Kinross Gold Corporation · TSX:K
Kinross Gold — Scotia Capital Precious Metals Conference 2004
33 slides from Kinross Gold's conference presentation, Nov 23, 2004
Slide 1: Scotia Capital Precious Metals Conference
Scotia Capital Precious Metals Conference November 23, 2004 dedicated to being world class
Slide 2: Forward Looking Statement
Forward Looking Statement Certain statements set forth in this presentation constitute "forward looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties and other factors that may cause the actual resul
Slide 3: Our global producing assets
Kinross Gold Corporation Fort Knox (100%) our global producing assets Alaska, USA (Open Pit) New Britannia (50%) Manitoba, Canada (U/G) Musselwhite (32%) Ontario, Canada (U/G) Porcupine (49%) Kettle River (100%) Ontario, Canada (Open Pit, U/G) Washington, USA (U/G) Lupin (100%) Alaska, USA (Open Pit
Slide 4: Our global producing assets
Kinross Gold Corporation Fort Knox (100%) our global producing assets Alaska, USA (Open Pit) New Britannia (50%) Manitoba, Canada (U/G) Musselwhite (32%) Ontario, Canada (U/G) Porcupine (49%) Kettle River (100%) Ontario, Canada (Open Pit, U/G) Washington, USA (U/G) Lupin (100%) Alaska, USA (Open Pit
Slide 5: Proven and Probable Reserves
Significant Reserve Increase 20 Proven and Probable Reserves Buckhorn Paracatu (millions of ounces) Reserves at Dec. 31 15 10 2002 2003 2004E
Slide 6: Average Mine Life
(1) Average Mine Life 0 4 8 12 16 Ca m 20 bio Go r ldC or p Gl am is Ki nr os s Ha rm on Ag nic y o Ea Source: BMO Nesbitt Burns Third Quarter 2004 “Red Book” gle Ba rri ck Increasing Average Mine Life An glo Me rid ian Ne wm on t Pl ac er
Slide 7: Increasing Production Profile
Increasing Production Profile 2,500 2,000 equivalent production 000's ounces gold 1,500 1,000 500 0 01 02 E E E E E 97 98 99 00 03 93 94 95 96 04 05 06 07 08 20 20 19 19 19 20 20 19 19 19 19 20 20 20 20 20 Formation Nerco Falconbridge Macassa AMAX Echo Bay / TVX Each transaction is a stepping stone…
Slide 8: Paracatu Acquisition
Paracatu Acquisition Pre-recovery Post-recovery (@ 79%) Purchase Price $ 260 M $ 260 M Proven and probable reserves 3.5 M oz. 2.8 M oz. acquired (millions) Average purchase cost $ 75 / oz. $ 94 / oz. Average total cash cost – LOM $ 235 / oz. $ 235 / oz. Capital expenditures – LOM $ 50 / oz. $ 61 / o
Slide 9: Paracatu Acquisition
Paracatu Acquisition • Signed letter of intent to purchase 51% of Paracatu from Rio Tinto for $260 million, transaction should close late 2004 • Kinross will be 100% owner and operator • Paracatu mine life greater than 20 years • Increases Kinross’ proven and probable gold reserves by 4.0 million oz
Slide 10: Goodwill Impairment Calculation
Goodwill Impairment Calculation (millions) Step One Fair value of Paracatu acquired (51%) $ 260 Carrying value of Paracatu (49%) 311 Indicated impairment $ (51) Step Two Fair value of Paracatu (51%) A $ 260 NAV of acquired assets ($425 gold price, 7%) B 196 Implied goodwill in acquisition (A - B) =
Slide 11: Comparison of Values Goodwill
Comparison of Values 350 Goodwill P, P & E 300 250 64 US$ Millions 200 207 150 100 196 50 104 0 49% Paracatu 51% Paracatu
Slide 12: Kinross at a Glance
Kinross at a Glance Key Facts Key Attributes • Senior gold producer, • Excellent spread of 2004 gold equivalent geopolitical risk production of 1.7 million • Modern, low cost asset ozs @ $235 to $240 per base oz. total cash cost • Exciting pipeline of • ~3,600 employees in 6 development projects cou
Slide 13: Kinross Today
Kinross Today Kinross is now a major gold producer, focused in the Americas Concerns addressed: Ø Financial leverage – strong balance sheet challenging opportunities require innovative strategies
Slide 14: Balance Sheet
Balance Sheet (at (at September September 30, 30, 2004) 2004) Assets Liabilities $ millions $ millions Cash 215.3 Current liabilities 107.7 Other working capital 151.1 Property, plant and equipment 788.7 Total debt 20.9 Goodwill 775.0 Site restoration costs 108.7 Other long term assets 61.4 Future t
Slide 15: Balance Sheet
Balance Sheet (at (at September September 30, 30, 2004) 2004) Use Cash and Debt for Paracatu Acquisition Assets Liabilities $ millions $ millions Cash 75.3 Current liabilities 107.7 Other working capital 151.1 Property, plant and equipment 1,048.7 Total debt 140.9 Goodwill 775.0 Site restoration cos
Slide 16: Kinross Today
Kinross Today Kinross is now a major gold producer, focused in the Americas Concerns addressed: Ø Financial leverage – strong balance sheet ü Ø Cash costs – comparable to other North American seniors challenging opportunities require innovative strategies
Slide 17: Total Cash Costs
Total Cash Costs How Kinross has improved relative to other producers over time? 400 350 Total Cash Costs 2000 Total Cash Costs 2004E 300 250 US dollars 200 150 100 50 0 Harmony Newmont Placer Anglo Agnico Eagle Cambior Glamis Meridian Kinross Goldcorp Barrick challenging opportunities require innov
Slide 18: Kinross Today
Kinross Today Kinross is now a major gold producer, focused in the Americas Concerns addressed: Ø Financial leverage – strong balance sheet ü Ø Cash costs – comparable to other North American seniors ü Ø Deliver on production and cost targets challenging opportunities require innovative strategies
Slide 19: Deliverables
Deliverables… Production - Budget Production - Actual Total Cash Cost - Budget Total Cash Costs - Actual 600 250 500 200 000s gold equivalent ounces 400 150 300 100 200 50 100 0 0 Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004 Q3 2004E Q4 2004E challenging opportunities require innovative strategie
Slide 20: Kinross Today
Kinross Today Kinross is now a major gold producer, focused in the Americas Concerns addressed: Ø Financial leverage – strong balance sheet ü Ø Cash costs – comparable to other North American seniors ü Ø Deliver on production and cost targets ü Ø Reserve life – increasing year over year challenging
Slide 21: Reserve Replacement - 2003
Reserve Replacement - 2003 16 14.1 2.7 13.2 (1.8) 12 Millions of ounces 8 4 0 31-Dec-02 Depletion New Discoveries 31-Dec-03 challenging opportunities require innovative strategies
Slide 22: Reserve Replacement – 2004E
Reserve Replacement – 2004E 20.1 20 4.9 0.5 18 16 2.7 14.1 (2.1) 12 Millions of ounces 8 4 0 31-Dec-03 Depletion Estimated Potential Anticipated 31-Dec-04E ($325) New Additions Through Change in ($350) Discoveries Acquisition Gold Price challenging opportunities require innovative strategies
Slide 23: Reserve Growth
Reserve Growth (excluding (excluding production) production) Estimated New 2P Reserves To Be Added in 2004 Paracatu Gurupi Buckhorn Fort Knox On target to replace reserves PJV On target to replace 55% of reserves Round Mtn On target to replace 25% of reserves La Coipa On target to replace reserves M
Slide 24: Kinross Today
Kinross Today Kinross is now a major gold producer, focused in the Americas Concerns addressed: Ø Financial leverage – strong balance sheet ü Ø Cash costs – comparable to other North American seniors ü Ø Deliver on production and cost targets ü Ø Reserve life – increasing year over year ü challengin
Slide 25: Growth and Development – Current Project Pipeline
Growth and Development – Current Project Pipeline Exploration Pre-feasibility Feasibility Construction Production Refugio Pamour Birkachan Paracatu Exp. Puren Gurupi Gold Hill Measured & Indicated Resources PQ Deeps Proven & Probable Reserves Progress January 03 to September 04 Emanuel North New Dis
Slide 26: Optimizing…
Paracatu Expansion Optimizing…
Slide 27: Paracatu Expansion – Optimizing…
Paracatu Expansion Optimizing… Ø Increase milling capacity and improve efficiency resulting in: • Increased gold recoveries • Lower costs • Increased resources due to lower cutoff grade Ø Increase production to 250,000 oz/yr (100%) thru 2025 • Average yearly production in first 5 years of +300,000 o
Slide 28: Renewed life…
Restarting Refugio (50% (50% Kinross, Kinross, operator) operator) Renewed life…
Slide 29: Restarting Refugio – Renewed life…
Restarting Refugio (50% (50% Kinross, Kinross, operator) operator) Renewed life… Ø New power line has been put in up to site, defective insulators need to be swapped out Ø Mobile equipment is arriving, new operators being trained on equipment, pre-strip is underway Ø Cement work is complete, now han
Slide 30: New life...
Gurupi Update New life...
Slide 31: Gurupi Update – New life…
Gurupi Update New life… Ø Kinross completed an internal scoping study which gave a positive indication of economic viability Ø Feasibility study is underway, expected to be completed in first quarter 2005 Ø Project is located in northern Brazil, four hours from two cities of several million people e
Slide 32: Summary
Summary • Strong balance sheet • Total cash costs similar to other senior gold producers • Meet or exceed production targets • Reserve concern being addressed • Increasing average mine life challenging opportunities require innovative strategies
Slide 33: Dedicated to being world class
dedicated to being world class Shares outstanding: 346.6 million Market cap.: US$2.9 billion KGC: NYSE K: TSX K.U: TSX (US dollar trading symbol) K.WT: TSX www.kinross.com Kinross Gold Corporation 40 King Street West, 52nd Floor Scotia Plaza Toronto, ON M5H 3Y2 416-365-5123 416-363-6622 866-561-3636
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