Kinross Gold Corporation · TSX:K
Kinross Gold — Investor Presentation (April 2009)
46 slides from Kinross Gold's investor presentation, Apr 16, 2009
Slide 1: Delivering Disciplined Growth
Delivering Disciplined Growth RBC Sales Desk Presentation – April 16, 2009
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 this presentation, including any information as to the future financial or operating performance of Kinross, constitute “forward-looking information
Slide 3: Why Kinross?
Why Kinross? Kinross today: 1. Growing margins, growing cash flows • Portfolio of 8 operating mines g costs declining o Production rising, g • Pure P gold/silver ld/ il producer d o Higher cash margins o Growth in margins and CFPS(3) • ‘09e: 2.4 – 2.5 mm oz Au(1) • Low cost of sales 2 2. Strong fina
Slide 4: Growing margins… growing cash flow
Growing margins… growing cash flow • 53% production growth (‘07 – ’09e) • Costs declined 21% through ‘08 • Comparing FY’07 to FY’08: – Gold up 23% – Margins up 32% – CFPS up 80% 4
Slide 5: Focused portfolio of 8 operating mines in 4 countries
Focused portfolio of 8 operating mines in 4 countries Operating Mines in Four Key Regions: Chile USA • Maricunga • Fort Knox • La Coipa • Kettle River – Buckhorn • Round Mountain Brazil Russia • Paracatu • Kupol • Crixas KINROSS GOLD CORPORATION APRIL 2009 5
Slide 6: Production guidance for 2009: up 36% over 2008
Production guidance for 2009: up 36% over 2008 Production Cost of Number Estimated Country Ounces (000s) % of 2009e total Sales / oz. of Mines Mine Life Chile 450 – 500 19% $425 – 460 2 16+ Bra il Brazil 580 – 650 25% $425 – 470 2 30+ Russia(4) 675 – 725 29% $265 – 290 1 8+ USA 625 – 680 27% $440 -
Slide 7: Growing production & declining costs
Growing production & declining costs Production (mm oz.) Cost of Sales ($/oz.)(2) 2.4 – 2.5 $421 1.8 $390 - $420 1.6 $368 (1) (1) 2007 2008 2009e 2007 2008 2009e (1) Please refer to endnote #1. KINROSS GOLD CORPORATION (2) Please refer to endnote #2. APRIL 2009 7
Slide 8: Kinross margins expanding
Kinross margins expanding • Kinross’ cost of sales margin(5) up 315% $436 • Average g realized g gold p price is up p 180% Up ost of Sales($/oz) Margin 315% $329 $279 $170 $161 Co $135 $105 FY'02 FY 02 FY'03 FY 03 FY'04 FY 04 FY'05 FY 05 FY'06 FY 06 FY'07 FY 07 FY'08 FY 08 (5) Please refer to endnot
Slide 9: Margin performance
Margin performance KGC: +315% 8 % NEM: +282% GG: +157% ABX: +92% 2002 2003 2004 2005 2006 2007 2008 KINROSS GOLD CORPORATION APRIL 2009 9
Slide 10: Strong financial & operating results
Strong financial & operating results • Record production & revenue in 2008 • ’08 CFPS CFPS: $1.01; $1 01 5 yr CAGR: CAGR 20% • $883 mm in cash; $68 mm net debt* • Growing reserves and resources * As at December 31, 2008; pro-forma equity issue completed February 5, 2009 and the acquisition of Lobo-M
Slide 11: 2008 Results
2008 Results Realized COS Margin(5) Gold equivalent production 1,838,038 oz. Gold Price +32% +23% $436/oz $857/oz Gold equivalent sales 1,756,056 oz. Revenue $1,617.0 mm Cost of Sales +14% Adjusted net earnings $248.8 $248 8 mm $421/oz per share $0.40 Cash Flow From Operations $634.6 mm (before chan
Slide 12: 2008 Highlights
2008 Highlights • Record production and revenue • g production at 3 projects Began j • Paid US$0.08 in dividends • Enhanced project pipeline with FDN and Lobo-Marte acquisitions • 3 successive quarters of increasing production and declining costs • Increased cash flow per share Q1 2009: • Completed
Slide 13: Growing cash flow per share
Growing cash flow per share Since 2003: • Cash flow per share up 2.5x • Gold price up 2.4x $1.01 $0.80 $0.56 $0.51 $0.45 $0 41 $0.41 2003 2004 2005 2006 2007 2008 *before changes in working capital KINROSS GOLD CORPORATION APRIL 2009 13
Slide 14: Proven and Probable Reserves
Proven and Probable Reserves(6) Gold (mm oz.) Silver (mm oz.) Copper (bn lbs.) 47 106 46 28 2.8 2.6 77 28 28 2006 2007 2008 2006 2007 2008 2006 2007 2008 Gold Silver Copper (mm oz.) (mm oz.) (bn lb.) Proven & Probable Reserves 46 106 2.6 Measured & Indicated Resources(7) 19 28 1.0 Inferred Resources
Slide 15: Balanced portfolio
Balanced portfolio • Reserves and resources are well diversified geographically • Expected mine life 20+ years, all in core regions 2P Reserves(6,7) M&I Resources(6,7) Inferred Resources(6,7,8) 45.6 mm oz. 19.1 mm oz. 21.3 mm oz. Russia Russia 7% USA USA 6% USA Brazil Chile 12% 3% 14% 32% Chile Chil
Slide 16: Gold resource growth: 11% 5-yr CAGR
Gold resource growth : 11% 5-yr CAGR 120 (6,7,8) Measured & Indicated Resources 60.0 (6) Proven & Probable Reserves Total resource oz per share 19.1 100 11.1 e per Share 45.0 80 Total Resource Ounce M oz. 8.0 60 30.0 6.1 82 8.2 46 6 46.6 45 6 45.6 40 6.2 15.0 27.9 24.7 20 19.4 14.1 0.0 0 2003 2004 2
Slide 17: Pipeline of projects for the future
Pipeline of projects for the future • Expansions being completed in ‘09 • Further F th organic i growth th att our mines i • Advancing next suite of projects • Exploration & JV strategies 17
Slide 18: Project pipeline
Project pipeline 2009 2010 2011 2012 2013 Paracatu Expansion Production Fort Knox Expansion Production Maricunga Engineering Construction Production Expansion Paracatu Phase 3 Engineering Construction Production Lobo‐Marte Metallurgical Testing Engineering Construction Production Fruta del Norte Inf
Slide 19: Fruta del Norte: high grade discovery in Ecuador
Fruta del Norte: high grade discovery in Ecuador • Discovery hole drilled in ’06 • Part of 85 85,600 600 hectares of exploration concessions • New mining legislation passed January 26, 2009 2009 Program: • Permitting process underway p • 2 drills onsite: manpower on standby y • 8,000 meter in-fill d
Slide 20: KINROSS GOLD CORPORATION APRIL 2009
KINROSS GOLD CORPORATION APRIL 2009 20
Slide 21: Fruta del Norte / Condor
Fruta del Norte / Condor • Condor project exploration: $10 mm FDN • Exploration Plan: o Exploration of FDN basin and Condor trend to identify new FDN-type targets o Total 2009 planned drilling: Pull-apart 26,900 m basin Inferred Resource(8): Tonnes Grade Ounces (000) (g/t) (000) Gold 58,900 7.23 13,
Slide 22: Condor Project Area
Condor Project Area • An Epithermal Belt in SE Ecuador • Las Penas Fault Zone: • 20 km of coincident Au, As & Sb in stream sediment samples analogous g to FDN g geochem Pull-apart footprint basin KINROSS GOLD CORPORATION APRIL 2009 22
Slide 23: Lobo-Marte deposits
Lobo-Marte deposits • Located in Chile, near current Kinross operations (2P: 1.06 g/t)(6) ~110 • Development stage asset with km large gold resources (M&I: 1.72 g/t)(7) • Infrastructure in place 2009 Program: (2P: 0.72 g/t) (6) • $3 mm infill drilling • Metallurgical test work (2P 0 (2P: 0.61 /t) (6
Slide 24: KINROSS GOLD CORPORATION APRIL 2009
KINROSS GOLD CORPORATION APRIL 2009 24
Slide 25: Cerro Casale: undeveloped gold-copper in Chile
Cerro Casale: undeveloped gold-copper in Chile • 50% ownership* in one of the world’s largest gold-copper porphyry deposits • 2008 pre-feasibility study update: o Capital: $3.6 bn o Conventional open pit mine and concentrator plant o 220 M/ta ore o 37 Mt/a heap leach o HPGR circuit KINROSS GOLD CORP
Slide 26: Cerro Casale project
Cerro Casale project 2009 Program: • Evaluating project ehancements • 13,000 meter infill drill program • Full feasibility study in Q3’09 Q3 09 Reserves: Kinross’ 50% share(6) Tonnes Grade Ounces Gold & SIlver (x 1,000) (g/t) (x 1,000) 2P Au 533,670 0.61 10,405 Ag 1.7 28,930 Tonnes Grade Pounds Copp
Slide 27: Focused exploration strategy
Focused exploration strategy Far East Russia N. American Cordillera Brazilian Craton Andean Cordillera Operating and development properties O Exploration target JV or junior investment target KINROSS GOLD CORPORATION APRIL 2009 27
Slide 28: The Maricunga Belt
The Maricunga Belt Chimberos • Leveraging regional expertise Este Esperanza • Geographic focus • District exploration potential • Enhancing sustainability Kiko Puren • Building value La Coipa La Isla Pingüino Copiapo Lobo-Marte Mines and advanced projects Pantanillo Active exploration projects Quebr
Slide 29: Maricunga
Guanaco Maricunga • Production began in 1996 • pp Approximate altitude 4,600 m • 2008 Production: Pancho o 223,341 oz @ $566/oz Verde Offices • Crushing plant capacity 40 ktpd o currently operating at 45 ktpd • H Heap lleach h Reserves and Resources(6) Leach Tonnes Grade Ounces pads (x 1,000) (g/t)
Slide 30: La Coipa mine and exploration district
La Coipa mine and exploration district • Altitude of operation - 4,200 m QDA. • In production since 1989 VALIENTE ESPERANZA • Processing: CHIMBERO o 17,000 tpd SAG mill PUREN W PUREN SE KIKO • 2008 Production: COIPA NORTE BRECHA NORTE o 226,239 oz* @ $489/oz CAN CAN POMPEYA LADERA FARELLON • Explora
Slide 31: Valuation and performance
V l ti and Valuation d performance f 31
Slide 32: RBC: Adjusted market cap / ounce
RBC: Adjusted market cap / ounce Per Reserve Ounce Per Resource Ounce $349 $322 $244 $187 $187 $174 $155 $152 $107 $99 GG AUY NEM KGC ABX GG AUY NEM ABX KGC Source: RBC research– April 13, 2009 KINROSS GOLD CORPORATION APRIL 2009 32
Slide 33: RBC: P/CFPS & P/NAV
RBC: P/CFPS & P/NAV P/CFPS (‘09) P/ NAV 42 8 42.8 2.7 25.4 1.8 1.8 1.6 1.3 14.1 13.4 11.5 AEM GG NEM KGC ABX AEM GG NEM KGC ABX Source: RBC research – April 13, 2009 KINROSS GOLD CORPORATION APRIL 2009 33
Slide 34: Key objectives for 2009
Key objectives for 2009 9 Complete Aurelian integration 9 Close Lobo-Marte acquisition from Teck 9 Lock-in significant share of input costs 9 Strengthened liquidity: close $415 mm equity issue 9 Replace operations’ operations reserves Paracatu expansion operating at 100% Advance Fruta
Slide 35: Why Kinross?
Why Kinross? 1 Growing margins, 1. margins growing cash flows 2. Strong g financial and operating p g results 3. Pipeline of projects for the future (2) Please refer to endnote #2. KINROSS GOLD CORPORATION APRIL 2009 35
Slide 36: Endnotes
Endnotes (1) For more information regarding Kinross’ production outlook for 2009, please refer to the press release dated January 7, 2009 available on our website at www.kinross.com. (2) Cost of sales per ounce is defined as cost of sales as per the financial statements divided by the number of gold
Slide 37: Appendix
Appendix: KINROSS GOLD CORPORATION APRIL 2009 37
Slide 38: Paracatu, Brazil (100%)
Paracatu, Brazil (100%) • Expansion to triple throughput to 60 mtpa • Expected to reach full capacity Q2’09 • Mine life out to 2041 Operating Results Operating p g Production Cost of Sales Results (Au eq. oz.) ($/oz.) 2008 188,156 $450 2007 , 174,987 $373 $ Reserves and Resources(6) Tonnes Grade Oun
Slide 39: Crixas, Brazil (50%)
Crixas, Brazil (50%) • JV with AngloGold Ashanti • Underground mine located in the Brazil Operating Results Operating Production Cost of Sales Results ((Au eq. q oz.)) (($/oz.)) 2008 87,669 $302 2007 91,305 $260 Reserves and Resources(6) Tonnes Grade Ounces (x 1,000) (g/t) (x 1,000) 2P Reserves 2,81
Slide 40: Maricunga, Chile (100%)
Maricunga, Chile (100%) • In the highly prospective Maricunga District • Open pit, heap leach operation • Pre-stripping of Pancho pit begins (March) Operating Results Operating O ti P d ti Production C t off S Cost Sales l Results (Au eq. oz.) ($/oz.) 2008 223,341 $566 2007 205 750 205,750 $447 Rese
Slide 41: La Coipa, Chile (100%)
La Coipa, Chile (100%) • Gold/silver mine in the Maricunga district • Mill facility located 60km from Lobo-Marte d deposits it Operating Results* Operating Production Cost of Sales Results (Au eq. oz.) ($/oz.) 2008 226,293 $489 2007 197,554 $269 Reserves and Resources(6) Tonnes Grade Ounces (x 1,000
Slide 42: Kupol, Russia (75%)
Kupol, Russia (75%) • Production began in June ‘08 • 3,000 tpd mill with open-pit and underground d d operationti • 2009 to be first full year of production Operating Results Operating Production Cost of Sales Results (Au eq. oz.) ($/oz.) 2008 469,907 $220 Reserves and Resources(6) Tonnes Grade Ounc
Slide 43: Fort Knox, USA (100%)
Fort Knox, USA(100%) • Located in Alaska • Expansion and new heap leach to extend t d mine i lif life and d llower costs t Operating Results Operating Production Cost of Sales Results (Au eq. oz.) ($/oz.) 2008 329,105 $461 2007 338 459 338,459 $344 Reserves and Resources(6) Tonnes Grade Ounces ((x 1
Slide 44: Round Mountain, USA (50%)
Round Mountain, USA (50%) • Kinross-operated JV with Barrick • Located in Nevada, USA • Open pit mine Operating Results Operating Production Cost of Sales Results (Au eq. oz.) ($/oz.) 2008 246,946 $465 2007 302 971 302,971 $316 Reserves and Resources(6) Tonnes Grade Ounces ((x 1,000) , ) (g/t)) (g (
Slide 45: Kettle River, USA (100%)
Kettle River, USA (100%) • Entered production in Q4’08 • Small foot-print, p underground g mine Operating Results Operating Production Cost of Sales Results (Au eq. oz.) ($/oz.) 2008 27 036 27,036 $344 Reserves and Resources(6) Tonnes Grade Ounces ((x 1,000) , ) (g/t)) (g ((x 1,000) , ) 2P Reserves
Slide 46: KINROSS GOLD CORPORATION APRIL 2009
KINROSS GOLD CORPORATION APRIL 2009