Kinross Gold Corporation · TSX:K
Kinross Gold — 2017 Denver Gold Forum
58 slides from Kinross Gold's conference presentation, Sep 26, 2017
Slide 1: Kinross Gold Corporation – 2017 Denver Gold Forum
September 24-27 KINROSS GOLD CORPORATION 2017 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 and responses to questions, including but not limited to any information as to the future performance of Kinross
Slide 3: Kinross Value Proposition
KINROSS VALUE PROPOSITION EXCELLENT OPERATIONAL TRACK RECORD • Diverse portfolio of operating mines consistently meeting or outperforming our operational targets STRONG BALANCE SHEET & FINANCIAL FLEXIBILITY • $2.5B in liquidity with net debt to EBITDA ratio of 0.6x(i) • No debt maturities prior to 2
Slide 4: Kinross Highlights
Delivered Operational Excellence Strengthened Balance Sheet Repaid $1B of debt 5 MET over past 5 years or $1.1B $1.1 $2.5B billion of cash $1.4 Consecutive EXCEEDED billion 0.6x Years Guidance Net debt to EBITDA Cash Available credit *Figures are as at June 30, 2017. Advanced High-Quality Organic De
Slide 5: TSX Sub-Indices Performance
COMPELLING RELATIVE VALUE TSX SUB-INDICES PERFORMANCE S&P/TSX 2016 Performance S&P/TSX YTD 2017 Performance(i) Kinross 71% Kinross 37% Base Metals 52% Consumer Discr. 15% Precious Metals 50% Gold price ($/oz.) 13% Materials 39% Base Metals 12% Energy 36% Industrials 12% Industrials 23% Technology 11
Slide 6: Enterprise Value versus Production
COMPELLING RELATIVE VALUE ENTERPRISE VALUE VERSUS PRODUCTION Market capitalization does not reflect significant scale of production and history of achieving guidance Enterprise Value(i) Net Debt to Historical Gold Production (Moz)(iii) Consensus Gold Production Estimates (Moz)(iii) (US$M) EBITDA(ii)
Slide 7: Operational Excellence
Operational Excellence 77 www.kinross.com
Slide 8: Diversified Portfolio of Operating Mines
OPERATIONAL EXCELLENCE DIVERSIFIED PORTFOLIO OF OPERATING MINES Over RUSSIA 60% of estimated 2017 gold equivalent production from mines located in the Americas AMERICAS Dvoinoye Kupol Fort Knox Kettle River-Buckhorn Bald Mountain Round Mountain 2017E GOLD EQUIVALENT PRODUCTION(2,3) Tasiast 22% Chira
Slide 9: Strong Operating Track Record
OPERATIONAL EXCELLENCE STRONG OPERATING TRACK RECORD Continuing our track record of meeting or outperforming our operational targets • Operations continued to deliver solid results in Q2 2017 Stand-out quarter from Round Mountain – delivering higher production with lowest quarter cost of sales per
Slide 10: 2017 Outlook
OPERATIONAL EXCELLENCE 2017 OUTLOOK(3) Forecasting another solid year from operations, with production and costs in-line with 2016 Kinross Total(2) Regional Forecast 2017E Unit Costs ($ per gold equivalent ounce) 2.5 to 2.7 Americas Cost of sales(4) $660 to $720 million 1.5 to 1.6Moz. 2017E Gold Equ
Slide 11: Balance Sheet Strength
Balance Sheet Strength 11 11 www.kinross.com
Slide 12: Solid Financial Position
BALANCE SHEET STRENGTH SOLID FINANCIAL POSITION Strong financial position to finance Tasiast Phase 2 and Round Mountain Phase W projects with existing liquidity LIQUIDITY POSITION MAINTAINING FINANCIAL FLEXIBILITY • Cash and cash equivalents of $1.1 billion as at June 30, 2017 Increase of $240 mil
Slide 13: 2017 Capital Expenditures Outlook
BALANCE SHEET STRENGTH 2017 CAPITAL EXPENDITURES OUTLOOK(3) Leveraging strong financial position to invest in development projects & our future 2017E Capital Expenditures ($ millions) Region Sustaining Non-Sustaining Regional Total Americas $295 $65 $360 West Africa $80 $375 $455 Russia $40 $15 $55
Slide 14: Manageable Debt Profile
BALANCE SHEET STRENGTH MANAGEABLE DEBT PROFILE No debt maturities prior to 2021 • $500 million debt offering completed in July Debt Ratings Used net proceeds and available cash on Agency Rating hand to repay $500 million term loan due S&P BB+ (Positive) 2020 Moody’s Ba1 (Stable) • As a result, no
Slide 15: Attractive Organic Development Projects
Attractive Organic Development Projects 15 15 www.kinross.com
Slide 16: 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 Project Location Q2 2018 Americas West Africa Q1 2018 Tasiast Phase 1 Expected to Russia reach full Q4 2017 commerc
Slide 17: Tasiast Two-Phased Mill Expansion
ATTRACTIVE DEVELOPMENT PROJECTS TASIAST TWO-PHASED MILL EXPANSION • Two-phased approach offers an attractive path to Tasiast’s significant growth potential at a significantly lower forecast capital cost than previously estimated(i) • Phase Two expected to transform Tasiast into a world-class mine wi
Slide 18: Large Orebody with Low Execution Risk
ATTRACTIVE DEVELOPMENT PROJECTS LARGE OREBODY WITH LOW EXECUTION RISK Focus has been to right-size the processing capacity to capture the full value and potential of Tasiast’s large mineral resource estimate RELATIVELY LOW-RISK BROWNFIELDS EXPANSION PROJECT • Have owned and operated the mine for app
Slide 19: Two-Phased Expansion Concept
ATTRACTIVE DEVELOPMENT PROJECTS TWO-PHASED EXPANSION CONCEPT PHASE ONE: EXPANSION TO 12,000 t/d Existing ball mills Gyratory Ore Oversized Leaching Refining crusher stockpile SAG mill PHASE TWO: EXPANSION TO 30,000 t/d Gyratory Ore SAG mill New, larger ball Additional leaching Thickening crusher sto
Slide 20: Phase Two Feasibility Study Results
ATTRACTIVE DEVELOPMENT PROJECTS PHASE TWO FEASIBILITY STUDY RESULTS Phase Two expansion expected to transform Tasiast into a world-class mine with low costs and a long estimated mine life Combined Phase One and Phase Two Average annual production (2020-2024) 812,000 ounces Production cost of sales (
Slide 21: Operating Efficiencies Enhancing Project
ATTRACTIVE DEVELOPMENT PROJECTS OPERATING EFFICIENCIES ENHANCING PROJECT Recent operating and processing enhancements have positively benefitted both Phase One and Phase Two expansion projects • Recent performance outperforming study • Further reduction in processing costs expected as estimates Phas
Slide 22: Phase One Progressing Well
ATTRACTIVE DEVELOPMENT PROJECTS PHASE ONE PROGRESSING WELL Phase One construction approximately two-thirds complete • Mechanical installation progressing well: Primary Crusher SAG mill shell fully in place; trunnions and bearings currently being installed Apron feeders for stockpile & reclaim tu
Slide 23: Phase One Progressing Well
ATTRACTIVE DEVELOPMENT PROJECTS PHASE ONE PROGRESSING WELL Phase One on schedule & on budget with full commercial production expected in Q2 2018 SAG mill Reclaim tunnel Leach tanks Oxygen plant 2323 www.kinross.com
Slide 24: Advancing Phase Two
ATTRACTIVE DEVELOPMENT PROJECTS ADVANCING PHASE TWO Phase Two expansion expected to reach commercial production in Q3 2020 • Project owner’s team established • Finalizing commercial terms for EPCM package • Currently advancing critical packages • Initial construction expected to begin early 2018 C
Slide 25: Round Mountain Phase W Overview
ATTRACTIVE DEVELOPMENT PROJECTS ROUND MOUNTAIN PHASE W OVERVIEW Phase W is a large zone of mineralization at depth and to west of the open-pit • With completion of the feasibility study, 2.0 million ounces upgraded to proven and probable gold reserves(i) Gold resource estimates in-line with 2016 y
Slide 26: Phase W Feasibility Study Results
ATTRACTIVE DEVELOPMENT PROJECTS PHASE W FEASIBILITY STUDY RESULTS Project expected to generate a 13% IRR at an assumed gold price of $1,200 per ounce Current mine plan + Phase W Average annual production (2018-2024) 341,000 gold ounces Production cost of sales (2018-2024) $765 per gold equivalent ou
Slide 27: Advancing Phase W
ATTRACTIVE DEVELOPMENT PROJECTS ADVANCING PHASE W Phase W construction expected to be complete in Q2 2019 • State and Federal permitting proceeding as planned • Advancing detailed engineering • Procurement commencing for long lead items and mining equipment • Stripping of Phase W expected to begin e
Slide 28: Developing Bald Mountain's Potential
ATTRACTIVE DEVELOPMENT PROJECTS DEVELOPING 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 of schedule • Added 1.2 million ounces to proven and probable mineral
Slide 29: Doubled Bald Mountain Gold Reserves
ATTRACTIVE DEVELOPMENT PROJECTS DOUBLED BALD MOUNTAIN GOLD RESERVES Successfully doubled gold reserve estimates ahead of schedule and replenished mineral resource estimates, providing opportunities for further reserve conversions South area Proven & Probable Mineral Reserve Estimates(1) 2,133 +568 N
Slide 30: 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 31: Russia Satellite Deposits
ATTRACTIVE DEVELOPMENT PROJECTS RUSSIA SATELLITE DEPOSITS Development of satellite deposits located near Kupol and Dvoinoye in advanced stages September Northeast Moroshka • High-grade deposit located approximately • Located approximately 4 km from Kupol 15 km from Dvoinoye • Decline development wel
Slide 32: Kupol Vein System
EXPLORATION KUPOL VEIN SYSTEM Mineralization open in certain zones, with greatest potential for near-term extensions to the north and south • Completed 44,000 meters of core drilling at North and South extensions in H1 2017 with encouraging results • Commencing geological modelling & evaluation to d
Slide 33: Tasiast Sud
EXPLORATION TASIAST SUD Accelerating drill program and initiating pre-feasibility study at Tasiast Sud • Drilling focused on the C6.13 and C6.15 deposits in the Tasiast Sud area Located immediately south of the Tasiast mine and west of the Tamaya deposit C6.13 • Completed 13,000 metres of drilling
Slide 34: Fort Knox East & South Wall
EXPLORATION FORT KNOX EAST & SOUTH WALL Positive intercepts during 2016 in the East and South Wall of the existing pit; additions to Fort Knox’s inferred resource estimate expected in 2017 East & South Wall significant drill intercepts Interval Au Hole ID From To (m) (g/t) FFC16-1483 36.6 65.5 29 0.
Slide 35: Kettle River: Curlew District
EXPLORATION KETTLE RIVER: CURLEW DISTRICT Promising opportunities in the Curlew District; infill drilling program planned for 2017 to test extensions of mineralized zones Plan Map of the Curlew District Cross Section Looking West N Historic K2 mine Workings Looking West K2 Mine Buckhorn K2 Mine Port
Slide 36: Compelling Relative Value
Compelling Relative Value 36 36 www.kinross.com
Slide 37: 2017E Production & All-In Sustaining Cost
COMPELLING RELATIVE VALUE 2017E PRODUCTION & ALL-IN SUSTAINING COST 2017E Gold Production 2017E All-In Sustaining Cost (million ounces) ($ per ounce) 6.0 $1,200 5.0 $1,000 4.0 $800 3.0 $600 2.0 $400 1.0 $200 0.0 $0 Goldcorp Goldcorp AngloGold IAMGold AngloGold IAMGold Newmont Newmont Gold Fields Gol
Slide 38: Industry-Leading Balance Sheet
COMPELLING RELATIVE VALUE INDUSTRY-LEADING BALANCE SHEET Net debt to EBITDA ratio of 0.6x as of June 30, 2017 Net Debt to EBITDA (LTM) 2.6 1.8 1.7 1.0 0.9 0.6 0.6 0.5 -1.0 Yamana Goldcorp AngloGold Barrick Gold Fields Newmont Kinross Agnico IAMGold Source: Company reports; Bloomberg – net debt to tr
Slide 39: 2017E Metrics
COMPELLING RELATIVE VALUE 2017E METRICS Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities EV / 2017E EBITDA P / 2017E OPERATING CF 12.4 13.8 9.6 8.9 10.3 9.6 9.3 7.6 7.1 6.2 7.1 5.2 5.1 5.9 4.6 5.5 4.5 4.1 Ne
Slide 40: Building Momentum for the Future
2020 2019 Expected 2018 start-up of PHASE W TASAIST 2017 construction PHASE TWO TASIAST expected to 2016 PHASE ONE be complete Expecting expected to stronger year be complete Delivered at BALD RECORD MOUNTAIN production Building Momentum for the Future 4040 www.kinross.com
Slide 41: Appendix
Appendix 4141 www.kinross.com
Slide 42: Currency & Oil Benefits
2017 OUTLOOK CURRENCY & OIL BENEFITS Well-positioned to benefit from favourable currency exchange and oil weakness 2017 Budget Assumptions(3) 2017 Sensitives (net of hedges)(3) Change Estimated impact 2017 Budget Current Spot(i) from to cost of sales Assumptions Gold US$1,200/oz. $1,297/oz. FX 10% U
Slide 43: Fuel & Currency Hedges
FINANCIAL DISCIPLINE FUEL & CURRENCY HEDGES Managing exposure to fluctuations in foreign currency and input commodity prices • Overall 2017 exposure ~37% hedged at favourable rates compared to spot • Continue to monitor our FX and oil exposure and look for opportunities to establish additional input
Slide 44: Fort Knox, USA (100%)
AMERICAS FORT KNOX, USA (100%) Among the world’s few cold climate heap leach facilities • Impressive track record of operational excellence • Achieved its 2nd highest production level in 2015, Fort Knox’s 19th year in operation • Estimated mine life: mill – 2019; mining – 2020 OPERATING RESULTS(4) 2
Slide 45: Round Mountain, USA (100%)
AMERICAS ROUND MOUNTAIN, USA (100%) Strong cash flow generator with opportunities to extend mine life • Incremental, high-margin ounces from Process Solution ESTIMATED MINE LIFE Management (PSM) 16 17 18 19 20 21 22 23 24 25 26 27 • Pending permitting approval, Phase W is expected to Mining generate
Slide 46: Summary of Feasibility Study Results
ROUND MOUNTAIN PHASE W SUMMARY OF FEASIBILITY STUDY RESULTS Operating Estimates (current mine plan + Phase W) Standalone Phase W Estimates Timeline Operational Metric Estimate Estimate Strip ratio 2.9 Life of mine production 1.5 million ounces Average grade processed 0.7 grams per tonne Life of mine
Slide 47: Bald Mountain, USA (100%)
AMERICAS BALD MOUNTAIN, USA (100%) Forecasting strong near-term cash flow with significant upside potential • Acquired in January 2016 • Large estimated mineral resource base with multiple sources of potential mineral reserve additions • Production expected to double in 2017 with reduced costs OPERA
Slide 48: Paracatu, Brazil (100%)
AMERICAS PARACATU, BRAZIL (100%) Large gold mine with a long mine life that extends to 2030 • Paracatu is among the world’s largest gold operations with annual throughput of ~60Mt • Realizing benefits from weakness in the Brazilian real • Estimated mine life: 2030 OPERATING RESULTS(4) 2015 2016 Prod
Slide 49: Kupol-Dvoinoye (100%)
RUSSIA KUPOL-DVOINOYE (100%) Our Russian operations are a model for successfully operating in a remote location • High-grade, low-cost underground mines • Estimated mine life: Kupol – 2020; Dvoinoye – 2018 OPERATING RESULTS(4) 2015 2016 Production (Au. Eq. oz.) 758,563 734,143 Production cost of sal
Slide 50: Foreign Investment in Russia
RUSSIA FOREIGN INVESTMENT IN RUSSIA Foreign Investment Advisory Council The world’s leading companies are invested in Chaired by the Russian Prime Minister, includes Russia CEOs from over 50 international companies 5050 www.kinross.com
Slide 51: Chirano, Ghana (90%)
WEST AFRICA CHIRANO, GHANA (90%) Cost reductions achieved at Chirano by transitioning to self-perform mining • Chirano is an open-pit and underground operation located in southwestern Ghana • Estimated mine life: 2020 OPERATING RESULTS(2,4) 2015 2016 Production (Au. Eq. oz.) 230,488 190,759 Producti
Slide 52: Tasiast, Mauritania (100%)
WEST AFRICA TASIAST, MAURITANIA (100%) Operating mine with a large gold resource located in a prospective district • Phase Two of mill expansion expected to transform Tasiast into a world-class operation; forecast to be completed in Q3 2020 • Estimated mine life: 2029 OPERATING RESULTS(4) 2015 2016
Slide 53: Summary of Feasibility Study Results
TASIAST EXPANSION PROJECT SUMMARY OF FEASIBILITY STUDY RESULTS Operating Estimates (Phase One & Two combined) Standalone Phase Two Estimates Timeline Operational Metric Estimate Estimate Total tonnes mined 438 million Initial capital $590 million Strip ratio 6.4 2020-2024 Average CIL grade processed
Slide 54: Endnotes
ENDNOTES 1) Mineral reserves and mineral resources are estimates. For more information regarding Kinross’ 2016 mineral reserve and mineral resource estimates, please refer to our Annual Mineral Reserve and Mineral Resource Statement as at December 31, 2016 contained in our news release dated Februar
Slide 55: Explanatory Notes - Exploration
EXPLANATORY NOTES - EXPLORATION Kupol Exploration Results A total of 48 diamond drill core holes are reported from Kupol Minex and mine-area exploration activity in 2016. All diamond drill core holes reported are HQ in diameter. The majority of holes presented (18) were drilled at the Kupol Hanging
Slide 56: Explanatory Notes - Exploration
EXPLANATORY NOTES - EXPLORATION Fort Knox Exploration Results Results are reported for 15 diamond drill core holes completed on the East and South walls of the Fort Knox open pit. All 15 of these diamond drill core holes are of HQ3 core diameter . At Fort Knox, the dip of the drill holes are taken f
Slide 57: Explanatory Notes - Exploration
EXPLANATORY NOTES - EXPLORATION Kettle River (Curlew) Exploration Results All 16 drill holes reported from the Curlew district are diamond drill core holes of HQ core diameter. A number of targets in the area were drilled, with eight holes reported from the Lower Portal, three holes from K5, two hol
Slide 58: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 York Street, 17th Floor │Toronto, ON │ M5J 2V5 www.kinross.com 5858 www.kinross.com