Kinross Gold Corporation · TSX:K
Kinross Gold — Q1 2017 Earnings Presentation
28 slides from Kinross Gold's earnings presentation, May 3, 2017
Slide 1: Q1 2017 Results Conference Call & Webcast
May 3 KINROSS GOLD CORPORATION 2017 Q1 2017 Results Conference Call & Webcast 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 but not limited to any information as to the future performance of Kinross
Slide 3: 2017 Priorities
2017 Priorities 3 3 www.kinross.com
Slide 4: Deliver Operational Excellence
2017 PRIORITIES DELIVER OPERATIONAL EXCELLENCE Continuing our track record of meeting or outperforming our operational targets • Operations delivered solid results in Q1 2017 US and Russian assets performed well Strong performance from Tasiast, with increased production and lower costs • On trac
Slide 5: Sale of Cerro Casale Interest
2017 PRIORITIES SALE OF CERRO CASALE INTEREST Agreement to sell 25% interest in Cerro Casale and 100% interest in Quebrada Seca STRENGTHENS BALANCE SHEET CONSIDERATION • Expect to use proceeds to advance organic $260M in cash payable at closing development projects & further strengthen the balance s
Slide 6: Advance Tasiast Two-Phased Expansion
2017 PRIORITIES ADVANCE TASIAST TWO-PHASED EXPANSION Combined Phase One and Two expansions expected to transform Tasiast into our largest producer with costs amongst the lowest in our portfolio Phase One Estimates(i) Phase Two Estimates(i) Average annual production 409,000 ounces 777,000 ounces Prod
Slide 7: Develop Bald Mountain's Potential
2017 PRIORITIES DEVELOP BALD MOUNTAIN’S POTENTIAL Kinross envisions Bald Mountain as a long-life asset with significant upside potential and mineral resource growth 2016: Doubled mineral reserve estimates ahead 2017: Expect to double production and continue of schedule to develop potential for mine
Slide 8: Advance Organic Projects
2017 PRIORITIES ADVANCE ORGANIC PROJECTS Pipeline of organic projects offer opportunities to expand production or increase mine life at our operations Round Mountain Phase W September Northeast Moroshka Nevada Russia Russia • Potential opportunity to • High-grade deposit located • Located approximat
Slide 9: Kinross Value Proposition
EXCELLENT operational track record Balance sheet STRENGTH ATTRACTIVE organic projects COMPELLING relative value Kinross Value Proposition www.kinross.com 99
Slide 10: Financial Strength & Flexibility
Financial Strength & Flexibility 10 10 www.kinross.com
Slide 11: Q1 2017 Highlights: Financial Results
Q1 2017 Highlights FINANCIAL RESULTS All figures in US$ millions, except ounces, per share and per ounce amounts Q1 2017 Q1 2016 Attributable gold equivalent ounces (oz.)(2) Produced 671,956 687,463 Sold 645,946 659,397 Average realized gold price ($/oz.) $1,220 $1,179 Production cost of sales(3) Go
Slide 12: Reduced Overhead
2017 OUTLOOK REDUCED OVERHEAD(i) Continued focus on financial discipline Overhead Expense • Achieved an 18% REDUCTION in (US$ millions) $208 overhead expense in 2016 versus 2015 $171 • Trend continues in 2017: $165 Overhead expense expected to be US$165 million(1) Q1 2017 7% LOWER than Q1 2016 2
Slide 13: 2017 Capital Expenditures Outlook
FINANCIAL DISCIPLINE 2017 CAPITAL EXPENDITURES OUTLOOK(1) Leveraging strong financial position to invest in development projects & our future 2017E Capital Expenditures ($ millions) Region Sustaining Non-Sustaining Regional Total Americas $295 $65 $360 West Africa $80 $375 $455 Russia $40 $15 $55 Co
Slide 14: Currency & Oil Benefits
2017 OUTLOOK CURRENCY & OIL BENEFITS Well-positioned to benefit from favourable currency exchange and oil weakness 2017 Budget Assumptions(1) 2017 Sensitives (net of hedges)(1) Change Estimated impact 2017 Budget Current Spot(i) from to cost of sales Assumptions Gold US$1,200/oz. $1,256/oz. FX 10% U
Slide 15: Fuel & Currency Hedges
FINANCIAL DISCIPLINE FUEL & CURRENCY HEDGES Managing exposure to fluctuations in foreign currency and input commodity prices • Overall 2017 exposure ~32% hedged at favourable rates compared to spot • Continue to monitor our FX and oil exposure and look for opportunities to establish additional input
Slide 16: Solid Financial Position
2017 PRIORITIES SOLID FINANCIAL POSITION Maintaining balance sheet strength & financial flexibility remain priority objectives PROFOMA LIQUIDITY POSITION MAINTAINING FINANCIAL FLEXIBILITY • Proforma net debt to EBITDA as at March 31, 2017: 0.6* As at Mar. 31* $1.1 • No debt maturities before 2020 $1
Slide 17: Operating Highlights
Operating Highlights 17 17 www.kinross.com
Slide 18: Americas
OPERATING HIGHLIGHTS AMERICAS • Continued strong performance at FORT KNOX and ROUND MOUNTAIN • 2017 production expected to double at BALD MOUNTAIN with lower costs compared to 2016 Production expected to be heavily weighted towards H2 2017 • KETTLE-RIVER BUCKHORN forecast to conclude mining in Q2
Slide 19: West Africa
OPERATING HIGHLIGHTS WEST AFRICA • Continued strong performance at TASIAST in Q1 2017 Increased production a result of improved throughput and higher grade Lowest cost of sales ($/oz. Au eq.) since 2012 Expect positive trend to continue in 2017 • CHIRANO mining in Tano open pit, and the Pabaos
Slide 20: Russia
OPERATING HIGHLIGHTS RUSSIA KUPOL-DVOINOYE • Production lower as a result of planned decline in grades • Development of September Northeast project completed on time and on budget • Filter cake plant now fully operational Provides additional tailings capacity for the current mine plan and provides
Slide 21: Attractive Development Projects
Attractive Development Projects 21 21 www.kinross.com
Slide 22: Advancing Organic Projects
ATTRACTIVE DEVELOPMENT PROJECTS ADVANCING ORGANIC PROJECTS Organic projects spanning all 3 of our regions offer opportunities to expand production or extend mine life at our operations Q2 2018 Q1 2018 Tasiast Phase 1 Full production Q4 2017 Vantage Major construction expected to begin Q3 2017 La Coi
Slide 23: Tasiast Two-Phased Expansion
ATTRACTIVE DEVELOPMENT PROJECTS TASIAST TWO-PHASED EXPANSION Phase One construction ~35% complete; on track for full production in Q2 2018 Phase One progressing well New primary crusher • Engineering now complete • Concrete work 60% complete • All major installation contracts have been awarded • Pro
Slide 24: Tasiast Phase One Progressing Well
ATTRACTIVE DEVELOPMENT PROJECTS TASIAST PHASE ONE PROGRESSING WELL Phase One on schedule and on budget with full production expected in Q2 2018 SAG mill pedestal Reclaim tunnel Leach tank foundations Oxygen plant 2424 www.kinross.com
Slide 25: Bald Mountain Vantage Complex
ATTRACTIVE DEVELOPMENT PROJECTS BALD MOUNTAIN VANTAGE COMPLEX Vantage Complex (South area) • Advancing engineering: roughly 60% complete • Contemplates construction of a new heap leach facility and related infrastructure Design includes additional 68M tonnes of capacity for both the known resource
Slide 26: Building Momentum for the Future
2020E Expected start-up of 2018E potential TASIAST PHASE TWO TASIAST PHASE 2017E ONE expected to ramp up to full 2016 Stronger year production expected at Delivered SOLID BALD MOUNTAIN PRODUCTION of 2.8Moz. Building Momentum for the Future 2626 www.kinross.com
Slide 27: Endnotes
ENDNOTES 1) For more information regarding Kinross’ production, cost, overhead expense and capital expenditures outlook for 2017, please refer to the news release dated February 15, 2017 which is available on our website at www.kinross.com. Kinross’ outlook for 2017 represents forward-looking inform
Slide 28: Kinross Gold Corporation contact details
KINROSS GOLD CORPORATION 25 York Street, 17th Floor │Toronto, ON │ M5J 2V5 www.kinross.com 2828 www.kinross.com