Round Mountain 59,375 $529 Kettle River 49,486 $313 Subtotal 169,490 $480 La Coipa 43 662 43,662 $453 Chile Maricunga 57,253 $518 Subtotal 100,915 $487 Paracatu 85,772 , $764 $ ssia Braz
Slide 17: Paracatu Expansion Update
Paracatu Expansion Update • Availability, efficiency and recovery showed improvement • Challenges achieving concurrent recovery and throughput at expected levels • Throughput in excess of 70% results in coarser grind oRecoveries are currently at 74% compared to a design target of 80% • Solutions: oI
Slide 18: Kinross Key Objectives for 2009
Kinross Key Objectives for 2009 Complete Aurelian integration Close Lobo-Marte acquisition from Teck Lock-in L k i significant i ifi t share h off iinputt costs t Strengthened liquidity: close $415 mm equity issue Replace Operations’ reserves Add tax-effective cash flow in Cana
Slide 19: Endnotes
Endnotes 1) Unless otherwise stated, gold equivalent production , gold equivalent ounces sold and cost of sales figures in this presentation are based on Kinross’ share of Kupol production (75%). 2)) Unless otherwise stated,, all cash flow and cash flow per p share figures g in this p presentation a
Slide 20: Third Quarter 2009 Results Conference Call & Webcast
THIRD QUARTER 2009 RESULTS CONFERENCE CALL & WEBCAST 20