Kinross Gold Corporation · TSX:K
Kinross Gold — CIBC World Markets 2006 Conference
22 slides from Kinross Gold's conference presentation, Feb 16, 2006
Slide 1: CIBC World Markets Conference
CIBC World Markets Conference Tye W. Burt President and C.E.O. Kinross Gold Corporation Whistler, B.C. February 16, 2006
Slide 2: Legal Notice
Legal Notice Certain statements set forth in this presentation constitute “forward looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties and other factors that may cause the actual results, performan
Slide 3: Overview
Overview • Kinross Gold Corporation • Kinross in Russia • Why Russia? • Strategic Considerations 3
Slide 4: Kinross: A Major Gold Producer
Kinross: A Major Gold Producer • 3rd largest North American-based gold producer • $4.5 billion market value – top performer past 6 months relative to peers • NYSE and TSE listed – recent volume: 6 million shares per day • 2005 estimate • Gold production – 1.6 MM ozs • Total Cash Costs – est. $275 pe
Slide 5: Americas Focus, Global Reach
Americas Focus, Global Reach Fort Knox (100%) Kubaka (98.1%) Magadan, Russia (Open Pit, U/G) Alaska, USA (Open Pit) Musselwhite (32%) Ontario, Canada (U/G) Porcupine (49%) Kettle River (100%) Ontario, Canada (Open Pit, U/G) Washington, USA (U/G) Round Mountain (50%) Nevada, USA (Open Pit) La Coipa (
Slide 6: 2005 Third Quarter Summary
2005 Third Quarter Summary YTD to September 30 ¾ Production on target: 1.23 mm oz. at $272 per oz 1 ¾ Revenues up 10%: $535 mm ¾ Cash flow from operating activities: $107 mm ¾ Earnings (after Aquarius write down): ($58.3 mm) ¾ Reserves at Paracatu increase: add 4.8 ozs ¾ Capital expenditures: $108 m
Slide 7: Kinross Strategic Focus
Kinross Strategic Focus 1. Growth from Core Operating Assets • capital projects = organic growth • enhance margins • exit non-core assets 2. Develop Best People • top health/safety record • excellence in environmental compliance • experienced management • “pay-for-performance” 3. Building Blocks for
Slide 8: Kinross in Russia
Kinross in Russia 8
Slide 9: Kinross in Russia
Kinross in Russia Omolon Gold1 • Kinross first visited Russia in 1990 • In mid-1993, Omolon won bid for the Kubaka • Located in the Magadan Oblast about 300 km south of the Arctic Circle, 700 km northeast of Magadan Notes: (1) 98.1% owned Kinross subsidiary 9
Slide 10: Kinross in Russia: Kubaka Mine
Kinross in Russia Kubaka Mine • Opened in early 1997 • Biggest gold mining operation in Russia in the late 1990s • From 1997 to 2005, Kubaka produced 93 tonnes of gold • Mining now completed; currently processing low grade stockpiles 10
Slide 11: Kinross in Russia
Kinross in Russia • A well-regarded corporate citizen 11
Slide 12: Kinross in Russia: Focus on Exploration
Kinross in Russia Focus on Exploration • 416 staff at YE05; 81 in exploration • 2006 planned activities: ¾ Kubaka reclamation ¾ Evaluation of Birkachan low grade heap leach potential ¾ Expanded exploration program – 30,500 meters drilling in Magadan Oblast 12
Slide 13: Why Russia?
Why Russia? 13
Slide 14: Why do we like Russia?
Why do we like Russia? • Home to 5th largest gold resource in the world CANADA 800 RUSSIA CHINA 700 9,100t* 800 U.S. 600 800 8,100t* 700 800 500 600 700 5,216t* 600 700 13,200t* 400 500 500 600 300 400 400 500 200 300 300 400 100 200 200 300 0 Canada 100 100 200 129 t 0 Russia 0 169 t 100 0 71 yrs 2
Slide 15: Top Undeveloped Gold Projects
Top Undeveloped Gold Projects • 130 undeveloped primary • Excluding those controlled by gold projects over 2.5 MM major gold companies or in higher oz Au, 22% located in CIS risk countries, 32% located in CIS Top 71 Primary Gold Projects* Top 130 Primary Gold Projects* (Excl. Major Gold Co. Holdings
Slide 16: State of Development
State of Development Russia • Strong and stable federal government • Growing economy; relatively high inflation; stable exchange rate • Powerful domestic competitors – Norilsk/Polyus, PolyMetal, etc. • Maturing legal framework, not consistently applied outside Moscow • Competitive environment for sp
Slide 17: Strategic Considerations
Strategic Considerations 17
Slide 18: Corporate Geographic Priorities
Corporate Geographic Priorities • Geographic focus on the Americas and selected other regions High Priority Medium Priority Low Priority 18
Slide 19: Pursuing Opportunities in Russia
Pursuing Opportunities in Russia • Kinross reinitiated corporate development activities in Russia in 2005 • Proceeding carefully • Key issues: ¾ Competition vs. partnership ¾ Transparency of process ¾ Ability to complete ‘western style’ due diligence ¾ Need for balance in the asset portfolio ¾ Price
Slide 20: Market Commentary
Market Commentary Russian Discount Market’s Tolerance for Risk • One year forward P/E’s1: ¾ Russian Index – 8.7x ¾ Brazil Index – 11.6x ¾ N.A. Indices – 17.4x • Gold Sector P/NAVs2 ¾ Companies with CIS exposure – 1.8x NAV ¾ N.A. Golds – 2.4x NAV Source: Scotia Capital Emerging Market Research Notes:
Slide 21: Closing Comments on Russia
Closing Comments on Russia • Kinross has experience in a country where experience matters • Size of gold potential: very large • Need discipline to match opportunity with value/cost, risk mitigation • Evolving partnership opportunities 21
Slide 22: Kinross Gold Corporation
Shares outstanding: 345.3 million Market cap.: US$4.5 billion (at Feb. 1, 2006) KGC: NYSE (Common shares) K: TSX (Common shares) K.U: TSX (US dollar trading symbol) K.WT: TSX (Warrants expiring 05/12/07) Kinross Gold Corporation 40 King Street West, 52nd Floor Scotia Plaza Toronto, ON M5H 3Y2 416-36