Kinross Gold Corporation · TSX:K
Kinross Gold — Investor Presentation (May 2019)
53 slides from Kinross Gold's investor presentation, May 2019
Slide 1: Delivering Value
May 2019 Delivering Value. Kinross Gold Corporation
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 Operational Excellence Financial Strength & Flexibility Diverse portfolio of operating mines consistently Leveraging our financial strength to invest on meeting or outperforming operational targets our development pipeline Repaid over $1.0 billion of debt 7 Consecutive Met
Slide 4: Operational Excellence
Operational Excellence We remain focused on operational excellence, building a culture of continuous improvement, innovation and disciplined cost management 4
Slide 5: Diversified Portfolio of Assets
Operational Excellence May 2019 Diversified Portfolio of Assets ~60% of 2019E gold equivalent production expected from mines located in the Americas Dvoinoye, Russia Kupol, Fort Knox, USA Russia Bald Mountain, USA Round Mountain, USA Tasiast, Mauritania 2019E Gold Equivalent Production(1,2) 20% Chir
Slide 6: Strong First Quarter Operating Results
Operational Excellence May 2019 Strong First Quarter Operating Results Continued track record of meeting or outperforming our operational targets • Strong production and excellent cost performance from the portfolio • On track to meet 2019 guidance targets for production, cost of sales, all-in susta
Slide 7: First Quarter Operational Highlights
Operational Excellence May 2019 First Quarter Operational Highlights Our three largest operations produced over 60% of Q1 production with an average cost of sales of $634/oz. Operation Q1 Performance(1,3) Highlights Paracatu, Brazil • Second consecutive quarter of Production (Au. eq. oz.) 146,776 re
Slide 8: Tasiast Exceeds Expectations
Operational Excellence May 2019 Tasiast Exceeds Expectations Strong performance of the Phase One expansion resulting in two consecutive quarters of record production and lower costs • Significant improvement in Tasiast’s performance following completion of the Phase One expansion Tasiast quarterly p
Slide 9: Achieving Performance Improvements at Paracatu
Operational Excellence May 2019 Achieving Performance Improvements at Paracatu Realizing the benefits of asset optimization and continuous improvement efforts through strong performance and cost reductions Paracatu’s strong performance driven by: Paracatu quarterly performance • Asset optimization p
Slide 10: Kupol/Dvoinoye Continues to Deliver
Operational Excellence May 2019 Kupol/Dvoinoye Continues to Deliver Consistent high performance from our two high-grade mines in Russia • Strong contributor to Kinross’ portfolio, with an attractive cost structure Satellite Deposits • Development of Dvoinoye Zone 1 continues on schedule Production
Slide 11: 2019E Production and Costs
Operational Excellence May 2019 2019E Production and Costs(2) Kinross Total(1) Regional Guidance 2019E Unit Costs ($ per gold equivalent ounce) 2.5 million Americas Cost of sales(1,3) $730/oz. (+/- 5%) (+/- 5%) 1.44 million 2019E Gold Equivalent Production (ounces) (+/- 5%) All-in sustaining cost(1,
Slide 12: Financial Strength & Flexibility
Financial Strength & Flexibility With strong cash flow and no debt maturities until 2021, we have the financial strength and flexibility to fund our pipeline of development projects 12
Slide 13: Strong Liquidity
Financial Strength & Flexibility May 2019 Strong Liquidity Strong position to finance organic development projects with existing liquidity and cash flow generation Strategic investments to add value to our portfolio Liquidity Position ($ billion) • Phase of reinvestment in our business: Completed
Slide 14: 2019E Capital Expenditures
Financial Strength & Flexibility May 2019 2019E Capital Expenditures(1) • 2019 capital expenditures are expected to be $1,050 million (+/- 5%), including estimated capitalized interest of $65 million 2019E 2019E Total 2019E Capital Region Sustaining Capital Non-Sustaining Capital (+/- 5%) Americas $
Slide 15: Manageable Debt Profile
Financial Strength & Flexibility May 2019 Manageable Debt Profile No debt maturities prior to 2021 Debt Schedule Debt Ratings Senior notes Revolving credit facility (drawn amounts) Agency Rating S&P BBB- (Stable) $500 $500 $500 Moody’s Ba1 (Stable) Fitch BBB- (Stable) $ millions Interest Rates $250
Slide 16: Development Projects & Exploration Highlights
Development Projects & Exploration Highlights We have a portfolio of development projects that we are progressing, and we are also focused on advancing a pipeline of future opportunities and high potential exploration targets 16
Slide 17: Project Milestones for 2019
Development Projects May 2019 Project Milestones for 2019 First Quarter Second Quarter Third Quarter Bald Mountain Vantage Complex Round Mountain Phase W La Coipa Restart Project Initiated mining in the South Area of Expected to extend mining until 2027 at Studying potential synergies between Bald M
Slide 18: Tasiast Expansion Update
Development Projects May 2019 Tasiast Expansion Update Phase Two continues to be a viable option as we evaluate capital efficient alternatives to optimize Tasiast’s throughput • Objective is to evaluate options that lower capital expenditures while preserving Tasiast’s overall value proposition • Ou
Slide 19: Tasiast Lower Capital Throughput Alternatives
Development Projects May 2019 Tasiast Lower Capital Throughput Alternatives Lower capital option to increase throughput to 30,000 t/d Phase One Lower capital Phase Two alternative Existing CIL Plant Gyratory Ore SAG mill New larger Pre-leach New tails crusher stockpile ball mill thickening thickenin
Slide 20: Tasiast Project Financing Update
Development Projects May 2019 Tasiast Project Financing Update Project financing has progressed, with strong interest from multilateral organizations and commercial banks • Targeting approximately $300 million in financing with participation from IFC, a member of the World Bank Group, Export Develop
Slide 21: Round Mountain Phase W Overview
Development Projects May 2019 Round Mountain Phase W Overview The Phase W project is expected to extend mining by 5 years at one of Kinross’ top performing mines located in one of the world’s best mining jurisdictions 21
Slide 22: Phase W Feasibility Study Results
Development Projects May 2019 Phase W Feasibility Study Results Project expected to generate a 13% IRR at an assumed gold price of $1,200 per ounce Current mine plan + Phase W Estimates Average annual production (2018-2024) 341,000 gold ounces Production cost of sales (2018-2024) $765 per gold equiv
Slide 23: Round Mountain Phase W
Development Projects May 2019 Round Mountain Phase W The Phase W project is nearing completion; commissioning of the processing circuit commenced ahead of schedule • Project nearing completion; advancing on schedule and on budget • Construction of new heap leach pad is now complete • Applying initia
Slide 24: Fort Knox Gilmore
Development Projects May 2019 Fort Knox Gilmore Gilmore project expected to extend mine life to 2030 and strengthen long-term U.S. production profile 24
Slide 25: Gilmore Feasibility Study Results
Development Projects May 2019 Gilmore Feasibility Study Results Project expected to generate a 17% IRR at an assumed gold price of $1,200 per ounce Current mine plan + Gilmore estimates Average annual production (2018-2027) 245,000 gold ounces Production cost of sales (2018-2027) $735 per gold equiv
Slide 26: Fort Knox Gilmore
Development Projects May 2019 Fort Knox Gilmore Initial production from Gilmore is expected in early 2020 • Project includes: The first two phases of a potential multi-phase layback of the Fort Knox pit; and Construction of a new heap leach pad • Advancing on budget and on schedule • Procurement
Slide 27: Bald Mountain Vantage Complex
Development Projects May 2019 Bald Mountain Vantage Complex Vantage Complex project in the South Area of Bald Mountain is well-advanced; commenced commissioning of processing circuit in Q1 as planned • Project is well-advanced • VCIC plant is approximately 70% complete • Heap leach is now approximat
Slide 28: Bald Mountain Exploration Highlights
Development Projects May 2019 Bald Mountain Exploration Highlights Kinross envisions Bald Mountain as a long-life asset with significant upside potential and mineral resource growth • 2018 drill program was focused on near-mine opportunities to increase the resource base and provide a direct impact
Slide 29: Chile Projects
Development Projects May 2019 Chile Projects We are evaluating the potential for a return to production in Chile La Coipa Restart Project N • Initiated a feasibility study on the Phase 7 deposit La Coipa Restart Expected to be complete in Q3 2019 project Lobo-Marte Project • Scoping study complete
Slide 30: Kupol Exploration Highlights
Exploration Highlights May 2019 Kupol Exploration Highlights Many targets identified along the main Kupol West Licence N Kupol trend NE-EXT • In 2018, primary objective was to test Kupol Mining Licence depth and north extensions of the main NE Kupol vein system NU • Drill intercepts continued to con
Slide 31: Another 1-Year Mine Life Extension in Russia
Exploration Highlights May 2019 Another 1-Year Mine Life Extension in Russia Continuing our track record of adding reserves to offset depletion at Kupol and Dvoinoye (4) Cumulative Production (Au eq.) Proven and Probable Reserves (Au eq.) 7.4 2.1 2018 • Estimated mill production extended to 6.9 2.3
Slide 32: Chirano Exploration Highlights
Exploration Highlights May 2019 Chirano Exploration Highlights Production at Chirano is now expected to extend to 2021, a 1-year extension • 2018 exploration focus continued to be adding incremental ounces to mine life Focused on infill drilling the depth potential at Akwaaba and Paboase • Followi
Slide 33: Compelling Relative Value
Compelling Relative Value Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities 33
Slide 34: 2018A Production & All-In Sustaining Cost
Compelling Relative Value May 2019 2018A Production & All-In Sustaining Cost 2018A Production 2018A All-In Sustaining Cost (million ounces) ($ per ounce) $1,200 5.0 $1,000 4.0 $800 3.0 $600 2.0 $400 1.0 $200 0.0 $0 Gold Fields Gold Fields Newmont AngloGold AngloGold Barrick Kinross Newcrest Agnico Y
Slide 35: 2019E Metrics
Compelling Relative Value May 2019 2019E Metrics Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities EV / 2019E EBITDA P / 2019E Operating CF 12.5 11.7 8.2 7.9 7.2 5.9 5.5 4.6 4.5 4.1 4.2 4.1 3.9 3.6 3.6 3.2 Go
Slide 36: Appendix
Appendix 36
Slide 37: Currency & Oil Sensitivities
Appendix May 2019 Currency & Oil Sensitivities 2019 Budget Assumptions(2) 2019 Sensitivities (net of hedges)(2) Change from Estimated impact 2019 Budget Current Spot(i) Assumptions to cost of sales Gold US$1,200 US$1,279 FX 10% US$15/oz. (per ounce) Russian rouble 10% US$19/oz.(ii) Oil US$65 US$62 (
Slide 38: Fort Knox, USA (100%)
Americas May 2019 Fort Knox, USA (100%) The Gilmore project is expected to extend mine life to 2030 • Successfully operating one of the world’s Operating Results(3) few cold weather heap leaches 2017 2018 • Estimated mine life: mill – 2020; mining – 2027; leaching – 2030 Production 381,115 255,569 (
Slide 39: Summary of Feasibility Study Results
Fort Knox Gilmore May 2019 Summary of Feasibility Study Results Operating Estimates (current mine plan + Gilmore) Incremental Gilmore Estimates(i) Timeline Operational Metric Estimate Estimate Average annual tonnes mined 60 million Strip ratio 1.2 Strip ratio 1.2 Life of mine ore processed 183 milli
Slide 40: Round Mountain, USA (100%)
Americas May 2019 Round Mountain, USA (100%) Strong cash flow generator with Phase W project extending mine life to 2027 • Phase W is expected to generate solid Operating Results(3) returns and extend mining 2017 2018 • Estimated mine life: 2024 (mining); 2027 (stockpile milling / residual leach) Pr
Slide 41: Summary of Feasibility Study Results
Round Mountain Phase W May 2019 Summary of Feasibility Study Results Operating Estimates (current mine plan + Phase W) Standalone Phase W Estimates Timeline Operational Metric Estimate Estimate Strip ratio 2.9 Life of mine production 1.5 million ounces Average grade processed 0.7 grams per tonne Lif
Slide 42: Bald Mountain, USA (100%)
Americas May 2019 Bald Mountain, USA (100%) Forecasting strong near-term cash flow with significant upside potential • Large estimated mineral resource base with Operating Results(3) multiple sources of potential mineral reserve 2017 2018 additions • In 2018, achieved record production; lowest Produ
Slide 43: Paracatu, Brazil (100%)
Americas May 2019 Paracatu, Brazil (100%) Large gold mine with a long mine life that extends to 2032 • Paracatu is among the world’s largest gold Operating Results(3) operations with annual throughput of ~60Mt 2017 2018 • Cornerstone asset in Kinross’ portfolio Production • Estimated mine life: 2032
Slide 44: Responsible & Safe Tailings Management
Appendix May 2019 Responsible & Safe Tailings Management All of our tailings facilities are designed and constructed to the highest engineering standards and meet or exceed regulatory and international requirements and standards of best practice • Tailings management programs incorporate Paracatu Ta
Slide 45: La Coipa Restart Project PFS Results (2015)
Americas May 2019 La Coipa Restart Project PFS Results (2015) Project expected to generate a 20% IRR at an assumed gold price of $1,200 per ounce • The pre-feasibility study estimates a 5.5 year mine life, following receipt of permits and commencement of stripping Processing expected to commence 1
Slide 46: Kupol-Dvoinoye (100%)
Russia May 2019 Kupol-Dvoinoye (100%) Our Russian mines are a model for successfully operating in a remote location • High-grade, low-cost underground mines Operating Results(3) supported by 1 mill 2017 2018 • Estimated mine life: 2023, following another Production 1-year extension in 2018 580,451 4
Slide 47: Foreign Investment in Russia
Russia May 2019 Foreign Investment in Russia The world’s leading companies are Foreign Investment Advisory Council invested in Russia • Chaired by the Russian Prime Minister, includes CEOs from over 50 international companies 47
Slide 48: Tasiast, Mauritania (100%)
West Africa May 2019 Tasiast, Mauritania (100%) Operating mine with a large gold resource located in a prospective district • Successfully completed the Phase One Operating Results(3) expansion in 2018 2017 2018 • Performance exceeding expectations; two Production consecutive quarters of record prod
Slide 49: Summary of Feasibility Study Results
Tasiast Expansion Project May 2019 Summary of Feasibility Study Results Operating Estimates (Phase One & Two combined) Standalone Phase Two Estimates Timeline Operational Metric Estimate Estimate Total tonnes mined 438 million Initial capital $590 million Strip ratio 6.4 2020-2024 Average CIL grade
Slide 50: Mauritania Highlights
West Africa May 2019 Mauritania Highlights Kinross has successfully operated in Mauritania since 2010 • Democratic republic that gained independence Country Statistics in 1960 (2017 estimates unless otherwise indicated) • Mining-friendly jurisdiction: Population 3.7M Well-developed, competitive mi
Slide 51: Chirano, Ghana (90%)
West Africa May 2019 Chirano, Ghana (90%) Cost reduction achieved at Chirano by transitioning to self-perform • Chirano is an underground and open pit Operating Results(1,3) operation located in southwestern Ghana 2017 2018 • Estimated mine life: 2021 Production 221,424 204,029 (Au. Eq. oz.) Product
Slide 52: Endnotes
Appendix May 2019 Endnotes 1) Unless otherwise noted, gold equivalent production, gold equivalent ounces sold and production cost of sales figures in this presentation are based on Kinross’ 90% share of Chirano production and sales. Also unless otherwise noted, dollar per ounce ($/oz.) figures in th
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