Kinross Gold Corporation · TSX:K
Kinross Gold — TD Securities Mining Conference 2012
32 slides from Kinross Gold's conference presentation, Jan 24, 2012
Slide 1: Delivering Disciplined Growth
DELIVERING DISCIPLINED GROWTH TD SECURITIES MINING CONFERENCE January 24, 2012 1
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, including any information as to the future performance of Kinross, constitute “forward looking statements” with
Slide 3: Why Kinross?
WHY KINROSS? 1. Robust operating cash flow from 10 operating mines today 2. Pure gold, high-growth senior producer 3. Disciplined approach to building unique suite of world-class gold assets 3
Slide 4: Focused in the World's Best Districts
FOCUSED IN THE WORLD’S BEST DISTRICTS Dvoinoye Kupol Fort Knox Kettle River-Buckhorn Round Mountain Tasiast Chirano Fruta del Norte Crixas Paracatu La Coipa Lobo-Marte Maricunga Cerro Casale 10 operating mines 5 development projects 4
Slide 5: Kinross Preliminary 2011 Results
KINROSS PRELIMINARY 2011 RESULTS • Within previously stated guidance range Gold Equivalent Production(1) Production Cost of Sales(2) 2.6 ~$600 2.3 $508 Ounces (millions) $/oz. 2010 2011 2010 2011 (1) Refer to endnote #1. 5 (2) Refer to endnote #2.
Slide 6: 2012 Outlook
2012 OUTLOOK(3) PRODUCTION & COSTS Production(1) % of Total Production cost of Sales(2) Region (000 ounces ) Production ($/oz) South America 930 – 1,030 36% $780 – $850 North America 620 - 660 24% $620 – $660 West Africa 500 – 560 20% $740 – $800 (attributable) Russia 525 – 565 20% $470 – $495 Gold
Slide 7: Delivering Expanding Margins
DELIVERING EXPANDING MARGINS 2005 – Q3 2011: $1,012 • Average realized gold price: +270% • Kinross’ attributable margin(4): +495% $873 $784 +495% $683 Attributable margin (US$/oz.) $530 $436 $329 $279 $170 2005 2006 2007 2008 2009 2010 Q1 Q2 Q3 2011 (4) Refer to endnote #4. 7
Slide 8: Financial Strength & Discipline
FINANCIAL STRENGTH & DISCIPLINE • Received investment grade credit ratings from all three major rating agencies • $1.2 bn line of credit • Approximately $1.6 bn of adjusted cash flow(5) over last twelve months. MARKET CAP CASH AND CASH EQUIVALENTS ADJUSTED CASH FLOW(2) (US$ bn) (US$ mm) (US$ mm) $1,
Slide 9: Liquidity & Capital Resources
LIQUIDITY & CAPITAL RESOURCES • Cash on hand at September 30, 2011: $1.9 billion • $1.2 billion revolving credit facility $1,875 As at September 30, 2011 US$ millions $1,137 $573 Cash and cash equivalents Available lines of credit Long-term investments & investments in associates 9
Slide 10: Goodwill Impairment Assessment
GOODWILL IMPAIRMENT ASSESSMENT • In the process of carrying out annual impairment testing • Expect to release results of this assessment with year-end results • Kinross expects to record a material non-cash accounting charge primarily relating to the goodwill recorded for the Tasiast mine • At Q3 20
Slide 11: Staking Districts, Adding Resources, Improving Grade
STAKING DISTRICTS, ADDING RESOURCES, IMPROVING GRADE GOLD RESOURCES(6) 2P GOLD RESERVE EXPLORATION SPEND (mm oz.) GRADE(6) ($ mm) Proven & Probable Gold Reserves (g/t) Measured & Indicated Gold Resources Inferred Gold Resources +221% +41% 0.72 +12x $220 20.1 0.51 24.7 2.9 63.3 6.1 $17 24.7 2005 Now
Slide 12: Improving Grade Profile
IMPROVING GRADE PROFILE Barrick Goldcorp Newmont Kinross 1.5 Proven and Probable Gold Reserve Grade Growth 1.4 1.3 1.2 (2005 index = 1) 1.1 1.0 0.9 0.8 0.7 0.6 0.5 2005 2006 2007 2008 2009 2010 Source: Company reports 12
Slide 13: Capital & Project Optimization
CAPITAL & PROJECT OPTIMIZATION OBJECTIVE: To advance Kinross’ major growth development projects while: Generating enhanced returns on capital Maximizing shareholder value Maintaining strong balance sheet • Capital & project optimization rationale: 1. Volatile market environment with shareholde
Slide 14: Tasiast, Mauritania
TASIAST, MAURITANIA Greenstone Rocks • Expanded drilling program focused Banded Iron Fm around existing Tasiast mine Intrusives Felsic Volcanics Greenschist Tenements • Only 8 km of 80 km strike length tested Tasiast Shear 2010 Resource Shell • Mining license area: 312 km2 • Total exploration licens
Slide 15: Tasiast, Mauritania
TASIAST, MAURITANIA TASIAST EXPANSION • Exploring alternatives to the Tasiast scoping study for further feasibility level review • Incorporating increased knowledge of the orebody based on recent infill drilling • Assessing ore processing options: milling, heap leaching & combinations of both • Near
Slide 16: Fruta del Norte, Ecuador
FRUTA DEL NORTE, ECUADOR FRUTA DEL NORTE • On-going discussions with government to advance negotiation of exploitation and investment protection agreements • Continuing to explore options to optimize capital and improve overall project economics prior to finalizing the feasibility study and agreemen
Slide 17: Dvoinoye, Russia
DVOINOYE, RUSSIA • Underground mine with an expected 8-year mine life Expected avg. output of 900 tonnes per day (2013-2020) • Ore to be processed at the Kupol mill Throughput expected to increase to 4,000 tpd • Development of exploration decline advanced to 650 metres as of end of Q3 2011 • Adv
Slide 18: Pompeya: New Discovery at La Coipa
POMPEYA: NEW DISCOVERY AT LA COIPA • Significant gold and silver discovery • Located 3 km northeast of La Coipa mill Part of the CMLC JV property (75% Kinross) • Significant intersections include: DPMP-006: 58 m @ 1.15 g/t Au & 256 g/t Ag (6.99 g/t Au eq.) DPMP-015: 146 m @ 2.4 g/t Au & 95.2 g
Slide 19: Why Kinross?
WHY KINROSS? 1. Robust operating cash flow from 10 operating mines today 2. Pure gold, high-growth senior producer 3. Disciplined approach to building unique suite of world-class gold assets 19
Slide 20: Appendix
APPENDIX 20
Slide 21: Fort Knox, USA (100%)
FORT KNOX, USA (100%) • Located in Alaska • Expansion and new heap leach to extend mine life OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) YTD Q3 2011 219,035 $675 FY 2010 349,729 $550 2010 GOLD RESERVES AND RESOURCES(6) TONNES GRADE OUNCES (thousands) (g/t) (thousands) 2P Reserv
Slide 22: Round Mountain, USA (50%)
ROUND MOUNTAIN, USA (50%) • Kinross-operated JV with Barrick • Located in Nevada, USA • Open-pit mine OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) YTD Q3 2011 143,860 $728 FY 2010 184,554 $657 2010 GOLD RESERVES AND RESOURCES(6) TONNES GRADE OUNCES (thousands) (g/t) (thousands)
Slide 23: Kettle River-Buckhorn, USA (100%)
KETTLE RIVER-BUCKHORN, USA (100%) • Entered production in Q4/08 • Small foot-print, underground mine • Near-mine exploration targets OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) YTD Q3 2011 133,289 $412 FY 2010 198,810 $330 2010 GOLD RESERVES AND RESOURCES(6) TONNES GRADE OUNCES
Slide 24: Kupol, Russia (100%)
KUPOL, RUSSIA (100%) • Completed transaction increasing ownership to 100% from 75% on April 27, 2011 • 3,000 tpd mill with open-pit and underground OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) YTD Q3 2011 448,639 $360 FY 2010 554,008 $319 Kinross increased its ownership in the K
Slide 25: Paracatu, Brazil (100%)
PARACATU, BRAZIL (100%) • Plant 2 expansions: 3rd ball mill commissioned in Q2 2011 4th ball mill expected to be operational in Q3 2012 OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) YTD Q3 2011 335,419 $715 FY 2010 482,397 $535 2010 GOLD RESERVES AND RESOURCES(6) TONNES GRADE
Slide 26: Crixas, Brazil (50%)
CRIXAS, BRAZIL (50%) • JV with AngloGold Ashanti • Underground mine located in the Brazil OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) YTD Q3 2011 45,802 $841 FY 2010 74,777 $486 2010 GOLD RESERVES AND RESOURCES(6) TONNES GRADE OUNCES (thousands) (g/t) (thousands) 2P Reserves 3,
Slide 27: La Coipa, Chile (100%)
LA COIPA, CHILE (100%) • Gold/silver mine in the Maricunga district • Comprehensive exploration program • Recent discovery at Pompeya (75% Kinross), located 3 km from mill OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) YTD Q3 2011 143,852 $708 FY 2010 196,330 $648 2010 GOLD RESERV
Slide 28: Maricunga, Chile (100%)
MARICUNGA, CHILE (100%) • Located the highly prospective Maricunga District • Open pit, heap leach operation OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) YTD Q3 2011 181,968 $468 FY 2010 156,590 $746 2010 GOLD RESERVES AND RESOURCES(6) TONNES GRADE OUNCES (thousands) (g/t) (thou
Slide 29: Tasiast, Mauritania (100%)
TASIAST, MAURITANIA (100%) • Open-pit mine ~300 km north of the city of Nouakchott • Remote, flat, sparsely populated desert OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) YTD Q3 2011 145,745 $691 FY 2010 56,611 $755 2010 production and costs for Tasiast reflect Kinross’ ownership
Slide 30: Chirano, Ghana (90%)
CHIRANO, GHANA (90%) • 90% owned by Kinross; Government of Ghana holds a 10% carried interest • 9 open-pits and 2 recently-discovered underground deposits OPERATING RESULTS (90%) PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) YTD Q3 2011 169,476 $702 FY 2010 80,298 $610 Production and costs for Chi
Slide 31: Endnotes
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’ ownership interest in Kupol (75% to April 27, 2011 and 100% thereafter) and 90% interest in Chirano. 2) Production cost of sales
Slide 32: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 YORK STREET, 17TH FLOOR TORONTO, ON M5J 2V5 WWW.KINROSS.COM 32