Kinross Gold Corporation · TSX:K
Kinross Gold — Q3 2010 Earnings Presentation
29 slides from Kinross Gold's earnings presentation, Nov 4, 2010
Slide 1: Delivering Disciplined Growth: Q3 2010 Results Webcast
Delivering Disciplined Growth Q3 2010 Financial and Operation Results Webcast November 4, 2010
Slide 2: Speakers
Speakers Tye Burt Thom Boehlert Brant Hinze Ken Thomas President & Chief Executive Vice‐President Executive Vice‐President Senior Vice‐President, Executive Officer & Chief Financial Officer & Chief Operating Officer Projects 2
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 or made in giving this presentation, including any information as to the future performance of Kinross, constitute “forward looking statements” with
Slide 4: Tye Burt
Tye Burt President & CEO 4
Slide 5: Q3 2010 Highlights
Q3 2010 Highlights • Continuing to deliver strong financial results Adjusted Operating Cash Revenue Adjusted Net Earnings(2) Flow(1,2) +26% +28% $ $736 $261 $124 $582 $203 ons US$ millio $2 Q3/09 Q3/10 Q3/09 Q3/10 Q3/09 Q3/10 (1) Please refer to endnote #1. (2) Please refer to endnote #2. 5
Slide 6: Q3 2010 Highlights
Q3 2010 Highlights • Production: 575,065 ounces (up 7% from Q3/09) • Cost of sales margin(3,4) of $673/oz. (up 37% from Q3/09) • Paracatu produces 129k oz and Board approves the 4th ball mill • Closed acquisition of Red Back Mining • Appointment of Brant Hinze as COO, effective October 1st, 2010 • S
Slide 7: Exploration Update at Tasiast
Exploration Update at Tasiast • Added 5 drills; 16 rigs on‐site o Adding 7 additional core drills o All rigs to be operational by late November • 64,682 m drilled in Q3 2010; 156,784 m drilled YTD • Kinross plans an additional 50,000 m for rest of the year, plus 20,000 m beyond 8 km mine corridor •
Slide 8: Resource Growth at Tasiast
Resource Growth at Tasiast 5.1 Ounces (milllions)(5,6) 1.9 1.4 9.2 9.3 0.8 5.4 3.7 Year‐end 2008 November 2009 September 2010 November 2010 Measured & Indicated Mineral Resources Inferred Mineral Resources Note: Mineral Resources are reported inclusive of Mineral Reserves. For the most recent Minera
Slide 9: Q3 2010 Highlights
Q3 2010 Highlights • Production: 575,065 ounces (up 7% from Q3/09) • Cost of sales margin(3,4) of $673/oz. (up 37% from Q3/09) • Paracatu produces 129k oz and Board approves the 4th ball mill • Closed acquisition of Red Back Mining • Appointment of Brant Hinze as COO, effective October 1st, 2010 • S
Slide 10: Thom Boehlert
Thom Boehlert Executive Vice‐President & CFO 10
Slide 11: Q3 2010 Results
Q3 2010 Results Realized COS (in millions, except ounces and per Q3/09 Q3/10 % Change Gold Price Margin(4) share amounts) +24% +37% Gold equivalent production $1,190/oz $673/oz 537,440 575,065 7% (ounces) (7) Gold equivalent sales (7) 554,232 576,955 4% (ounces) Revenue $582.3 $735.5 26% Cost of (1,
Slide 12: Strong Balance Sheet
Strong Balance Sheet • Cash on hand: ~$1.4 bn • E i investment Equity i portfolio f li valued l d at ~$292.2 $292 2 mm $1,381 millions $713 US$ m $524 Cash and cash equivalents Long‐term investments Long‐term debt 12
Slide 13: 2010 Outlook
2010 Outlook(8) Production and Costs C Country Production d i (000 ounces ) C off Sales Cost S l / oz. USA 690 – 745 $480 – 520 Russia(7) 495 – 525 $340 – 365 Brazil 510 – 580 $490 – 555 Chile 350 – 380 $700 – 720 Kinross ((w/o / West Africa)) 2.2 mm oz. $495 – 510 $ West Africa(7,9) 135 – 155 $650
Slide 14: West Africa Cost of Sales Forecast
West Africa Cost of Sales Forecast For Kinross Ownership Period +$105 $650 - $675 +$85 $460 - $485 of Sales ($/oz)(7,9) Cost o Updated Forecast Addition of Royalties Impact of Fair Value Updated Forecast (Red Back Basis) Adjustment (Kinross Basis) (7) Please refer to endnote #7. (9) Please refer to
Slide 15: 2010 Outlook
2010 Outlook(8) Kinross Updated (US$ million) (without West Africa) (including West Africa) Capital p expenditures p $590 $ $630 $ Exploration $102 $130 Q4 2010e Depreciation $320/oz. (8) Please refer to endnote #8. 15
Slide 16: Brant Hinze
Brant Hinze Executive Vice‐President & COO 16
Slide 17: Paracatu Continues to Perform Ahead of Plan
Paracatu Continues to Perform Ahead of Plan 130 000 130,000 129,257 , $700 $650 125,000 production (ounces) $600 120 000 120,000 117 472 117,472 118 101 118,101 $ $550 Cost of Saales ($/oz) $500 115,000 $450 108 421 108,421 Gold equivalent p 110 000 110,000 $400 105,000 $350 $300 100 000 100,000 $25
Slide 18: Q3 2010 Operating Results
Q3 2010 Operating Results Production Cost of Sales (oz.) (US$/oz.) Fort Knox 108,680 $501 Round Mountain 48,477 $647 Kettle River 46,687 $368 (7) Kupol 119,545 $347 Paracatu 129,257 $505 Crixas 19,866 $483 La Coipa 53,471 $ $729 Maricunga 28,844 $868 Kinross only total: 554,827 $508 Tasiast 8 853 8,
Slide 19: Dr. Ken Thomas
Dr. Ken Thomas Senior Vice‐President, Projects 19
Slide 20: Paracatu: 3rd Ball Mill Update
Paracatu: 3rd Ball Mill Update Initial mechanical parts on concrete Lifting mill parts to concrete foundation foundation and mill cradle installed 20
Slide 21: Paracatu: At-site Expansion
Paracatu: At‐site Expansion 3rd Ball Mill • Installing 3rd ball mill to increase throughput • Procurement commitments at 90% • Total project 60% complete; construction at site 40% complete • On schedule for completion and commissioning in H1 2011 4th Ball B ll Mill • Allows Paracatu to sustain plann
Slide 22: Dvoinoye, Russia
Dvoinoye, Russia • Closed acquisition August 27, 2010 Pevek • Completed over 10,000 m of linear drilling Dvoinoye deposit & Vodorazdelnaya y • Completed road connection between site and concession paved highway to Pevek • Clearing of old mine infrastructure well underway ~100 km • Targeted to commen
Slide 23: Tasiast: Conceptual Pit Shell
Tasiast: Conceptual Pit Shell 5 mm oz reserve pit 20 mm oz exploration target pit
Slide 24: Fruta del Norte, Ecuador
Fruta del Norte, Ecuador • Pre‐feasibility expected to be complete by year‐end • Feasibility expected H1 2011 Quito • Geotechnical and hydrogeological drilling on La Zarza and Colibri concessions • EIA for La Zarza exploration decline submitted • Approval expected in H1 2011 • Water permit granted i
Slide 25: Lobo-Marte, Chile
Lobo‐Marte, Chile • Updated pre‐feasibility study to be complete in Q4 2010 La Coipa • Feasibility b l study d expected d to be b complete l in H1 2011 Lobo‐Marte ~110 km • Geotechnical drilling complete; condemnation, hydrological and infill drilling expected to be complete Maricunga b year‐end by
Slide 26: Tye Burt
Tye Burt President & CEO 26
Slide 27: Key Objectives for 2010
Key Objectives for 2010 Declare increased reserves Complete Lobo Lobo‐Marte Marte pre‐feasibility pre feasibility study Close sale of 25% of Cerro Casale Complete 18,000 drill program at Fruta del Norte Complete l investment in Red d Backk Mining Complete acquisition of Underwo
Slide 28: Kinross Gold Corporation
Kinross Gold Corporation 25 York Street, 17th Floor Toronto, ON M5H 2V5 Tel: 416 416‐365‐5123 365 5123 Toll‐Free: 1‐866‐561‐3636 www.kinross.com 28
Slide 29: Endnotes
Endnotes 1) Unless otherwise stated, all cash flow and cash flow per share figures in this presentation are adjusted operating cash flow. 2) Adjusted net earnings and adjusted operating cash flow numbers are non‐GAAP financial measures which are meant to provide additional information and should not