Kinross Gold Corporation · TSX:K
Kinross Gold — BMO Capital Markets Global Metals & Mining Conference 2009
40 slides from Kinross Gold's conference presentation, Feb 22, 2009
Slide 1: Delivering Disciplined Growth
Delivering g Disciplined p Growth BMO BMO Capital Capital Markets Markets Global Global Mining Metals Conference & Mining – Conference February 22, 2009 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? Kinross today: • Pure gold/silver producer 1. Growing margins, growing cash flows • ‘09e: 2.4 – 2.5 mm oz Au(1) o Production P d ti rising, i i costs t ddeclining li i • Low cost of sales o Higher cash margins o Growth in cash flow per share(3) • ‘09e: $390 - $420/oz.(1,2) 2 2. St Stron
Slide 4: Growing margins… growing cash flow
Growing margins… growing cash flow • 53% production growth (‘07 – ’09e) • Costs declined 21% through ‘08 • Comparing FY’07 to FY’08: – Gold up 23% – Margins up 32% – CFPS up 79% 4
Slide 5: Focused Portfolio of Operating Mines
Focused Portfolio of 8 Operating Mines Operating Mines in Four Key Regions: Chile USA • Maricunga • Fort Knox • La Coipa • Kettle River – Buckhorn • Round Mountain Brazil Russia • Paracatu • Kupol • Crixas BMO CAPITAL MARKETS GLOBAL MINING CONFERENCE 5 FEBRUARY 22-25, 2009
Slide 6: Production guidance for 2009
Production guidance for 2009: up 36% over 2008 Ounces Cost of Number Estimated Country (000 ounces) Sales per oz. of mines Mine Life Chile 450 – 500 $425 – 460 2 16+ Brazil 580 – 650 $425 – 470 2 30+ 30 Russia(4) 675 – 725 $265 – 290 1 8+ USA 625 – 680 $440 - 490 3 7+ Total Kinross(1): 2 4 – 2.5 2.4
Slide 7: Growing Production & Declining Costs
Growing Production & Declining Costs Production (mm oz.)(4) Cost of Sales ($/oz.)(2) 2.4 – 2.5 $421 1.8 $390 - $420 1.6 $368 (1) (1) 2007 2008 2009e 2007 2008 2009e BMO CAPITAL MARKETS GLOBAL MINING (1) Please refer to endnote #1. CONFERENCE (2) Please refer to endnote #2. 7 FEBRUARY 22-25, 2009 (4)
Slide 8: Kinross Margins Expanding
Kinross Margins Expanding • Kinross’ cost of sales margin(5) up 315% $436 • Average g realized g gold p price is up p 180% Up ost of Sales($/oz) Margin 315% $329 $279 $170 $161 Co $135 $105 FY'02 FY 02 FY'03 FY 03 FY'04 FY 04 FY'05 FY 05 FY'06 FY 06 FY'07 FY 07 FY'08 FY 08 BMO CAPITAL MARKETS GLOBAL
Slide 9: Strong Financial & Operating Results
Strong Financial & Operating Results • ’08 CFPS: $1.01; Adjusted EPS: $0.40; • $883 mm iin cash; h $68 mm nett d debt* bt* • Balanced portfolio of reserves • Growth in M&I and Inferred Resources * As at December 31, 2008; pro-forma equity issue completed February 5, 2009 and the acquisition of Lobo-
Slide 10: 2008 Results
2008 Results Realized COS Margin(5) Gold equivalent production 1,838,038 oz. Gold Price +32% +23% $436/oz $857/oz Gold equivalent sales 1,756,056 oz. Revenue $1,617.0 mm Cost of Sales +14% Adjusted net earnings $248.8 $248 8 mm $421/oz per share $0.40 Cash Flow From Operations $634.6 mm (before chan
Slide 11: Growing Cash Flow Per Share
Growing Cash Flow Per Share Since 2003: • Cash flow per share up 2.5x • Gold price up 2.4x $1.01 $0.80 $0.56 $0.51 $0.45 $0 41 $0.41 2003 2004 2005 2006 2007 2008 BMO CAPITAL MARKETS GLOBAL MINING CONFERENCE *before changes in working capital 13 FEBRUARY 22-25, 2009
Slide 12: Proven and Probable Reserves
Proven and Probable Reserves(6) Gold (mm oz.) Silver (mm oz.) Copper (bn lbs.) 47 106 46 28 2.8 2.6 77 28 28 2006 2007 2008 2006 2007 2008 2006 2007 2008 Gold Silver Copper (mm oz.) (mm oz.) (bn lb.) Proven & Probable Reserves 46 106 2.6 Measured & Indicated Resources(7) 19 28 1.0 Inferred Resources
Slide 13: Balanced Portfolio
Balanced Portfolio • Reserves and resources are well diversified geographically • Expected mine life 20+ years, all in core regions 2P Reserves(6,7) M&I Resources(6,7) Inferred Resources(6,7,8) 45.6 mm oz. 19.1 mm oz. 21.3 mm oz. Russia Russia USA 7% USA USA Brazil 2% 6% Chile 32% 12% Chile 14% 38%
Slide 14: Gold Resource Growth
Gold Resource Growth 0.12 (6,7,8) Measured & Indicated Resources 60.0 (6) Proven & Probable Reserves Total resource oz per share 19.1 01 0.1 11.1 e per Share 45.0 0.08 Total Resource Ounce M oz. 8.0 0.06 30.0 6.1 82 8.2 46 6 46.6 45 6 45.6 0.04 6.2 15.0 27.9 24.7 0.02 19.4 14.1 0.0 0 2003 2004 2005
Slide 15: Pipeline of projects for the future
Pipeline of projects for the future • Expansions being completed in ‘09 • Organic O i growth th att our mines i • Advancing next suite of projects • Exploration & JV strategies 15
Slide 16: Project Pipeline
Project Pipeline Exploration Evaluation Pre-Feasibility Feasibility Construction Production Paracatu Expansion Fort Knox Expansion Cerro Casale Lobo-Marte F Fruta del d lNNorte Maricunga Expansion Paracatu Phase 3 JV portfolio BMO CAPITAL MARKETS GLOBAL MINING CONFERENCE 16 FEBRUARY 22-25, 2009
Slide 17: Fruta del Norte: High grade discovery in Ecuador
Fruta del Norte: High grade discovery in Ecuador • Discovery hole drilled in ’06 • 14 mm ozs of Inferred gold resources(6,8) • 22 mm ozs of Inferred silver resources(6,8) • Part of 85,600 hectares of exploration concessions • New mining legislation passed January 26, 2009 2009 Program: • Permitting
Slide 18: BMO Capital Markets Global Mining Conference February 22-25, 2009
BMO CAPITAL MARKETS GLOBAL MINING CONFERENCE 18 FEBRUARY 22-25, 2009
Slide 19: Lobo-Marte Deposits
Lobo-Marte Deposits • Located in Chile, near current Kinross operations (2P: 1.06 g/t)(6) ~110 • Development stage asset with km large gold resources (M&I: 1.72 g/t)(7) • Infrastructure in place 2009 Program: (2P: 0.72 g/t) (6) • $3mm infill drilling • Metallurgical test work (2P 0 (2P: 0.61 /t) (6)
Slide 20: BMO Capital Markets Global Mining Conference February 22-25, 2009
BMO CAPITAL MARKETS GLOBAL MINING CONFERENCE 20 FEBRUARY 22-25, 2009
Slide 21: Cerro Casale – Undeveloped gold-copper in Chile
Cerro Casale – Undeveloped gold-copper in Chile • 50% ownership in one of the world’s largest g g gold-copper pp deposits p • Proven & Probable Reserves(6): o 10.4 mm oz. of gold o 2.6 2 6 bn lbs. lbs of copper o 34.1 M oz. of silver 2009 Program: • Evaluating project enhancements • 13,000 meter inf
Slide 22: Focused Exploration Strategy
Focused Exploration Strategy Far East Russia N. American Cordillera Brazilian Craton Andean Cordillera Operating and development properties O Exploration target JV or junior investment target BMO CAPITAL MARKETS GLOBAL MINING CONFERENCE 22 FEBRUARY 22-25, 2009
Slide 23: Valuation and performance
V l ti and Valuation d performance f 23
Slide 24: BMO: Total Cash Costs
BMO: Total Cash Costs (US$/oz.) $437 $434 $428 $ $429 $422 $417 $414 $412 $406 $402 $393 $391 $391 $383 $382 NEM AUY GG KGC ABX NEM AUY ABX GG KGC GG NEM AUY ABX KGC 2009e 2010e 2011e BMO CAPITAL MARKETS GLOBAL MINING CONFERENCE Source: BMO Gold Pages – February 17, 2009 24 FEBRUARY 22-25, 2009
Slide 25: BMO: Adjusted market cap / recoverable ounce
BMO: Adjusted market cap / recoverable ounce $537 $512 er reserve ounce Sr. North American avg: $383 $336 $334 $331 US$ pe GG AUY KGC ABX NEM BMO CAPITAL MARKETS GLOBAL MINING Source: BMO Gold Pages – February 18, 2009 CONFERENCE 25 FEBRUARY 22-25, 2009
Slide 26: BMO: P/CFPS & P/NAV
BMO: P/CFPS & P/NAV P/CFPS (‘09) P/ NAV (0%) 1.12 38.6 29 9 29.9 0 79 0.79 0.66 0.65 0.64 16 7 16.7 11.8 11.4 AEM GG KGC ABX NEM AEM GG NEM KGC ABX BMO CAPITAL MARKETS GLOBAL MINING Source: BMO Gold Pages – February 18, 2009 CONFERENCE 26 FEBRUARY 22-25, 2009
Slide 27: Total returns: 2006 - 2008
Total returns: 2006 - 2008 Kinross 101% Gold ETF 68% XAU Index 0% S&P 500 -23% BMO CAPITAL MARKETS GLOBAL MINING CONFERENCE 27 FEBRUARY 22-25, 2009 Source: Bloomberg L.P.; assumes re-investment of dividends
Slide 28: Kinross Key Objectives for 2009
Kinross Key Objectives for 2009 9 Complete Aurelian integration 9 Close Lobo-Marte acquisition from Teck 9 Lock-in significant share of input costs 9 Strengthened liquidity: close $415 mm equity issue 9 Replace operations’ operations reserves Paracatu expansion operating at 100% Advanc
Slide 29: Why Kinross?
Why Kinross? 1 Growing margins, 1. margins growing cash flows 2. Strong g financial and operating p g results 3. Pipeline of projects for the future BMO CAPITAL MARKETS GLOBAL MINING (2) Please refer to endnote #2. CONFERENCE 29 FEBRUARY 22-25, 2009
Slide 30: Endnotes
Endnotes (1) For more information regarding Kinross’ production outlook for 2009, please refer to the press release dated January 7, 2009 available on our website at www.kinross.com. (2) Cost of sales per ounce is defined as cost of sales as per the financial statements divided by the number of gold
Slide 31: Appendix
Appendix: BMO CAPITAL MARKETS GLOBAL MINING CONFERENCE 31 FEBRUARY 22-25, 2009
Slide 32: Paracatu, Brazil
Paracatu, Brazil (100%) • Expansion to triple throughput to 60 mtpa • Expected to reach full capacity Q2’09 • Mine life out to 2041 Operating Results Operating p g Production Cost of Sales Results (Au eq. oz.) ($/oz.) 2008 188,156 $450 2007 , 174,987 $373 $ Reserves and Resources(6) Tonnes Grade Oun
Slide 33: Crixas, Brazil
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.)) 2008 87,669 $302 2007 91,305 $260 Reserves and Resources(6) Tonnes Grade Ounces (x 1,000) (g/t) (x 1,000) 2P Reserves 2,81
Slide 34: Maricunga, Chile
Maricunga, Chile (100%) • In the highly prospective Maricunga District • Open pit, heap leach operation • Pre-stripping of Pancho pit begins (March) Operating Results Operating O ti P d ti Production C t off S Cost Sales l Results (Au eq. oz.) ($/oz.) 2008 223,341 $566 2007 205 750 205,750 $447 Rese
Slide 35: La Coipa, Chile
La Coipa, Chile (100%) • Gold/silver mine in the Maricunga district • Mill facility located 60km from Lobo-Marte deposits Operating Results* Operating Production Cost of Sales Results (Au eq. oz.) ($/oz.) 2008 226,293 $489 2007 197,554 $269 Reserves and Resources(6) Tonnes Grade Ounces (x 1,000) (g/
Slide 36: Kupol, Russia
Kupol, Russia (75%) • Production began in June ‘08 • 3,000 tpd mill with open-pit and underground operation • 2009 to be first full year of production Operating Results Operating Production Cost of Sales Results (Au eq. oz.) ($/oz.) 2008 469,907 $220 Reserves and Resources(6) Tonnes Grade Ounces (x
Slide 37: Fort Knox, USA
Fort Knox, USA(100%) • Located in Alaska • Expansion and new heap leach to extend t d mine i lif life and d llower costs t Operating Results Operating Production Cost of Sales Results (Au eq. oz.) ($/oz.) 2008 329,105 $461 2007 338 459 338,459 $344 Reserves and Resources(6) Tonnes Grade Ounces ((x 1
Slide 38: Round Mountain, USA
Round Mountain, USA (50%) • Kinross-operated JV with Barrick • Located in Nevada, USA • Open pit mine Operating Results Operating Production Cost of Sales Results (Au eq. oz.) ($/oz.) 2008 246,946 $465 2007 302 971 302,971 $316 Reserves and Resources(6) Tonnes Grade Ounces ((x 1,000) , ) (g/t)) (g (
Slide 39: Kettle River, USA
Kettle River, USA (100%) • Entered production in Q4’08 • Small foot-print, p underground g mine Operating Results Operating Production Cost of Sales Results (Au eq. oz.) ($/oz.) 2008 27 036 27,036 $344 Reserves and Resources(6) Tonnes Grade Ounces ((x 1,000) , ) (g/t)) (g ((x 1,000) , ) 2P Reserves
Slide 40: BMO Capital Markets Global Mining Conference February 22-25, 2009
BMO CAPITAL MARKETS GLOBAL MINING CONFERENCE FEBRUARY 22-25, 2009
Kinross Gold — BMO Capital Markets Global Metals & Mining Conference 2009 on 6ix