Kinross Gold Corporation · TSX:K
Kinross Gold — Investor Presentation (November 2005)
32 slides from Kinross Gold's investor presentation, Nov 22, 2005
Slide 1: Driving Value Growth
Driving Value Growth Kinross Gold Corporation Corporate Overview November 2005
Slide 2: Legal Notice
Legal Notice 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 results, performan
Slide 3: Kinross: A Major Gold Producer
Kinross: A Major Gold Producer • 2005 estimated: • Gold production – 1.6 million ounces • Total cash costs – $275 per ounce • ~4,000 employees in 6 countries • Straight-forward balance sheet • Simple debt structure • No gold hedging • Continuing reserve growth • 19.4 million ounces at Dec. 31/04 ($3
Slide 4: Global Reach; Americas Focus
Global Reach; Americas Focus Kubaka (98.1%) Fort Knox (100%) Magadan, Russia (Open Pit, U/G) Alaska, USA (Open Pit) Musselwhite (32%) Ontario, Canada (U/G) Porcupine (49%) Kettle River (100%) Ontario, Canada (Open Pit, U/G) Washington, USA (U/G) Round Mountain (50%) Nevada, USA (Open Pit) La Coipa (
Slide 5: Kinross Success Factors
Kinross Success Factors • Exceptional EH&S record • Experienced and driven management/ops teams • Excellent spread of geopolitical risk: focus in Americas • Strong portfolio of assets and JVs to work with • Modern, high-capacity production base • Building pipeline of development projects and explora
Slide 6: Attractive Asset Location
Attractive Asset Location 2004 RESERVES 17% 23% 46% 11% 3% US Canada Brazil Chile Other 19.4 million ounces of gold at Dec. 31, 2004, an increase of 47% over 2002 Reserves located in politically stable countries 6
Slide 7: Attractive Asset Location
Attractive Asset Location 2005 PRODUCTION 15% 16% 48% 13% 8% US Canada Brazil Chile Other 63% of production is North American based 65% of costs are US dollar based Large U.S. base offers security, lowers foreign exchange risk 7
Slide 8: 2004 Production and Total Cash Cost
2004 Production and Total Cash Cost Gold Equivalent Total Cash Mine Production Cost (ounces) ($/oz) Fort Knox 338,334 $254 Round Mountain 387,785 $214 Porcupine 193,799 $232 Musselwhite 76,640 $267 Kettle River 96,789 $238 New Britannia 23,652 $288 Lupin 66,577 $351 Paracatu 92,356 $231 La Coipa 150
Slide 9: Highlights 2004
Highlights 2004 ¾ Production: 1.65 mm oz. (gold equiv.) ¾ Cash flow from operating activities: $161.2 mm ¾ Capital expenditures: $169.5 mm ¾ Net loss: $55.9 mm (includes impairment charges of $59.9 mm) ¾ Net reserve additions: 5.3 mm ozs. ¾ Closed acquisition of 51% at Paracatu: $261 mm ¾ Previous g
Slide 10: 2003 Restatement Summary
2003 Restatement Summary unaudited Previous Restated (all amounts are expressed in millions, except per share amounts) 2003 Change 2003 Revenue $ 571.9 $ - $ 571.9 Depreciation, depletion and amortization $ 140.9 $ 31.8 $ 172.7 Impairment charges $ (9.9) $ (406.8) $ (416.7) Net earnings (loss) attri
Slide 11: New Carrying Values – Dec. 31/03
New Carrying Values – Dec. 31/03 300 200 $ millions 100 0 n te er s u i as pa ai up iu at hi iv nt rix oi r ur lw ac R ua ou C C G se ar tle Aq M La P us et nd K M ou R PP&E Mineral Int. & Exp. Properties Goodwill 11
Slide 12: Cash Flow from Operations
Cash Flow from Operations1 Growth 160 140 120 100 $ millions 80 60 40 20 0 1998 1999 2000 2001 2002 2003 2004 1. Before working capital adjustments 12
Slide 13: Production and Costs
Production and Costs 450 2.0 400 Avg. Realized Gold Price 1.8 350 1.5 Ounces of Production (millions 300 Total Cash Costs2. 1.3 250 US$ 1.0 200 0.8 150 0.5 100 50 0.3 - - 1 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005e Gold Equivalent Production Average Realized Gold Price Total
Slide 14: Growing Cash Margins
Growing Cash Margins 180 160 140 120 100 Increasing 80 cash 60 margin 40 20 - 2000 2001 2002 2003 2004 2005e 500 1.8 450 1.6 Ounces of Production (millions) 400 1.4 350 1.2 300 1.0 US$ 250 0.8 200 0.6 150 100 0.4 50 0.2 - - 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005e Gold Equiv
Slide 15: Cash Margin – Senior Producers
Cash Margin – Senior Producers 200 New mont US$/ounce 150 Placer Kinross 100 Barrick 50 2000 2001 2002 2003 2004 1H 2005 Cash Margin Per Ounce Produced 2000 2001 2002 2003 2004 1H 2005 CAGR* Newmont $111 $87 $124 $163 $181 $182 10% Placer 179 155 161 148 151 125 (3%) Kinross 96 103 105 136 158 160 1
Slide 16: Capital Projects Drive New Organic Growth
Capital Projects Drive New Organic Growth Contributes First Full Year 1. Refugio Q4 2005 2006 2. PJV - Pamour Q4 2005 2006 3. Puren Q3 2006 2007 4. Round Mtn. Layback Q4 2006 2007 5. Buckhorn Q4 2006 2007 6. Paracatu Exp. Q4 2007 2008 16
Slide 17: Refugio, Chile (50%, operator)
Refugio, Chile (50%, operator) Restart is complete and contributing in 2005 17
Slide 18: Paracatu, Brazil (100%)
Paracatu, Brazil (100%) Expansion study to be completed in 2006, will contribute late 2007 and beyond 18
Slide 19: Round Mountain, USA (50%, operator)
Round Mountain, USA (50%, operator) Pit layback has begun, expect additional ore in late 2006 19
Slide 20: Round Mountain, USA (50%, operator)
Round Mountain, USA (50%, operator) Deep underground exploration program; drifting has begun 20
Slide 21: Fort Knox, USA (100%)
Fort Knox, USA (100%) 21
Slide 22: La Coipa, Chile (50%)
La Coipa, Chile (50%) Puren deposit pre-strip underway for contribution in 2006 22
Slide 23: Kettle River, USA (100%)
Kettle River, USA (100%) Buckhorn Mountain – start-up in late 2006 after closing Crown Resources transaction 23
Slide 24: Kinross Driving Forward
Kinross Driving Forward • Continue with strong EH&S component • Growth from Core Operating assets • Exit non-core assets • Operational “Building Blocks” optimized • Focus on quality mines, Kinross as operator • Continuous cost control and gross margin focus • Enhanced greenfield exploration • Metric
Slide 25: Exploration Priorities
Exploration Priorities Existing Assets High Priority Exploration Targets Medium Priority Low Priority 25
Slide 26: Continued Reserve Growth – at Oct./05
Continued Reserve Growth – at Oct./05 25 4.8 4.3 19.4 (1.4) 20 2.9 14.1 (1.9) 15 13.2 10 5 0 31-Dec-02 31-Dec-03 Depletion Reserve Acquisitions 31-Dec-04 Estimated Paracatu @ $300 @ $325 Additions @ $350 Depletion Reserve to Additions 31-Oct-05 @ $400 26
Slide 27: Paracatu Exploration
Paracatu Exploration 298,000E 300,000E 302,000E Mineral Rights and 8,100,000N Surface Access Area Brazil $400 Paracatu Scoping RPM Mine Pit Crest Plant Rio de Janeiro Active Toe Mining Lease 8,098,000N Mine grade ore Dec.04 Low grade ore Section 10200N Pit Outline Old drill hole 2004 drill hole Phas
Slide 28: Paracatu Mine, Cross Section
Paracatu Mine, Cross Section Existing drill hole Phase B completed drill hole Phase C planned drill hole Metasiltstone Laterite Reserve mineralization Potential mineralization Visible mineralization 10,200N West Rico Creek, Looking North 7,500E 8,000E 8,500E Surface 0.59g/t Au / 111m WCR-706 0.50g/t
Slide 29: Strategic Focus
Strategic Focus • Focus on large core assets • Focus on the best people • Focus on selected countries • Focus on Kinross-operated assets • Focus on increased exploration spend and JVs 29
Slide 30: Bullish On Gold
Bullish On Gold 1.80 U.S. 1.60 India 1.40 Europe Canada 1.20 Australia 1.00 South Africa 0.80 0.60 Oct-02 Oct-03 Oct-04 Oct-05 Jan-02 Apr-02 Jul-02 Jan-03 Apr-03 Jul-03 Jan-04 Apr-04 Jul-04 Jan-05 Apr-05 Jul-05 US$ weakness, Supply/Demand Fundamentals 30
Slide 31: Kinross Driving Forward
Kinross Driving Forward Disciplined capital and Growth from the core attention for assets that contribute value to Kinross Location, location… Asset portfolio in secure countries Strong management team; Management strength excellence in operations and EH&S Proven transactional Corporate transactions
Slide 32: Kinross Gold Corporation
Shares outstanding: 345.3 million Market cap.: US$2.6 billion (at Nov. 21, 2005) KGC: NYSE (Common shares) K: TSX (Common shares) K.U: TSX (US dollar trading symbol) K.WT: TSX (Warrants expiring 05/12/07) Kinross Gold Corporation 40 King Street West, 52nd Floor Scotia Plaza Toronto, ON M5H 3Y2 416-3