Kinross Gold Corporation · TSX:K
Kinross Gold — FY2014 Earnings Presentation
39 slides from Kinross Gold's earnings presentation, Feb 11, 2015
Slide 1: Q4 & FY 2014 Results Conference Call & Webcast
February 11 KINROSS GOLD CORPORATION 2015 Q4 & FY 2014 Results Conference Call & Webcast 11 www.kinross.com
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: Q4 & FY 2014 Results Highlights
Q4 & FY 2014 RESULTS HIGHLIGHTS 33 www.kinross.com J. PAUL ROLLINSON, CEO
Slide 4: Delivering Results: 2014 Highlights
2014 HIGHLIGHTS DELIVERING RESULTS • Record gold equivalent production of 2.71 million ounces(1) • Production cost of sales(2) of $720 per gold equivalent ounce • All-in sustaining cost(3) of $973 per gold equivalent ounce • Capital expenditures of $632 million (1) Refer to endnote #1. (2) Refer to
Slide 5: Record Annual Production at 3 Mines in 2014
PARACATU, BRAZIL MARICUNGA, CHILE TASIAST, MAURITANIA • Record production of • Production increased • Record production of 521,026 Au eq. oz. 32% from 2014 260,485 Au eq. oz. RECORD ANNUAL PRODUCTION AT 3 MINES IN 2014 55 OPERATIONAL EXCELLENCE5 www.kinross.com
Slide 6: Success in Managing Costs in 2014
CHIRANO, GHANA MARICUNGA, CHILE PARACATU, BRAZIL • Cost of sales declined by • Cost of sales declined by • Cost of sales declined to 22% from 2013 19% from 2013 $764 in Q4/14 SUCCESS IN MANAGING COSTS IN 2014 66 OPERATIONAL EXCELLENCE www.kinross.com
Slide 7: Russia
• Exceeded 2014 production with cost of sales lower than guidance RUSSIA • Produced 751,101 Au eq. oz. at $507/oz. 77 (3) Refer to endnote #3. www.kinross.com
Slide 8: Reducing Capital Spending
DISCIPLINED CAPITAL ALLOCATION REDUCING CAPITAL SPENDING • Trend of declining capital $1.86B expenditures since 2012 • REDUCED capital expenditures by 50% from 2013 $1.26B $632M 2012 2013 2014 88 www.kinross.com
Slide 9: Best Safety Performance in Kinross History
BEST SAFETY PERFORMANCE IN KINROSS HISTORY 99 OPERATIONAL EXCELLENCE www.kinross.com
Slide 10: Strong Balance Sheet
STRONG BALANCE SHEET FINANCIAL STRENGTH & FLEXIBILITY CASH AND CASH EQUIVALENTS* • Generated strong adjusted operating $1,025 cash flow of $977 MILLION in 2014 despite weaker gold prices $794 • Increased cash position to approximately $1 BILLION $ millions *includes restricted cash 2013 2014 1010 ww
Slide 11: Tasiast Mill Expansion
ATTRACTIVE GROWTH OPPORTUNITIES TASIAST MILL EXPANSION Kinross not proceeding with Tasiast expansion at the present time MAINTAINING BALANCE SHEET STRENGTH AND FINANCIAL FLEXIBILITY OVERRIDING FACTOR • Gold price outlook and impact on cash flow generation during 35-month construction period importan
Slide 12: 2015 Outlook At-a-Glance
OPERATIONAL EXCELLENCE 2015 OUTLOOK AT-A-GLANCE(4) • Gold equivalent production expected to be 2.4 to 2.6 million ounces • Production cost of sales expected to be $720 to $780 per Au eq. oz. • All-in sustaining cost expected to be $1,000 to $1,100 per Au eq. oz. • Capital expenditures of $725 millio
Slide 13: The Way Forward: Principles for Building Value
THE WAY FORWARD PRINCIPLES FOR BUILDING VALUE Track record of delivering on four strategic priorities strongly positions Kinross in a volatile gold price environment Operational • 10 consecutive quarters of strong operating results excellence • Met or outperformed annual guidance for production, cos
Slide 14: Financial Highlights
FINANCIAL HIGHLIGHTS 1414 www.kinross.com TONY GIARDINI, CFO
Slide 15: Solid Financial Position
STRONG BALANCE SHEET SOLID FINANCIAL POSITION Balance sheet strength continues to be a priority objective STRONG LIQUIDITY POSITION MAINTAINING FINANCIAL FLEXIBILITY • Improved balance sheet in 2014: • Repaid $60M of debt • Ended 2014 with $1.0B in cash, an increase of $231M from 2013 $1.0 $2.5B • R
Slide 16: Q4 & Full-Year 2014 Financial Results
Q4 & FULL-YEAR 2014 FINANCIAL RESULTS (in millions, except ounces and per share amounts) Q4 2013 Q4 2014 2013 2014 Gold equivalent production(1) 646,234 672,051 2,631,092 2,710,390 (ounces) Production cost of sales(2) $765 $714 $743 $720 ($ per Au. eq. oz.) All-in sustaining cost(3) $1,175 $1,006 $1
Slide 17: Non-Cash Impairment Charge
Q4 & FULL-YEAR 2014 NON-CASH IMPAIRMENT CHARGE • Recorded after-tax non-cash impairment charges of $932 million $145 million relating to goodwill $787 million relating to property, plant and equipment, primarily at Tasiast and Chirano • Also recognized an impairment charge of $157 million relate
Slide 18: 2015 Outlook: Production & Cost Guidance
2015 OUTLOOK PRODUCTION & COST GUIDANCE(4) • 2015 all-in sustaining cost expected to be $1,000-$1,100 per gold equivalent ounce Gold Production % of Total Production Cost of Sales Region (000 Au eq. oz.) Production ($/oz. Au eq.) Americas 1,300 – 1,400 54% $790 – $850 West Africa 390 – 440 17% $850
Slide 19: 2015 Outlook: Capital Expenditures Guidance
2015 OUTLOOK CAPITAL EXPENDITURES GUIDANCE(4) 2015 capital expenditures are expected to be $725 million, including estimated capitalized interest of $40 million Region Sustaining Non-Sustaining Regional Total Americas $350 $10 $360 West Africa $70 $170 $240 Russia $80 $ -- $80 Corporate $5 $ -- $5 T
Slide 20: Operating Highlights
OPERATING HIGHLIGHTS 2020 www.kinross.com WARWICK MORLEY-JEPSON, COO
Slide 21: Delivering Strong Operating Results
OPERATIONAL EXCELLENCE DELIVERING STRONG OPERATING RESULTS RUSSIA AMERICAS Dvoinoye Kupol Fort Knox Kettle River-Buckhorn Round Mountain 2015E GOLD EQUIVALENT Tasiast PRODUCTION(3) Chirano 29% WEST AFRICA 2.4-2.6M Paracatu ounces 54% La Coipa Maricunga 17% GLOBAL PORTFOLIO Operating mine Americas We
Slide 22: Americas
OPERATIONAL EXCELLENCE AMERICAS(4) 2015E: Expected to produce 1.3 - 1.4 M Au eq. oz. at cost of sales of $790 - $850/oz. • Region exceeded its 2014 production guidance and achieved cost of sales within the lower-end of the guidance range • Record annual production at Paracatu due to higher grade and
Slide 23: Russia
OPERATIONAL EXCELLENCE RUSSIA(4) 2015E: Expected to produce 710-760k Au eq. oz. at cost of sales of $495 - $525/oz. • Strong performance from combined Kupol-Dvoinoye operation in 2014 resulting in the region exceeding its 2014 guidance for production with cost of sales below guidance • Higher grade
Slide 24: West Africa
OPERATIONAL EXCELLENCE WEST AFRICA(1,2,4) 2015E: Expected to produce 390-440k Au eq. oz. at cost of sales of $850 - $920/oz. • Region met its 2014 production guidance and cost of sales guidance • Achieved record annual production at both Tasiast and Chirano • Increase due mainly to higher mill grade
Slide 25: 2014 Mineral Reserves and Resources
QUALITY OVER QUANTITY 2014 MINERAL RESERVES AND RESOURCES(6) PROVEN & PROBABLE MINERAL RESERVES PROVEN & PROBABLE GOLD RESERVES • Decreased approximately 8.4 million ounces 42.8 34.4 MM OZ. Reclassified approximately 6 million ounces of reserves at Lobo-Marte to the measured & indicated mineral re
Slide 26: Exploration Highlights
EXPLORATION HIGHLIGHTS 2626 www.kinross.com
Slide 27: La Coipa Phase 7
EXPLORATION HIGHLIGHTS LA COIPA PHASE 7 LA COIPA DISTRICT • Drilling on a number of targets located in the eastern area of the La Coipa district Puren CATALINA • Encouraging results from oxide mineralized zone • Drilling continues to outline the geometry of the mineralization and test extent of mine
Slide 28: Kupol-Moroshka
EXPLORATION HIGHLIGHTS KUPOL-MOROSHKA MOROSHKA • Located approximately 4 km East of Kupol • Drilling defined ~198koz. gold and ~2.3Moz. silver of Indicated resource(6) PROVIDENCE DISCOVERY • Discovered a new epithermal vein located 800 m SW of Moroshka • Remains open and untested to the south and at
Slide 29: Dvoinoye: September Northeast
EXPLORATION HIGHLIGHTS DVOINOYE: SEPTEMBER NORTHEAST • Located approximately 15 km NW of Dvoinoye • Drilling defined high- grade gold-silver mineralization over a strike length of 150 m • Work planned in 2015 to define an initial mineral resource estimate • Defined multiple new targets areas and pro
Slide 30: Chirano
EXPLORATION HIGHLIGHTS CHIRANO • Drilling from 150 to 600 m below the bottom of the existing pits at Akoti and Suraw AKOTI: Exploration drilling contributed approximately 163,000 gold ounces at an average grade of 3.7 g/t Au to year-end 2014 M&I estimate for Chirano(6) SURAW: Exploration drillin
Slide 31: Tasiast
EXPLORATION HIGHLIGHTS TASIAST • Defined measured & indicated mineral resources totaling approximately 327,000 gold ounces at Fennec, C67 and C68 satellite deposits(6) • Encouraging drill results at the Tamaya targets, with additional drilling planned for 2015 Imkebdene license Piment C616 Central F
Slide 32: Strong Track Record
OPERATIONAL EXCELLENCE STRONG TRACK RECORD Consistently meeting or outperforming our commitments 2012 2013 2014 Guidance Actual Guidance Actual Guidance Actual Gold equivalent production(1) 2.5 to 2.6 M 2.6M 2.6 to 2.65M 2.63M 2.6 to 2.7M 2.71M (ounces) Cost of sales(2) $690 to $705 $740 to $790 $74
Slide 33: Strong Track Record
OPERATIONAL EXCELLENCE STRONG TRACK RECORD 2012 2013 2014 MET or EXCEEDED annual production guidance MET or came in UNDER annual cost of sales guidance MET or came in UNDER annual capital expenditures guidance CONSISTENTLY MEETING OR OUTPERFORMING OUR 3333 www.kinross.com COMMITMEN
Slide 34: The Way Forward: Principles for Building Value
THE WAY FORWARD PRINCIPLES FOR BUILDING VALUE • Focus on operational excellence • Quality over quantity • Disciplined capital allocation • Maintaining a strong balance sheet 3434 www.kinross.com
Slide 35: 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’ 90% share of Chirano production and sales. 2) Attributable production cost of sales per gold equivalent ounce sold is a non-GAAP
Slide 36: Explanatory Notes: Exploration
EXPLANATORY NOTES: EXPLORATION La Coipa Exploration Results Results are reported for 45 diamond drill core holes completed at Catalina in the La Coipa District. All results for the exploration drill campaign are reported as Au grams per tonne (Au g/t), Ag grams per tonne (Ag g/t) and as Au Equivalen
Slide 37: Explanatory Notes: Exploration
EXPLANATORY NOTES: EXPLORATION Kupol & Dvoinoye Exploration Results All 28 drill holes in 2014 at Providence were diamond drill core holes (HQ or NQ core diameter). The Providence vein dips sub-vertically, therefore, drill holes are angled between minus 50° and 75° to the east and west. The composit
Slide 38: Explanatory Notes: Exploration
EXPLANATORY NOTES: EXPLORATION Tasiast Exploration Results Drill hole identifiers ending with suffix DD are diamond drill core holes (HQ diameter) and those ending with suffix RC are reverse circulation (RC) holes. Holes with “A” prefixing DD or RC are diamond core or reverse circulation re-drills o
Slide 39: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 York Street, 17th Floor │Toronto, ON │ M5J 2V5 www.kinross.com 3939 www.kinross.com