Kinross Gold Corporation · TSX:K
Kinross Gold — 2015 TD Securities Mining Conference
45 slides from Kinross Gold's conference presentation, Jan 27, 2015
Slide 1: Kinross Gold Corporation – 2015 TD Securities Mining Conference
January 27 KINROSS GOLD CORPORATION 2015 TD Securities Mining Conference 1 www.kinross.com
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 and responses to questions, including but not limited to any information as to the future performance of Kinross
Slide 3: Kinross Value Proposition
KINROSS VALUE PROPOSITION EXCELLENT OPERATIONAL TRACK RECORD • 9 consecutive quarters of strong results STRONG BALANCE SHEET • $2.4B in liquidity and conservative net debt of $1.2B • No significant debt maturities until 2016 ATTRACTIVE GROWTH OPPORTUNITIES • Potential Tasiast mill expansion expected
Slide 4: Delivering Operational Excellence
DELIVERING OPERATIONAL EXCELLENCE 4 www.kinross.com
Slide 5: Diversified Portfolio of Operating Mines
OPERATIONAL EXCELLENCE DIVERSIFIED PORTFOLIO OF OPERATING MINES Over RUSSIA 50% of estimated 2014 gold equivalent production from mines located in the Americas AMERICAS Dvoinoye Kupol Fort Knox Kettle River-Buckhorn Round Mountain 2014E GOLD EQUIVALENT PRODUCTION(2,3) Tasiast 28% Chirano WEST AFRICA
Slide 6: Strong Operating Performance
OPERATIONAL EXCELLENCE STRONG OPERATING PERFORMANCE Continuing track record of consistent and dependable operational performance • Produced 2.0M gold equivalent ounces YTD Q3 2014 694koz 680koz 665koz • Expect to be at the HIGH-END of revised production guidance of gold equivalent production 2.6-2.7
Slide 7: Focusing on Costs
OPERATIONAL EXCELLENCE FOCUSING ON COSTS Achieved significant year-over-year reductions in all-in sustaining cost 2014E: $950-$990/oz • All-in sustaining cost(4) of $963 per $1,001 gold equivalent ounce YTD Q3 2014 $976 • LOWERED 2014 all-in sustaining $919 ($ per gold equivalent ounce) cost guidanc
Slide 8: Americas
• Five mines located in the US, Brazil and Chile AMERICAS • 2014E regional guidance: 1,330 – 1,430k oz. at $780-840/oz.(3) 8 (3) Refer to endnote #3. www.kinross.com
Slide 9: Americas
OPERATIONAL EXCELLENCE AMERICAS Region tracking high-end of 2014 production guidance with costs expected in low-end of range • Record quarterly production at Paracatu resulting from continuous improvements initiatives • Record quarterly production at Maricunga driven by on-going operational improvem
Slide 10: Russia
• Two high-grade underground mines serviced by one mill RUSSIA • 2014E regional guidance: 710-750k oz. at $520-550/oz.(3) 10 (3) Refer to endnote #3. www.kinross.com
Slide 11: Russia Operations
OPERATIONAL EXCELLENCE RUSSIA OPERATIONS Kupol & Dvoinoye operations continue to be unaffected by events in Ukraine • Continued strong performance resulted in an increase to 2014E regional production guidance(3) • Kinross maintains an open dialogue with both Canadian & Russian governments • Russian
Slide 12: West Africa
WEST • Strong focus on optimizing efficiency and performance AFRICA • 2014E regional guidance: 480 – 540koz. at $790 – $830/oz.(3) 12 (3) Refer to endnote #3. www.kinross.com
Slide 13: West Africa Operations
OPERATIONAL EXCELLENCE WEST AFRICA OPERATIONS Cost of sales per ounce in the first nine months declined 10% compared with 2013 • Lower regional cost of sales driven by: Transition to self-perform mining at Chirano reduced costs in Q3 by 29% year-over-year Continuous improvement efforts at Tasias
Slide 14: 2014 Guidance Update
OPERATIONAL EXCELLENCE 2014 GUIDANCE UPDATE(3) Strong year-to-date operating results and cost reduction initiatives resulting in revised 2014 guidance ORIGINAL 2014E GUIDANCE UPDATED 2014E GUIDANCE 2.6 – 2.7 million ounces Gold equivalent production(2) 2.5 - 2.7 million ounces Expected to be at the
Slide 15: Strong Financial Discipline
STRONG FINANCIAL DISCIPLINE 15 www.kinross.com
Slide 16: Solid Financial Position
STRONG BALANCE SHEET SOLID FINANCIAL POSITION Balance sheet strength continues to be a priority objective STRONG LIQUIDITY POSITION MAINTAINING FINANCIAL FLEXIBILITY • Improved balance sheet during the first 9 months of 2014: • Repaid $60M of debt $0.9 • Increased cash position by $100M $2.4B • Redu
Slide 17: Financial Flexibility
STRONG BALANCE SHEET FINANCIAL FLEXIBILITY No material debt maturities prior to 2016 SCHEDULED DEBT REPAYMENTS $1,250 $ millions $500 $270 $60 $- 2015 2016 2017 2018 2019 & thereafter (i) Term loan Senior notes Kupol loan (i) Consists of $250 million principle amount of 3.625% senior notes due 2016,
Slide 18: Reducing Capital Spending
DISCIPLINED CAPITAL ALLOCATION REDUCING CAPITAL SPENDING Actual Original budget 2014E guidance • Trend of declining capital $2.2B expenditures since 2012 $1.9B • LOWERED 2014 guidance to $1.6B $630 - $650M from $675M(3) $1.26B $630- $650M (3) 2012 2013 2014E (3) Refer to endnote #3. 18 www.kinross.c
Slide 19: Attractive Growth Opportunities
ATTRACTIVE GROWTH OPPORTUNITIES 19 www.kinross.com
Slide 20: Tasiast, Mauritania
GROWTH OPPORTUNITIES TASIAST, MAURITANIA • Existing mine with an 8,000 tpd mill originally designed to process ore from a series of small open pits • Identified 38,000 tpd as optimal throughput for the larger, 15 million ounce orebody 20 www.kinross.com
Slide 21: Feasibility Study Estimates
GROWTH OPPORTUNITIES – TASIAST, MAURITANIA FEASIBILITY STUDY ESTIMATES Mill expansion has the potential to transform Tasiast into Kinross’ largest mine with costs among the lowest in the portfolio AVERAGE FOR THE FIRST 5 YEARS LIFE OF MINE (2018-2022) (2014-2029) Average annual production 848,000 oz
Slide 22: Tasiast Mill Expansion
THIRD QUARTER UPDATE TASIAST MILL EXPANSION Do not expect to make a final decision whether to proceed with a potential mill expansion until 2015 MAINTAINING BALANCE SHEET STRENGTH OVERRIDING FACTOR IN INVESTMENT DECISION Other considerations include: • Financing plan: expect to fund the project thro
Slide 23: Tasiast District Exploration
GROWTH OPPORTUNITIES – TASIAST, MAURITANIA TASIAST DISTRICT EXPLORATION* Encouraging exploration results along Tasiast’s prospective 80 km trend Imkebdene license Piment C616 Central Fennec C613 Tmeimichat license C614 C69 C67 Aoueouat C615 C68 C611 C612 El Gaicha license Tamaya Tasiast Sud license
Slide 24: La Coipa Phase 7
GROWTH OPPORTUNITIES - CHILE LA COIPA PHASE 7 Initiated a pre-feasibility study at La Coipa Phase 7 in Chile • Expected to be completed during Q3 2015 • The pre-feasibility study will focus on: The Pompeya deposit, where drilling has outlined higher average grades than previously processed at La C
Slide 25: Kupol – Moroshka, Russia
HIGH-QUALITY EXPLORATION TARGETS KUPOL – MOROSHKA, RUSSIA • Moroshka located 4 km east of the Kupol mine • Drilling confirmed continuity of high grades along a 400 strike metre vein structure Kupol CURRENT PRELIMINARY ESTIMATE mine site • Moroshka contains a minimum total potential mineral resource
Slide 26: Dvoinoye, Russia
HIGH-QUALITY EXPLORATION TARGETS DVOINOYE, RUSSIA Encouraging results from initial exploration work on September trend, located approximately 15 km northwest of Dvoinoye For additional information, please see Kinross’ news release dated February 12, 2014 and Appendices A and B, which are available o
Slide 27: Chirano, Ghana
HIGH-QUALITY EXPLORATION TARGETS CHIRANO, GHANA • Drilling program designed to test underground potential of mineralization beneath Suraw, Akoti and Tano open pits • Results confirmed mineralization extends 100 to 400 metres below bottom of each pit • Remains open at depth at all three deposits 2013
Slide 28: Compelling Valuation
COMPELLING VALUATION 28 www.kinross.com
Slide 29: Production and All-in Sustaining Cost
COMPELLING VALUATION PRODUCTION AND ALL-IN SUSTAINING COST COMPANY GUIDANCE COMPANY GUIDANCE 2014E GOLD PRODUCTION(i) (mm oz.) 2014E ALL-IN SUSTAINING COSTS(ii) ($/oz.) 7.0 $1,200 6.0 $1,000 Average 5.0 $800 4.0 $600 3.0 $400 2.0 1.0 $200 0.0 $0 Barrick Newmont Goldcorp Kinross Yamana Agnico Eldorad
Slide 30: Net Debt to 2015E EBITDA
COMPELLING VALUATION NET DEBT TO 2015E EBITDA 2.6 2.1 1.8 1.5 1.2 1.2 0.1 Barrick Yamana Newmont Agnico Goldcorp Kinross Eldorado Source: Bloomberg – January 23, 2015 30 www.kinross.com
Slide 31: Enterprise Value versus Production
COMPELLING VALUATION ENTERPRISE VALUE VERSUS PRODUCTION $27.7 Gold Production Multiple (Moz.)1 Delta with of Kinross Kinross YTD Q3 (US$B) Enterprise 2014E 2014A Value $22.3 $19.7 Barrick 6.3 4.7 22.5 5.3x Enterprise value (US$ billions) Newmont 4.9 3.6 14.5 3.8x Goldcorp 3.0 2.0 17.1 4.3x Kinross 2
Slide 32: 2015E Metrics
COMPELLING VALUATION 2015E METRICS Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities EV / 2015E EBITDA P / 2015E OPERATING CF 13.7 12.3 10.7 10.9 9.9 9.8 7.2 7.0 6.4 5.9 5.4 5.0 4.8 4.1 Eldorado Goldcorp Agni
Slide 33: Appendix
APPENDIX 33 www.kinross.com
Slide 34: Fort Knox, USA (100%)
AMERICAS FORT KNOX, USA (100%) Among the world’s few cold climate heap leach facilities • Achieved record annual production in 2013, Fort Knox’s 16th year in operation • Impressive track record of operational excellence OPERATING RESULTS(5) FY 2012 FY 2013 Production (Au. Eq. oz.) 359,948 421,641 Pr
Slide 35: Round Mountain, USA (50%)
AMERICAS ROUND MOUNTAIN, USA (50%) Round Mountain is a best-practice leader in many areas, including preventative maintenance • Kinross-operated JV with Barrick • Bulk tonnage open-pit operation OPERATING RESULTS(5) FY 2012 FY 2013 Production (Au. Eq. oz.) 192,330 162,826 Production cost of sales ($
Slide 36: Kettle River-Buckhorn, USA (100%)
AMERICAS KETTLE RIVER-BUCKHORN, USA (100%) Low-cost, high-grade underground mine located in Washington state • Significant cash flow contributor with costs among the lowest in the portfolio • Small footprint operation OPERATING RESULTS(5) FY 2012 FY 2013 Production (Au. Eq. oz.) 156,093 150,157 Prod
Slide 37: Paracatu, Brazil (100%)
AMERICAS PARACATU, BRAZIL (100%) Large gold mine with a long mine life that extends to 2030 • Paracatu is among the world’s largest gold operations with annual throughput of ~60Mt • Achieved record annual production in 2013 OPERATING RESULTS(5) FY 2012 FY 2013 Production (Au. Eq. oz.) 466,709 500,38
Slide 38: Maricunga, Chile (100%)
AMERICAS MARICUNGA, CHILE (100%) High-altitude heap leach operation located in the highly prospective Maricunga District • New team focused on improving operating efficiencies and reducing costs • Continued performance improvements since Q3/13 OPERATING RESULTS(5) FY 2012 FY 2013 Production (Au. Eq.
Slide 39: Kupol-Dvoinoye (100%)
RUSSIA KUPOL-DVOINOYE (100%) Our Russian operations are a model for successfully operating in a remote location • High-grade, low-cost underground mines • Dvoinoye is the 4th mine Kinross has operated in its 20-year history in the region OPERATING RESULTS(5) FY 2012 FY 2013 Production (Au. Eq. oz.)
Slide 40: Tasiast, Mauritania (100%)
WEST AFRICA TASIAST, MAURITANIA (100%) Operating mine with a large gold resource and potential for a mill expansion • Expect to begin realizing benefits of infrastructure improvements • Achieved record quarterly production in Q1/14 OPERATING RESULTS(5) FY 2012 FY 2013 Production (Au. Eq. oz.) 185,33
Slide 41: Chirano, Ghana (90%)
WEST AFRICA CHIRANO, GHANA (90%) Cost reductions achieved at Chirano through transition to self-perform mining • Chirano is now among our lowest cost operations following transition to self-perform mining in open pits and underground OPERATING RESULTS(2,5) FY 2012 FY 2013 Production (Au. Eq. oz.) 26
Slide 42: Explanatory Notes: Exploration
EXPLANATORY NOTES: EXPLORATION Tasiast Exploration Results Hole identifiers ending with suffix DD are diamond drill core holes (HQ diameter) and those ending with suffix RC are reverse circulation (RC) holes. Holes with “A” prefixing DD or RC are diamond core or reverse circulation re-drills of the
Slide 43: Explanatory Notes: Exploration
EXPLANATORY NOTES: EXPLORATION Kupol and Dvoinoye Exploration Results All drill holes at Moroshka are diamond drill core holes (HQ or NQ core diameter). The Moroshka vein dips sub-vertically to the east. Drill holes are angled between minus 50° and 75° to the east and west. Results provided for Moro
Slide 44: Endnotes
ENDNOTES 1) For more information regarding the results of the Tasiast feasibility study, please refer to the news release dated March 31, 2014, as well as the Tasiast technical report filed March 31, 2014, both of which are available on our website at www.kinross.com. 2) Unless otherwise noted, gold
Slide 45: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 York Street, 17th Floor │Toronto, ON │ M5J 2V5 www.kinross.com 45 www.kinross.com