Kinross Gold Corporation · TSX:K
Kinross Gold — CIBC London Gold Forum 2018
58 slides from Kinross Gold's conference presentation, April 2018
Slide 1: Delivering Value
April 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 $1.0 billion over 6 Met or exceeded past
Slide 4: TSX Sub-Indices Performance
Compelling Relative Value April 2018 TSX Sub-Indices Performance S&P/TSX 2016 Performance S&P/TSX 2017 Performance Kinross 71% Kinross 39% Base Metals 52% Health Care 38% Precious Metals 50% Base Metals 30% Materials 39% Consumer Discr. 20% Energy 36% Industrials 19% Industrials 23% Technology 17% F
Slide 5: Enterprise Value Versus Production
Compelling Relative Value April 2018 Enterprise Value Versus Production Market capitalization does not reflect significant scale of production and history of achieving guidance Enterprise Value(i) Net Debt to Historical Production (Moz)(iii) Consensus Production Estimates (Moz) (US$M) EBITDA(ii) Pas
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 April 2018 Diversified Portfolio of Assets 60% of estimated 2018 gold equivalent production 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(2,3) 20% Chi
Slide 8: Strong Operating Track Record
Operational Excellence April 2018 Strong Operating Track Record Continued track record of meeting or outperforming our operational targets • Met guidance for sixth consecutive year in 2017 • Achieved the high-end of production and the low-end of cost forecasts Particularly impressive results at Ta
Slide 9: 2018E Production and Costs
Operational Excellence April 2018 2018E Production and Costs Kinross Total(3) Regional Guidance 2018E Unit Costs ($ per gold equivalent ounce) 2.5 million Americas Cost of sales(4) $730/oz. (+/- 5%) (+/- 5%) 1.51 million 2018E Gold Equivalent Production (ounces) (+/- 5%) All-in sustaining cost(4) $9
Slide 10: Acquisition of Power Plants in Brazil
Operational Excellence April 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
Slide 11: 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 11
Slide 12: Solid Financial Position
Strong Balance Sheet & Financial Flexibility April 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: $1.6 billion
Slide 13: 2018E Capital Expenditures Outlook
Strong Balance Sheet & Financial Flexibility April 2018 2018E Capital Expenditures Outlook Leveraging strong financial position to invest in development projects and our future 2018E Capital Expenditures ($ millions)(2) Region Sustaining Non-Sustaining Regional Total Americas $280 $285 $565 West Afr
Slide 14: 2018E Non-Sustaining Capital Guidance
Strong Balance Sheet & Financial Flexibility April 2018 2018E Non-Sustaining Capital Guidance Expecting to invest $680 million of non-sustaining capital as we execute on 5 projects and advance 3 development opportunities • Leveraging financial strength we’ve built 2018E Non-Sustaining Capital(2) ove
Slide 15: Manageable Debt Profile
Strong Balance Sheet & Financial Flexibility April 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 16: Attractive Development Projects
Attractive Development Projects Our pipeline of 5 high-quality development projects are all proceeding on schedule and on budget, and we are also continuing to advance 3 additional development opportunities 16
Slide 17: Advancing Organic Projects
Advancing Organic Projects All of our development projects are advancing according to plan, with key milestones planned for 2018 and beyond Q1 2018 Q2 2018 Q3 2018 Q4 2018 2019 2020 Tasiast Phase 2 Tasiast Phase 1 Moroshka Bald Mountain Tasiast Phase 2 Construction Expected to Expected to commence m
Slide 18: Tasiast Two-Phased Mill Expansion
Attractive Development Projects Tasiast Two-Phased Mill Expansion • Phase Two expected to transform Tasiast into a world-class mine with sizeable production, low costs and a long estimated mine life 18
Slide 19: Large Orebody with Low Execution Risk
Attractive Development Projects April 2018 Large Orebody with Low Execution Risk Focus has been to right-size the processing capacity to capture the full value and potential of Tasiast’s large mineral resource estimate Relatively Low-Risk Brownfields Expansion Project • Have owned and operated the m
Slide 20: Two-Phased Expansion Concept
Attractive Development Projects April 2018 Two-Phased Expansion Concept Phase One: Expansion to 12,000 t/d Existing ball mills Gyratory Ore Oversized Leaching Refining crusher stockpile SAG mill Phase Two: Expansion to 30,000 t/d Gyratory Ore SAG mill New, larger ball Additional leaching Thickening
Slide 21: Phase Two Feasibility Study Results
Attractive Development Projects April 2018 Phase Two Feasibility Study Results Phase Two expansion expected to transform Tasiast into a world-class mine with low costs and a long estimated mine life Combined Phase One and Phase Two Estimates Average annual production (2020-2024) 812,000 ounces Produ
Slide 22: Operating Efficiencies Enhancing Project
Attractive Development Projects April 2018 Operating Efficiencies Enhancing Project Recent operating and processing enhancements have positively benefitted both Phase One and Phase Two expansion projects • Recent performance outperforming study • Further reduction in processing costs expected as est
Slide 23: Tasiast Phase One
Attractive Development Projects April 2018 Tasiast Phase One On track for full commercial production by end of June 2018 • Plant construction is approximately 93% complete Remaining work focused primarily on electrical, instrumentation and controls installations • Tailings storage facility now com
Slide 24: Tasiast Phase One Progressing Well
Attractive Development Projects April 2018 Tasiast Phase One Progressing Well On track for full commercial production by end of June 2018 Tailings facility in operation Primary crusher Conveyor CIL plant 24
Slide 25: Tasiast Phase Two
Attractive Development Projects April 2018 Tasiast Phase Two Phase Two is expected to transform Tasiast into a large, world-class operation with low costs and a long mine life • Preparing to start development work with Phase One nearing completion • Early works for ball mill and power plant expected
Slide 26: Round Mountain Phase W Overview
Attractive Development Projects April 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 26
Slide 27: Phase W Feasibility Study Results
Attractive Development Projects April 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 p
Slide 28: Advancing Round Mountain Phase W
Attractive Development Projects April 2018 Advancing Round Mountain Phase W Phase W construction expected to be complete in Q2 2019 • Received Decision Record from the U.S. Bureau of Land Management and other necessary approvals in Q4 2017 • Stripping of Phase W was initiated in late 2017, ahead of
Slide 29: Realizing Bald Mountain's Potential
Attractive Development Projects April 2018 Realizing Bald Mountain’s Potential 2016: Doubled reserve estimates(1) 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 Reserve
Slide 30: Bald Mountain Vantage Complex
Attractive Development Projects April 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 • Contemplates construction of a new heap leach facility and related infrastructure Design inc
Slide 31: Bald Mountain Exploration Highlights
Attractive Development Projects April 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
Slide 32: Fort Knox Gilmore
Attractive Development Projects April 2018 Fort Knox Gilmore Commenced feasibility study analyzing potential layback to the west; expected to be complete mid-2018 32
Slide 33: Fort Knox Gilmore
Attractive Development Projects April 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 wor
Slide 34: Tasiast Sud
Attractive Development Projects April 2018 Tasiast Sud Evaluating the potential for a dump leach operation located 10km south of the Tasiast mine • Tasiast Sud pre-feasibility study progressing well; expected to be complete in H2 2018 o Study evaluating potential for dump leach operation that combin
Slide 35: Kupol
Exploration Highlights April 2018 Kupol Increasing 2018 exploration budget for Kupol 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 mineralizati
Slide 36: 1-Year Mine Life Extension in Russia
Exploration Highlights April 2018 1-Year Mine Life Extension in Russia Continuing our track record of adding reserves to offset depletion at Kupol and Dvoinoye 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 2022,
Slide 37: Curlew District
Exploration Highlights April 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 t
Slide 38: Compelling Relative Value
Compelling Relative Value Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities 38
Slide 39: 2018E Production & All-In Sustaining Cost
Compelling Relative Value April 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 AngloG
Slide 40: Industry-Leading Balance Sheet
Compelling Relative Value April 2018 Industry-Leading Balance Sheet Net debt to EBTIDA ratio of 0.6x as at December 31, 2017 2.5 Net Debt to EBITDA (LTM) 1.7 1.5 1.0 0.9 0.8 0.6 0.4 -1.2 Yamana Goldcorp AngloGold Barrick Gold Fields Agnico Kinross Newmont IAMGold Source: Company reports; Bloomberg –
Slide 41: 2018E Metrics
Compelling Relative Value April 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 12.7 14.4 8.8 8.4 9.6 8.4 7.2 5.7 5.6 5.1 5.6 4.5 4.0 3.8 4.5 4.3
Slide 42: Appendix
KINROSS | 25 42
Slide 43: Currency & Oil Sensitivities
Appendix April 2018 Currency & Oil Sensitivities 2018 Budget Assumptions(2) 2018 Sensitivities (net of hedges)(2) Change from Estimated impact 2018 Budget Current Spot(i) Assumptions to cost of sales Gold US$1,200/oz. $1,336/oz. FX 10% US$17/oz. Russian rouble 10% US$19/oz.(ii) Oil US$55/bbl. $63/bb
Slide 44: Fuel & Currency Hedges
Appendix April 2018 Fuel & Currency Hedges Managing exposure to fluctuations in foreign currency and input commodity prices • Overall 2018 FX exposures ~30% hedged at favourable rates compared to current spot prices • Continue to monitor our FX and oil exposure and look for opportunities to establis
Slide 45: Fort Knox, USA (100%)
Americas April 2018 Fort Knox, USA (100%) Commenced Gilmore feasibility study to analyze potential future layback • Impressive track record of operational Operating Results(4) excellence 2016 2017 • Estimated mine life: mill – 2020; mining – 2021 Production 409,844 381,115 (Au. Eq. oz.) Production c
Slide 46: Round Mountain, USA (100%)
Americas April 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(4) returns and extend mining 2016 2017 • Estimated mine life: 2024 (mining); 2027 (stockpile milling / residual leach)
Slide 47: Summary of Feasibility Study Results
Round Mountain Phase W April 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 L
Slide 48: Bald Mountain, USA (100%)
Americas April 2018 Bald Mountain, USA (100%) Forecasting strong near-term cash flow with significant upside potential • Large estimated mineral resource base with Operating Results(4) multiple sources of potential mineral reserve 2016 2017 additions • Successfully doubled production & lowered Produ
Slide 49: Paracatu, Brazil (100%)
Americas April 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(4) operations with annual throughput of ~60Mt 2016 2017 • Cornerstone asset in Kinross’ portfolio Production • Estimated mine life: 20
Slide 50: Overview of Acquired Power Plants
Americas April 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 min
Slide 51: La Coipa Restart Project PFS Results
Americas April 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 ye
Slide 52: Kupol-Dvoinoye (100%)
Russia April 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(4) supported by 1 mill 2016 2017 • Estimated mine life: 2022 Production 734,143 580,451 (Au. Eq. oz.) Production cost of sa
Slide 53: 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 53
Slide 54: Tasiast, Mauritania (100%)
West Africa April 2018 Tasiast, Mauritania (100%) Operating mine with a large gold resource located in a prospective district • Phase Two of mill expansion expected to Operating Results(4) transform Tasiast into a world-class 2016 2017 operation; forecast to reach commercial production in Q3 2020 Pr
Slide 55: Summary of Feasibility Study Results
Tasiast Expansion Project April 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 grad
Slide 56: Chirano, Ghana (90%)
West Africa April 2018 Chirano, Ghana (90%) Cost reduction achieved at Chirano by transitioning to self-perform • Chirano is an underground operation Operating Results(3,4) located in southwestern Ghana 2016 2017 • Estimated mine life: 2020 Production 190,759 221,424 (Au. Eq. oz.) Production cost of
Slide 57: Endnotes
Appendix April 2018 Endnotes 1) Mineral reserves and mineral resources are estimates. For more information regarding Kinross’ 2017 mineral reserve and mineral resource estimates, please refer to our Annual Mineral Reserve and Mineral Resource Statement as at December 31, 2017 contained in our news r
Slide 58: Kinross
KINROSS 25 YEARS