Kinross Gold Corporation · TSX:K
Kinross Gold — 2017 RBC Capital Markets Global Metals and Mining Conference
52 slides from Kinross Gold's conference presentation, Jun 13, 2017
Slide 1: Kinross Gold Corporation
June 13-14 KINROSS GOLD CORPORATION 2017 RBC Capital Markets Global Metals and Mining Conference 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 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 EXCELLENT OPERATIONAL TRACK RECORD • Diverse portfolio of operating mines consistently meeting or outperforming our operational targets STRONG BALANCE SHEET & FINANCIAL FLEXIBILITY • $2.5B in liquidity with net debt to EBITDA ratio of 0.6x(i) • No debt maturities prior to 2
Slide 4: 2016 Highlights
Delivered Operational Excellence Strengthened Balance Sheet Repaid $1B of debt 5 MET over past 5 years or $1.1B $1.1 $2.5B billion of cash $1.4 Consecutive EXCEEDED billion Years Guidance 0.6x Net debt to EBITDA Cash Available credit *Figures are as at March 31, 2017, adjusted to reflect the sale of
Slide 5: TSX Sub-Indices Performance
COMPELLING RELATIVE VALUE TSX SUB-INDICES PERFORMANCE S&P/TSX 2016 Performance S&P/TSX YTD 2017 Performance(i) Kinross 71% Kinross 39% Base Metals 52% Technology 15% Precious Metals 50% Telecom 11% Materials 39% Consumer Discr. 10% Energy 36% Industrials 10% Industrials 23% Utilities 8% Financials 1
Slide 6: Enterprise Value Versus Production
COMPELLING RELATIVE VALUE ENTERPRISE VALUE VERSUS PRODUCTION Market capitalization does not reflect significant scale of production and history of achieving guidance Enterprise Value(i) Net Debt to Historical Gold Production (Moz)(iii) Consensus Gold Production Estimates (Moz)(iii) (US$M) EBITDA(ii)
Slide 7: Operational Excellence
Operational Excellence 77 www.kinross.com
Slide 8: Diversified Portfolio of Operating Mines
OPERATIONAL EXCELLENCE DIVERSIFIED PORTFOLIO OF OPERATING MINES Over RUSSIA 60% of estimated 2017 gold equivalent production from mines located in the Americas AMERICAS Dvoinoye Kupol Fort Knox Kettle River-Buckhorn Bald Mountain Round Mountain 2017E GOLD EQUIVALENT PRODUCTION(2,3) Tasiast 22% Chira
Slide 9: Strong Operating Track Record
OPERATIONAL EXCELLENCE STRONG OPERATING TRACK RECORD Continuing our track record of meeting or outperforming our operational targets • Operations delivered solid results in Q1 2017 US and Russian assets performed well Strong performance from Tasiast, with increased production and lower costs • O
Slide 10: 2017 Outlook
OPERATIONAL EXCELLENCE 2017 OUTLOOK(3) Forecasting another solid year from operations, with production and costs in-line with 2016 Kinross Total(2) Regional Forecast 2017E Unit Costs ($ per gold equivalent ounce) 2.5 to 2.7 Americas Cost of sales(4) $660 to $720 million 1.5 to 1.6Moz. 2017E Gold Equ
Slide 11: Balance Sheet Strength
Balance Sheet Strength 11 11 www.kinross.com
Slide 12: Solid Financial Position
2017 PRIORITIES SOLID FINANCIAL POSITION Maintaining balance sheet strength & financial flexibility remain priority objectives PROFOMA LIQUIDITY POSITION MAINTAINING FINANCIAL FLEXIBILITY • Proforma net debt to EBITDA as at March 31, 2017: 0.6* As at Mar. 31* $1.1 • No debt maturities before 2020 $1
Slide 13: Sale of Cerro Casale Interest
2017 PRIORITIES SALE OF CERRO CASALE INTEREST Agreement to sell 25% interest in Cerro Casale and 100% interest in Quebrada Seca STRENGTHENS BALANCE SHEET CONSIDERATION • Expect to use proceeds to advance organic $260M in cash payable at closing development projects & further strengthen the balance s
Slide 14: 2017 Capital Expenditures Outlook
FINANCIAL DISCIPLINE 2017 CAPITAL EXPENDITURES OUTLOOK(3) Leveraging strong financial position to invest in development projects & our future 2017E Capital Expenditures ($ millions) Region Sustaining Non-Sustaining Regional Total Americas $295 $65 $360 West Africa $80 $375 $455 Russia $40 $15 $55 Co
Slide 15: Manageable Debt Profile
FINANCIAL DISCIPLINE MANAGEABLE DEBT PROFILE No significant debt maturities prior to 2020 Debt Schedule Debt Ratings Term Loan Senior notes Agency Rating $500 $500 $500 S&P BB+ (Positive) Moody’s Ba1 (Stable) Fitch BBB- (Stable) Interest Rates $250 Senior Notes due 2021 5.125% Senior Notes due 2024
Slide 16: Attractive Organic Development Projects
Attractive Organic Development Projects 16 16 www.kinross.com
Slide 17: Advancing Organic Projects
ATTRACTIVE DEVELOPMENT PROJECTS ADVANCING ORGANIC PROJECTS Organic projects spanning all 3 of our regions offer opportunities to expand production or extend mine life at our operations Q2 2018 Q1 2018 Tasiast Phase 1 Full production Q4 2017 Vantage Major construction expected to begin Q3 2017 La Coi
Slide 18: Tasiast Two-Phased Mill Expansion
TASIAST EXPANSION PROJECT TASIAST TWO-PHASED MILL EXPANSION • Two-phased approach offers an attractive path to Tasiast’s significant growth potential at a significantly lower forecast capital cost than previously estimated • Proceeding with Phase One of the expansion; full production expected in Q2
Slide 19: Large Orebody with Low Execution Risk
TASIAST EXPANSION PROJECT LARGE OREBODY WITH LOW EXECUTION RISK Challenge is to right-size the processing capacity to capture the full value and potential of Tasiast’s large mineral resource estimate RELATIVELY LOW-RISK BROWNFIELDS EXPANSION PROJECT • Have owned and operated the mine for over 5 year
Slide 20: Two-Phased Expansion Concept
TASIAST EXPANSION PROJECT TWO-PHASED EXPANSION CONCEPT PHASE ONE: EXPANSION TO 12,000 t/d Existing ball mills Gyratory Ore Oversized Leaching Refining crusher stockpile SAG mill PHASE TWO: EXPANSION TO 30,000 t/d Gyratory Ore Oversized New, larger ball Additional leaching Thickening crusher stockpil
Slide 21: Advance Tasiast Two-Phased Expansion
2017 PRIORITIES ADVANCE TASIAST TWO-PHASED EXPANSION Combined Phase One and Two expansions expected to transform Tasiast into our largest producer with costs amongst the lowest in our portfolio Phase One Estimates(i) Phase Two Estimates(i) Average annual production 409,000 ounces 777,000 ounces Prod
Slide 22: Tasiast Two-Phased Expansion
ATTRACTIVE DEVELOPMENT PROJECTS TASIAST TWO-PHASED EXPANSION Phase One construction ~35% complete; on track for full production in Q2 2018 Phase One progressing well New primary crusher • Engineering now complete • Concrete work 60% complete • All major installation contracts have been awarded • Pro
Slide 23: Tasiast Phase One Progressing Well
ATTRACTIVE DEVELOPMENT PROJECTS TASIAST PHASE ONE PROGRESSING WELL Phase One on schedule and on budget with full production expected in Q2 2018 SAG mill pedestal Reclaim tunnel Leach tank foundations Oxygen plant 2323 www.kinross.com
Slide 24: Developing Bald Mountain's Potential
ATTRACTIVE ORGANIC DEVELOPMENT PROJECTS DEVELOPING BALD MOUNTAIN’S POTENTIAL Kinross envisions Bald Mountain as a long-life asset with significant upside potential and mineral resource growth 2016: Doubled mineral reserve estimates ahead of schedule • Added 1.2 million ounces to proven and probable
Slide 25: Doubled Bald Mountain Gold Reserves
ATTRACTIVE ORGANIC DEVELOPMENT PROJECTS DOUBLED BALD MOUNTAIN GOLD RESERVES Successfully doubled gold reserve estimates ahead of schedule and replenished mineral resource estimates, providing opportunities for further reserve conversions Proven & Probable Mineral Reserve Estimates(1) South area 2,13
Slide 26: Bald Mountain Vantage Complex
ATTRACTIVE DEVELOPMENT PROJECTS BALD MOUNTAIN VANTAGE COMPLEX Vantage Complex (South area) • Advancing engineering: roughly 60% complete • Contemplates construction of a new heap leach facility and related infrastructure Design includes additional 68M tonnes of capacity for both the known resource
Slide 27: Round Mountain Phase W
ATTRACTIVE ORGANIC DEVELOPMENT PROJECTS ROUND MOUNTAIN PHASE W Phase W is an opportunity to potentially extend estimated mine life • At year-end 2016, the work in support of the Phase W feasibility study: Upgrade of 1.3 million gold ounces to Measured & Indicated resources Added 1.7 million gold
Slide 28: Russia Satellite Deposits
ATTRACTIVE ORGANIC DEVELOPMENT PROJECTS RUSSIA SATELLITE DEPOSITS Development of satellite deposits located near Kupol and Dvoinoye in advanced stages September Northeast Moroshka • High-grade deposit located approximately • Located approximately 4 km from Kupol 15 km from Dvoinoye • Portal construc
Slide 29: Kupol Vein System
EXPLORATION KUPOL VEIN SYSTEM Mineralization open in certain zones, with greatest potential for near-term extensions to the north and south • Comprehensive exploration review generated series of extension targets which were drilled during second half of 2016 • Continued drilling, geological interpre
Slide 30: Fort Knox East & South Wall
EXPLORATION FORT KNOX EAST & SOUTH WALL Positive intercepts during 2016 in the East and South Wall of the existing pit; additions to Fort Knox’s inferred resource estimate expected in 2017 East & South Wall significant drill intercepts Interval Au Hole ID From To (m) (g/t) FFC16-1483 36.6 65.5 29 0.
Slide 31: Kettle River: Curlew District
EXPLORATION KETTLE RIVER: CURLEW DISTRICT Promising opportunities in the Curlew District; infill drilling program planned for 2017 to test extensions of mineralized zones Plan Map of the Curlew District Cross Section Looking West N Historic K2 mine Workings Looking West K2 Mine Buckhorn K2 Mine Port
Slide 32: Compelling Relative Value
Compelling Relative Value 32 32 www.kinross.com
Slide 33: 2017E Production & All-In Sustaining Cost
COMPELLING RELATIVE VALUE 2017E PRODUCTION & ALL-IN SUSTAINING COST 2017E Gold Production 2017E All-In Sustaining Cost (million ounces) ($ per ounce) 6.0 $1,200 5.0 $1,000 4.0 $800 3.0 $600 2.0 $400 1.0 $200 0.0 $0 Goldcorp Goldcorp AngloGold IAMGold AngloGold IAMGold Newmont Newmont Gold Fields Gol
Slide 34: Industry-Leading Balance Sheet
COMPELLING RELATIVE VALUE INDUSTRY-LEADING BALANCE SHEET Net debt to EBITDA ratio of 0.6x as of March 31, 2017* Net Debt to EBITDA (LTM) 2.3 1.8 1.4 1.3 0.9 0.8 0.8 0.6 -0.6 Yamana Goldcorp AngloGold Barrick Gold Fields Newmont Agnico Kinross IAMGold Source: Company reports; Bloomberg (May 30, 2017)
Slide 35: 2017E Metrics
COMPELLING RELATIVE VALUE 2017E METRICS Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities EV / 2017E EBITDA P / 2017E OPERATING CF 13.1 14.1 9.9 8.9 8.9 8.8 6.9 7.1 6.9 5.5 5.4 4.8 4.6 5.5 4.8 4.5 3.9 3.7 Gol
Slide 36: Building Momentum for the Future
2020E Expected start-up of 2018E potential TASIAST PHASE TWO TASIAST PHASE 2017E ONE expected to ramp up to full 2016 Stronger year production expected at Delivered SOLID BALD MOUNTAIN PRODUCTION of 2.8Moz. Building Momentum for the Future 3636 www.kinross.com
Slide 37: Appendix
Appendix 3737 www.kinross.com
Slide 38: Currency & Oil Benefits
2017 OUTLOOK CURRENCY & OIL BENEFITS Well-positioned to benefit from favourable currency exchange and oil weakness 2017 Budget Assumptions(2) 2017 Sensitives (net of hedges)(2) Change Estimated impact 2017 Budget Current Spot(i) from to cost of sales Assumptions Gold US$1,200/oz. $1,267/oz. FX 10% U
Slide 39: Fuel & Currency Hedges
FINANCIAL DISCIPLINE FUEL & CURRENCY HEDGES Managing exposure to fluctuations in foreign currency and input commodity prices • Overall 2017 exposure ~32% hedged at favourable rates compared to spot • Continue to monitor our FX and oil exposure and look for opportunities to establish additional input
Slide 40: Fort Knox, USA (100%)
AMERICAS FORT KNOX, USA (100%) Among the world’s few cold climate heap leach facilities • Impressive track record of operational excellence • Achieved its 2nd highest production level in 2015, Fort Knox’s 19th year in operation • Estimated mine life: mill – 2019; mining – 2020* OPERATING RESULTS(4)
Slide 41: Round Mountain, USA (100%)
AMERICAS ROUND MOUNTAIN, USA (100%) Strong cash flow generator with opportunities to extend mine life • Incremental, high-margin ounces from Process Solution ESTIMATED MINE LIFE* Management (PSM) 16 17 18 19 20 21 22 23 - 27 • Opportunity to extend mine life beyond current estimates Mining with Phas
Slide 42: Bald Mountain, USA (100%)
AMERICAS BALD MOUNTAIN, USA (100%) Forecasting strong near-term cash flow with significant upside potential • Acquired in January 2016 • Large estimated mineral resource base with multiple sources of potential mineral reserve additions • Production expected to double in 2017 with reduced costs OPERA
Slide 43: Paracatu, Brazil (100%)
AMERICAS PARACATU, BRAZIL (100%) Large gold mine with a long mine life that extends to 2030 • Paracatu is among the world’s largest gold operations with annual throughput of ~60Mt • Realizing benefits from weakness in the Brazilian real • Estimated mine life: 2030* OPERATING RESULTS(4) 2015 2016 Pro
Slide 44: Kupol-Dvoinoye (100%)
RUSSIA KUPOL-DVOINOYE (100%) Our Russian operations are a model for successfully operating in a remote location • High-grade, low-cost underground mines • Estimated mine life: Kupol – 2020; Dvoinoye – 2018* OPERATING RESULTS(4) 2015 2016 Production (Au. Eq. oz.) 758,563 734,143 Production cost of sa
Slide 45: Foreign Investment in Russia
RUSSIA FOREIGN INVESTMENT IN RUSSIA Foreign Investment Advisory Council The world’s leading companies are invested in Chaired by the Russian Prime Minister, includes Russia CEOs from over 50 international companies 4545 www.kinross.com
Slide 46: Chirano, Ghana (90%)
WEST AFRICA CHIRANO, GHANA (90%) Cost reductions achieved at Chirano by transitioning to self-perform mining • Chirano is an open-pit and underground operation located in southwestern Ghana • Estimated mine life: 2020* OPERATING RESULTS(2,4) 2015 2016 Production (Au. Eq. oz.) 230,488 190,759 Product
Slide 47: Tasiast, Mauritania (100%)
WEST AFRICA TASIAST, MAURITANIA (100%) Operating mine with a large gold resource located in a prospective district • Proceeding with Phase One of the expansion, with Phase Two an option to further add significant production • Estimated mine life: Phase One – 2033; if we proceed with a Phase Two expa
Slide 48: Endnotes
ENDNOTES 1) Mineral reserves and mineral resources are estimates. For more information regarding Kinross’ 2016 mineral reserve and mineral resource estimates, please refer to our Annual Mineral Reserve and Mineral Resource Statement as at December 31, 2016 contained in our news release dated Februar
Slide 49: Explanatory Notes - Exploration
EXPLANATORY NOTES - EXPLORATION Kupol Exploration Results A total of 48 diamond drill core holes are reported from Kupol Minex and mine-area exploration activity in 2016. All diamond drill core holes reported are HQ in diameter. The majority of holes presented (18) were drilled at the Kupol Hanging
Slide 50: Explanatory Notes - Exploration
EXPLANATORY NOTES - EXPLORATION Fort Knox Exploration Results Results are reported for 15 diamond drill core holes completed on the East and South walls of the Fort Knox open pit. All 15 of these diamond drill core holes are of HQ3 core diameter . At Fort Knox, the dip of the drill holes are taken f
Slide 51: Explanatory Notes - Exploration
EXPLANATORY NOTES - EXPLORATION Kettle River (Curlew) Exploration Results All 16 drill holes reported from the Curlew district are diamond drill core holes of HQ core diameter. A number of targets in the area were drilled, with eight holes reported from the Lower Portal, three holes from K5, two hol
Slide 52: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 York Street, 17th Floor │Toronto, ON │ M5J 2V5 www.kinross.com 5252 www.kinross.com
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