Kinross Gold Corporation · TSX:K
Kinross Gold — Canaccord Sales Desk Presentation (March 2010)
46 slides from Kinross Gold's conference presentation, Mar 25, 2010
Slide 1: Delivering Disciplined Growth
Delivering Disciplined Growth C Canaccord dSSales l D Desk kPPresentation t ti Toronto, ON March 25, 2010
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 this presentation, including any information as to the future financial or operating performance of Kinross, constitute “forward‐looking information
Slide 3: Why Kinross?
Why Kinross? • Growing cash flow – Production P d ti has h risen i while hil margins i h have expanded d d – CFPS(1): 5 yr CAGR : 25% – Strongg balance sheet: $632.4 $ mm • Pipeline of future opportunities Kinross Today – Increasing reserve and resource base Portfolio of 8 operating mines Pure g
Slide 4: Kinross' Evolution
Kinross’ Evolution Kinross Tomorrow Next wave of growth through project Kinross Today development 2011 ‐ 2012 • 8 operating mines • 3rd ball mill at Paracatu • Focus in core regions Kinross • $937.2 mm cash flow (‘09) ( 09) • Maricunga Expansion Yesterday • $632.4 mm cash on hand • Dvoinoye* • $12.3
Slide 5: Major gold discoveries: 1997-2008
Major gold discoveries: 1997‐2008 3,500 90 nding M oz.) 80 3 000 3,000 ate Stage Spen 3 Year Average of Major Au Disscoveries (MM 70 2,500 60 2,000 , Grassroots + La 50 (US$ MM) 1,500 40 30 1,000 3 Year Average of G 20 500 10 - 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 # of Major
Slide 6: World Gold Reserves and Resources
World Gold Reserves and Resources Total Reserves & Resources Total Reserves & Country % (mm ozs) Resources (tonnes) Brazil Chile 1. South Africa 997 29.7% United States 2. Russia 225 6.7% Russia South Africa 3. Australia 193 5.8% 4. Indonesia 193 5.8% Mexico 5. U.S 177 5.3% 6. Canada 135 4.0% Canada
Slide 7: Growing Margins and Growing Cash Flow
Growing Margins and Growing Cash Flow • 41% production d i growth: h 2007 to 2009 • Margin growth: 27% 5‐yr CAGR • CFPS growth: 25% 5‐yr CAGR 7
Slide 8: Focused Portfolio in Five Countries
Focused Portfolio in Five Countries Portfolio of Mines and Projects Chile United States • Maricunga • Fort Knox • La Coipa • Kettle River‐Buckhorn • Lobo‐Marte • Round Mountain • Cerro Casale Brazil Russia ¾ Paracatu • Kupol ¾ Crixas • Dvoinoye* y Ecuador Canada • Fruta del Norte White G
Slide 9: 2010 Production Guidance
2010 Production Guidance Production Cost of Number Estimated Country % of 2010e Ounces (000s) Sales / oz. of Mines Mine Life total Chile 460 – 480 21% $500 – 520 2 16+ Brazil 510 – 580 24% $490 – 555 2 30+ Russia(6) 495 – 525 23% $340 – 365 1 8+ USA 690 – 745 32% $480 – 520 3 7+ Total Kinross(4): 2.
Slide 10: Expanding Margins: +27% 5-yr CAGR
Expanding Margins: +27% 5‐yr CAGR 2004 – 2009: $530 • Average realized gold price: +139% • Kinross’ attributable cost of sales margin(7): +229% $436 +229% Cost of Sales Margin ($/oz..) $329 $279 $161 $170 FY'04 FY'05 FY'06 FY'07 FY'08 FY'09 (7) Refer to endnote #7. 10
Slide 11: Growing Cash Flow per Share
Growing Cash Flow per Share • Record high operating cash flow(1) in 2009 (+35% vs. 2008) $1.36 • 5‐yr CAGR: 25% Adjusted Cash FFlow per Sharre (US$) $1.01 $ $0.80 $0 56 $0.56 $ $0.51 $0.45 FY'04 FY'05 FY'06 FY'07 FY'08 FY'09 (1) Refer to endnote #1. 11
Slide 12: Gold Resource Growth
Gold Resource Growth(2) Inferred Resources 140.0 80.0 Measured & Indicated Resources Proven and Probable Reserves 16 2 16.2 Total resource ounce per 1,000 shares (3) 21.2 120.0 70.0 7.0 m oz.) 60.0 100.0 16.6 17 3 17.3 esources (mm 50.0 11.1 80.0 40.0 3.9 60.0 Total Re 2.9 8.0 30.0 4.5 6.1 51.0 40.0
Slide 13: Strong Financial & Operating Performance
Strong Financial & Operating Performance • Record R d production d i in i 2009 • Record cash flow and margins in 2009 • Growing reserves and resources 13
Slide 14: Highlights from Q4 2009
Highlights from Q4 2009 Q4 ‘09 Highlights • Production increased to 613,858 Au eq. oz. (up 12% from Q4’08) • Cost of sales(5): $437/oz (co‐product); $383/oz (by‐product) • Record cost of sales margin(7) of $657/oz. (up 57% from Q4 Q4’08) 08) FY ‘09 Highlights • Production increased to 2,238,665 Au e
Slide 15: Performance Improvement in Q4 2009
Performance Improvement in Q4 2009 Production up 613,858 Costs down 6% $464 14% $437 537,440 Q3'09 Q4'09 Q3'09 Q4'09 Gold equivalent production (oz.) Cost of Sales ($/oz.)(5) (5) Refer to endnote #5. 15
Slide 16: 2009 Full-Year Results
2009 Full‐Year Results COS Margin(6) (in millions, except ounces and 2008 2009 % Change Realized g+9% COS Margin(7) Gold Price $492/oz per share +22% h amounts) t ) +13% $530/oz Gold equivalent production $967/oz 1,838,038 2,238,655 22% (ounces) Gold equivalent sales 1,756,056 2,251,189 28% (ounces)
Slide 17: Update on Corporate and Regional Organization
Update on Corporate and Regional Organization • Newly‐strengthened regional organization and management teams • Four strategic operating groups: Corporate Project External Relations Mining Development Development & Corporate Operations Responsibility • Provides increased focus and integration in the
Slide 18: Pipeline of Projects for the Future
Pipeline of Projects for the Future • Further F h organic i growth h at our mines i • Advancing next suite of projects • Exploration & JV strategies 18
Slide 19: At-Site Growth Opportunities
At‐Site Growth Opportunities Paracatu, Brazil – 3rd Ball Mill • Increasing grinding capacity by installing a 3rd ball mill • Delivery of 15 MW mill expected mid‐2010 • Installation and commissioning in H1 2011 • Capital costs: ~$97 million ($90 million in 2010) Maricunga, Chile ‐ Expansion • Scoping
Slide 20: Kinross to Acquire High-grade Kupol Satellite Deposit
Kinross to Acquire High‐grade Kupol Satellite Deposit • Acquiring 100% of the Dvoinoye deposit and Vodorazdelnaya concession(9) o High‐grade deposit ~90 km north of Kupol Dvoinoye deposit & o Estimated potential deposit of ~3.5 – 3.9 mm Vodorazdelnaya tonnes at an average grade of ~17 – 19 g/t Au(10
Slide 21: Dvoinoye
DVOINOYE Dvoinoye • Small scale‐open pit mine • Operates 6 months of the year • Potential resource of 3.5 – 3.9 mm tonnes 17 – 19 g/t Au((10)) at an average grade of ~17 KUPOL (10) Refer to final slide endnote #10. 21
Slide 22: Dvoinoye Directly Aligns with Kinross Strategy
Dvoinoye Directly Aligns with Kinross Strategy 9 High‐grade deposit 9 Leverages nearby‐existing infrastructure, operating and technical expertise 9 mill Expected capital cost benefit by processing Dvoinoye ore at existing Kupol vs. building stand‐alone processing facilities 9 Further exploration pot
Slide 23: Lobo-Marte, Chile
Lobo‐Marte, Chile • Completed pre‐feasibility study La Coipa p estimate: $ • Capital $575 – $ $650 million • 47,000 tpd heap leach with SART plant Lobo‐Marte ~110 km • Operating costs expected to be $11.50‐$12.50 Maricunga per tonne t Cerro Casale • Estimated start date: 2014 • Annual production: 35
Slide 24: Fruta del Norte, Ecuador
Fruta del Norte, Ecuador • 18,000 metre drill campaign in 2010 • Expected to be completed by Q3 2010 Quito • Pre‐feasibility expected by year‐end • Environmental Impact Statements to be submitted in Q2 2010 for drilling permits for Colibri concession • Strengthened leadership: • Appointment of RVP E
Slide 25: Fruta del Norte/Condor
Fruta del Norte/Condor • Exploration to date has located a number of epithermal and FDN porphyry‐style targets which will be the focus of continued regional exploration l • FDN NI 43‐101 Technical Report*: Describes major exploration targets Pull-apart basin in area of Suarez pull‐apart basin • Esti
Slide 26: Update on Cerro Casale
Update on Cerro Casale La Coipa • Agreement to sell down from 50% to 25%: o Total value: $475 mm Lobo‐Marte ~110 km • Rebalances Cerro Casale in our overall portfolio, reduces future capital and increases cash Maricunga • Finalizing feasibility study that envisions (for 25% interest): Cerro Casale o
Slide 27: Exploration Success at La Coipa
Exploration Success at La Coipa • In‐pit / near‐pit drilling program increases reserves and extends mine life ESPERANZA – In 2009, 28,400 m drilling adds 503koz net increase in reserves PUREN W PUREN – Added 3 years to mine life (from 2012 to 2015) COIPA NORTE BRECHA NORTE • Continue in‐pit / near‐p
Slide 28: Kinross Acquires Underworld Resources
Kinross Acquires Underworld Resources • Kinross announces a friendly deal to acquire 100% of Underworld Resources (11) o Excludes 8.5% already owned by Kinross (fully‐diluted) • Offer unanimously supported by the Underworld Board • 0.141 of a Kinross share + $0.01 cash for each share of Underworld •
Slide 29: Overview of Underworld
Overview of Underworld Alaska Yukon Territory • Main asset: White Gold p project j o Early stage property with 121 holes Fort Knox (29,235m) drilled* Dawson City o Located in the Tintina gold belt White Gold Project o 95 km south of Dawson City, Yukon Territory, Canada o Recently released resource e
Slide 30: Valuation
Valuation 30
Slide 31: Canaccord: P / NAV 5%, $850/oz
Canaccord: P / NAV5%, $850/oz 2.3 1.9 1.7 1.6 1.2 AEM GG ABX KGC AUY Source: Canaccord Metals & Mining – Precious Metals & Minerals, Mar. 23, 2010 31
Slide 32: Canaccord: P / 2010E CFPS
Canaccord: P / 2010E CFPS 16.8 12.5 12.2 7.7 7.3 GG AEM KGC ABX AUY Source: Canaccord Metals & Mining – Precious Metals & Minerals, Mar. 23, 2010 32
Slide 33: Key Objectives for 2010
Key Objectives for 2010 9 Declare increased reserves 9 Complete C l LLobo‐Marte b M pre‐feasibility f ibili study d 9 Final feasibility study for Cerro Casale Close sale of 25% of Cerro Casale Complete acquisition of Underworld Resources Complete Maricunga Expansion feasibility study (H1
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Slide 35: Endnotes
Endnotes (1) Unless otherwise stated, all cash flow and cash flow per share figures in this presentation are adjusted operating cash flow. Adjusted operating cash flow figures are non‐GAAP financial measures which are meant to provide additional information and should not be used as a substitute for
Slide 36: Cautionary Note to Shareholders in the U.S.
Cautionary Note to Shareholders in the U.S. Information in this presentation, including the documents incorporated by reference herein, has been prepared in accordance with the requirements of securities laws in effect in Canada, which differ from the requirements of United States securities laws. W
Slide 37: Appendix
Appendix 37
Slide 38: Fort Knox, USA (100%)
Fort Knox,, USA (100%) ( ) • Located in Alaska • Expansion and new heap leach to extend mine life • Material being stacked on new pads Operating Results Production Cost of Sales (Au eq. oz) ($/oz) 2009 263,260 $546 2008 329,105 $461 2009 Gold Reserves and Resources(3) Tonnes Grade Ounces (thousands)
Slide 39: Round Mountain, USA (50%)
Round Mountain,, USA ((50%)) • Kinross‐operated JV with Barrick • Located in Nevada, USA • Open pit mine Operating Results Production Cost of Sales (Au eq. oz) ($/oz) 2009 213,916 $517 2008 246,946 $465 2009 Gold Reserves and Resources(3) Tonnes Grade oz (h (thousands) d) ( /) (g/t) (h (thousands) d
Slide 40: Kettle River, USA (100%)
Kettle River,, USA ((100%)) • Entered production in Q4’08 • Small foot‐print, p , underground g mine • 2009 first full year • Near‐mine exploration Operating Results Production Cost of Sales (Au eq. oz) ($/oz) 2009 173,555 $294 2008 27,036 $344 2009 Gold Reserves and Resources(3) Tonnes Grade oz (th
Slide 41: Kupol, Russia (75%)
Kupol, p , Russia (75%) ( ) • 3,000 tpd mill with open‐pit and underground operation • 2009 first full year of production Operating Results Production Cost of Sales (Au eq. oz) ($/oz) 2009 694,130 $257 2008 469,907 $220 2009 Reserves and Resources(3) Tonnes Grade Ounces (thousands) (g/t) (thousands)
Slide 42: Paracatu, Brazil (100%)
Paracatu, Brazil (100%) • Recoveries near target • M j expansion Major i commissioning i i i • Adding 3rd ball mill Operating Results Production Cost of Sales (Au eq. oz) ($/oz) 2009 354,396 $693 2008 188 156 188,156 $450 2009 Gold Reserves and Resources(3) Tonnes Grade Ounces (thousands) (g/t) (tho
Slide 43: Crixas, Brazil (50%)
Crixas,, Brazil (50%) ( ) • JV with AngloGold Ashanti • Underground mine located in the Brazil Operating Results Production Cost of Sales (Au eq. oz) ($/oz) 2009 74,654 $412 2008 87,669 , $302 $ Reserves and Resources(3) Tonnes Grade Ounces (thousands) (g/t) (thousands) 2P Reserves 2,923 3.70 347 M&
Slide 44: La Coipa, Chile (100%)
La Coipa, p , Chile ((100%)) • Gold/silver mine in the Maricunga district • Mill facilityy located 60km from Lobo‐Marte deposits p • Comprehensive exploration program Operating Results Production Cost of Sales (Au eq. oz) ($/oz) 2009 231,169 $438 2008 226,293 $489 2009 Reserves and Resources(3) Tonn
Slide 45: Maricunga, Chile (100%)
Maricunga, g , Chile ((100%)) • Located the highly prospective Maricunga District • Open p pit, p heap p leach operation p • Expansion under review Operating Results Production Cost of Sales (Au eq. oz) ($/oz) 2009 233,585 $521 2008 223 341 223,341 $566 2009 Gold Reserves and Resources(3) Tonnes Gra
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