Kinross Gold Corporation · TSX:K
Kinross Gold — RBC Global Mining and Materials Conference 2018
54 slides from Kinross Gold's conference presentation, Jun 7, 2018
Slide 1: Delivering Value
June 2018 Delivering Value. Kinross Gold Corporation
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 Operational Excellence Financial Strength & Flexibility Diverse portfolio of operating mines consistently Maintaining strong balance sheet continues to meeting or outperforming operational targets be a priority objective Repaid over $1.0 billion over 6 Met or exceeded past
Slide 4: TSX Sub-Indices Performance
Compelling Relative Value June 2018 TSX Sub-Indices Performance S&P/TSX 2016 Performance S&P/TSX 2017 Performance Kinross 71% Kinross 39% Base Metals 52% Health Care 38% Precious Metals 50% Base Metals 30% Materials 39% Consumer Discr. 20% Energy 36% Industrials 19% Industrials 23% Technology 17% Fi
Slide 5: Enterprise Value Versus Production
Compelling Relative Value June 2018 Enterprise Value Versus Production Market capitalization does not reflect significant scale of production and history of achieving guidance Enterprise Value(i) Net Debt to Historical Production (Moz)(iii) Consensus Production Estimates (Moz) (US$M) EBITDA(ii) Past
Slide 6: Operational Excellence
Operational Excellence We remain focused on operational excellence, building a culture of continuous improvement, innovation and disciplined cost management 6
Slide 7: Diversified Portfolio of Assets
Operational Excellence June 2018 Diversified Portfolio of Assets 60% of 2018E gold equivalent production expected from mines located in the Americas Dvoinoye, Russia Kupol, Russia Fort Knox, USA Bald Mountain, USA Round Mountain, USA Tasiast, Mauritania 2018E Gold Equivalent Production(1,2) 20% Chir
Slide 8: Strong First Quarter Operating Results
Operational Excellence June 2018 Strong First Quarter Operating Results Continued track record of meeting or outperforming our operational targets • Strong production and excellent cost performance across portfolio • Achieved lowest all-in sustaining cost since Kinross began reporting the metric in
Slide 9: First Quarter Operating Highlights
Operational Excellence June 2018 First Quarter Operating Highlights Bald Mountain, NV Fort Knox, AK Paracatu, Brazil • Record low cost of sales • Excellent cost performance • Strong production • Continued strong • Production in-line with our • Significant improvement in production expectations rainf
Slide 10: 2018E Production and Costs
Operational Excellence June 2018 2018E Production and Costs(1) Kinross Total(2) Regional Guidance 2018E Unit Costs ($ per gold equivalent ounce) 2.5 million Americas Cost of sales(3) $730/oz. (+/- 5%) (+/- 5%) 1.51 million 2018E Gold Equivalent Production (ounces) (+/- 5%) All-in sustaining cost(3)
Slide 11: Acquisition of Power Plants in Brazil
Operational Excellence June 2018 Acquisition of Power Plants in Brazil(i) Expected to reduce Paracatu’s cost of sales by ~$80/oz. Transaction Overview over the life of mine • Kinross to acquire two • Lowers operating costs by eliminating ~70% of future power hydro power plants in Summary purchases B
Slide 12: Strong Balance Sheet & Financial Flexibility
Strong Balance Sheet & Financial Flexibility With strong cash flow and no debt maturities until 2021, we have the financial strength and flexibility to fund our pipeline of development projects 12
Slide 13: Solid Financial Position
Strong Balance Sheet & Financial Flexibility June 2018 Solid Financial Position Strong position to finance organic development projects with existing cash and liquidity Maintaining Financial Flexibility Liquidity Position • Cash and cash equivalents of ~$1.0 billion • Available credit: $1.6 billion
Slide 14: Financial Strength & Discipline
Strong Balance Sheet & Financial Flexibility June 2018 Financial Strength & Discipline Our balance sheet has strengthened over the two-year construction period for Tasiast Phase One • Approved Phase One with view that balance sheet would be sufficient to fund construction • With bulk of Phase One sp
Slide 15: 2018E Capital Expenditures Outlook
Strong Balance Sheet & Financial Flexibility June 2018 2018E Capital Expenditures Outlook(1) Leveraging strong financial position to invest in development projects and our future Capital Expenditures • Total capital expenditures for 2018 are Sustaining Non-sustaning expected to be $1,075 million (+/
Slide 16: Manageable Debt Profile
Strong Balance Sheet & Financial Flexibility June 2018 Manageable Debt Profile No debt maturities prior to 2021 Debt Schedule Debt Ratings Agency Rating $500 $500 $500 S&P BBB- (Stable) Moody’s Ba1 (Stable) Fitch BBB- (Stable) $ millions Interest Rates $250 Senior Notes due 2021 5.125% Senior Notes
Slide 17: Development Projects
Development Projects We have a portfolio of development projects that we are progressing, as well as a pipeline of future opportunities that we are focused on advancing 17
Slide 18: Advancing Our Projects
Development Projects June 2018 Advancing Our Projects Portfolio of development projects and future opportunities progressing well Tasiast Two-Phased Expansion Round Mountain Phase W Bald Mountain Vantage Complex Phase One nearing completion; on Engineering ~90% complete Engineering ~90% complete bud
Slide 19: Tasiast Phase One
Development Projects June 2018 Tasiast Phase One On track to achieve throughput of 12,000 t/d by end of June 2018 • Successfully commissioned: Tailings storage facility Upgrades to power supply system Several ancillary systems • Advanced stages of commissioning the new primary crusher • Commis
Slide 20: Tasiast Phase One Nearing Completion
Development Projects June 2018 Tasiast Phase One Nearing Completion Primary crusher & conveyor Cyclone tower Conveyor & pebble crusher CIL plant 20
Slide 21: Tasiast Update
Development Projects June 2018 Tasiast Update We are assessing the Government of Mauritania’s request to enter into mutually beneficial discussions respecting all of Kinross’ activities in Mauritania, with a view to improving economic benefits to the country, including the potential impact on Phase
Slide 22: Round Mountain Phase W Overview
Development Projects June 2018 Round Mountain Phase W Overview The Phase W project is expected to extend mining by 5 years at one of Kinross’ top performing mines located in one of the world’s best mining jurisdictions 22
Slide 23: Phase W Feasibility Study Results
Development Projects June 2018 Phase W Feasibility Study Results Project expected to generate a 13% IRR at an assumed gold price of $1,200 per ounce Current mine plan + Phase W Estimates Average annual production (2018-2024) 341,000 gold ounces Production cost of sales (2018-2024) $765 per gold equi
Slide 24: Round Mountain Phase W
Development Projects June 2018 Round Mountain Phase W Phase W construction expected to be complete in Q2 2019 • Detailed engineering now 90% complete • Commenced grading of new heap leach area and earthworks in the new infrastructure area • Commissioned 2 new electric rope shovels • Stripping progre
Slide 25: Realizing Bald Mountain's Potential
Development Projects June 2018 Realizing Bald Mountain’s Potential 2016: Doubled reserve estimates(4) 2017: Doubled production & lowered costs • Added 1.2 million ounces, doubling the reserve estimate before depletion 300000 1200 $1,182 282,715 2.1 250000 1000 Proven and Probable Reserves (Moz.) Cos
Slide 26: Bald Mountain Vantage Complex
Development Projects June 2018 Bald Mountain Vantage Complex Construction of a new heap leach facility and related infrastructure to develop Vantage Complex in the South Area of Bald Mountain • Engineering approximately 90% complete • Earthworks are well underway • Majority of procurement packages a
Slide 27: Bald Mountain Exploration Highlights
Development Projects June 2018 Bald Mountain Exploration Highlights Kinross envisions Bald Mountain as a long-life asset with significant upside potential and mineral resource growth 2017 program largely focused on target identification • Targeted extensions at existing pits in order to support oper
Slide 28: Fort Knox Gilmore
Development Projects June 2018 Fort Knox Gilmore Commenced feasibility study analyzing potential layback to the west; expected to be complete in June 2018 28
Slide 29: Fort Knox Gilmore
Development Projects June 2018 Fort Knox Gilmore More than doubled Fort Knox’s measured and indicated resource estimates • Drilling program initiated in 2014, completing 73,000 metres of core and reverse circulation drilling in 205 holes • Results of the drilling program, engineering work and gainin
Slide 30: La Coipa Restart Project
Development Projects June 2018 La Coipa Restart Project We are evaluating the potential for a return to long-term production in Chile La Coipa Restart Project • Expect to initiate a feasibility study in mid-year • Permitting progressing Remaining two sectoral permits expected in H2 2018 Lobo Marte
Slide 31: Kupol
Exploration Highlights June 2018 Kupol Increased Kupol exploration budget in 2018 to continue exploration of high-potential targets • Primary objective of 2017 drilling in the North Extension was to determine extent of mineralization We continue to intersect high grade narrow vein mineralization e
Slide 32: 1-Year Mine Life Extension in Russia
Exploration Highlights June 2018 1-Year Mine Life Extension in Russia Continuing our track record of adding reserves to offset depletion at Kupol and Dvoinoye (4) Cumulative Production (Au eq.) Proven and Probable Reserves (Au eq.) 6.9 2.3 2017 • Estimated mill production extended to 6.3 2.6 2016 20
Slide 33: Curlew District
Exploration Highlights June 2018 Curlew District Promising underground opportunities in the Curlew District; drilling to define gaps and extend mineralization along strike • In 2018, we plan to dewater and rehabilitate the historic K2 mine in order to conduct exploration drilling from underground to
Slide 34: Compelling Relative Value
Compelling Relative Value Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities 34
Slide 35: 2018E Production & All-In Sustaining Cost
Compelling Relative Value June 2018 2018E Production & All-In Sustaining Cost 2018E Production 2018E All-In Sustaining Cost (million ounces) ($ per ounce) $1,200 5.0 $1,000 4.0 $800 3.0 $600 2.0 $400 1.0 $200 0.0 $0 Newmont Barrick Newmont Barrick Yamana Goldcorp Yamana AngloGold Gold Fields AngloGo
Slide 36: Industry-Leading Balance Sheet
Compelling Relative Value June 2018 Industry-Leading Balance Sheet Net debt to EBTIDA ratio of 0.6x as at March 31, 2018 2.3 Net Debt to EBITDA (LTM) 1.7 1.5 1.1 1.0 1.0 0.6 0.4 -1.1 Yamana Goldcorp AngloGold Barrick Agnico Gold Fields Kinross Newmont IAMGold Source: Company reports; Bloomberg – net
Slide 37: 2018E Metrics
Compelling Relative Value June 2018 2018E Metrics Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities EV / 2018E EBTIDA P / 2018E Operating CF 14.5 13.0 8.6 9.6 8.5 8.7 7.8 5.9 5.8 5.7 5.9 4.2 4.0 4.5 3.7 4.1 3
Slide 38: Appendix
KINROSS | 25 38
Slide 39: Currency & Oil Sensitivities
Appendix June 2018 Currency & Oil Sensitivities 2018 Budget Assumptions(1) 2018 Sensitivities (net of hedges)(1) Change from Estimated impact 2018 Budget Current Spot(i) Assumptions to cost of sales Gold US$1,200/oz. $1,293/oz. FX 10% US$17/oz. Russian rouble 10% US$12/oz.(ii) Oil US$55/bbl. $64/bbl
Slide 40: Fuel & Currency Hedges
Appendix June 2018 Fuel & Currency Hedges Managing exposure to fluctuations in foreign currency and input commodity prices • Overall 2018 FX exposures ~36% hedged at favourable rates compared to current spot prices • Continue to monitor our FX and oil exposures and look for opportunities to establis
Slide 41: Fort Knox, USA (100%)
Americas June 2018 Fort Knox, USA (100%) Commenced Gilmore feasibility study to analyze potential future layback • Impressive track record of operational Operating Results(3) excellence 2016 2017 • Estimated mine life: mill – 2020; mining – 2021 Production 409,844 381,115 (Au. Eq. oz.) Production co
Slide 42: Round Mountain, USA (100%)
Americas June 2018 Round Mountain, USA (100%) Strong cash flow generator with Phase W project extending mine life to 2027 • Phase W is expected to generate solid Operating Results(3) returns and extend mining 2016 2017 • Estimated mine life: 2024 (mining); 2027 (stockpile milling / residual leach) P
Slide 43: Summary of Feasibility Study Results
Round Mountain Phase W June 2018 Summary of Feasibility Study Results Operating Estimates (current mine plan + Phase W) Standalone Phase W Estimates Timeline Operational Metric Estimate Estimate Strip ratio 2.9 Life of mine production 1.5 million ounces Average grade processed 0.7 grams per tonne Li
Slide 44: Bald Mountain, USA (100%)
Americas June 2018 Bald Mountain, USA (100%) Forecasting strong near-term cash flow with significant upside potential • Large estimated mineral resource base with Operating Results(3) multiple sources of potential mineral reserve 2016 2017 additions • Successfully doubled production & lowered Produc
Slide 45: Paracatu, Brazil (100%)
Americas June 2018 Paracatu, Brazil (100%) Large gold mine with a long mine life that extends to 2032 • Paracatu is among the world’s largest gold Operating Results(3) operations with annual throughput of ~60Mt 2016 2017 • Cornerstone asset in Kinross’ portfolio Production • Estimated mine life: 203
Slide 46: Overview of Acquired Power Plants
Americas June 2018 Overview of Acquired Power Plants Agreement to acquire Barra dos Coquieros and Caçu hydro power plants Location • Both are located on the Claro River in the State of Goias, approximately 660km west of Paracatu • No additional infrastructure is required to provide power to the mine
Slide 47: La Coipa Restart Project PFS Results
Americas June 2018 La Coipa Restart Project PFS Results Project expected to generate a 20% IRR at an assumed gold price of $1,200 per ounce • The pre-feasibility study estimates a 5.5 year mine life, following receipt of permits and commencement of stripping Processing expected to commence 1.5 yea
Slide 48: Kupol-Dvoinoye (100%)
Russia June 2018 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 1 mill 2016 2017 • Estimated mine life: 2022 Production 734,143 580,451 (Au. Eq. oz.) Production cost of sal
Slide 49: Foreign Investment in Russia
Russia 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 49
Slide 50: Tasiast, Mauritania (100%)
West Africa June 2018 Tasiast, Mauritania (100%) Operating mine with a large gold resource located in a prospective district • Phase One expected to double production Operating Results(3) from current levels while significantly 2016 2017 reducing costs Production • Expected to reach 12,000 t/d by th
Slide 51: Summary of Feasibility Study Results
Tasiast Expansion Project June 2018 Summary of Feasibility Study Results Operating Estimates (Phase One & Two combined) Standalone Phase Two Estimates Timeline Operational Metric Estimate Estimate Total tonnes mined 438 million Initial capital $590 million Strip ratio 6.4 2020-2024 Average CIL grade
Slide 52: Chirano, Ghana (90%)
West Africa June 2018 Chirano, Ghana (90%) Cost reduction achieved at Chirano by transitioning to self-perform • Chirano is an underground operation Operating Results(2,3) located in southwestern Ghana 2016 2017 • Estimated mine life: 2020 Production 190,759 221,424 (Au. Eq. oz.) Production cost of
Slide 53: Endnotes
Appendix June 2018 Endnotes 1) For more information regarding Kinross’ production, cost and capital expenditures outlook for 2018, please refer to the news releases dated February 14, 2018, and May 8, 2018, both of which are available on our website at www.Kinross.com. Kinross’ outlook for 2018 repr
Slide 54: KINROSS
KINROSS 25 YEARS
Kinross Gold — RBC Global Mining and Materials Conference 2018 on 6ix