Kinross Gold Corporation · TSX:K
Kinross Gold — 2013 Denver Gold Forum
39 slides from Kinross Gold's conference presentation, Sep 24, 2013
Slide 1: Kinross Gold Corporation 2013 Denver Gold Forum
September 22-25 KINROSS GOLD CORPORATION 2013 DENVER GOLD FORUM 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: Principles for Building Value
PRINCIPLES FOR BUILDING VALUE • Focus on operational excellence • Quality over quantity • Disciplined capital allocation • Maintaining a strong balance sheet 33 www.kinross.com
Slide 4: Operating Mines in Core Regions
OPERATIONAL EXCELLENCE OPERATING MINES IN 4 CORE REGIONS • Diversified portfolio of assets located in some of the world’s best gold districts producing RUSSIA Dvoinoye Kupol Fort Knox Kettle River - Buckhorn Round Mountain WEST AFRICA NORTH AMERICA Tasiast Chirano 2013 OUTLOOK(1,2) Paracatu gold equ
Slide 5: Delivering Strong Operating Performance
OPERATIONAL EXCELLENCE 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(2) GOLD EQUIVALENT PRODUCTION COST OF ALL-IN SUSTAINING COST(4) PRODUCTION(
Slide 6: Focus on Maximizing Margins & Cash Flow
OPERATIONAL EXCELLENCE FOCUS ON MAXIMIZING MARGINS & CASH FLOW • 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 / l
Slide 7: North America
NORTH • 2013 regional guidance(2): 680 – 720koz. at $635 – 675/oz. AMERICA • Well-run, stable open-pit and underground operations 77 (2) Refer to endnote #2. www.kinross.com
Slide 8: North America
OPERATIONAL EXCELLENCE NORTH AMERICA • Region on track to meet both production and production cost of sales guidance for 2013 Fort Knox Q2 2013 RESULTS Kettle River - Buckhorn • Fort Knox continued to achieve strong mill grades and recovery Round Mountain • Strong quarter at Kettle River as the oper
Slide 9: South America
SOUTH • 2013 regional guidance(2): 800 – 870koz. at $870 – $940/oz. AMERICA • Largest operating region accounting for ~33% of annual production 99 (2) Refer to endnote #2. www.kinross.com
Slide 10: South America
OPERATIONAL EXCELLENCE SOUTH AMERICA • Region on track to meet both production and production cost of sales guidance for 2013 Paracatu Q2 2013 RESULTS La Coipa Maricunga • Paracatu continues to benefit from robust continuous improvement program as part of Kinross Way Forward SOUTH AMERICA 2013E(2):
Slide 11: Encouraging Exploration Potential
LA COIPA, CHILE ENCOURAGING EXPLORATION POTENTIAL PHASE 7 • Significant gold and silver discovery Catalina • Located 3 km northeast of La Coipa mill Phase 7 Part of the CMCL JV property (75% Kinross) CATALINA La Coipa mill • Oxide mineralization has been identified 800 m southeast of La Coipa Phas
Slide 12: West Africa
WEST • 2013 regional production(2): 415 – 480koz. at $890 – $950/oz. AFRICA • Strong focus on increasing efficiency and performance in the region 1212 (2) Refer to endnote #2. www.kinross.com
Slide 13: West Africa
OPERATIONAL EXCELLENCE WEST AFRICA • Region on track to meet both production and production cost of sales Tasiast guidance for 2013 Q2 2013 RESULTS Chirano • Tasiast achieved highest quarterly production level since WEST AFRICA 2013E(2): 415-480koz. acquisition for the 2nd consecutive quarter at $89
Slide 14: District Exploration
TASIAST, MAURITANIA DISTRICT EXPLORATION C616 Fennec C613 C614 C69 C67 Aoueouat C615 C68 C611 C612 Tamaya C23 80 Km 1414 www.kinross.com
Slide 15: Russia
• 2013 regional guidance(2): 505 – 535koz. at $550 – $580/oz. RUSSIA • Model for successfully operating in a remote region 1515 www.kinross.com (2) Refer to endnote #2.
Slide 16: Russia
OPERATIONAL EXCELLENCE RUSSIA • Region on track to meet both production and production cost of sales Kupol guidance for 2013 Q2 2013 RESULTS • Mill throughput and recoveries remained strong RUSSIA 2013E(2): 505-535koz. at $550-580/oz. • Opportunities to optimize mine plans identified as part of the
Slide 17: Moroshka Target
KUPOL, RUSSIA MOROSHKA TARGET • Located 5 km southeast of Kupol Kupol Moroshka trend • Presence of high-grade (geochemistry) mineralization over a strike length of 300 m and a Moroshka vein vertical range of 150 m • Similar geology to Kupol North 1717 www.kinross.com
Slide 18: Dvoinoye Russia
DVOINOYE RUSSIA ON BUDGET & ON SCHEDULE 1818 www.kinross.com
Slide 19: Dvoinoye on Schedule & on Budget
RUSSIA DVOINOYE ON SCHEDULE & ON BUDGET • First ore from development activities delivered Mine Portal Infrastructure to Kupol Underground development continues as expected Positions mine to start its first planned stoping operations in Q3/13 • Overall infrastructure construction progress is at 7
Slide 20: Targeting Margins & Cash Flow
QUALITY OVER QUANTITY TARGETING MARGINS & CASH FLOW • This principle emphasizes choosing margins and cash flow over production volume • Applies to all aspects of the business: Exploration Mine planning Production and resource strategies EXAMPLES • Strategic decision to maintain gold price assu
Slide 21: Capital Expenditures ($ billions)
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 22: Solid Financial Position
MAINTAINING A STRONG BALANCE SHEET SOLID FINANCIAL POSITION • 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 credi
Slide 23: Financial Flexibility
MAINTAINING A STRONG BALANCE SHEET FINANCIAL FLEXIBILITY • Modest net debt position of $924 million at June 30, 2013 • No material debt maturities prior to 2016 SCHEDULED DEBT REPAYMENTS $1,000 $750 $ MILLIONS $270 $20 $60 $60 $60 $250 2013 2014 2015 2016 2017 2018 & Term loan Senior notes Kupol loa
Slide 24: Cost Review & Reduction
MAINTAINING A STRONG BALANCE SHEET COST REVIEW & REDUCTION COMPREHENSIVE COST REVIEW PROCESS LAUNCHED ACROSS ORGANIZATION • Reduced spending in many areas: Closed Vancouver procurement office Closed Mexico exploration office Eliminated approximately 200 full-time positions in Ecuador Elimina
Slide 25: Taking Action to Build Shareholder Value
TRANSFORMING KINROSS TAKING ACTION TO BUILD SHAREHOLDER VALUE KINROSS PERCEPTION THEN KINROSS REALITY TODAY Inconsistent operational INCONSISTENT OPERATION • Four straight quarters of solid performance PERFORMANCE performance • On track to meet 2013 production & cost guidance • Solid ranking on all-
Slide 26: Relative Valuation
RELATIVE VALUATION 2012 GOLD PRODUCTION(i) ALL-IN SUSTAINING COSTS(ii) EV / 2013E EBITDA(iii) (million ounces) Q2 2013 7.4 $1,279 ($/oz.) 16.8 $1,136 $1,127 $1,072 13.0 5.0 $919 $916 9.7 9.6 6.0 5.8 2.4 2.4 1.0 1.0 ABX NEM GG KGC AEM AUY GG NEM AEM KGC ABX AUY GG AEM AUY NEM ABX KGC (i) Source: Comp
Slide 27: Principles for Building Value
PRINCIPLES FOR BUILDING VALUE • Focus on operational excellence • Quality over quantity • Disciplined capital allocation • Maintaining a strong balance sheet 2727 www.kinross.com
Slide 28: Appendix
APPENDIX 2828 www.kinross.com
Slide 29: Fort Knox, Alaska (100%)
UNITED STATES FORT KNOX, ALASKA (100%) • Production commenced in 1997 • Heap leach production commenced in late 2009 OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) OF SALES ($/oz.)(3) H1 2013 195,992 $566 FY 2012 359,948 $663 2012 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thousa
Slide 30: Round Mountain (50%)
UNITED STATES ROUND MOUNTAIN (50%) • Kinross-operated JV with Barrick • Bulk tonnage open-pit operation • Commercial production began in 1977 OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) OF SALES ($/oz.) (3) H1 2013 80,437 $809 FY 2012 192,330 $717 2012 GOLD RESERVES AND RESOURCES(5) TO
Slide 31: Kettle River – Buckhorn (100%)
UNITED STATES KETTLE RIVER – BUCKHORN (100%) • Entered production in Q4 2008 • Small foot-print, underground mine • Near-mine exploration targets OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) OF SALES ($/oz.)(3) H1 2013 84,914 $503 FY 2012 156,093 $482 2012 GOLD RESERVES AND RESOURCES(5)
Slide 32: Kupol (100%)
RUSSIA KUPOL (100%) • High-grade underground mine • Upgrades to mill increased throughput from 3,500 tpd to 4,500 tpd OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) OF SALES ($/oz.)(3) H1 2013 246,226 $527 FY 2012 578,252 $472 2012 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thous
Slide 33: Paracatu (100%)
BRAZIL PARACATU (100%) • Plant 2 expansions now complete: 3rd ball mill commissioned in Q2 2011 4th ball mill commissioned in Q3 2012 OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) OF SALES ($/oz.)(3) H1 2013 240,138 $846 FY 2012 466,709 $881 2012 GOLD RESERVES AND RESOURCES(5) TONNES
Slide 34: La Coipa (100%)
CHILE LA COIPA (100%) • Expect to suspend mining of the existing orebody in the fourth quarter of 2013 • Continuing to assess the remaining reserves, resources and exploration potential Including the future potential of La Coipa Phase 7 (Pompeya) OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq
Slide 35: Maricunga (100%)
CHILE MARICUNGA (100%) • Located in the highly prospective Maricunga District • High-altitude heap leach operation OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) OF SALES ($/oz.)(3) H1 2013 104,094 $1,083 FY 2012 236,369 $779 2012 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thousa
Slide 36: Tasiast (100%)
MAURITANIA TASIAST (100%) • Open-pit mine ~300 km north of the city of Nouakchott • Remote, flat, sparsely populated desert OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) OF SALES ($/oz.)(3) H1 2013 133,804 $969 FY 2012 185,334 $889 2012 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES
Slide 37: Chirano (90%)
GHANA CHIRANO (90%) • 90% owned by Kinross; Government of Ghana holds a 10% carried interest • 9 open-pits and 2 recently-discovered underground deposits • Achieved first gold pour in 2005 OPERATING RESULTS(1) PRODUCTION PRODUCTION COST (Au eq. oz.) OF SALES ($/oz.)(3) H1 2013 116,707 $776 FY 2012 2
Slide 38: 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 and do not include production from Crixas, due to the sale of Kinross’ 50% ownership completed J
Slide 39: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 York Street, 17th Floor │Toronto, ON │ M5J 2V5 www.kinross.com 3939 www.kinross.com