Kinross Gold Corporation · TSX:K
Kinross Gold — Q3 2015 Earnings Presentation
28 slides from Kinross Gold's earnings presentation, Nov 10, 2015
Slide 1: Kinross Gold Corporation Q3 2015 Results Conference Call & Webcast
November 10 KINROSS GOLD CORPORATION 2015 Q3 2015 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: Third Quarter Results Highlights
THIRD QUARTER RESULTS HIGHLIGHTS 3 3 www.kinross.com
Slide 4: Third Quarter Highlights: Delivering Strong Performance
THIRD QUARTER HIGHLIGHTS DELIVERING STRONG PERFORMANCE Continuing track record of meeting or beating our operational targets • Strong performance from operations delivered solid Q3 2015 results • On track to meet 2015 REVISED guidance for production, cost of sales and all-in sustaining cost • Expect
Slide 5: Strong Balance Sheet: Financial Strength & Flexibility
STRONG BALANCE SHEET FINANCIAL STRENGTH & FLEXIBILITY CASH AND CASH EQUIVALENTS • Increased cash balance by ~$40 MILLION since year-end 2014, despite lower gold $1,025 prices $984 • REDUCED net debt by over $80 million to under $950 million $ millions 31-Dec-14 30-Sep-15 55 www.kinross.com
Slide 6: Financial Discipline: Focus on Managing Costs
FINANCIAL DISCIPLINE FOCUS ON MANAGING COSTS REVIEW OF DISCRETIONARY SPENDING ALL-IN SUSTAINING COST(4) ($ per gold equivalent ounce) • Completed company-wide review of overhead spending and organizational structure $1,122 $1,082 • Reduced corporate labour costs by 23%, with expected annualized savi
Slide 7: Organic Growth Opportunities: La Coipa Project
ORGANIC GROWTH OPPORTUNITIES LA COIPA PROJECT • Pre-feasibility study on La Coipa completed during Q3 2015 • Project offers a number of expected attractive attributes: Leverages existing infrastructure Relatively low execution risk Modest capital investment Exploration upside Located in an
Slide 8: Phased Approach to a Tasiast Mill Expansion
ORGANIC GROWTH OPPORTUNITIES PHASED APPROACH TO A TASIAST MILL EXPANSION • Concept under study would add incremental capacity to increase mill throughput in two phases by leveraging existing infrastructure PHASE ONE would increase throughput to 12,000 tpd with the addition of a gyratory crusher an
Slide 9: Kinross Value Proposition
KINROSS VALUE PROPOSITION EXCELLENT OPERATIONAL TRACK RECORD • Continuing to meet or outperform our operational targets STRONG BALANCE SHEET • $2.5B in liquidity and conservative net debt of ~$950M • Repaid the Kupol loan during Q3, ahead of schedule ATTRACTIVE FUTURE GROWTH OPPORTUNITIES • La Coipa
Slide 10: Financial Results Highlights
FINANCIAL RESULTS HIGHLIGHTS 10 10 www.kinross.com
Slide 11: Third Quarter 2015 Financial Results
THIRD QUARTER 2015 FINANCIAL RESULTS Q3 2014 Q3 2015 Attributable gold equivalent ounces (oz.)(2) Produced 693,818 680,679 Sold 739,095 715,648 Average realized gold price ($/oz.) $1,268 $1,122 Production cost of sales ($/oz.)(3) Gold equivalent $698 $668 By-product $685 $655 All-in sustaining cost
Slide 12: Strong Balance Sheet: Solid Financial Position
STRONG BALANCE SHEET SOLID FINANCIAL POSITION Maintaining balance sheet strength & financial flexibility remain priority objectives STRONG LIQUIDITY POSITION MAINTAINING FINANCIAL FLEXIBILITY • Improved balance sheet during the first 9 months of 2015: Added $41M to cash position, ending the period
Slide 13: Operating Highlights
OPERATING HIGHLIGHTS 13 13 www.kinross.com
Slide 14: Operational Excellence: Americas
OPERATIONAL EXCELLENCE AMERICAS • ROUND MOUNTAIN benefiting from • PARACATU production increased due to continuous improvement initiatives aimed higher mill grades and increased recovery, at improving heap leach operations which improved cost of sales Temporarily suspended Plant 1 and • FORT KNOX
Slide 15: Operational Excellence: Russia
OPERATIONAL EXCELLENCE RUSSIA • Continued strong performance from the combined KUPOL-DVOINOYE operation • Q3 production cost of sales decreased year-over- year to $469 per Au eq. oz. • Lowest level since Dvoinoye operations commenced in 2013 • Benefiting from higher mill grades resulting from proces
Slide 16: Operational Excellence: West Africa
OPERATIONAL EXCELLENCE WEST AFRICA • TASIAST production decreased compared with Q2 2015 due mainly to the wind-down of dump leach production • CHIRANO production decreased as a result of expected lower grades due to declining contribution from the Akwaaba underground deposit • Development of the Ako
Slide 17: Organic Projects Update
ORGANIC PROJECTS UPDATE 17 17 www.kinross.com
Slide 18: La Coipa Project: Pre-feasibility Study Results
PRE-FEASIBILTY STUDY RESULTS LA COIPA PROJECT Project expected to generate a 20% IRR at an assumed gold price of $1,200 per ounce • PFS based on using existing infrastructure to blend and process higher grade material from the recently delineated Phase 7 deposit with oxide/transition material from t
Slide 19: La Coipa Project: Pre-feasibility Study Results
PRE-FEASIBILTY STUDY RESULTS LA COIPA PROJECT Based on positive results, Kinross intends to complete further optimization studies and continue to assess additional exploration opportunities at La Coipa PERMITTING • Submitted a DIA earlier this year • Preparing a response to the relevant agencies’ re
Slide 20: Tasiast Expansion: Two-Phased Expansion Concept
TASIAST EXPANSION PROJECT TWO-PHASED EXPANSION CONCEPT PHASE ONE • Leverages existing mill infrastructure to increase throughput to 12,000 tpd from 8,000 tpd • Includes installation of an oversized SAG mill and gyratory crusher • Expected to enhance processing of the harder, higher grade West Branch
Slide 21: Tasiast Expansion Project: Phase One Estimates
TASIAST EXPANSION PROJECT PHASE ONE ESTIMATES Highlights of the early detailed engineering work completed to date on Phase One Metric Estimates Average annual production – first 2 years 368,000 gold ounces Cash cost per ounce – first 2 years $575 per gold equivalent ounce All-in cost per ounce – fir
Slide 22: Tasiast Expansion: Two-Phased Expansion Concept, Phase Two
TASIAST EXPANSION PROJECT TWO-PHASED EXPANSION CONCEPT PHASE TWO • Could further increase total throughput to as much as 38,000 tpd with the addition of milling, leaching, thickening and refining capacity CONCEPUTAL FLOW SHEET Gyratory Ore Oversized crusher stockpile SAG mill Additional ball Additio
Slide 23: A Phased Approach to a Mill Expansion
TASIAST EXPANSION PROJECT A PHASED APPROACH TO A MILL EXPANSION A phased approach would optimize the current operation in the near-term while reducing overall capital cost of a larger expansion A FINANCIALLY PRUDENT ALTERNATIVE TO REALIZING TASIAST’S GROWTH POTENTIAL • A feasibility study on the ini
Slide 24: Kinross Value Proposition
KINROSS VALUE PROPOSITION EXCELLENT OPERATIONAL TRACK RECORD • Continuing to meet or outperform our operational targets STRONG BALANCE SHEET • $2.5B in liquidity and conservative net debt of ~$950M • Repaid the Kupol loan during Q3, ahead of schedule ATTRACTIVE FUTURE GROWTH OPPORTUNITIES • La Coipa
Slide 25: Appendix
APPENDIX 25 25 www.kinross.com
Slide 26: La Coipa Project: Pre-feasibility Study Results
PRE-FEASIBILTY STUDY RESULTS LA COIPA PROJECT • 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 years after pre-stripping has been initiated and continue for 4 years ADDITIONAL OPERATING METRIC
Slide 27: Endnotes
ENDNOTES 1) For more information regarding Kinross’ production, cost and capital expenditures outlook for 2015, please refer to the news releases dated February 10, 2015, September 17, 2015 and November 10, 2015, all of which are available on our website at www.kinross.com. Kinross’ outlook for 2015
Slide 28: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 York Street, 17th Floor │Toronto, ON │ M5J 2V5 www.kinross.com 2828 www.kinross.com