Kinross Gold Corporation · TSX:K
Kinross Gold — Denver Gold Forum 2009
43 slides from Kinross Gold's conference presentation, Sep 16, 2009
Slide 1: Delivering Disciplined Growth
Delivering Disciplined Growth Denver Gold Forum – September 16th, 2009
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 this presentation, including any information as to the future financial or operating performance of Kinross, constitute “forward-looking information
Slide 3: Why Kinross?
Why Kinross? 1. Growing margins, growing cash flow Kinross today: • Portfolio of 8 operating mines g costs declining o Production rising, g o Higher margins, CFPS(1): 5 yr CAGR: 20% • Policy of no gold-hedging o Strong balance sheet • Pure gold/silver producer 2. Pipeline of future opportunities • ‘
Slide 4: Declining world supply from mine production
Declining world supply from mine production 2001: Peak Production 3000 2500 Other 2000 Big Four* Tonnes 1500 1000 500 0 1969 1974 1979 1984 1989 1994 1999 2004 *S South th Africa, Af i United U it d States, St t Australia, A t li Canada C d DENVER GOLD FORUM Source: GFMS Gold Survey 2009 4 SEPTEMBER
Slide 5: Increasing demand for gold
Increasing demand for gold $110 $1,000 Investment / Other $100 Fabrication $900 Gold price (US$/oz) $90 $800 billions) $80 $700 oz) Demand (US$ b $70 d Price (US$/o $600 $60 $500 $50 $400 Gold Total Gold D $40 $300 $30 $200 $20 $10 $100 $0 $0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 DENVER
Slide 6: Major gold discoveries: 1997-2007
Major gold discoveries: 1997-2007 3,000 90 MM oz.) nding 80 Discoveries (M 2 500 2,500 ate Stage Spen 70 2,000 60 50 e of Major Au D Grassroots + La 1,500 (US$ MM) 40 1,000 30 ar Average of G 3 Year Average 20 500 10 - 0 3 Yea 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 # of Major 10 8 5
Slide 7: World gold reserves and resources
World gold reserves and resources Total Reserves & Resources Top Countries (mm ozs) (mm ozs) Total Reserves & Country % Resources Brazil Chile 1. South Africa 997 29.7% United States 2. Russia 225 6.7% Russia South Africa 3. Australia 193 5.8% 4. Indonesia 193 5.8% Mexico 5. U.S 177 5.3% Canada 6. C
Slide 8: World gold reserves and resources
World gold reserves and resources Total Reserves & Resources Top Countries (mm ozs) (mm ozs) Total Reserves & Country % Resources Brazil Chile 1. South Africa 997 29.7% United States 2. Russia 225 6.7% Russia South Africa 3. Australia 193 5.8% 4. Indonesia 193 5.8% Mexico 5. U.S 177 5.3% Canada 6. C
Slide 9: Relative global production growth by region
Relative global production growth by region Latin America Asia CIS Oceania Africa North America 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: GFMS World Gold Survey 2009 DENVER GOLD FORUM 9 SEPTEMBER 16TH, 2009
Slide 10: Growing margins… growing cash flow
Growing margins… growing cash flow • 47% production growth: 2007 to 2009e • Y-o-Y Costs declined 7% in Q2’09* • Margins up 350% since 2002 • CFPS growth – 20% 5-yr CAGR** *Versus Q2’08 10 **Based on full year-end results 2003 - 2008
Slide 11: Focused portfolio of mines & projects in 5 countries
Focused portfolio of mines & projects in 5 countries Mines and projects: Chile USA • Maricunga • Fort Knox • p La Coipa • Kettle River - • Lobo-Marte Buckhorn • Cerro Casale • Round Mountain Brazil Russia • Paracatu • Kupol • Crixas Ecuador • Fruta del Norte DENVER GOLD FORUM 11 SEPTEMBER 16TH, 2009
Slide 12: Production guidance for 2009: up 30% over 2008
Production guidance for 2009: up 30% over 2008 Production Cost of Number Estimated Country Ounces (000s) % of 2009e total Sales / oz. of Mines Mine Life Chile 450 – 500 20% $425 – 460 2 16+ Bra il Brazil 480 – 550 22% $525 – 570 2 30+ Russia(4) 675 – 725 30% $265 – 290 1 8+ USA 625 – 680 28% $440 –
Slide 13: Growing production & declining costs
Growing production & declining costs Production (mm oz.) Cost of Sales ($/oz.)(3) 2.3 – 2.4 $421 1.8 $390 - $420 1.6 $368 (2) (2) 2007 2008 2009e 2007 2008 2009e (2) Please refer to endnote #2. DENVER GOLD FORUM (3) Please refer to endnote #3. 13 SEPTEMBER 16TH, 2009
Slide 14: Kinross margins expanding
Kinross margins expanding • Average realized gold price is up 199% $478 $481 • Kinross’ cost of sales margin(6) up 350% $436 Up 350% $329 $279 $161 $170 $135 $107 2002 2003 2004 2005 2006 2007 2008 Q1 2009 Q2 2009 DENVER GOLD FORUM (6) Please refer to endnote #6. 14 SEPTEMBER 16TH, 2009
Slide 15: Margin performance
Margin performance (2002 – Q2 2009) • 5-year CAGR*: KGC: +350% • Gold price: 19% NEM +297% NEM: 297% • Kinross margin: 26% GG: +140% ABX: +116% FY'02 FY'03 FY'04 FY'05 FY'06 FY'07 FY'08 Q2 2009 *Based on full year-end results 2003 - 2008 DENVER GOLD FORUM 15 SEPTEMBER 16TH, 2009
Slide 16: Strong financial & operating results
Strong financial & operating results • Record p production & revenue in 2008 • Q2’09 CFPS(5): $0.33 (up 83% Y-o-Y) • Growing reserves and resources (5) Please refer to endnote #5. 16
Slide 17: Q2 2009 results
Q2 2009 results Realized COS Margin(6) % (in millions, except ounces and per share Q2’09 Q2’08 Gold Price +10% amounts) change +1% $481/oz $915/oz Gold equivalent production (oz.) 560,479 406,032 38% Gold equivalent sales (oz.) 583,607 330,633 77% Revenue $598.1 $298.7 100% Cost of Sales -7% Cash Fl
Slide 18: Growing cash flow per share
Growing cash flow per share Cash flow (before changes in working capital)(1,5) H1’09 vs. H1’08(5): • Gold price -1% $1 01 $1.01 • Cash flow per share +88% $0.80 $0.64 $0.56 $0.51 $0.45 $0 41 $0.41 $0.34 FY'03 FY'04 FY'05 FY'06 FY'07 FY'08 H1'08 H1'09 DENVER GOLD FORUM (1) Please refer to endnote #1.
Slide 19: Gold resource growth: 14% 5-yr CAGR
Gold resource growth : 14% 5-yr CAGR 80.0 140 (9) Inferred Resources 21.2 (7,8) Measured & Indicated Resources 70.0 Proven and Probable Reserves (7) 120 (10) Total resourrce ounce per 1,000 shares Total ounces per 1,000 shares 60.0 7.0 100 19.1 11.1 50.0 80 M oz. 40.0 3.9 60 2.9 8.0 30 0 30.0 45 4.5
Slide 20: Balanced portfolio
Balanced portfolio • Reserves and resources are well diversified geographically • Expected mine life 20+ years, all in core regions 2P Reserves(7,8) M&I Resources(7,8) Inferred Resources(7,8,9) 45.6 mm oz. 19.1 mm oz. 21.3 mm oz. Russia Russia 7% USA USA 6% USA Brazil Chile 12% 3% 14% 32% Chile Chil
Slide 21: Pipeline of projects for the future
Pipeline of projects for the future • Expansions being completed in ‘09 • Further F th organic i growth th att our mines i • Advancing next suite of projects • Exploration & JV strategies 21
Slide 22: Lobo-Marte, Chile
Lobo-Marte, Chile La Coipa ((2P: 1.06 g g/t)) • Located in Chile, near current Kinross Lobo-Marte ~110 km operations (M&I: 1.72 g/t) m • Development stage asset with large gold Maricunga (2P: 0.72 g/t) resources Cerro Casale • Infrastructure in place (2P: 0.61 0 61 g/t) • Opportunity to leverage Kin
Slide 23: Lobo-Marte, Chile
Lobo-Marte, Chile • Project parameters under consideration(11) o Phase 1: Truck 2.4 g/t ore to La Coipa mill o Phase 2: 40 – 50k tpd heap leach operation o Initial capital: approx. $450 – 500 mm o Approx. pp 350,000 , ozs / yyr o SART plant to increase recoveries • Recent milestones: o Scoping study
Slide 24: Fruta del Norte, Ecuador
Fruta del Norte, Ecuador Quito • Project parameters under consideration(11): o Underground mine o 3,000 , tpd p milling g capacity p y • Recent milestones: o Ecuador Mining Law approved (January ‘09) o Environmental Management Plan completed, submitted and approved • Next steps: o Awaiting final app
Slide 25: Fruta del Norte / Condor
Fruta del Norte / Condor • 2009 spending: FDN o Fruta del Norte: $ $25 mm o Condor project exploration: $10 mm • Exploration Plan: Pull-apart o Exploration of FDN basin and basin Condor trend to identify new FDN- type targets o Total 2009 planned drilling: 26,900 m DENVER GOLD FORUM 25 SEPTEMBER 16T
Slide 26: Cerro Casale, Chile
Cerro Casale, Chile La Coipa ((2P: 1.06 g g/t)) • Project parameters under consideration(11): o Open-pit mine with 18 yr. mine life Lobo-Marte ~110 km (M&I: 1.72 g/t) o 54 Mt/a ore processing plant and a 37 Mt/a heap m leach M i Maricunga o Avg. annual production (first full 10 yrs.)* (2P: 0.72 g/t)
Slide 27: Current mines: expansion projects
Current mines: expansion projects Maricunga, Chile – Expansion(11) o Scoping study completed late 2008 o Expanded throughput could increase annual production o Pre-feasibility expected at end of 2009 L C La Coipa, i Chile(11) Chil o Land package doubled in 2008 to 98,000 ha o Comprehensive district
Slide 28: Project pipeline
Project pipeline A. Near completion 2009 2010 2011 2012 2013+ Paracatu Expansion Production Fort Knox Expansion Production B. Expansions Maricunga Engineering Construction Production Paracatu Phase 3 Engineering Construction Production C. New Projects Lobo‐Marte Metallurgical Testing Engineering Con
Slide 29: Valuation and performance
V l ti and Valuation d performance f 29
Slide 30: P/E & P/CFPS
P/E & P/CFPS P/E P/CFPS: 2009 95.1 46.8 62.2 28.2 39.3 17.6 22.2 21.0 13.0 11.7 AEM GG NEM KGC ABX AEM GG KGC ABX NEM DENVER GOLD FORUM 30 SEPTEMBER 16TH, 2009
Slide 31: Kinross Key Objectives for 2009
Kinross Key Objectives for 2009 9 Complete Aurelian integration 9 Close Lobo-Marte acquisition from Teck 9 Lock-in L k i significant i ifi t share h off iinputt costs t 9 Strengthened liquidity: close $415 mm equity issue 9 Replace Operations’ reserves 9 Add tax-effective cash flow in Ca
Slide 32: Why Kinross? Growing margins, growing cash flows
Why Kinross? 1 Growing margins, 1. margins growing cash flows 2. Pipeline p of future opportunities pp 3. Compelling valuation DENVER GOLD FORUM 33 SEPTEMBER 16TH, 2009
Slide 33: Endnotes
Endnotes (1) Unless otherwise stated, all cash flow and cash flow per share figures in this presentation are before changes in working capital. Cash flow before changes in working capital is a non-GAAP measure and is defined as cash flow provided from operating activities before changes in operating
Slide 34: Appendix
Appendix: DENVER GOLD FORUM 35 SEPTEMBER 16TH, 2009
Slide 35: Paracatu, Brazil (100%)
Paracatu, Brazil (100%) • Expansion to triple throughput to 60 mtpa • Expected to reach full capacity Q4’09 • Mine life out to 2041 Operating Results Operating p g Production Cost of Sales Results (Au eq. oz.) ($/oz.) H1’09 160,203 $683 2008 , 188,156 $450 $ Reserves and Resources(7) Tonnes Grade Ou
Slide 36: Crixas, Brazil (50%)
Crixas, Brazil (50%) • JV with AngloGold Ashanti • Underground mine located in the Brazil Operating Results Operating Production Cost of Sales Results ((Au eq. q oz.)) (($/oz.)) H1’09 32,241 $425 2008 87,669 $302 Reserves and Resources(7) Tonnes Grade Ounces (x 1,000) (g/t) (x 1,000) 2P Reserves 2,8
Slide 37: Maricunga, Chile (100%)
Maricunga, Chile (100%) • In the highly prospective Maricunga District • Open pit, heap leach operation • Pre-stripping of Pancho pit • Expansion under review Operating Results Operating O ti P d ti Production C t off S Cost Sales l Results (Au eq. oz.) ($/oz.) H1’09 116,439 $529 2008 223 341 223,34
Slide 38: La Coipa, Chile (100%)
La Coipa, Chile (100%) • Gold/silver mine in the Maricunga district • Mill facility located 60km from Lobo-Marte deposits • Comprehensive exploration program Operating Results* Ope at g Operating Production Cost of Sales Results (Au eq. oz.) ($/oz.) H1’09 130,722 $392 2008 , 226,293 $489 $ Reserves
Slide 39: Kupol, Russia (75%)
Kupol, Russia (75%) • 3,000 tpd mill with open-pit and underground operation • 2009 tto b be fifirstt ffullll year off production d ti Operating Results Operating Production Cost of Sales Results (Au eq. oz.) ($/oz.) H1’09 368,541 $246 2008 469,907 $220 Reserves and Resources(7) Tonnes Grade Ounces
Slide 40: Fort Knox, USA (100%)
Fort Knox, USA(100%) • Located in Alaska • Expansion and new heap leach to extend t d mine i lif life and d llower costs t • Material being stacked on new pads Operating Results Operating O i Production Cost of Sales Results (Au eq. oz.) ($/oz.) H1’09 116,017 $598 2008 329 105 329,105 $461 Reserves
Slide 41: Round Mountain, USA (50%)
Round Mountain, USA (50%) • Kinross-operated JV with Barrick • Located in Nevada, USA • Open pit mine Operating Results Operating Production Cost of Sales Results (Au eq. oz.) ($/oz.) H1’09 101,498 $526 2008 246 946 246,946 $465 Reserves and Resources(7) Tonnes Grade Ounces ((x 1,000) , ) (g/t)) (g
Slide 42: Kettle River, USA (100%)
Kettle River, USA (100%) • Entered production in Q4’08 • Small foot-print, underground mine • 2009 fifirstt full f ll year • Near-mine exploration Operating Results Operating Production Cost of Sales Results (Au eq. oz.) ($/oz.) H1’09 61,706 $304 2008 27,036 $ $344 Reserves and Resources(7) Tonnes G
Slide 43: DENVER GOLD FORUM SEPTEMBER 16 TH , 2009
DENVER GOLD FORUM SEPTEMBER 16TH, 2009