Kinross Gold Corporation · TSX:K
Kinross Gold — BMO Nesbitt Burns Gold Conference 2004
33 slides from Kinross Gold's conference presentation, Mar 3, 2004
Slide 1: Aspiring to Be World Class
ASPIRING TO BE WORLD CLASS BMO Nesbitt Burns Gold Conference March 3, 2004
Slide 2: Kinross Today
Kinross Today Kinross is now a major gold producer, focused in the Americas Concerns addressed: ¾ Financial leverage – strong balance sheet 9 ¾ Cash costs – comparable to other North American seniors 9 ¾ Reserve life – increasing year over year 9 ¾ Execution risk – None 9 ¾ Deliver on the deliverabl
Slide 3: Kinross Has Grown
Kinross Has Grown 2,000 Formation Nerco Falconbridge Macassa AMAX Echo Bay / TVX 1,500 gold equivalent 000's ounces 1,000 500 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004E Each transaction is a stepping stone…
Slide 4: Production Profile and Margin
Production Profile and Margin Expanding margins Shrinking 450 1.8 margins 400 1.6 350 1.4 300 1.2 250 1.0 200 0.8 150 0.6 100 0.4 50 0.2 - - 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004E Gold Equivalent Production Average Realized Gold Price Total Cash Costs
Slide 5: 2003 Results… Returning to Profitability
2003 Results… Returning to Profitability ¾ EPS of $0.09 in Q4/03; EPS of $0.06 in 2003 ¾ Produced 1.62 million gold equivalent ounces at total cash costs of $222 per ounce ¾ Cash flow from operations of $106.4 million in 2003 ¾ Increased reserves by; ¾ 7.5% to 14.1 million ounces of gold ¾ 19% to 38
Slide 6: Kinross Share Performance: Poised…
Kinross Share Performance K.TO, Last Trade K.TO, [O/H/L/C Last Trade Bar] .XAU, [O/H/L/C Close(Last Bar] Monthly Trade) [Line] Monthly Poised… 16Nov 26Jan89 89 - 15Jul04 21Jul04 Pr Pr USD 42 140 40 38 130 36 34 120 32 30 110 28 26 100 24 22 90 20 18 80 16 14 70 12 10 60 8 6 50 4 2 Jul89 Jul89 Jan90
Slide 7: Net Cash
Net Cash 200 100 $ millions 0 ~$380M ~$460M -100 -200 -300 Actual Year end 1998 1999 2000 2001 2002 2003 net netcash cash at year end expectation 2003 at Q3
Slide 8: Fort Knox, USA (100% Kinross)
Fort Knox, USA (100% (100% Kinross) Kinross) • Large, efficient mill fed by two open pit mines • ~350,000 ounces of gold produced annually • Reserves increased 10% in 2003 20% USA 2004 Estimated Production (% of total production) 80%
Slide 9: Round Mountain, USA (50% Kinross, operator)
Round Mountain, USA (50% (50% Kinross, Kinross, operator operator )) • World’s largest and most efficient heap leach mine • 360,000 ounces of gold produced annually to Kinross’ account • Renewed exploration focus almost replaced reserves in 2003 20% USA 42% USA 48% 52% 58% 2004 Estimated Production
Slide 10: Porcupine, Canada (49% Kinross)
Porcupine, Canada (49% (49% Kinross) Kinross) • Largest historic gold district in North America having produced over 65 million ounces • 200,000 ounces of gold production per year for Kinross • Replaced reserves consumed in 2003 29% 40% USA 48% 52% Canada 2004 Estimated Production Canada (% of total
Slide 11: Paracatu, Brazil (49% Kinross)
Paracatu, Brazil (49% (49% Kinross) Kinross) • Large and efficient open pit mine and mill to be expanded • Kinross’ production to grow from 100,000 to 150,000 per year • Reserves increased by almost 5% in 2003 with a further increase expected when the expansion is approved 8% 23% Other 29% 21% South
Slide 12: Reserve Comparison
Reserve Comparison Millions of North America ounces of gold Fort Knox 18 c re ase Round Mountain % in Porcupine 14.4 16.2 Other 16 South America 14.1 Paracatu 13.2 14 La Coipa Refugio Crixas 12 Other - Global Kubaka 10 Rest of World Geographic Distribution of Reserves at $325 Gold North 8 Other 5% A
Slide 13: Current Project Pipeline
Current Project Pipeline Exploration Pre-feasibility Feasibility Construction Production Emanuel Creek Refugio Pamour Paracatu Expansion Puren Gold Hill Birkachan PQ Deeps Measured & Indicated Resources Gil Proven & Probable Reserves Tsokol New Acquisition New Discovery Emanuel North Progress Januar
Slide 14: Capital Expenditures
Capital Expenditures • Kinross’ current asset base requires sustaining capital of $50 - $75 million per year • Have added managerial and technical personnel to oversee development of the project pipeline $ millions 175 Other 150 Porcupine Paracatu 125 Refugio 100 Sustaining 75 50 25 0 2002 2003 2004
Slide 15: Restarting Refugio: Renewed life…
Restarting Refugio (50% (50% Kinross, Kinross, operator) operator) Renewed life…
Slide 16: Restarting Refugio: Renewed life…
Restarting Refugio (50% (50% Kinross, Kinross, operator) operator) Renewed life… ¾ Proven and probable reserves at $325/oz and $400/oz of 1.4 and 2.7 million ounces, respectively (50% basis) ¾ Capital cost ~ $100 million (100% basis) ¾ Initial production Q4/04 ¾ Annual life of mine production (100%
Slide 17: Paracatu Expansion: Optimizing…
Paracatu Expansion (49% (49% Kinross) Kinross) Optimizing…
Slide 18: Paracatu Expansion: Optimizing…
Paracatu Expansion (49% (49% Kinross) Kinross) Optimizing… ¾ Increase milling capacity and improve efficiency resulting in: • Increased gold recoveries • Lower costs • Increased resources due to lower cutoff grade ¾ Increase production to 250,000 oz/yr (100%) thru 2025 • Average yearly production in
Slide 19: Porcupine: Extending life…
Porcupine (49% (49% Kinross) Kinross) Extending life… CENTRAL 2003 North Zone ZONE Discovery 2002 EXPLORATION DRILLING #3 PIT PROPOSED PIT OUTLINE WEST PIT
Slide 20: Porcupine: Extending life…
Porcupine (49% (49% Kinross) Kinross) Extending life… ¾ Pamour open pit to extend mine life beyond 2012 ¾ Mill expansion to 15,000 tpd in 2004 ¾ First ore from new pit in 2005 ¾ +200,000 ozs per year (100%) at total cash costs of ~ $215 - $235 / oz ¾ Open pit feasibility study complete, permitting i
Slide 21: Kettle River: Rebirth…
Kettle River (100% (100% Kinross) Kinross) Rebirth…
Slide 22: Kettle River: Rebirth…
Kettle River (100% (100% Kinross) Kinross) Rebirth… ¾ Emanuel Creek orebodies are fully permitted ¾ Production has commenced ¾ ~100,000 ozs per year ¾ Emanuel North zone appears to be comparable grade to the Emanuel Creek and Emanuel West zones, but larger ¾ Developing an access strategy to further
Slide 23: Other Projects
Other Projects Drilling at Kubaka (98.1%) in Russia extends mine life – Production at Birkachan to commence in 2004 – U/G development at Tsokol to commence in 2004 Gold Hill at Round Mountain (50%) advancing to feasibility in 2004 Definition drilling on the newly discovered Forquilha Sul ore body at
Slide 24: Operational Strategic Initiatives
Operational Strategic Initiatives • Deploy capital strategically • Closely monitor operations • Maintain quality management teams • Continuous improvements initiatives at existing sites
Slide 25: Corporate Mission…Strategy
Corporate Mission…Strategy “ASPIRING TO BE WORLD CLASS” ¾ Work the current portfolio to its potential ¾ Continue expanding the reserve base ¾ Go back to the drill bit ¾ Find and retain quality employees ¾ Meet or exceed Corporate Governance standards
Slide 26: Corporate Governance: Board Composition
Corporate Governance Board Composition Independent Directors Other John E. Oliver – Chairman, Kinross Robert M. Buchan – President & CEO John A. Brough Scott A. Caldwell – Executive VP and COO John M.H. Huxley Arthur H. Ditto – retired mining exec. John A. Keyes Cam A. Mingay George F. Michals Richa
Slide 27: Corporate Governance: Ongoing Initiatives
Corporate Governance Ongoing Initiatives • Split the role of Chairman and CEO in 2003 • Stock options and other compensation schemes not excessive • Independent internal auditor reporting directly to the audit committee will be in place this year • Added independent Board members with backgrounds in
Slide 28: Strategy
Strategy Growth from within Paracatu expansion, Gurupi Optimize cash starved assets - Attention to assets Round Mountain, Kettle River Strengthen management team Bench Strength by attracting and retaining quality employees Proven transactional Corporate transactions where capabilities synergies can
Slide 29: Business Development: Crown Acquisition
Business Development Crown Acquisition ¾ Permitting process has begun at Buckhorn ¾ Acquisition of Crown anticipated to be complete in Q2/04 ¾ Initial results indicate: • Yearly production of ~150,000 – 160,000 ozs Au • Total cash costs of < $150 / oz • Initial capital costs of ~ $10 – $15 million ¾
Slide 30: 2003 Goals / Achievements
2003 Goals / Achievements 1. Turn three operating styles into one…Kinross’ 9 2. Generate cash flow, operating costs and production expected of a senior producer 9 3. Achieve and maintain 2 million ounce production profile 9 4. Layout a growth strategy
Slide 31: Looking Ahead - 2004 Goals
Looking Ahead - 2004 Goals 1. Grow reserves • Paracatu expansion; Buckhorn • Increase average mine life from 7 to 8 years in 2004 2. Deploy surplus capital appropriately 3. Deliver on the deliverables 4. Achieve and maintain 2 million ounce production profile
Slide 32: Forward Looking Statement
Forward Looking Statement Certain statements set forth in this presentation constitute "forward looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties and other factors that may cause the actual resul
Slide 33: Kinross Gold Corporation: Aspiring to be World Class
Kinross Gold Corporation Aspiring to be World Class Kinross Gold Corporation Shares outstanding: 345.6 million 40 King Street West, 52nd Floor KGC: NYSE K: TSX Scotia Plaza K.U: TSX (US dollar trading symbol) Toronto, ON M5H 3Y2 K.WT: TSX 416-365-5123 416-363-6622 866-561-3636 www.kinross.com info@k
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