Kinross Gold Corporation · TSX:K
Kinross Gold — FY2010 Earnings Presentation
33 slides from Kinross Gold's earnings presentation, Feb 17, 2011
Slide 1: Delivering Disciplined Growth: Q4 & Full-Year 2010 Results Webcast
DELIVERING DISCIPLINED GROWTH Q4 & Full-Year 2010 Financial and Operating Results Webcast February 17, 2011 1
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: Tye Burt, President & CEO
TYE BURT President & CEO TYE BURT CHIEF EXECUTIVE OFFICER 3
Slide 4: 2010 Highlights
2010 HIGHLIGHTS • Production(1): 2.3 mm ounces (up 4% from 2009) • Record revenue of $3.0 billion (up 25% from 2009) • Adjusted operating cash flow(4) of $1.1 billion (up 16% from 2009) • Adjusted net earnings(4) of $478.8 million (up 57% from 2009) • Increased gold reserve and resources(5): Added
Slide 5: 2010 Highlights
2010 HIGHLIGHTS • Continuing to deliver strong financial results Revenue Adjusted Operating Cash Adjusted Net Earnings(4) +25% Flow (4) +57% +16% $1,091 $3,010 $937 $479 $2,412 US$ millions $305 2009 2010 2009 2010 2009 2010 (4) Refer to endnote #4. 5
Slide 6: Advancing Our Projects
ADVANCING OUR PROJECTS Tasiast Fruta del Norte Dvoinoye Lobo-Marte • Completed scoping • Prepared pre-feasibility • Completed scoping • Updated pre-feasibility study and technical report study complete • 60,000 tpd mill • LOM production of • 900 tpd underground • 47,000 tpd heap leach ~410,000 oz /
Slide 7: Increasing Gold Resources
INCREASING GOLD RESOURCES(5) Proven & Probable Mineral Measured & Indicated Mineral Inferred Mineral Resources Reserves Resources +48% +23% +7% 62.4 Ounces (millions) 51.0 24.0 16.6 17.7 16.2 2009 2010 2009 2010 2009 2010 (5) Refer to endnote #5. 7
Slide 8: Thom Boehlert, Chief Financial Officer
THOM O BOEHLERT O Executive Vice-President & CFO THOM BOEHLERT CHIEF FINANCIAL OFFICER 8
Slide 9: Q4 2010 Results
Q4 2010 RESULTS Realized COS (in millions, except ounces and per Q4/09 Q4/10 % Change Gold Price Margin(2,3) share amounts) +22% +19% (1) $1,333/oz Gold equivalent production 613,858 676,635 10% $782/oz (ounces) (1) Gold equivalent sales 586,543 647,494 10% (ounces) Revenue $699.0 $920.4 32% Cost of
Slide 10: FY 2010 Results
FY 2010 RESULTS Realized COS (in millions, except ounces and per 2009 2010 % Change Gold Price Margin(2,3) share amounts) +23% +29% (1) $1,191/oz Gold equivalent production 2,238,665 2,334,104 4% $683/oz (ounces) (1) Gold equivalent sales 2,251,189 2,343,505 4% (ounces) Revenue $2,412.1 $3,010.1 25%
Slide 11: 2011 Outlook
2011 OUTLOOK Production and Costs(6) Production % of Total Region Cost of Sales / oz. oz (000 ounces ) Production South America 1,000 – 1,070 41% $585 - $650 North America 590 – 630 24% $625 - $685 West Africa 440 – 500 18% $595 - $655 (attributable) Russia 435 - 455 17% $395 - $435 (attributable) C
Slide 12: 2011 Outlook
2011 OUTLOOK Capital Expenditures (US$ millions) Mine & Processing Region Maintenance New Projects Total by Region Development p South America $130 $505 $95 $730 United States $10 $155 $- $165 West Africa $50 $180 $210 $440 Russia $15 $30 $110 $155 Corporate $10 $- $- $10 Total by $215 $870 $415 $1,
Slide 13: Strong Balance Sheet
STRONG BALANCE SHEET • Cash on hand: ~$1.5 bn • Equity pipeline investment portfolio valued at ~$203 ~$203.8 8 mm $1,467 US$ milllions $630 $503 Cash and cash equivalents Long-term Long term investments Long-term Long term debt 13
Slide 14: Brant Hinze, Chief Operating Officer
BRANT HINZE CHIEF OPERATING OFFICER 14
Slide 15: Operating Results
OPERATING RESULTS Q4 2010 FY 2010 Production Cost of Sales Production Cost of Sales (oz.) (US$/oz.) (oz.) (US$/oz.) Fort Knox 85,139 $547 349,729 $550 Round Mountain 43,521 $798 184,554 $657 Kettle River 53 255 53,255 $363 198 810 198,810 $330 Kupol(1) 149,504 $313 554,008 $319 Paracatu 117,567 $560
Slide 16: Dr. Glen Masterman, VP Exploration
DR. GLEN MASTERMAN VICE-PRESIDENT, EXPLORATION 16
Slide 17: Track Record of Reserve Growth
TRACK RECORD OF RESERVE GROWTH(5) KINROSS ORGANIC RESERVE ADDITIONS TODAY Prroven and Prrobable Gold Reserves 62.4 WEST AFRICA 9.7 RESERVE ADDITION 51.0 2.4 (mm oz) PRODUCTION 10.0* DEPLECTION 5.8 CERRO CASALE 25% SALE 2009 2010 Numbers may not add due to rounding *As of December 31, 2010, not at da
Slide 18: Exploration Update at Tasiast
EXPLORATION UPDATE AT TASIAST • 3 additional drills added in January 2011; 25 drills currently on site • Drilled D ill d 64 64,000 000 m iin th the W Westt B Branch h area iin Q4 2010 Targeting deeper extensions of the Greenschist Zone • New N sample l prep ffacility ilit iin N Nouakchott k h tt t
Slide 19: Resource Growth at Tasiast
RESOURCE GROWTH AT TASIAST(5,7) 8.6 Ounces (milllions) 5.1 1.9 2.1 14 1.4 9.2 9.3 0.8 7.6 5.4 37 3.7 Year-end 2008 November 2009 September 2010 November 2010 Year-end 2010 Proven and Probable Mineral Reserves Measured & Indicated Mineral Resources (inclusive of 2P reserves) Measured & Indicated Mine
Slide 20: Dr. Ken Thomas, SVP Projects
DR. KEN THOMAS SENIOR VICE-PRESIDENT, PROJECTS 20
Slide 21: Paracatu: At-Site Expansion
PARACATU: AT-SITE EXPANSION 3rd Ball Mill • Installing 3rd ball mill to increase throughput • Construction 75% complete; project 82% complete • On schedule for completion and commissioning in H1 2011 4th Ball Mill • Sustains Plant 2 throughput at ~41 mtpa in future years • Additional shovel and truc
Slide 22: Tasiast, Mauritania
TASIAST, MAURITANIA • Scoping study complete • New N processing i plant l t with ith expected t d 60,000 60 000 ttpd d throughput – total 68,000 tpd • 16-year mine life • Expected avg. annual production of 1.5 mm oz (first 8 full yrs) o Expected avg. grade of 2 g/t o Expected avg. recoveries of 93%
Slide 23: Tasiast, Mauritania
TASIAST, MAURITANIA • Ordered key processing equipment: 3 crushers, 1 SAG mill and 2 ball mills / motors • Retained international EPCM joint-venture firm for feasibility study o Basic engineering commencing Q2 2011 • Appointed RVP, West Africa and Tasiast Project Director • Feasibility study expecte
Slide 24: Fruta del Norte, Ecuador
FRUTA DEL NORTE, ECUADOR • Prepared pre-feasibility study and technical report g • Underground operation p with an estimated 16-year y mine life • LOM avg. production estimate : 410k Au eq. oz. per year Expected avg. gold grade of 8.07 g/t Expected avg. gold recovery of 93% Underground Mine Layo
Slide 25: Fruta del Norte, Ecuador
FRUTA DEL NORTE, ECUADOR • Construction on the La Zarza exploration decline expected p to start in Q2/11 • Advancing permitting: Expect to submit EIAs for mine and plant operations to the Ministry of Environment by mid-2011 • Project start-up targeted for late 2014 25
Slide 26: Dvoinoye, Russia
DVOINOYE, RUSSIA • Scoping study completed January 2011 • Underground mine with an expected 8 8-year year mine life Expected avg. output of 900 tonnes per day (2013-2020) • Ore to be processed at the Kupol mill Kupol mill throughput expected to increase to 4,000 tpd Dvoinoye feed expected to b
Slide 27: Lobo-Marte, Chile
LOBO-MARTE, CHILE • Completed pre-feasibility study update • 10-year mine life • Expected 47,000 tpd heap leach with SART plant • Annual production estimate: 350k oz. per year Expected avg. grade: 1.17 g/t Lobo Final Pit Expected avg. recovery: 60-70% • Cost of sales estimate: ~$500/oz; ~$450/oz
Slide 28: Lobo-Marte, Chile
LOBO-MARTE, CHILE • Received approval for additional 20,000 m of drilling in Q4/10 • Infill and geotechnical drill to continue in 2011 • Hydrogeological, geotechnical and infill drilling associated with previous permit completed in Q4/10 • Expect to submit EIA in mid-2011 • Pre-feasibility Pre feasi
Slide 29: Tye Burt, President & CEO
TYE BURT President & CEO TYE BURT CHIEF EXECUTIVE OFFICER 29
Slide 30: Key Objectives for 2011
KEY OBJECTIVES FOR 2011 Complete Tasiast scoping study Declare NI 43 43-101 101 resource at Dvoinoye Complete Fruta del Norte pre-feasibility study Complete Dvoinoye scoping study Commence construction on La Zarza exploration decline at Fruta del Norte Commissioning of the 3rd ba
Slide 31: Continuing the Kinross Transformation
CONTINUING THE KINROSS TRANSFORMATION Kinross Yesterday Kinross Now(6) 4.5 – 4.9 on (mm oz) ent production (mm oz) valent productio 2.3 2.5 – 2.6 Gold equiv Gold equivale 1.6 2005 2010 2011e 2015e (6) Refer to endnote #6. 31
Slide 32: Endnotes
ENDNOTES 1) Unless otherwise noted, gold equivalent production, gold equivalent ounces sold and cost of sales figures in this presentation are based on Kinross’ 75% ownership interest in Kupol and 90% interest in Chirano. 2) Costt off sales C l per ounce is i ddefined fi d as costt off sales l as pe
Slide 33: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 YORK STREET, 17TH FLOOR TORONTO, ON M5J 2V5 WWW.KINROSS.COM 33