Kinross Gold Corporation · TSX:K
Kinross Gold — BMO Toronto Marketing - June 2009
44 slides from Kinross Gold's conference presentation, Jun 2, 2009
Slide 1: Delivering Disciplined Growth
Delivering Disciplined Growth BMO Toronto Marketing - June 2009
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? 1. Growing margins, growing cash flow Kinross today: • Portfolio of 8 operating mines g costs declining o Production rising, g o Higher margins, CFPS(3): 5 yr CAGR: 20% • Policy of no gold-hedging o Strong balance sheet • Pure gold/silver producer 2. Pipeline of future opportunities • ‘
Slide 4: Total Gold Demand
Total Gold Demand (in dollars) $110 $1,000 Investment / Other $100 Fabrication $900 Gold price (US$/oz) $90 $800 billions) $80 $700 oz) Demand (US$ b $70 d Price (US$/o $600 $60 $500 $50 $400 Gold Total Gold D $40 $300 $30 $200 $20 $10 $100 $0 $0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 KIN
Slide 5: Declining World Production
Declining World Production (in tonnes) 2001: Peak Production 3000 2500 Other 2000 Big Four* Tonnes 1500 1000 500 0 1969 1974 1979 1984 1989 1994 1999 2004 *S South th Africa, Af i United U it d States, St t Australia, A t li Canada C d KINROSS GOLD CORPORATION Source: GFMS Gold Survey 2009 JUNE 2009
Slide 6: Growing margins… growing cash flow
Growing margins… growing cash flow • 53% production growth: 2007 to 2009e • Y-o-Y Costs declined 13% in Q1’09 • Margins up 355% since 2002 • CFPS growth – 20% 5-yr CAGR* *Based on full year-end results 2003 - 2008 6
Slide 7: Focused portfolio of 8 operating mines in 4 countries
Focused portfolio of 8 operating mines in 4 countries Operating Mines in Four Key Regions: Chile USA • Maricunga • Fort Knox • La Coipa • Kettle River – Buckhorn • Round Mountain Brazil Russia • Paracatu • Kupol • Crixas KINROSS GOLD CORPORATION JUNE 2009 7
Slide 8: Production guidance for 2009: up 36% over 2008
Production guidance for 2009: up 36% over 2008 Production Cost of Number Estimated Country Ounces (000s) % of 2009e total Sales / oz. of Mines Mine Life Chile 450 – 500 19% $425 – 460 2 16+ Bra il Brazil 580 – 650 25% $425 – 470 2 30+ Russia(4) 675 – 725 29% $265 – 290 1 8+ USA 625 – 680 27% $440 -
Slide 9: Growing production & declining costs
Growing production & declining costs Production (mm oz.) Cost of Sales ($/oz.)(2) 2.4 – 2.5 $421 1.8 $390 - $420 1.6 $368 (1) (1) 2007 2008 2009e 2007 2008 2009e KINROSS GOLD CORPORATION (1) Please refer to endnote #1. JUNE 2009 (2) Please refer to endnote #2. 9
Slide 10: World Total Cash Costs & Kinross
World Total Cash Costs & Kinross • In 2008, Kinross moved to the bottom quartile of the industry cost curve, against industry trend of increasing costs and declining production $ $1,000 $800 2008 Cash Costs Kinross 2007 Cash Costs $600 2006 Cash Costs $/oz. US$ $400 $200 $0 25% 50% 75% 100% -$200 Cu
Slide 11: Kinross margins expanding
Kinross margins expanding • Average realized gold price is up 180% • Kinross’ cost of sales margin(5) up 355% $478 $ $436 Up 355% st of Sales Margin ($//oz) $329 $279 $161 $170 Cos $135 $105 FY'02 FY 02 FY'03 FY 03 FY'04 FY 04 FY'05 FY 05 FY'06 FY 06 FY'07 FY 07 FY'08 FY 08 Q1'09 Q1 09 (5) Please re
Slide 12: Margin performance
Margin performance (2002 – Q1 2009) • 5-year CAGR: KGC: +355% • Gold price: 19% NEM • Kinross margin: 26% GG ABX FY'02 FY'03 FY'04 FY'05 FY'06 FY'07 FY'08 Q1'09 KINROSS GOLD CORPORATION JUNE 2009 12
Slide 13: Strong financial & operating results
Strong financial & operating results • Record p production & revenue in 2008 • Q1’09 CFPS: $0.32 (up 100% YoY) • Growing reserves and resources 13
Slide 14: Q1 2009 Results
Q1 2009 Results Realized COS Margin(5) % (in millions, except ounces and per share Q1’09 Q1’08 Gold Price +5% amounts) change g -3% $478/oz $897/oz Gold equivalent production (oz.) 526,888 331,784 59% Gold equivalent sales (oz.) 526,807 356,864 48% Revenue $532.7 $330.2 61% Cost of Sales -11% Cash F
Slide 15: Growing cash flow per share
Growing cash flow per share Q1’09 vs. Q1’08: • Gold price down 3% $1 01 $1.01 • Cash flow per share doubled $0.80 $0.56 $0.51 $0.45 $0 41 $0.41 $0.32 $0.16 FY'03 FY'04 FY'05 FY'06 FY'07 FY'08 Q1'08 Q1'09 *before changes in working capital KINROSS GOLD CORPORATION JUNE 2009 15
Slide 16: Gold resource growth : 14% 5-yr CAGR
Gold resource growth : 14% 5-yr CAGR 80.0 140 (8) Inferred Resources 21.2 (6,7) Measured & Indicated Resources 70.0 Proven and Probable Reserves (6) 120 (9) Total resourrce ounce per 1,000 shares Total ounce per 1,000 shares 60.0 7.0 100 19.1 11.1 50.0 80 M oz. 40.0 3.9 60 2.9 8.0 30 0 30.0 45 4.5 6
Slide 17: Global production by region
Global production by region Kinross assets acquired: Brazil – Paracatu Chile – Maricunga, La Coipa, Cerro Casale, Lobo-Marte Latin America Ecuador – Fruta del Norte Russia – Kupol Asia North America - Buckhorn CIS Oceania Africa North America 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 KINROSS
Slide 18: Balanced portfolio
Balanced portfolio • Reserves and resources are well diversified geographically • Expected mine life 20+ years, all in core regions 2P Reserves(6,7) M&I Resources(6,7) Inferred Resources(6,7,8) 45.6 mm oz. 19.1 mm oz. 21.3 mm oz. Russia Russia 7% USA USA 6% USA Brazil Chile 12% 3% 14% 32% Chile Chil
Slide 19: Pipeline of projects for the future
Pipeline of projects for the future • Expansions being completed in ‘09 • Further F th organic i growth th att our mines i • Advancing next suite of projects • Exploration & JV strategies 19
Slide 20: Lobo-Marte
Lobo-Marte La Coipa (2P: 1.06 g/t) • Located in Chile, near current Kinross operations Lobo-Marte ~110 km ~ (M&I 1 (M&I: 1.72 72 g/t) /t) • Development stage asset with large gold resources Maricunga (2P: 0.72 g/t) • Infrastructure in place Cerro Casale • Opportunity to leverage Kinross’ (2P: 0.61 g
Slide 21: Lobo-Marte
Lobo-Marte • Project parameters under consideration o Phase 1: Truck 2.4 g/t ore to La Coipa mill o Phase 2: 40 – 50k tpd heap leach operation o SART plant to reduce costs • Recent milestones: o Scoping study initiated (58,000 m drilling) o Project team in place • Next N t steps: t o Infill drilling
Slide 22: Fruta del Norte
Fruta del Norte Quito • Project parameters under consideration: o Underground mining o 3,000 3 000 tpd milling capacity • Recent milestones: o Ecuador Mining Law approved (January ‘09) Fruta del Norte o Environmental Management Plan completed and submitted (Q1’09) • Next steps: o 12,000 metre drilli
Slide 23: Fruta del Norte / Condor
Fruta del Norte / Condor • 2009 spending: FDN o Fruta del Norte: $25 mm o Condor project exploration: $10 mm • Exploration Plan: o Exploration of FDN basin and Pull-apart Condor trend to identify new FDN- basin type targets o Total 2009 planned drilling: 26,900 m KINROSS GOLD CORPORATION JUNE 2009 2
Slide 24: Condor Project Area
Condor Project Area • An Epithermal Belt in SE Ecuador • Las Penas Fault Zone: • 20 km of coincident Au, As & Sb in stream sediment samples analogous g to FDN g geochem Pull-apart footprint basin KINROSS GOLD CORPORATION JUNE 2009 24
Slide 25: Cerro Casale
Cerro Casale La Coipa (2P: 1.06 g/t) • Project parameters under consideration: o Open-pit mine with 18 yr. mine life Lobo-Marte ~11 o 220 Mt/a ore processing plant and a 37 Mt/a (M&I: 1.72 g/t) 10 km heap leach Maricunga o Avg. annual production (first full 10 yrs.)* (2P: 0.72 g/t) – 430k oz. of gol
Slide 26: Current mines: expansion projects
Current mines: expansion projects Maricunga, Chile - Expansion o Scoping p g study y completed p late 2008 o Expanded throughput could double production o Pre-feasibility expected at end of 2009 La Coipa, Chile o Land package doubled in 2008 to 98,000 ha o Comprehensive district exploration under wa
Slide 27: Project pipeline
Project pipeline A. Near completion 2009 2010 2011 2012 2013 Paracatu Expansion Production Fort Knox Expansion Production B. Expansions Maricunga Engineering Construction Production Paracatu Phase 3 Engineering Construction Production C. New Projects Lobo‐Marte Metallurgical Testing Engineering Cons
Slide 28: Valuation and performance
V l ti and Valuation d performance f 28
Slide 29: BMO: Total Cash Costs ($/oz.)
BMO: Total Cash Costs ($/oz.) $473 $476 $466 $454 $438 $432 $430 $429 $422 $419 $405 $392 $383 $386 $372 ABX AUY NEM KGC GG ABX NEM AUY GG KGC ABX NEM GG AUY KGC 2009 2010 2011 KINROSS GOLD CORPORATION Source: BMO Gold Pages – May 22, 2009 JUNE 2009 29
Slide 30: BMO: Adjusted mkt cap / recoverable ounce
BMO: Adjusted mkt cap / recoverable ounce $656 $594 $382 $381 $381 GG AUY KGC ABX NEM KINROSS GOLD CORPORATION Source: BMO Gold Pages – May 22, 2009 JUNE 2009 30
Slide 31: BMO: P / CFPS & P / NAV
BMO: P / CFPS & P / NAV 28.7 0.89 0.78 0.75 0 67 0.67 16.1 14.1 14.0 12.1 0.5 GG KGC AUY ABX NEM GG ABX NEM KGC AUY P / CFPS ((‘09)) P / NAV KINROSS GOLD CORPORATION Source: BMO Gold Pages – May 22, 2009 JUNE 2009 31
Slide 32: Kinross Key Objectives for 2009
Kinross Key Objectives for 2009 9 Complete Aurelian integration 9 Close Lobo-Marte acquisition from Teck 9 Lock-in significant share of input costs 9 Strengthen liquidity: close $415 mm equity issue 9 Replace operations’ reserves 9 Declare next dividend 9 Add tax-effective cash flow in C
Slide 33: Why Kinross?
Why Kinross? 1 Growing margins, 1. margins growing cash flows 2. Pipeline p of future opportunities pp 3. Compelling valuation (2) Please refer to endnote #2. KINROSS GOLD CORPORATION JUNE 2009 33
Slide 34: Endnotes
Endnotes (1) For more information regarding Kinross’ production outlook for 2009, please refer to the press release dated January 7, 2009 available on our website at www.kinross.com. (2) Cost of sales per ounce is defined as cost of sales as per the financial statements divided by the number of gold
Slide 35: Appendix
Appendix: KINROSS GOLD CORPORATION JUNE 2009 35
Slide 36: Paracatu, Brazil (100%)
Paracatu, Brazil (100%) • Expansion to triple throughput to 60 mtpa • Expected to reach full capacity Q2’09 • Mine life out to 2041 Operating Results Operating p g Production Cost of Sales Results (Au eq. oz.) ($/oz.) Q1’09 72,745 $666 2008 , 188,156 $450 $ Reserves and Resources(6) Tonnes Grade Oun
Slide 37: Crixas, Brazil (50%)
Crixas, Brazil (50%) • JV with AngloGold Ashanti • Underground mine located in the Brazil Operating Results Operating Production Cost of Sales Results ((Au eq. q oz.)) (($/oz.)) Q1’09 11,595 $428 2008 87,669 $302 Reserves and Resources(6) Tonnes Grade Ounces (x 1,000) (g/t) (x 1,000) 2P Reserves 2,8
Slide 38: Maricunga, Chile (100%)
Maricunga, Chile (100%) • In the highly prospective Maricunga District • Open pit, heap leach operation • Pre-stripping of Pancho pit begins (March) Operating Results Operating O ti P d ti Production C t off S Cost Sales l Results (Au eq. oz.) ($/oz.) Q1’09 56,765 $541 2008 223 341 223,341 $566 Rese
Slide 39: La Coipa, Chile (100%)
La Coipa, Chile (100%) • Gold/silver mine in the Maricunga district • Mill facility located 60km from Lobo-Marte d deposits it Operating Results* Operating Production Cost of Sales Results (Au eq. oz.) ($/oz.) Q1’09 66,240 $391 2008 226,293 $489 Reserves and Resources(6) Tonnes Grade Ounces (x 1,000
Slide 40: Kupol, Russia (75%)
Kupol, Russia (75%) • 3,000 tpd mill with open-pit and underground operation • 2009 tto b be fifirstt ffullll year off production d ti Operating Results Operating Production Cost of Sales Results (Au eq. oz.) ($/oz.) Q1’09 192,842 $224 2008 469,907 $220 Reserves and Resources(6) Tonnes Grade Ounces
Slide 41: Fort Knox, USA (100%)
Fort Knox, USA(100%) • Located in Alaska • Expansion and new heap leach to extend t d mine i lif life and d llower costs t Operating Results Operating Production Cost of Sales Results (Au eq. oz.) ($/oz.) Q1’09 48,626 $672 2008 329 105 329,105 $461 Reserves and Resources(6) Tonnes Grade Ounces ((x 1
Slide 42: Round Mountain, USA (50%)
Round Mountain, USA (50%) • Kinross-operated JV with Barrick • Located in Nevada, USA • Open pit mine Operating Results Operating Production Cost of Sales Results (Au eq. oz.) ($/oz.) Q1’09 50,176 $510 2008 246 946 246,946 $465 Reserves and Resources(6) Tonnes Grade Ounces ((x 1,000) , ) (g/t)) (g (
Slide 43: Kettle River, USA (100%)
Kettle River, USA (100%) • Entered production in Q4’08 • Small foot-print, p underground g mine Operating Results Operating P d ti Production C t off S Cost Sales l Results (Au eq. oz.) ($/oz.) Q1’09 27,899 $307 2008 27 036 27,036 $344 Reserves and Resources(6) Tonnes Grade Ounces ((x 1,000) , ) (g/
Slide 44: KINROSS GOLD CORPORATION JUNE 2009
KINROSS GOLD CORPORATION JUNE 2009