Kinross Gold Corporation · TSX:K
Kinross Gold — Q4 2013 Earnings Presentation
37 slides from Kinross Gold's earnings presentation, Feb 13, 2014
Slide 1: Q4 & FY 2013 Results Conference Call & Webcast
February 13 KINROSS GOLD CORPORATION 2014 Q4 & FY 2013 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 and responses to questions, including any information as to the future performance of Kinross, constitute “forwa
Slide 3: J. Paul Rollinson, Chief Executive Officer
J. PAUL ROLLINSON CHIEF EXECUTIVE OFFICER 33 www.kinross.com
Slide 4: Principles for Building Value
PRINCIPLES FOR BUILDING VALUE • Focus on operational excellence • Quality over quantity • Disciplined capital allocation • Maintaining a strong balance sheet 44 www.kinross.com
Slide 5: Delivering Strong Operating Performance
OPERATIONAL EXCELLENCE DELIVERING STRONG OPERATING PERFORMANCE • Production within updated guidance and exceeded original guidance of 2.4 to 2.6 mm oz. Au eq. • Achieved low-end 2013 of cost of sales guidance range • Full-year all-in sustaining cost below guidance of $1,100 to $1,200 per ounce GOLD
Slide 6: 2013 Mineral Reserves and Resources
QUALITY OVER QUANTITY 2013 MINERAL RESERVES AND RESOURCES(4) FULLY-LOADED COSTING METHODOLOGY FOR RESERVE PROVEN & PROBABLE GOLD RESERVES ESTIMATES 59.6 39.7 • Includes costs such as: sustaining capital, mine waste MM OZ. management costs, etc. • Contributed to a 33% reduction in gold reserves estim
Slide 7: 2014 Outlook At-a-Glance
OPERATIONAL EXCELLENCE 2014 OUTLOOK AT-A-GLANCE(6) • Gold equivalent production expected to be 2.5 to 2.7 million ounces • Production cost of sales expected to be $730 to $780/Au eq. oz. • All-in sustaining cost expected to be $950 to $1,050/Au eq. oz. (6) Refer to endnote #6. 77 www.kinross.com
Slide 8: Tony Giardini, Chief Financial Officer
TONY GIARDINI CHIEF FINANCIAL OFFICER 88 www.kinross.com
Slide 9: Fourth Quarter 2013 Financial Results
FOURTH QUARTER 2013 FINANCIAL RESULTS (in millions, except ounces and per share amounts) Q4 2012 Q4 2013 % Change AVERAGE REALIZED GOLD PRICE Gold equivalent production(1) $1,707 724,510 646,234 -11% (ounces) $ per gold ounce Gold equivalent sales(1) 687,162 683,419 -1% $1,268 (ounces) Revenue $1,18
Slide 10: Full-Year 2013 Financial Results
FULL-YEAR 2013 FINANCIAL RESULTS (in millions, except ounces and per share % amounts) 2012 2013 AVERAGE REALIZED GOLD Change PRICE Gold equivalent production(1) 2,617,813 2,631,092 +1% $1,643 (ounces) $ per gold ounce $1,402 Gold equivalent sales(1) 2,591,478 2,669,276 +3% (ounces) Revenue $4,307.3
Slide 11: Spending Reductions Achieved in 2013
FULL-YEAR 2013 SPENDING REDUCTIONS ACHIEVED IN 2013 CAPITAL EXPENDITURES TOTAL OVERHEAD COSTS(i) EXPLORATION EXPENSE $1.86 $169 $240 $212 $1.26 $112 US$ millions US$ millions US$ billion 2012 2013 2012 2013 2012 2013 (i) Includes general and administrative and business development costs. 1111 www.ki
Slide 12: Maintaining a Solid Balance Sheet
AS AT DECEMBER 31, 2013 MAINTAINING A SOLID BALANCE SHEET • Balance sheet strength continues to be a priority objective • Net debt position of $1,385 million at December 31, 2013 Repaid $523 million in debt in 2013 • No material debt maturities prior to 2016 Only regular principal amortization p
Slide 13: Production & Cost Guidance
2014 OUTLOOK PRODUCTION & COST GUIDANCE(6) • 2014 all-in sustaining cost(3) expected to be $950-1,050 per gold equivalent ounce Gold Production % of Total Production Cost of Sales Region (000 oz. Au eq.) Production ($/oz. Au eq.) Americas 1,330 – 1,430 53% $780 – $840 West Africa 480 – 540 20% $810
Slide 14: Continued Focus on Capital Discipline
DISCIPLINED CAPITAL ALLOCATION CONTINUED FOCUS ON CAPITAL DISCIPLINE(6) 2012 spend Initial 2013 $1.9 bn estimate Identified $340 mm in savings throughout 2013 $1.6 bn $1.40 bn $1.26 bn Expecting another significant reduction in 2014 $675 mm Full-year Original 2013 Revised 2013 Actual 2013 2014E 2012
Slide 15: Further Spending Reductions in 2014
2014 OUTLOOK FURTHER SPENDING REDUCTIONS IN 2014(6) CAPITAL EXPENDITURE OUTLOOK (US$ millions) • 2014 capital expenditures are expected to be approximately $675 million, including an estimated capitalized interest of approximately $70 million Region Sustaining Non-Sustaining Regional Total Americas
Slide 16: Brant Hinze, President & Chief Operating Officer
BRANT HINZE PRESIDENT & CHIEF OPERATING OFFICER 1616 www.kinross.com
Slide 17: Delivering Strong Operating Results
OPERATIONAL EXCELLENCE DELIVERING STRONG OPERATING RESULTS • Record production in 2013: 2.63 million gold equivalent ounces(1) THE AMERICAS RUSSIA Dvoinoye Kupol Fort Knox Kettle River - Buckhorn Round Mountain Tasiast 2014 OUTLOOK(1,6) Chirano expected gold equivalent production WEST AFRICA 2.5 – 2
Slide 18: North America
OPERATIONAL EXCELLENCE NORTH AMERICA • Region exceeded its 2013 production guidance and outperformed Fort Knox cost guidance Kettle River - Buckhorn FOURTH QUARTER 2013 RESULTS Round Mountain • Record annual production and strong cost performance at Fort Knox NORTH AMERICA • Q4 production declined r
Slide 19: South America
OPERATIONAL EXCELLENCE SOUTH AMERICA • Regional production at the high end of its 2013 production guidance and within cost of sales guidance range Paracatu La Coipa Maricunga FOURTH QUARTER 2013 RESULTS • Record annual production at Paracatu SOUTH AMERICA • Q4 production impacted by lower grades and
Slide 20: Consolidating the Americas
OPERATIONAL EXCELLENCE CONSOLIDATING THE AMERICAS • Integrating North & South America into one region Fort Knox • Expect that this will allow us to realize significant Kettle River - Buckhorn synergies in regional overhead costs Round Mountain 2014 REGIONAL OUTLOOK(6) • Americas expected to produce
Slide 21: West Africa
OPERATIONAL EXCELLENCE WEST AFRICA • Region exceeded 2013 production guidance range and cost of sales was at the low end of the guidance range Tasiast FOURTH QUARTER 2013 RESULTS Chirano WEST AFRICA • Improved production and costs at Tasiast a result of higher mill grades and higher throughput • Pro
Slide 22: Russia
OPERATIONAL EXCELLENCE RUSSIA • Region exceeded its 2013 production guidance and outperformed cost Dvoinoye Kupol guidance FOURTH QUARTER 2013 RESULTS RUSSIA • Better than expected throughput, grades and recoveries mainly a result of faster than planned ramp-up of the expanded Kupol mill • Approxima
Slide 23: 2013 Gold Reserves
QUALITY OVER QUANTITY 2013 GOLD RESERVES(4) • Rigorous mine plan optimization program established at all operating sites to ensure fully- loaded costs incorporated into mine plans • Has not resulted in any sterilization of estimated mineral resources(i) • Estimated potential ounces are still availab
Slide 24: Grade Increases at All Operating Mines
QUALITY OVER QUANTITY GRADE INCREASES AT ALL OPERATING MINES • Net of FDN impact, Kinross overall estimated average gold reserve grade increased 14% year-over-year % CHANGE IN PROVEN & PROBABLE RESERVE GRADE 37% 2012 vs. 2013 13% 9% 4% 4% 5% 2% 1% Kupol / Kettle River Maricunga Fort Knox Paracatu Ch
Slide 25: Glen Masterman, Senior Vice-President, Exploration
GLEN MASTERMAN SENIOR VICE-PRESIDENT, EXPLORATION 2525 www.kinross.com
Slide 26: Tasiast District Exploration
WEST AFRICA TASIAST DISTRICT EXPLORATION Imkebdene license Piment C616 Central Fennec C613 Tmeimichat license C614 C69 C67 Aoueouat C615 C68 C611 C612 El Gaicha license Tamaya Tasiast Sud license N’Daouas-Est license 80 Km For additional information, please see Kinross’ news release dated February 1
Slide 27: Tasiast: Piment Central
WEST AFRICA TASIAST: PIMENT CENTRAL • Discovered new zone of high-grade Piment Central mineralization below west sidewall High Grade Footwall Vein Prolongation of the pit • Occurs within existing footprint of the mine Piment • New style of mineralization Section 75011 TA17091DD 5 m @ 7.0 g/t Au West
Slide 28: La Coipa Phase 7
AMERICAS LA COIPA PHASE 7 • Drilling on a number of targets stepping out from LA COIPA DISTRICT known mineralization and historic occurrences in 10 areas Puren West CATALINA Atenas • Encouraging early results • Drilling continues to outline the geometry of the mineralization Catalina • Remains open
Slide 29: Kupol – Moroshka
RUSSIA KUPOL – MOROSHKA • Moroshka located 4 km east of Kupol mine • Drilling confirmed continuity of high grades along 400 strike metre vein CURRENT PRELIMINARY ESTIMATE Kupol mine site • Moroshka contains a minimum total potential mineral resource of 0.4 to 0.6 million tonnes grade 11.9 to 19.7 g/
Slide 30: Moroshka Longitudinal Section
RUSSIA MOROSHKA LONGITUDINAL SECTION For additional information, please see Kinross’ news release dated February 12, 2014 and Appendices A and B, which are available on our website at www.kinross.com , as well as the Explanatory Notes available on slide 36 of this presentation. 3030 www.kinross.com
Slide 31: Dvoinoye
RUSSIA DVOINOYE • September Northeast target located approximately 15 km northwest of Dvoinoye For additional information, please see Kinross’ news release dated February 12, 2014 and Appendices A and B, which are available on our website at www.kinross.com , as well as the Explanatory Notes availab
Slide 32: September Northeast Long Section
RUSSIA SEPTEMBER NORTHEAST LONG SECTION Trench T-06 (projected) 3.9 m @ 139 g/t Au SP13-030 SP13-010 2.7 m @ 184.55 g/t Au 1.7 m @ 21.14 g/t Au Including 1 m @ 497.42 g/t SP13-013 2.3 m @ 9.16 g/t Au SP12-023 6.5 m @ 16.28 g/t Au SP13-047 Including 2.5 m @ 36.86 g/t Au 5.4 m @ 14.29 g/t Au Including
Slide 33: Chirano, Ghana
WEST AFRICA CHIRANO, GHANA • Drilling program designed to test underground potential of mineralization beneath Suraw, Akoti and Tano open pits • Results confirmed mineralization extends 100 to 400 metres below bottom of each pit • Remains open at depth at all three deposits 2013 drill holes For addi
Slide 34: 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 J
Slide 35: Explanatory Notes: Exploration
EXPLANATORY NOTES: EXPLORATION Tasiast Exploration Results Hole identifiers ending with suffix DD are diamond drill core holes (HQ diameter) and those ending with suffix RC are reverse circulation (RC) holes. Holes with “A” prefixing DD or RC are diamond core or reverse circulation re-drills of the
Slide 36: Explanatory Notes: Exploration
EXPLANATORY NOTES: EXPLORATION Kupol and Dvoinoye Exploration Results All drill holes at Moroshka are diamond drill core holes (HQ or NQ core diameter). The Moroshka vein dips sub-vertically to the east. Drill holes are angled between minus 50° and 75° to the east and west. Results provided for Moro
Slide 37: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 York Street, 17th Floor │Toronto, ON │ M5J 2V5 www.kinross.com 3737 www.kinross.com