Kinross Gold Corporation · TSX:K
Kinross Gold — Investor Presentation (July 2014)
42 slides from Kinross Gold's investor presentation, Jul 21, 2014
Slide 1: Kinross Gold Corporation
July 2014 KINROSS GOLD CORPORATION 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: Kinross At-a-Glance
KINROSS AT-A-GLANCE SENIOR GOLD PRODUCER • World’s fifth largest gold producer with 9 operating mines Open-pit and underground mines located in the United States, Chile, Brazil, Russia, Ghana and Mauritania • Solid record of strong operating performance Achieved record production of 2.63 million
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: Diversified Portfolio of Operating Mines
KINROSS WAY FORWARD DIVERSIFIED PORTFOLIO OF OPERATING MINES RUSSIA AMERICAS Dvoinoye Kupol Fort Knox Kettle River-Buckhorn Round Mountain Tasiast 2014E GOLD EQUIVALENT PRODUCTION(3) Chirano WEST AFRICA 27% Paracatu 2.5-2.7M ounces 53% La Coipa Maricunga 20% GLOBAL PORTFOLIO Operating mine Americas
Slide 6: Americas
• Operating region comprised of 5 mines located in the US, Brazil and Chile AMERICAS • 2014E regional guidance: 1,330 – 1,430k oz. at $780-840/oz.(3) 66 (3) Refer to endnote #3. www.kinross.com
Slide 7: Russia
• Comprised of 2 high-grade operating mines RUSSIA • Full benefit of Dvoinoye coming on-stream in 2014 • 2014E regional guidance: 690-730k oz. at $560-590/oz.(3) 77 (3) Refer to endnote #3. www.kinross.com
Slide 8: West Africa
WEST • Strong focus on optimizing efficiency and performance in the region AFRICA • 2014E regional guidance: 480 – 540koz. at $810 – $880/oz.(3) 88 (3) Refer to endnote #3. www.kinross.com
Slide 9: 2014 Outlook: Production & Cost Guidance
2014 OUTLOOK PRODUCTION & COST GUIDANCE(3) • 2014 all-in sustaining cost(4) expected to be $950 - $1,050 per gold equivalent ounce WEST AFRICA REGION AMERICAS RUSSIA (attributable) TOTAL Gold equivalent production 1,330 - 1,430 690 - 730 480 - 540 2.5 – 2.7M (000 oz. Au eq.) % of total production 53
Slide 10: Operational Excellence
OPERATIONAL EXCELLENCE STRONG Q1 2014 OPERATING PERFORMANCE • Strong performance from operations delivered solid Q1 2014 results Results for production, cost of sales and all-in sustaining cost favourable year-over-year GOLD EQUIVALENT PRODUCTION COST OF ALL-IN SUSTAINING COST(4) PRODUCTION(1) SAL
Slide 11: Continued Focus on Cost Reduction
OPERATIONAL EXCELLENCE CONTINUED FOCUS ON COST REDUCTION • Focus on cost reductions and continuous improvement resulting in lower cost of sales at three of our sites in Q1 2014 CHIRANO, GHANA TASIAST, MAURITANIA MARICUNGA, CHILE • Production cost of sales per • Production cost of sales per • Product
Slide 12: Focus on Reducing Spending
DISCIPLINED CAPITAL ALLOCATION FOCUS ON REDUCING SPENDING • Trend of declining capital $1.9B expenditures since 2012 • Expecting another significant reduction in 2014 $1.26B $675M (3) 2012 2013 2014E (3) Refer to endnote #3. 1212 www.kinross.com
Slide 13: Solid Financial Position
STRONG BALANCE SHEET SOLID FINANCIAL POSITION Balance sheet strength continues to be a priority objective STRONG LIQUIDITY POSITION MAINTAINING FINANCIAL FLEXIBILITY • Investment grade credit ratings $0.8B • Net debt: $1.3B as at March 31, 2014 • Completed $500 million debt offering in March 2014 $2
Slide 14: Financial Flexibility
STRONG BALANCE SHEET FINANCIAL FLEXIBILITY(i) No material debt maturities prior to 2016 SCHEDULED DEBT REPAYMENTS $1,250 $ MILLIONS $500 $270 $60 $60 $250 $– 2014 2015 2016 2017 2018 2019 & thereafter (i) Term loan Senior notes(ii) Kupol loan (i) Figures on this slide are pro-forma the completion of
Slide 15: Feasibility Study on Mill Expansion Complete
TASIAST, MAURITANIA FEASIBILITY STUDY ON MILL EXPANSION COMPLETE • Feasibility study based on 38,000 tpd mill produced promising results • A mill expansion has the potential to: Add a major source of new production to Kinross’ portfolio Lower the company’s overall cost structure Generate signi
Slide 16: Mill Expansion Feasibility Study Estimates
TASIAST, MAURITANIA MILL EXPANSION FEASIBILITY STUDY ESTIMATES Improved estimated economics are primarily the result of estimated lower capital expenditures, an optimized mine plan and lower expected operating costs AVERAGE FOR THE FIRST 5 YEARS LIFE OF MINE (2018-2022) (2014-2029) Average annual pr
Slide 17: Reduced Capital Expenditure Estimate
TASIAST FEASIBILITY STUDY RESULTS REDUCED CAPITAL EXPENDITURE ESTIMATE Initial capital expenditure estimate of $1.6 billion significantly lower than original $2.7 billion estimated in the pre-feasibility study 2013 infrastructure spending Deferral of $2.7B $330M seawater pipeline Spending Included t
Slide 18: Potential Mill Expansion
TASIAST, TASIAST,MAURITANIA MAURITANIA POTENTIAL POTENTIALMILL MILLEXPANSION EXPANSION • •Do Donot notexpect expecttotomake makea afinal finaldecision decisionwhether whethertotoproceed proceedwith witha apotential potentialmill mill expansion until 2015 at the earliest expansion until 2015 at the e
Slide 19: Tasiast District Exploration
HIGH-QUALITY EXPLORATION TARGETS 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
Slide 20: Tasiast: Piment Central
HIGH-QUALITY EXPLORATION TARGETS 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
Slide 21: La Coipa Phase 7
HIGH-QUALITY EXPLORATION TARGETS 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
Slide 22: Kupol – Moroshka
HIGH-QUALITY EXPLORATION TARGETS 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 to
Slide 23: Moroshka Longitudinal Section
HIGH-QUALITY EXPLORATION TARGETS 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 41 of this presentat
Slide 24: Dvoinoye
HIGH-QUALITY EXPLORATION TARGETS 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
Slide 25: September Northeast Long Section
HIGH-QUALITY EXPLORATION TARGETS 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
Slide 26: Chirano, Ghana
HIGH-QUALITY EXPLORATION TARGETS 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
Slide 27: Relative Valuation
RELATIVE VALUATION 2014E GOLD PRODUCTION(i) 2014E ALL-IN SUSTAINING COSTS(ii) EV / 2014E EBITDA(iii) (mm oz.) ($/oz.) 12.6 7.0 $1,200 6.0 $1,000 9.4 9.3 9.2 5.0 8.3 $800 7.6 4.0 $600 5.5 3.0 $400 2.0 1.0 $200 0.0 $0 ABX NEM GG KGC AUY AEM EGO NEM KGC AEM GG ABX EGO AUY GG EGO AUY NEM ABX AEM KGC (i)
Slide 28: Appendix
APPENDIX 2828 www.kinross.com
Slide 29: Fully-Loaded Costing Methodology
QUALITY OVER QUANTITY FULLY-LOADED COSTING METHODOLOGY • Builds upon NI 43-101 standards to include additional costs for estimating mineral reserves • Objectives: Maximize near-term cash flow & NPV Every ounce is cash flow positive on a “fully-loaded” basis KINROSS WAY FORWARD: MINERAL RESERVE E
Slide 30: 2013 Mineral Reserves and Resources
QUALITY OVER QUANTITY 2013 MINERAL RESERVES AND RESOURCES(6) FULLY-LOADED COSTING METHODOLOGY FOR PROVEN & PROBABLE GOLD RESERVES MINERAL RESERVE ESTIMATES 59.6 42.8 MM OZ. • Contributed to a reduction in gold reserves estimates, which is offset by estimated: Higher grades 2012 2013 Reduced capi
Slide 31: Fort Knox, USA (100%)
AMERICAS FORT KNOX, USA (100%) Among the world’s few cold climate heap leach facilities • Achieved record annual production in 2013, Fort Knox’s 16th year in operation • Impressive track record of operational excellence OPERATING RESULTS(5) FY 2012 FY 2013 Production (Au. Eq. oz.) 359,948 421,641 Pr
Slide 32: Round Mountain, USA (50%)
AMERICAS ROUND MOUNTAIN, USA (50%) Round Mountain is a best-practice leader in many areas, including preventative maintenance • Kinross-operated JV with Barrick • Bulk tonnage open-pit operation OPERATING RESULTS(5) FY 2012 FY 2013 Production (Au. Eq. oz.) 192,330 162,826 Production cost of sales ($
Slide 33: Kettle River-Buckhorn, USA (100%)
AMERICAS KETTLE RIVER-BUCKHORN, USA (100%) Low-cost, high-grade underground mine located in Washington state • Small footprint operation • Significant cash flow contributor with costs among the lowest in the portfolio OPERATING RESULTS(5) FY 2012 FY 2013 Production (Au. Eq. oz.) 156,093 150,157 Prod
Slide 34: Paracatu, Brazil (100%)
AMERICAS PARACATU, BRAZIL (100%) Large gold mine with a long mine life that extends to 2030 • Paracatu is among the world’s largest gold operations with annual throughput of ~60Mtpa • Achieved record annual production in 2013 OPERATING RESULTS(5) FY 2012 FY 2013 Production (Au. Eq. oz.) 466,709 500,
Slide 35: Maricunga, Chile (100%)
AMERICAS MARICUNGA, CHILE (100%) High-altitude heap leach operation located in the highly prospective Maricunga District • New team focused on improving operating efficiencies and reducing costs • Performance improvements in Q4/13 and Q1/14 OPERATING RESULTS(5) FY 2012 FY 2013 Production (Au. Eq. oz
Slide 36: Kupol-Dvoinoye (100%)
RUSSIA KUPOL-DVOINOYE (100%) Our Russian operations are a model for successfully operating in a remote location • High-grade, low-cost underground mines • Dvoinoye is the 4th mine Kinross has operated in its 20-year history in the region OPERATING RESULTS(5) FY 2012 FY 2013 Production (Au. Eq. oz.)
Slide 37: Tasiast, Mauritania (100%)
WEST AFRICA TASIAST, MAURITANIA (100%) Operating mine with a large gold resource and potential for a mill expansion • Expect to begin realizing benefits of infrastructure improvements • Achieved record quarterly production in Q1/14 OPERATING RESULTS(5) FY 2012 FY 2013 Production (Au. Eq. oz.) 185,33
Slide 38: Chirano, Ghana (90%)
WEST AFRICA CHIRANO, GHANA (90%) Cost reductions achieved at Chirano through transition to self-perform mining • Costs have be decreasing steadily over the past 4 quarters • Chirano is now among our lowest cost operations OPERATING RESULTS(1,5) FY 2012 FY 2013 Production (Au. Eq. oz.) 263,911 247,86
Slide 39: 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. 2) For more information regarding the results of the Tasiast feasibility study, please refer to
Slide 40: 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 41: 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 42: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 York Street, 17th Floor │Toronto, ON │ M5J 2V5 www.kinross.com 4242 www.kinross.com