Kinross Gold Corporation · TSX:K
Kinross Gold — Investor Presentation (May 2011)
56 slides from Kinross Gold's investor presentation, May 2011
Slide 1: Delivering Disciplined Growth
DELIVERING DISCIPLINED GROWTH KINROSS GOLD CORPORATION May 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: Why Gold? Why Kinross? Why Now?
WHY GOLD? WHY KINROSS? WHY NOW? 3
Slide 4: Industry Production Declining
INDUSTRY PRODUCTION DECLINING • Forecasted world production from gold mining likely to decline 2,800 2,700 s) uction (Tonnes 2 600 2,600 2,500 Gold Produ 2,400 2,300 2,200 2,100 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: GFMS 10 Year Outlook on Gold (December 2010) 4
Slide 5: Increasing Demand for Gold
INCREASING DEMAND FOR GOLD $225 $1,520 Investment / Other Total Fabrication $200 Gold Price (US$/oz) $1,320 Current gold price $175 $1,120 $150 and (US$ billions) oz.) $920 d Price (US$/o $125 $720 $100 Gold Tottal Gold Dema $520 $75 $320 $50 $25 $120 $0 -$80 1999 2000 2001 2002 2003 2004 2005 2006
Slide 6: Fewer Gold Discoveries
FEWER GOLD DISCOVERIES Total gold ounces discovered (mm oz.) 3,500 90 Gold exploration spending (US$ mm) 80 3,000 on spending (US$ mm) 70 Ounc 2,500 60 ces discovered 2,000 50 1,500 40 Gold exploratio d (mm oz.) 30 1,000 20 G 500 10 - 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 200
Slide 7: Why Kinross?
WHY GOLD? WHY KINROSS? WHY NOW? 7
Slide 8: Why Kinross?
WHY KINROSS? 1. Industry-leading growth from a senior gold producer 2. World-class projects with experienced teams and financial resources to build them 3 3. Attractive valuation 8
Slide 9: Continuing the Kinross Transformation
CONTINUING THE KINROSS TRANSFORMATION Kinross Gold Production Yesterday Kinross Gold Production Now(1) 4.5 – 4.9 ction (mm oz) on (mm oz) Gold equivalent produc Gold equivallent productio 2.3 2.6 – 2.7 16 1.6 2005 2010 2011e 2015e (revised upwards) (1) Refer to endnote #1. 9
Slide 10: Focused in the World's Best Districts
FOCUSED IN THE WORLD’S BEST DISTRICTS Dvoinoye Kupol Fort Knox Kettle River-Buckhorn Round Mountain Tasiast Chirano Fruta del Norte Crixas Paracatu La Coipa Lobo-Marte Maricunga Cerro Casale 10 operating mines 5 development projects 10
Slide 11: Q1 2011 Results: Continuing to Deliver
Q1 2011 RESULTS: CONTINUING TO DELIVER Revenue Adjusted Operating Cash Adjusted Net Earnings(2) +42% Flow(2) +81% $937 +67% $398 $180 US$ millions $658 $239 $100 $0.34/sh $0.35/sh $0.16/sh $0.14/sh Q1 2010 Q1 2011 Q1 2010 Q1 2011 Q1 2010 Q1 2011 (2) Refer to endnote #2. 11
Slide 12: Delivering Expanding Margins
DELIVERING EXPANDING MARGINS 2005 – Q1 2011: $784 • Average realized gold price: +198% • Kinross’ attributable margin(3,4): +361% $683 +361% butable margin ($ per ounce) $530 $436 $329 $279 Attrib $170 2005 2006 2007 2008 2009 2010 Q1 2011 (3) Refer to endnote #3. (4) Refer to endnote #4. 12
Slide 13: Growing Cash Flow per Share
GROWING CASH FLOW PER SHARE • 5-yr CAGR : 21% $1.36 $1.32 w per Share (US$)(2) $1.01 $0.80 Adjustted Cash Flow $0.56 $0.51 $0.35 2005 2006 2007 2008 2009 2010 Q1 2011 (2) Refer to endnote #2. 13
Slide 14: Increasing Gold Resources
INCREASING GOLD RESOURCES 110 Inferred Resources 140 Measured & Indicated Resources 100 Proven and Probable Reserves 120 T t l resource ounce per 1,000 Total 1 000 shares h 24 0 24.0 90 00 shares 80 100 esources (mm oz.)(5) 16.2 70 17.7 20.7 Gold resource oz per 1,00 7.0 80 60 16.6 11.1 13.7 50 60 G
Slide 15: Track Record of Reserve Growth
TRACK RECORD OF RESERVE GROWTH ORGANIC KINROSS RESERVE ADDITIONS TODAY WEST AFRICA 9.7 62.4 Reserves(5) RESERVE ADDITION 2.4 10.0 51.0 PRODUCTION 58 5.8 obable Gold R DEPLETION CERRO CASALE 25% (mm oz) SALE Proven and Pro 19.4 2004 2009 009 2010 0 0 Numbers may not add due to rounding *As of Decembe
Slide 16: 2011 Production Guidance
2011 PRODUCTION GUIDANCE • Kinross’ global portfolio of operations to produce 2.6 – 2.7 mm oz in 2011(1) Production % of Total Region Production cost / oz. (000 ounces ) Production South America 1,000 – 1,070 39% $585 - $650 North America 590 – 630 23% $625 - $685 West Africa 440 – 500 18% $595 - $6
Slide 17: Strong Balance Sheet
STRONG BALANCE SHEET • Cash on hand at March 31, 2011: $1.6 bn • Equity pipeline investment portfolio valued at $113 $113.4 4 mm As at March 31, 2011 $1,561 US$ millions $591 $470 Cash and cash equivalents Long-term investments & Total debt investments in associates 17
Slide 18: Project Pipeline
PROJECT PIPELINE Project 2011 2012 2013 2014 2015 Paracatu a aca u desu desulphurization p u a o nic growth Paracatu 3rd ball mill Maricunga SART plant Organ Paracatu 4th ball mill Dvoinoye Tasiast ent Lobo Marte Lobo-Marte Developme Fruta del Norte Cerro Casale Conceptual timeline based on current
Slide 19: Gold Production from New Projects
GOLD PRODUCTION FROM NEW PROJECTS +1.3(i) oduction (mm oz) Estimated average annual gold pro +0.41(ii) +0.35(ii) Tasiast Expansion Fruta del Norte Lobo Marte Lobo-Marte (i) Does not include current Tasiast production; estimated average annual production for first full 8 years (ii) Estimated average
Slide 20: Tasiast, Mauritania
TASIAST, TASIAST MAURITANIA 20
Slide 21: Mauritania: Key Facts
MAURITANIA: KEY FACTS # Producing Mine # Exploration / Development Project • Among most sparsely-populated countries 1) 2) Tasiast(Robinson) Tasiast (Kinross) - –Au Au Guelb Moghrein (First Quantum) – Cu/Co/Au 3) Askaf Askaf(Sphere (Xstrata)Minerals) – Iron Ore – Iron Ore • Gained independence from
Slide 22: Tasiast, Mauritania
TASIAST, MAURITANIA Greenstone Rocks • Expanded drilling program Banded Iron Fm Intrusives focused around existing Tasiast Felsic Volcanics Greenschist mine Tenements Tasiast Shear 2010 Resource Shell • Only 8 km of 80 km strike length tested 20.0 km 22
Slide 23: Progression of Drilling at Tasiast
PROGRESSION OF DRILLING AT TASIAST January 2011 February 2010 April 2009 Tasiast Shear 2010 Resource Shell 23
Slide 24: Exploration Update at Tasiast
EXPLORATION UPDATE AT TASIAST • 3 additional drills added in January 2011; 26 drills currently on site • Drilled D ill d 65 65,000 000 m iin th the W Westt B Branch h area iin Q1 2011 Targeting deeper extensions of the Greenschist Zone • New N sample l prep ffacility ilit iin N Nouakchott k h tt t
Slide 25: Tasiast Orebody & Resource Pit
TASIAST OREBODY & RESOURCE PIT 25
Slide 26: Tasiast Greenschist Zone
TASIAST GREENSCHIST ZONE LONG-SECTION GST 1km 26
Slide 27: Resource Growth at Tasiast
RESOURCE GROWTH AT TASIAST 8.6 ons)(5,6) 5.1 Ounces (millio 1.9 2.1 O 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 M
Slide 28: Tasiast Scoping Study
TASIAST SCOPING STUDY • 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 29: Tasiast, Mauritania
TASIAST, MAURITANIA • Procurements for expanded mine fleet made Shovels and drills now out to tender Purchased generators with 16 MW of capacity • Retained international EPCM joint-venture firm for feasibility study Basic engineering commencing Q2 2011 • ADR plant and new dump leach facility u
Slide 30: Fruta del Norte, Ecuador
FRUTA DEL NORTE, NORTE ECUADOR 30
Slide 31: Fruta del Norte, Ecuador
FRUTA DEL NORTE, ECUADOR • Prepared pre-feasibility study and technical report • Underground operation estimated 16-year mine life • LOM avg. production estimate : 410k Au eq. oz. / year Expected avg. gold grade of 8.07 g/t Expected avg. gold recovery of 93% • LOM avg. cost of sales expected to
Slide 32: Fruta del Norte, Ecuador
FRUTA DEL NORTE, ECUADOR • Advancing the exploration decline: Construction of the portal high wall commenced Development of the decline is expected to start-up in Q3 2011 and is expected to be complete in Q1 2013 Expect to develop 600 m of decline by year-end • Advancing permitting: Expect t
Slide 33: Lobo-Marte, Chile
LOBO-MARTE, LOBO-MARTE CHILE 33
Slide 34: Lobo-Marte, Chile
LOBO-MARTE, CHILE • Completed pre-feasibility study update • 10 10-year year mine life • Expected 47,000 tpd heap leach with SART plant • Annual production estimate: 350k oz. per year Expected avg avg. grade: 1.17 1 17 g/t Expected avg. recovery: 60-70% • Cost of sales estimate: ~$500/oz; Lobo F
Slide 35: Lobo-Marte, Chile
LOBO-MARTE, CHILE • 20,000 m drill campaign 70% complete Geotechnical drilling has been completed Geotechnical and mine block models expected to be completed in Q3 2011 • Exploration E l ti d drilling illi att Valy V l Prospect P t Located 3 km south of Lobo deposit Geological and drill expl
Slide 36: Kupol & Dvoinoye, Russia
KUPOL & DVOINOYE, RUSSIA == aa
Slide 37: Increasing Kupol Ownership to 100%
INCREASING KUPOL OWNERSHIP TO 100% • Kinross increased Kupol ownership to 100% Includes the Kupol East-West East West exploration licenses • Total consideration: approx. $350 million To be financed through proceeds of Harry Winston share sale and non-recourse debt facility of $200 million • Cons
Slide 38: Dvoinoye, Russia
DVOINOYE, RUSSIA • Underground mine with an expected 8-year mine life Expected avg avg. output of 900 tonnes per day (2013 (2013-2020) 2020) • Ore to be processed at the Kupol mill Throughput expected to increase to 4,000 tpd • Initial capital estimate: ~$300 $ million • Development of explorati
Slide 39: Why Now?
WHY GOLD? WHY KINROSS? WHY NOW? 39
Slide 40: BMO: P/NAV
BMO: P/ 6% NAV 1.2 1.0 0.9 0.7 0.7 0.6 AGNICO GOLDCORP BARRICK NEWMONT YAMANA KINROSS Source: BMO Gold Pages – May 16, 2011 40
Slide 41: BMO: P / 2011e Cash Flow
BMO: P / 2011e CASH FLOW 14.9 14.8 11.9 8.4 8.3 8.0 AGNICO GOLDCORP KINROSS BARRICK YAMANA NEWMONT Source: BMO Gold Pages – May 16, 2011 41
Slide 42: 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
Slide 43: Why Kinross?
WHY KINROSS? 1. Industry-leading growth from a senior gold producer 2. World-class projects with experienced teams and financial resources to build them 3 3. Attractive valuation 43
Slide 44: Appendix
APPENDIX 44
Slide 45: Fort Knox, USA (100%)
FORT KNOX, USA (100%) • Located in Alaska • Expansion E i and d new h heap lleach h tto extend mine life OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) Q1 2011 65,047 $628 Q1 2010 69,640 $517 2010 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thousands) (g/t) (thousands) 2P Re
Slide 46: Round Mountain, USA (50%)
ROUND MOUNTAIN, USA (50%) • Kinross-operated JV with Barrick • L Located t d iin N Nevada, d USA • Open-pit mine OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) Q1 2011 42,121 $792 Q1 2010 45,629 $578 2010 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thousands) (g/t) (thousand
Slide 47: Kettle River-Buckhorn, USA (100%)
KETTLE RIVER-BUCKHORN, USA (100%) • Entered production in Q4/08 • S ll ffoot-print, Small t i t underground d d mine i • Near-mine exploration targets OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) Q1 2011 45 852 45,852 $375 Q1 2010 48,405 $280 2010 GOLD RESERVES AND RESOURCES(5) TO
Slide 48: Kupol, Russia (100%)
KUPOL, RUSSIA (100%) • Completed transaction increasing ownership to 100% from 75% on April 27, 2011 • 3,000 tpd mill with open-pit and underground • Mill to process high-grade ore from nearby Dvoinoye deposit OPERATING RESULTS (75%) PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) Q1 2011 154 257 154,
Slide 49: Paracatu, Brazil (100%)
PARACATU, BRAZIL (100%) • Recoveries near target • M j expansion Major i commissioning i i i • Adding 3rd and 4th ball mills OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) Q1 2011 100 427 100,427 $690 Q1 2010 117,473 $555 2010 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thou
Slide 50: Crixas, Brazil (50%)
CRIXAS, BRAZIL (50%) • JV with AngloGold Ashanti • Underground U d d mine i llocated t d iin th the Brazil OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) Q1 2011 14 813 14,813 $741 Q1 2010 18,856 $432 2010 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thousands) (g/t) (thousan
Slide 51: La Coipa, Chile (100%)
LA COIPA, CHILE (100%) • Gold/silver mine in the Maricunga district • Comprehensive exploration program OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) Q1 2011 54 446 54,446 $596 Q1 2010 47,664 $511 2010 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thousands) (g/t) (thousands)
Slide 52: Maricunga, Chile (100%)
MARICUNGA, CHILE (100%) • Located the highly prospective Maricunga District • Open pit, heap leach operation OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) Q1 2011 58,740 $482 Q1 2010 51,777 $566 2010 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thousands) (g/t) (thousands) 2
Slide 53: Tasiast, Mauritania (100%)
TASIAST, MAURITANIA (100%) • Open-pit mine ~300 km north of the city of Nouakchott • Remote, flat, sparsely populated desert OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) Q1 2011 51,321 $499 Kinross acquired the Tasiast mine on September 17, 2010. 2010 GOLD RESERVES AND RESOURCES(5
Slide 54: Chirano, Ghana (90%)
CHIRANO, GHANA (90%) • 90% owned by Kinross; Government of Ghana holds a 10% carried interest • 9 open-pits and 2 recently- discovered underground deposits OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) Q1 2011 55,833 $706 Kinross acquired the Chirano mine on September 17, 2010. 201
Slide 55: Endnotes
ENDNOTES 1) For more information regarding Kinross production and cost forecast for 2011 and production target for 2015, please refer to the press release dated May 3, 2011, available on our website at www.kinross.com. 2) Adjusted Adj t d nett earnings i and d adjusted dj t d operating ti cashh flow
Slide 56: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 YORK STREET, 17TH FLOOR TORONTO, ON M5J 2V5 WWW.KINROSS.COM 56