Kinross Gold Corporation · TSX:K
Kinross Gold — Q2 2013 Earnings Presentation
26 slides from Kinross Gold's earnings presentation, Aug 1, 2013
Slide 1: Kinross Gold Corporation Q2 2013 Results Conference Call & Webcast
August 01 KINROSS GOLD CORPORATION 2013 Q2 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, including any information as to the future performance of Kinross, constitute “forward looking statements” with
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 fundamentals • Disciplined capital allocation • Quality over quantity in mine planning • Balance sheet strength & liquidity 44 www.kinross.com
Slide 5: Delivering Strong Operating Performance
FOCUS ON OPERATIONAL FUNDAMENTALS DELIVERING STRONG OPERATING PERFORMANCE • Strong performance from operations delivered solid results in Q2 2013 • Q2 production cost of sales and all-in sustaining cost beneath low-end of 2013 guidance(1) GOLD EQUIVALENT PRODUCTION COST OF ALL-IN SUSTAINING COST(4)
Slide 6: Dvoinoye, Russia: On Budget & On Schedule
DVOINOYE, RUSSIA ON BUDGET & ON SCHEDULE 66 www.kinross.com
Slide 7: Capital Discipline Continues in 2013
DISCIPLINED CAPITAL ALLOCATION CAPITAL DISCIPLINE CONTINUES IN 2013 2012 estimate following project resequence Identified $200 million of Actual 2012 $2.2 capital reductions spend $2.0 Initial 2013 $1.9 estimate $150 mm of capital reductions $1.6 $1.45 Capital Expenditures ($ billions) February Q2 -
Slide 8: Cost Review & Reduction
ACCELERATING THE KINROSS WAY FORWARD COST REVIEW & REDUCTION • Do not anticipate making a decision whether to proceed with a mill expansion at Tasiast before 2015, regardless of the project feasibility study outcome Not expecting major capital spending on Tasiast in 2014 • Expected 2013 savings of
Slide 9: Principles for Building Value
PRINCIPLES FOR BUILDING VALUE • Focus on operational fundamentals • Disciplined capital allocation • Quality over quantity in mine planning • Balance sheet strength & liquidity 99 www.kinross.com
Slide 10: Tony Giardini, Chief Financial Officer
TONY GIARDINI EXECUTIVE VICE-PRESIDENT & CHIEF FINANCIAL OFFICER 1010 www.kinross.com
Slide 11: Second Quarter 2013 Financial Results
SECOND QUARTER 2013 FINANCIAL RESULTS Realized Margin(6) % (in millions, except ounces and per share amounts) Q2 2012 Q2 2013 Gold Price -22% Change -11% $657/oz. $1,394/oz. Gold equivalent production(2) 632,772 655,381 +4% (ounces) Gold equivalent sales(2) 634,538 689,501 +9% (ounces) Revenue $1,00
Slide 12: Non-Cash Impairment Charge
SECOND QUARTER 2013 NON-CASH IMPAIRMENT CHARGE • Recent and continued decline in gold price and deferral of potential construction decision on Tasiast identified as indicators of potential impairment • Performed impairment testing using updated assumptions and estimates, including: Lower short-ter
Slide 13: Maintaining a Solid Balance Sheet
AS AT JUNE 30, 2013 MAINTAINING A SOLID BALANCE SHEET • Balance sheet strength continues to be a priority • Extended maturity date of $1.0 billion term loan and $1.5 billion revolving credit facility Term loan has no mandatory amortization payments Tangible net worth covenant for the credit faci
Slide 14: Brant Hinze, President & Chief Operating Officer
BRANT HINZE PRESIDENT & CHIEF OPERATING OFFICER 1414 www.kinross.com
Slide 15: Operating Results Highlights
SECOND QUARTER 2013 OPERATING RESULTS HIGHLIGHTS • Strong performance from operations continued in the second quarter • On target to meet 2013 production and cost of sales guidance RUSSIA Q2 production: 121,728 oz. Q2 cost of sales: $516/oz. Kupol Fort Knox Kettle River - Buckhorn WEST AFRICA Round
Slide 16: The Kinross Way Forward
MAXIMIZING MARGINS & CASH FLOW THE KINROSS WAY FORWARD • Success in reducing both operating costs and capital expenditures since launching the Kinross Way Forward in H2 2012 • Prioritizing cash flow 1. MINE PLAN OPTIMIZATION • Optimizing pushback widths, mine sequencing • Exploiting zero / low-capex
Slide 17: North America
FOCUS ON OPERATIONAL FUNDAMENTALS NORTH AMERICA • Region on track to meet both production and production cost of sales guidance for 2013 Fort Knox • Fort Knox continued to achieve strong mill grades and recovery Kettle River - Buckhorn • Strong quarter at Kettle River as the operation continued to R
Slide 18: Russia
FOCUS ON OPERATIONAL FUNDAMENTALS RUSSIA • Region on track to meet both production and production cost of sales Kupol guidance for 2013 • Mill throughput and recoveries remained strong • Opportunities to optimize mine plans identified as part of the Kinross Way RUSSIA Forward resulted in expected sa
Slide 19: West Africa
FOCUS ON OPERATIONAL FUNDAMENTALS WEST AFRICA • Region on track to meet both production and production cost of sales guidance for 2013 Tasiast • Tasiast achieved highest quarterly production level since acquisition for Chirano the 2nd consecutive quarter WEST AFRICA 2013E(1): 415-480koz. Higher gr
Slide 20: South America
FOCUS ON OPERATIONAL FUNDAMENTALS SOUTH AMERICA • Region on track to meet both production and production cost of sales guidance for 2013 Paracatu • Paracatu continues to benefit from robust continuous improvement La Coipa program as part of Kinross Way Forward Maricunga Achieved cost reductions in
Slide 21: Potential Mill Expansion at Tasiast
DISCIPLINED PROJECT DEVELOPMENT POTENTIAL MILL EXPANSION AT TASIAST Truck Shop • Kinross does not expect to make a decision whether to proceed with a potential mill expansion until 2015 at the earliest Regardless of the outcome of the feasibility study • Project feasibility study remains on schedu
Slide 22: Dvoinoye Remains on Schedule
DISCIPLINED PROJECT DEVELOPMENT DVOINOYE REMAINS ON SCHEDULE • First ore from development activities delivered Mine Portal Infrastructure to Kupol • Underground development continues as expected Positions mine to start its first planned stoping operations in Q3/13 • Overall infrastructure construc
Slide 23: Q2 Exploration Highlights
2013 EXPLORATION PROGRAM Q2 EXPLORATION HIGHLIGHTS TASIAST Existing plant • Work delineated mineralization in quartz veins Footwall located along the Footwall Zone Zone Adjacent to the west side of Piment Central Vein intersected in 15 drill holes 10 additional holes planned to follow-up posit
Slide 24: Q2 Exploration Highlights
2013 EXPLORATION PROGRAM Q2 EXPLORATION HIGHLIGHTS LA COIPA PHASE 7 (POMPEYA) LA COIPA • Encouraging drill results were returned from the Catalina target Catalina Oxide mineralization has been Phase 7 identified 800 m southeast of La Coipa Phase 7 (Pompeya) • Further drilling is underway to assess
Slide 25: Endnotes
ENDNOTES 1) For more information regarding Kinross’ production, cost and capital expenditures outlook for 2013, please refer to the news releases dated February 13, 2013 and July 31, 2013, both available on our website at www.kinross.com. Kinross’ outlook for 2013 represents forward- looking informa
Slide 26: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 York Street, 17th Floor │Toronto, ON │ M5J 2V5 www.kinross.com 2626 www.kinross.com