Kinross Gold Corporation · TSX:K
Kinross Gold — Gold Forum Americas 2020
79 slides from Kinross Gold's conference presentation, Sep 21, 2020
Slide 1: Delivering Value.
September 2020 Delivering Value. Kinross Gold Corporation
Slide 2: Cautionary Statement on Forward-Looking Information
September 2020 Cautionary Statement on Forward-Looking Information Cautionary Statement on Forward-Looking InformationAll 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
Slide 3: Supportive Backdrop Attracts New Investors
Gold Price Outlook September 2020 Supportive Backdrop Attracts New Investors Low and increasingly negative real rates are supportive for gold prices • Gold is highly correlated to real interest U.S. 10-Year Real Rate rates vs. Gold Price • Real rates remain low and downward -2.0 $2,500 trending due
Slide 4: Ongoing Fiscal Stimulus Supportive
Gold Price Outlook September 2020 Ongoing Fiscal Stimulus Supportive Gold increasing as U.S. Federal Reserve balance sheet continues to expand; Significant increases in money supply also driving gold prices higher U.S. Federal Reserve - Total Assets Gold Price vs. U.S. Money Supply vs. Gold Price (M
Slide 5: Kinross Gold Corporation
Kinross Gold Corporation
Slide 6: Why Kinross?
Kinross Gold Corporation September 2020 Why Kinross? GLOBAL 2019 PORTFOLIO PRODUCTION Portfolio(1) 8 mines 3 regions 2.5Moz. FINANCIALLY LARGE GOLD GEOGRAPHICALLY EXCELLENT COMMITTED TO STRONG WITH PRODUCER, DIVERSIFIED OPERATING TRACK RESPONSIBLE ATTRACTIVE HIGHLY LIQUID PRODUCER RECORD MINING VALU
Slide 7: Diversified Portfolio of Assets
Kinross Gold Corporation September 2020 Diversified Portfolio of Assets Portfolio of mines and development projects located in three core regions Dvoinoye, Russia Kupol, Fort Knox, USA Russia Chulbatkan, Russia Bald Mountain, USA Round Mountain, USA 2019 Gold Equivalent Production(1) Tasiast, Maurit
Slide 8: Eight Consecutive Years of Meeting Guidance
Kinross Gold Corporation September 2020 Eight Consecutive Years of Meeting Guidance Kinross has met or exceeded guidance targets for production, costs and capital expenditures for the past eight years 2012 2013 2014 2015 2016 2017 2018 2019 Met or exceeded annual production guidance
Slide 9: 2020 Guidance Reinstated
Kinross Gold Corporation September 2020 2020 Guidance Reinstated On track to meet targets for production, costs and capital expenditures 2020 Guidance(2) H1 2020 Results (+/- 5%) Gold equivalent production (ounces)(1,3) 2.4 million 1.14 million Production cost of sales ($ per gold equivalent ounce)(
Slide 10: Robust Three-Year Outlook
Kinross Gold Corporation September 2020 Robust Three-Year Outlook Strong three-year guidance with plans to increase production by half a million gold equivalent ounces, while lowering costs, from 2021-2023 Production growth and declining Growing Production and costs driven by: Declining Capital(1,2)
Slide 11: Prioritizing Resource Conversion
Kinross Gold Corporation September 2020 Prioritizing Resource Conversion(6) Significant potential for mine life extension at existing assets 25.0 20.0 15.0 10.0 5.0 - Reserve life Resource life (i) Reserve and resource life calculations based on 2019 production figures where available, otherwise bas
Slide 12: Strong Liquidity and Financial Flexibility
Kinross Gold Corporation September 2020 Strong Liquidity and Financial Flexibility Liquidity Position Financial Flexibility ($ billion) • Available liquidity of ~$2.3 billion • Continuing to strengthen net debt to EBITDA As at • Repaid $750 million draw on revolving June 30, 2020 credit facility due
Slide 13: Leading Free Cash Flow Profile
Kinross Gold Corporation September 2020 Leading Free Cash Flow Profile Portfolio of mines expected to generate exceptional free cash flow • Analysts forecast strong and Free Cash Flow Yield vs. Peers(i) growing free cash flow 12% • Attractive free cash flow yield relative to peers due to: 9% • past
Slide 14: Disciplined Capital Allocation Strategy
Kinross Gold Corporation September 2020 Disciplined Capital Allocation Strategy Defined by our three pillars: Reinvesting in our Business • Sustaining capex - maintaining our existing operations safely and to world-class environmental standards • Expansion projects – pursuing attractive returns by l
Slide 15: Manageable Debt Profile
Kinross Gold Corporation September 2020 Manageable Debt Profile Kinross’ senior notes are rated investment grade with the next repayment due in September 2021 Debt Schedule Debt Ratings Agency Rating $72 S&P BBB- (Stable) $32 Moody’s Baa3 (Stable) $500 $500 $500 Fitch BBB- (Stable) $ millions Intere
Slide 16: Continuing to Enhance Value
Kinross Gold Corporation September 2020 Continuing to Enhance Value Strong track record over past 8 years: Future Expectation(2): Growing to 2.9 million Au eq. oz. in Production(1) ~2.5 million Au eq. oz. per year 2023, with expectation to maintain elevated production profile Costs and Reduced AISC
Slide 17: Commitment to Responsible Mining and ESG
Kinross Gold Corporation September 2020 Commitment to Responsible Mining and ESG Prioritizing the effective management of ESG risks through our principled approach to sustainability and strong on-the-ground performance at our operations • ESG performance consistently RobecoSAM ranks in top quartile
Slide 18: Managing COVID-19 Risks
Kinross Gold Corporation September 2020 Managing COVID-19 Risks Prioritizing the health and safety of employees and host communities Managing the Pandemic and Minimizing Impacts • Early actions helped protect sites and ensure business continuity; all sites remain in operation to date in 2020 • On-go
Slide 19: Superior Exposure to Gold
Kinross Gold Corporation September 2020 Superior Exposure to Gold Kinross offers the purest exposure to gold of the peer group Revenue by Commodity 2020-22E (% of Total) 100% 90% 80% Yamana Kinross Gold Fields Newmont AngloGold Agnico Barrick Gold Silver Copper Other Source: RBC Equity Research 19
Slide 20: Competitive Production and AISC Profile
Kinross Gold Corporation September 2020 Competitive Production and AISC Profile 2020E Production 2020E All-In Sustaining Cost (million ounces) ($ per ounce) 7.0 $1,050 6.0 5.0 $900 4.0 3.0 2.0 $750 1.0 - $600 Barrick Kirkland Lake Barrick Kirkland Lake Newmont AngloGold Gold Fields Agnico Eagle Agni
Slide 21: Attractive Value Opportunity
Kinross Gold Corporation September 2020 Attractive Value Opportunity Relative to peers, considering Kinross’ annual production growth, cost structure and track record P / 2020E Operating CF EV / 2020E EBITDA 14.2 16.7 12.1 10.0 9.9 10.7 10.7 10.0 8.1 9.3 7.9 8.8 7.2 7.5 6.5 6.4 7.2 5.6 Kirkland Lake
Slide 22: Discounted Valuation Not Justified by Quality of Assets
Kinross Gold Corporation September 2020 Discounted Valuation Not Justified by Quality of Assets Kinross has two of the world’s thirteen Tier One assets, with the target of re-establishing Kinross Russia as a third Global Tier One Assets by Total Cash Costs $ 800 $ 600 $ 400 $ 200 - Percent of Peer 2
Slide 23: Discounted Valuation Not Justified by Operating Jurisdictions
Kinross Gold Corporation September 2020 Discounted Valuation Not Justified by Operating Jurisdictions Attractive value opportunity relative to peers considering Kinross’ in-line geopolitical score P/NAV vs. Fraser Institute Ranking (Weighted by NAV) 2.20x Agnico Eagle Analyst Consensus P/NAV 2.00x 1
Slide 24: Kinross Investment Case
Kinross Investment Case Operational Excellence Financial Strength & Flexibility Diverse portfolio of mines consistently meeting Maintaining a strong balance sheet continues to or outperforming operational targets be a priority objective 8 Available liquidity of ~$2.3 billion Met or $2.3 Attractive n
Slide 25: Operations and Development Projects
Operations and Development Projects
Slide 26: Americas
Americas 2019 Gold Equivalent Production(1) Paracatu, Country Highlights Brazil Our largest mine, Paracatu, 21% 25% boasts an attractive cost Brazil structure supported by favourable foreign exchange 2.5M ounces Fort Knox, Alaska Nearly 1/3rd of our production 8% comes from Nevada and 23% U.S.A. Ala
Slide 27: Paracatu, Brazil (100%)
Americas September 2020 Paracatu, Brazil (100%) Tier 1 gold mine with a long mine life that extends to 2031 • Paracatu is among the world’s largest Operating Results(3) gold operations, with annual throughput 2018 2019 H1’20 of ~60Mt Production 521,575 619,563 263,217 • Continued outperformance driv
Slide 28: Round Mountain, U.S.A. (100%)
Americas September 2020 Round Mountain, U.S.A. (100%) Strong cash flow generator with Phase W project extending mine life to 2027 • Phase W is expected to generate solid returns Operating Results(3) and extend mining 2018 2019 H1’20 • Estimated mine life: 2024 (mining); 2027 (stockpile milling / res
Slide 29: Fort Knox, U.S.A. (100%)
Americas September 2020 Fort Knox, U.S.A. (100%) The Gilmore project is expected to extend mine life to 2030 • Successfully operating one of the Operating Results(3) world’s few cold weather heap leaches 2018 2019 H1’20 • Production and cash costs per ounce Production 255,569 200,263 107,697 both im
Slide 30: Fort Knox Gilmore
Americas September 2020 Fort Knox Gilmore Expected to extend mine life to 2030 and strengthen long-term U.S. production profile Base case mine plan + Gilmore estimates Incremental Gilmore estimates Average annual production 245,000 Au oz. Total ounces recovered 1.5Moz. (2018-2027) Production cost of
Slide 31: Bald Mountain, U.S.A. (100%)
Americas September 2020 Bald Mountain, U.S.A. (100%) Forecasting strong near-term cash flow with significant upside potential • Large estimated mineral resource base Operating Results(3) with multiple sources of potential mineral 2018 2019 H1’20 reserve additions that are expected to extend mine lif
Slide 32: A Return to Production in Chile
Americas September 2020 A Return to Production in Chile Construction is underway at the La Coipa Restart project and studies are progressing at Lobo-Marte, which could enable production in a favourable mining jurisdiction beyond 2040 • La Coipa and Lobo-Marte are located in Chile’s Atacama N (Region
Slide 33: La Coipa Restart Project
Americas September 2020 La Coipa Restart Project Pre-stripping expected in early 2021; first production expected in mid-2022 • Leverages existing infrastructure, including plant and Maricunga mine fleet • Potential to extend mine life through satellite deposits • Work ramping up after COVID-19 limit
Slide 34: La Coipa Restart Feasibility Study Results
Americas September 2020 La Coipa Restart Feasibility Study Results Project expected to generate a 28% IRR at an assumed gold price of $1,200/oz. Feasibility Study Estimates Life of mine production (2022 to 2024) 690,000 gold equivalent ounces Average production cost of sales(3) $575 per gold equival
Slide 35: Lobo-Marte
Americas September 2020 Lobo-Marte Project adds 6.4 million higher-grade gold ounces to estimated probable mineral reserves, extending Kinross’ reserve life index(i) by approximately 2.5 years • Potential to be a cornerstone asset with attractive all-in sustaining costs, supporting Gold Reserves(ii)
Slide 36: Lobo-Marte Pre-Feasibility Study Results
Americas September 2020 Lobo-Marte Pre-Feasibility Study Results Proceeding to feasibility study, expected to be complete in Q4 2021 Pre-Feasibility Study Estimates Initial Capital Costs ($M) Life of mine production (million Au oz.) 4.5 Mine equipment $100 Life of mine ore processed (million tonnes)
Slide 37: West Africa
West Africa 2019 Gold Equivalent Production(1) Country Highlights Tasiast, 21% Mauritania Recently enhanced partnership with the 2.5Mounces 56% Mauritania Government of Mauritania to build on a decade of strong 16% results in-country; 24k project progressing well 7% Expected mine life extension Chir
Slide 38: Positive Momentum in Mauritania
West Africa September 2020 Positive Momentum in Mauritania Successfully operated for over 10 years Cumulative production of over 2 million gold equivalent ounces Established $300M political risk insurance policy with MIGA A member of the World Bank Constructed Phase One Project successfully comm
Slide 39: Tasiast, Mauritania (100%)
West Africa September 2020 Tasiast, Mauritania (100%) Low-cost mine with a large gold resource located in a prospective district • Estimated mine life: 2033 Operating Results(3) • Delivered the lowest costs in the portfolio in 2018 2019 H1’20 Q2 2020, despite pandemic-related Production challenges a
Slide 40: Tasiast Project Financing
West Africa September 2020 Tasiast Project Financing Reflects comprehensive process of due diligence with lenders • Signed $300 million IFC-led project financing agreement in December 2019 o Non-recourse to Kinross o Four new, important partners in project underscore confidence in Tasiast and Maurit
Slide 41: Advancing the Tasiast 24k Project
West Africa September 2020 Advancing the Tasiast 24k Project Well-positioned to execute the 24k project Low relative execution risk • Project plan leverages Kinross’ experience successfully building and operating Phase One • Less infrastructure requirements • Permits in place Project advancing on sc
Slide 42: Tasiast 24k Project Feasibility Study Results
West Africa September 2020 Tasiast 24k Project Feasibility Study Results Proceeding with value-enhancing Tasiast 24k project, which offers attractive estimated returns, increased production and lower costs Operating Estimates Throughput capacity 24,000 t/d Average annual production (2022 – 2028) 563
Slide 43: Low-Capital Continuous Improvement Approach to 24k
West Africa September 2020 Low-Capital Continuous Improvement Approach to 24k Increasing throughput with debottlenecking initiatives, plant upgrades and optimization of the mine plan and processing circuit Building off success of Phase One and Project Overview continued outperformance of the SAG mil
Slide 44: Chirano, Ghana (90%)
West Africa September 2020 Chirano, Ghana (90%) Expected mine life extension and increased production due to exploration success • Chirano is an underground and open pit Operating Results(1,3) operation located in southwestern Ghana 2018 2019 H1’20 • Mine life expected to extend to at least 2025 Pro
Slide 45: Targeting Mine Life Extension at Chirano
West Africa September 2020 Targeting Mine Life Extension at Chirano 29,000 metres of drilling was completed at the Akwaaba, Tano, Obra and Mamnao West areas in H1 2020 • Attractive opportunity for mining beyond 2025 at Obra: o H1 2020 drilling yielded significant intercepts and extended the depth of
Slide 46: Russia
Russia 2019 Gold Equivalent Production(1) Kupol-Dvoinoye 21% Country Highlights Recently acquired Chulbatkan development project expected 2.5M ounces 56% to extend our long history of production in Russia beyond 23% Russia 2030 Long track record of mine life extensions expected to continue at Kupol
Slide 47: Deep Experience In-Country
Russia September 2020 Deep Experience In-Country Kinross has a long and successful 25-year track record investing in Russia Significant operating experience 2019 Statistics: • Operated four mines, including the high-grade, low Kinross Investments in Russia cost Kupol and Dvoinoye mines 98.2% of empl
Slide 48: Foreign Investment in Russia
Russia September 2020 Foreign Investment in Russia The world’s leading companies are Foreign Investment Advisory Council invested in Russia • Chaired by the Russian Prime Minister, includes CEOs from over 50 international companies 48
Slide 49: Strong Platform in Russia
Russia September 2020 Strong Platform in Russia Track record of adding reserves through exploration to offset depletion at Kupol supports a potential bridge to production at Chulbatkan 12.0 2025 Gold Equivalent Ounces 10.0 End of Mine Life 8.0 (Millions) 6.0 2020 4.0 2.0 - 2015 2008 2009 2010 2011 2
Slide 50: Kupol-Dvoinoye (100%)
Russia September 2020 Kupol-Dvoinoye (100%) Our Russian mines are a model for successfully operating in a remote location • High-grade, low-cost underground mines Operating Results(3) supported by one mill 2018 2019 H1’20 • Mine life expected to extend to at least 2025 Production 489,947 527,343 251
Slide 51: Chulbatkan: Favourable Project Location
Russia September 2020 Chulbatkan: Favourable Project Location Khabarovsk is industrialized and has a well-established mining and exploration sector Mining-friendly jurisdiction Kupol Magadan • Several gold producers active in the region Khabarovsk Ten operating mines Fourth largest gold producin
Slide 52: Chulbatkan: Strong Base Case with Upside Potential
Russia September 2020 Chulbatkan: Strong Base Case with Upside Potential Expected to be a substantial open pit gold mine with a low all-in sustaining cost(3) • Preliminary estimates; scope of project may change following planned extensive drill program and technical studies and trade-offs Excellent
Slide 53: Significant Upside Opportunities at Chulbatkan
Russia September 2020 Significant Upside Opportunities at Chulbatkan Robust exploration program has commenced with a focus of defining and further extending the resource • Confirmatory drill program(5) encountered a potential • Drill planning and execution to grow high-grade structure within the exi
Slide 54: Encouraging Results at Chulbatkan
Russia September 2020 Encouraging Results at Chulbatkan ~35,500m of infill, step-out and metallurgical drilling completed by the end of Q2 2020 • Exploration results support thesis for the project: o Large estimated resource with highly continuous mineralization open along strike and at depth • Expe
Slide 55: Chulbatkan Regional Exploration Upside
Russia September 2020 Chulbatkan Regional Exploration Upside Numerous untested potential targets within the ~120km2 exploration license • Multiple structural environments analogous to Chulbatkan deposit • Multiple downstream placer gold occurrences indicate hard rock sources within license area • Nu
Slide 56: Corporate Responsibility
Corporate Responsibility 56
Slide 57: Our Approach
Corporate Responsibility September 2020 Our Approach At the heart of our success is our people and our four Core Values Our Values and Guiding Principles unite our global workforce Our approach to Corporate Responsibility can be distilled into four main areas: • Do no harm – We work to protect our w
Slide 58: Strong Safety Performance
Corporate Responsibility September 2020 Strong Safety Performance Maintained Total Reportable Injury Frequency Rate on par with, or better than, low-risk, non-industrial sectors • Implemented risk controls, training, and provided leadership to ensure a culture of safe work at all Benchmarking TRIFR
Slide 59: Climate Change and Energy Efficiency
Corporate Responsibility September 2020 Climate Change and Energy Efficiency GHG intensity one of lowest in the industry – Paracatu down by 38% since 2017 • Completed independent evaluation of disclosure and performance on climate change in 2020 Benchmarking GHG Emissions Five-Year Average • Initiat
Slide 60: Managing our Environmental Footprint
Corporate Responsibility September 2020 Managing our Environmental Footprint We are a responsible steward of land and water during all stages of the mine’s life cycle 2019 Highlights Performance Highlights • Received the top ranking for the second year in • Sustained one of the a row from World Wild
Slide 61: Responsible & Safe Tailings Management
Corporate Responsibility September 2020 Responsible & Safe Tailings Management All of our tailings facilities are designed and constructed to the highest engineering standards and meet or exceed regulatory and international requirements and standards of best practice • Tailings management programs i
Slide 62: Governance Highlights
Corporate Responsibility September 2020 Governance Highlights Kinross is committed to the highest standards of corporate governance and accountability • 9 of 10 Board members are • All directors are independent except for independent the Chief Executive Officer • All of our board committees are • Bo
Slide 63: Awards and Recognitions
Corporate Responsibility September 2020 Awards and Recognitions Kinross received strong recognition for its ESG performance, scoring in the 88th percentile in SAM 2019 assessment Health and Safety: • Sentinels of Safety award at Fort Knox from the U.S. National Mining Association • Chirano named the
Slide 64: Appendix
IX Append KINROSS
Slide 65: Second Quarter 2020 Financial Highlights
Second Quarter 2020 Financial Highlights
Slide 66: Operational and Financial Highlights
Second Quarter 2020 Financial Highlights September 2020 Operational and Financial Highlights Company tracking within original guidance ranges; portfolio of mines generated strong free cash flow • Increased cash position to ~$1.5 billion; overall liquidity of ~$2.3 billion • Investment grade Q2 2020
Slide 67: Second Quarter Financial Highlights
Second Quarter 2020 Financial Highlights September 2020 Second Quarter Financial Highlights Produced approximately 572,000oz.(1) at an average cost of sales of $725/oz.(1,3) and an all-in sustaining cost of $984/oz.,(1,3) tracking original guidance ranges Year-over-year improvements Quarter-over-qua
Slide 68: COVID-19 Response
COVID-19 Response
Slide 69: Essential Service Status
COVID-19 Response September 2020 Essential Service Status(i) Operation Location Status Government Decree Mining considered essential as part of State of Nevada regulations issued on Round Mountain Nevada, U.S.A. Operating March 20, 2020. Mining considered essential as part of State of Nevada regulat
Slide 70: Community Impact
COVID-19 Response September 2020 Community Impact Community health and safety is a key priority. Kinross has committed $5.4 million to help local communities and health authorities deal with the impacts of COVID-19. • Donated medical supplies and equipment to health authorities in many of our jurisd
Slide 71: Terms Reached with the Government of Mauritania
Terms Reached with the Government of Mauritania
Slide 72: Enhanced Partnership with Government of Mauritania
Terms Reached with Government of Mauritania September 2020 Enhanced Partnership with Government of Mauritania “Tasiast is an important contributor to Mauritania and we believe our new agreement will be a positive model for other foreign mining investors.” - Mauritanian Ministry of Petroleum, Mines a
Slide 73: Updated Royalty Structure
Terms Reached with Government of Mauritania September 2020 Updated Royalty Structure Voluntarily updating royalty structure to bring it in line with current law and comparable levels in the region • Strengthens the foundation for long-term stability and further aligns interests by ensuring Mauritani
Slide 74: Tasiast Sud: 30-year Exploitation License to be Granted
Terms Reached with Government of Mauritania September 2020 Tasiast Sud: 30-year Exploitation License to be Granted Large, prospective property located ~10km south of the Tasiast mine area • Initial mining expected to take place at the Tamaya deposit; mill grade ore to be processed at the existing Ta
Slide 75: Mauritania Highlights
Terms Reached with Government of Mauritania September 2020 Mauritania Highlights Kinross has successfully operated in Mauritania since 2010 • Peaceful and democratic transition of power in 2019 Country Statistics(i) (2019 estimates, unless otherwise noted) President Ghazouani elected with a pro- b
Slide 76: Significant Contributions In-Country
Terms Reached with Government of Mauritania September 2020 Significant Contributions In-Country From 2010 - 2019, Kinross has contributed over $3 billion to Mauritania’s economy through taxes, procurement, community programs and wages • Invested over $30M in training and capacity building from 2013
Slide 77: Endnotes
Appendix September 2020 Endnotes 1) Unless otherwise noted, gold equivalent production, gold equivalent ounces sold and production cost of sales figures in this presentation are based on Kinross’ 90% share of Chirano production and sales. Also unless otherwise noted, dollar per ounce ($/oz.) figures
Slide 78: Notes – 2019 Kinross Mineral Reserve & Resource Statements
Notes – 2019 Kinross Mineral Reserve & Resource Statements September 2020 (1) Unless otherwise noted, the Company’s mineral reserves are estimated using appropriate cut-off grades based on an assumed gold price of $1,200 per ounce. Mineral reserves are estimated using appropriate process recoveries,
Slide 79: Slide 79