Kinross Gold Corporation · TSX:K
Kinross Gold — Merger or Acquisition (February 2007)
31 slides from Kinross Gold's merger presentation, February 2007
Slide 1: Delivering Disciplined Growth
Delivering Disciplined GROWTH February 2007
Slide 2: Cautionary Statement
Cautionary Statement All statements, other that statements of historical fact, contained or incorporated by reference in this presentation, including any information as to the future financial or operating performance of Kinross constitute "forward-looking statements" within the meaning of certain s
Slide 3: Tye W. Burt and Clive T. Johnson
Tye W. Burt Clive T. Johnson President & CEO Chairman, President & CEO Kinross Gold Corporation Bema Gold Corporation 3
Slide 4: Acquisition Terms
Acquisition Terms Structure: Plan of Arrangement Tax-free share for share exchange (Cdn) Exchange Ratio: 0.441 of a Kinross share for each Bema share C$6.61 per share(1) Consideration Premium of 34% to the 20-day volume weighted average Offered: price of Bema shares Transaction value of C$3.5 Billio
Slide 5: Strategic Rationale
Strategic Rationale Significant increase to Mineral Reserve and Resource base 68% increase to Kinross’ 2005 reported gold reserves 38% increase to Kinross’ 2005 reported gold resources Kupol is a world class growth project Reserves: 4.4 million ounces of gold, 54 million ounces of silver Fully finan
Slide 6: Strategic Rationale continued…
Strategic Rationale continued… Consolidates ownership of Refugio in Chile Kinross operated; consistent production since restart in late 2005 Cerro Casale Strategic asset: Chile, globally Immediate synergies and accretion to NAV Cash flow and earnings accretive in 2009 and beyond 6
Slide 7: Value for Bema Shareholders
Value for Bema Shareholders Attractive premium 34% premium to Bema’s 20-day weighted trading price on TSX Greater upside in stronger pro forma entity Bema shareholders will own approximately 39% of pro forma Kinross (diluted*) Balanced asset portfolio Reserves: Chile 39%, Brazil 37%, North America 1
Slide 8: Exploration Alliance
Exploration Alliance Kinross to participate in private exploration and development company with Clive Johnson and team Accomplished exploration and development team Will have $20 million in assets including Bema’s interest in the Petrex mine Kinross to own 9.9% with right to increase to 19.9% Russia
Slide 9: Kinross: A Major Gold Producer
Kinross: A Major Gold Producer 2006 estimated: Gold equivalent production – 1.44 million ounces Cost of sales1 – est. $320 per ounce ~3,500 employees in 4 countries Straight-forward balance sheet Simple debt structure No gold hedging Continuing reserve growth 24.7 million ounces at Dec. 31/05 ($400/
Slide 10: Four-Point Plan
Four-Point Plan OBJECTIVE: ENHANCE NET ASSET VALUE AND CASH FLOW PER SHARE GROWTH FROM BUILDING BLOCKS BEST NEW THE CORE FOR THE FUTURE PEOPLE OPPORTUNITIES Regionally Strengthened Paracatu Round Mountain streamlined management team expansion underground approach & board Round Mountain Implementing
Slide 11: Kinross - Third Quarter 2006
Kinross - Third Quarter 2006 Revenue of $223.6 million Gold equivalent production was 365,555 ounces (full year 2006 production expected to exceed original estimate of 1.44 mm gold equivalent ounces by approx. 20,000 – 30,000 ounces) Cost of sales1 of $321 per ounce on 359,827 gold equivalent ounces
Slide 12: Refining Portfolio
Refining Portfolio NON-CORE ASSETS SOLD George/Goose Lake Aquarius E-Crete Blanket Norseman Katanga New Britannia (in process) Equity positions Lupin (in process) NEW INVESTMENTS Brett Resources Verena Minerals Crown Resources X-Cal 12
Slide 13: Complementary Asset Base
Complementary Asset Base Kupol (75%) Chukotka, Russia (Open pit, U/G) Fort Knox (100%) Alaska, USA (Open pit) Julietta (90%) Magadan, Russia (U/G) Musselwhite (32%) Ontario, Canada (U/G) Kettle River (100%) Washington, USA (U/G) Porcupine (49%) Round Mountain (50%) Ontario, Canada (Open pit, U/G) Ne
Slide 14: Superior Growth Profile
Superior Growth Profile PRO FORMA PRODUCTION 2006E-2009E (M Au Eq.oz) Kinross Bema 56% 2.8 2.3 0.9 1.8 0.6 1.8 0.3 0.3 1.9 1.5 1.7 1.5 2006E 2007E 2008E 2009E Source: Available street research consensus. 14
Slide 15: Superior Growth Profile
Superior Growth Profile PRODUCTION GROWTH 2006-2009 56% 53% 47% 36% 18% 14% 11% 2% Barrick Newmont Polyus AngloGold Gold Fields Harmony Goldcorp Kinross (to 2010) + Bema 1. Source: Company filings and guidance, investor presentations and available street research estimates. 2. Goldcorp production gr
Slide 16: Exceptional Reserves & Resources
Exceptional Reserves & Resources MINERAL RESERVES AND RESOURCES*(1) +68% Proven and Probable Gold Reserves (M oz Au) +38% Measured and Indicated Gold Resources 50.0 8.4 30.8 6.1 19.2 41.6 2.3 24.7 16.9 Kinross Bema New Kinross * M ounces Au equivalent at Dec 31, 2005 & subsequent news releases (1) C
Slide 17: Balanced Geographic Diversification
Balanced Geographic Diversification 2005 RESERVES(1) KINROSS PRE-TRANSACTION PRO FORMA KINROSS North America North 27% Chile America Chile 10% 16% 39% Brazil 63% Brazil Russia 37% 8% (1) Company filings and subsequent new releases (Petrex reserves and resources excluded from Bema). For disclosure on
Slide 18: Balanced Geographic Diversification
Balanced Geographic Diversification 2009E PRO FORMA PRODUCTION (1) Brazil 28% North America 45% Russia 17% Chile 10% (1) Source: Kinross and estimated LOM annual production of 550K oz Au for Kupol from Bema corporate presentations. 18
Slide 19: Expanded Project Pipeline
Expanded Project Pipeline EXPLORATION PRE-FEASIBILITY FEASIBILITY CONSTRUCTION PRODUCTION Kupol Paracatu Expansion Buckhorn: Kettle River Cerro Casale Pancho: Refugio Fort Knox Heap Leach Gold Hill: Round Mountain Ladera Farellon: La Coipa Round Mountain U/G Gurupi Monte do Carmo (Verena) Patrocinio
Slide 20: Competitive Cost Profile
Competitive Cost Profile 2006 ESTIMATED COST OF SALES (US$/oz Au) $414 $359 $329 $300 $300 $285 $264 $120 Harmony Gold Fields Kinross Newmont AngloGold Barrick Polyus Goldcorp + Bema MINE 2009E COST 2009E PRODUCTION (US$/oz Au eq.) (%) Kupol Approx. $130 17% Paracatu Expansion Approx. $230 23% Kettl
Slide 21: Attractively Priced Reserves
Attractively Priced Reserves MARKET CAP PER OUNCE OF MINERAL RESERVES $538 $368 $210 $218 $179 $195 $153 $120 Harmony Gold Fields Kinross + Barrick AngloGold Newmont Polyus Goldcorp Bema Source: Available street research as at November 6, 2006. Kupol 2009E costs assumes silver converted to gold equi
Slide 22: Pro Forma Financial Metrics
Pro Forma Financial Metrics (all dollar amounts in US dollars) KINROSS BEMA NEW KINROSS (1) (1) (2) Shares Outstanding (millions) 362 482 594 Share Price (3) $12.57 $6.23 $12.57 Market Capitalization (billions) $4.6 $3.0 Est. $7.5 (4) Debt (millions) $88 $266 $354 (5) (6) Cash (millions) $135 $182 a
Slide 23: Four Point Plan in Action
Four Point Plan in Action Growth from core assets: Buckhorn in 2007 Paracatu expansion in 2008 Kupol in 2008 Strengthened team in Russia Building blocks for further expansion Exciting exploration and development upside in four key regions 23
Slide 24: A Great New Company
A Great New Company Est. US$7.5B market cap company with industry leading growth profile 56% growth in production 2006 to 2009 World-class, low-risk, geographically-diversified asset base Mineral Reserves and Resources Approx. 50 million oz of gold (approx. 80 million oz of silver; 2.9 billion lbs o
Slide 25: A Great New Company continued…
A Great New Company continued… Excellent projects under construction – Paracatu, Kupol, Buckhorn District exploration opportunity pipeline: Chile, Russia Strong financial position to fund project pipeline Pro forma cash balance of approx. $350 million Declining cost profile Experienced management te
Slide 26: Kinross Outperforms
Kinross Outperforms 1.50 1.30 Relative Performance +19% 1.10 +14% 0.90 -17% 0.70 Jan-06 Dec-06 Feb-06 Mar-06 May-06 Jun-06 Jul-06 Oct-06 Nov-06 Jan-07 Sep-06 Apr-06 Aug-06 Major North American Gold Producers (Average) Kinross Gold Price Major North American Gold Producers include: Barrick and Newmon
Slide 27: Kinross Gold Corporation and Bema Gold Corporation
KINROSS GOLD CORPORATION BEMA GOLD CORPORATION 40 King Street West, 52nd Floor, 3100 – 595 Burrard Street Scotia Plaza, Toronto, ON M5H 3Y2 Vancouver, BC V7X 1J1 Tel: 416-365-5123 Fax: 604-681-8209 Fax: 416-363-6622 Toll Free: 800-316-8855 Toll Free: 866-561-3636 info@kinross.com investor@bemagold.c
Slide 28: Delivering Disciplined Growth
Delivering Disciplined GROWTH February 2007
Slide 29: Appendices
Appendices
Slide 30: Performance
Performance Share Price Performance vs Output Cost of Slow maintaining Growth increasing Target Zone asset base exceed Share Price Super benefits of Senior* scale • ABX – 12% Rapid Senior* • AU – (8%) Seniors with ≥ Growth • G– 15% • GFI – 3.5 MM oz pa Intermediate* • HMY – 31% 23% output under- • A
Slide 31: Complementary Asset Base
Complementary Asset Base Zaldivar El Salvador Porterillos El Penon Agua de Falda Esperanza La Coipa Cominor JV Siete Hermanas La Isla Soledad Escondido INA La Pepa Volcan Pantanillo Refugio ENT Cacique Santa Cecilia Quebrada ARG Cerro Casale Pascua Lama La Coipa (50%) Chile (Open Pit) Cerro Casale (