Kinross Gold Corporation · TSX:K
Kinross Gold — 23rd Annual CIBC Western Institutional Investor Conference (January 2020)
58 slides from Kinross Gold's conference presentation, Jan 29, 2020
Slide 1: Delivering Value.
January 2020 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 Leveraging our financial strength to invest in our meeting or outperforming operational targets development pipeline Repaid over $1.0 billion of debt 7 Consecutive Met
Slide 4: Operational Excellence
Operational Excellence We remain focused on operational excellence, building a culture of continuous improvement, innovation and disciplined cost management 4
Slide 5: Diversified Portfolio of Assets
Operational Excellence January 2020 Diversified Portfolio of Assets ~60% of 2019E gold equivalent production expected from mines located in the Americas Dvoinoye, Russia Kupol, Fort Knox, USA Russia Chulbatkan, Russia Bald Mountain, USA Round Mountain, USA Tasiast, Mauritania 2019E Gold Equivalent P
Slide 6: On Track to Meet 2019 Guidance Targets
Operational Excellence January 2020 On Track to Meet 2019 Guidance Targets Continued track record of meeting or outperforming our operational targets • Strong production and excellent cost performance from the portfolio • On track to meet 2019 guidance targets for production, cost of sales, all-in s
Slide 7: 2019E Outlook
Operational Excellence January 2020 2019E Outlook(2) Kinross Total(1) Regional Guidance 2019E Unit Costs ($ per gold equivalent ounce)(2,3) Tracking towards the low end of cost of sales guidance 2.5 million Americas (+/- 5%) 1.44 million Cost of sales $730/oz. (+/- 5%) 2019E Gold Equivalent Producti
Slide 8: Third Quarter 2019 Operational Highlights
Operational Excellence January 2020 Third Quarter 2019 Operational Highlights In the first nine months of 2019, our three largest operations produced over 60% of total production with an average cost of sales of $619/oz.(3) Operation First nine Months 2019 Highlights Performance(3) Kupol-Dvoinoye, R
Slide 9: Achieving Performance Improvements at Paracatu
Operational Excellence January 2020 Achieving Performance Improvements at Paracatu Realizing the benefits of asset optimization and continuous improvement efforts through strong performance and cost reduction Strong performance year-to-date driven by: • Asset optimization program, resulting in bette
Slide 10: Continued Strong Performance at Tasiast
Operational Excellence January 2020 Continued Strong Performance at Tasiast Strong performance year-to-date highlights the benefits of the Phase One expansion, resulting in higher production and improved costs • Significant improvement in Tasiast’s performance following completion of the Phase One e
Slide 11: Strong Performance at Kupol-Dvoinoye
Operational Excellence January 2020 Strong Performance at Kupol-Dvoinoye Consistent, low-cost operations Q3 highlights • Achieved the lowest cost of sales per ounce in the portfolio in Q3 2019 • Production increased compared with Q2 2019, a result of higher grades Russia Results First nine 2019 mont
Slide 12: Financial Strength & Flexibility
Financial Strength & Flexibility With strong cash flow and no debt maturities until 2021, we have the financial strength and flexibility to fund our pipeline of development projects 12
Slide 13: Third Quarter 2019 Financial Highlights
Financial Strength & Flexibility January 2020 Third Quarter 2019 Financial Highlights Capturing the benefits of higher gold prices and improved cost performance Year-over-year improvements Third quarter 2019 performance 21% Average realized gold price Increased revenue, cash flow and increase ($ per
Slide 14: Share Price Reaction to Third Quarter Results
Financial Strength & Flexibility January 2020 Share Price Reaction to Third Quarter Results 2019 Performance Third Quarter 2019 Consensus Kinross Gold GDX Analyst Actual Consensus 170 EPS $0.08 $0.08 Met 160 CFPS $0.24 $0.24 Met Sell-Side Commentary 150 • “From an operational standpoint, Q3/19 was a
Slide 15: Strong Liquidity Position
Financial Strength & Flexibility January 2020 Strong Liquidity Position Strong position to finance organic development projects with existing liquidity and cash flow generation • Manageable debt schedule with no debt maturities Liquidity Position prior to September 2021 ($ billion) • 1-year extensio
Slide 16: Manageable Debt Profile
Financial Strength & Flexibility January 2020 Manageable Debt Profile No debt maturities prior to 2021 Debt Schedule Debt Ratings Revolving credit facility (drawn amounts) Senior notes Agency Rating S&P BBB- (Stable) (i) $120 Moody’s Ba1 (Positive) Fitch BBB- (Stable) $500 $500 $500 Interest Rates $
Slide 17: Development Projects & Exploration Highlights
Development Projects & Exploration Highlights We have a portfolio of development projects that we are progressing, and we are also focused on advancing a pipeline of future opportunities and high potential exploration targets 17
Slide 18: Tasiast 24k Project Feasibility Study Results
Development Projects January 2020 Tasiast 24k Project Feasibility Study Results Proceeding with value-enhancing Tasiast 24k project, which offers attractive returns, increased production and lower costs Operating Estimates Throughput capacity 24,000 t/d Average annual production (2022 – 2028) 563,00
Slide 19: Low-Capital Continuous Improvement Approach
Development Projects January 2020 Low-Capital Continuous Improvement Approach Increase to throughput through debottlenecking initiatives, plant upgrades and optimization of the mine plan and processing circuit Building off success of Phase One and Project Overview continued outperformance of the SAG
Slide 20: Advancing the Tasiast 24k Project
Development Projects January 2020 Advancing the Tasiast 24k Project Well-positioned to execute the 24k project Low relative execution risk • Project plan leverages Kinross’ experience successfully building and operating Phase One • Less infrastructure requirements • Permits in place for the 24k proj
Slide 21: Tasiast Project Financing
Development Projects January 2020 Tasiast Project Financing Signed definitive loan agreement for up to $300 million for Tasiast • Participation from IFC, a member of the World Bank Group, Export Development Canada (EDC) and two commercial banks • Agreement was signed following a comprehensive due di
Slide 22: Positive Momentum in Mauritania
Development Projects January 2020 Positive Momentum in Mauritania Successfully operated in Mauritania for over 10 years Cumulative production of over 2 million gold equivalent ounces Established $300M political risk insurance policy with MIGA, member of the World Bank Constructed Phase One ~$800
Slide 23: Chulbatkan: Strong Base Case with Upside Potential
Development Projects January 2020 Chulbatkan: Strong Base Case with Upside Potential Expected to be a substantial open pit gold mine with a low all-in sustaining cost • Preliminary estimates; scope of project may change following planned extensive drill program and technical studies and trade-offs E
Slide 24: Overview of the Chulbatkan Resource
Development Projects January 2020 Overview of the Chulbatkan Resource Near-surface, high-grade, open-pit, heap leachable deposit with large estimated resource • Near surface, highly continuous • Significant drilling ends in mineralization; current mineralization resource extends to ~375m depth • Min
Slide 25: Significant Upside Opportunities at Chulbatkan
Development Projects January 2020 Significant Upside Opportunities at Chulbatkan Kinross plans to undertake a robust exploration program with a focus of defining and further extending the resource • Confirmatory drill program(6) encountered a • Drill planning and execution to grow high-grade structu
Slide 26: Chulbatkan Regional Exploration Upside
Development Projects January 2020 Chulbatkan Regional Exploration Upside Numerous untested potential targets within the ~120km2 exploration license • Multiple structural environments analogous to Chulbatkan deposit • Multiple downstream placer gold occurrences indicate hard rock sources within licen
Slide 27: Nevada Projects Now Complete
Development Projects January 2020 Nevada Projects Now Complete Construction and commissioning of the Bald Mountain Vantage Complex and Round Mountain Phase W complete Bald Mountain Round Mountain • Severe weather and poor vendor • During Q3, fleet prioritized to mitigate wall performance earlier thi
Slide 28: Fort Knox Gilmore
Development Projects January 2020 Fort Knox Gilmore Gilmore project expected to extend mine life to 2030 and strengthen long-term U.S. production profile 28
Slide 29: Gilmore Feasibility Study Results
Development Projects January 2020 Gilmore Feasibility Study Results Project expected to generate a 17% IRR at an assumed gold price of $1,200 per ounce Current mine plan + Gilmore estimates Average annual production (2018-2027) 245,000 gold ounces Production cost of sales (2018-2027)(3) $735 per gol
Slide 30: Fort Knox Gilmore
Development Projects January 2020 Fort Knox Gilmore Initial production from Gilmore is expected in early 2020 • Advancing on budget and on schedule • Heap leach construction and dewatering activities planned for 2019 are now complete Will recommence in the spring of 2020 • Stripping commenced in Q
Slide 31: Chile Projects
Development Projects January 2020 Chile Projects We are evaluating the potential for a return to production in Chile La Coipa Restart Project N • Feasibility study results expected to be released in February 2020 La Coipa Restart project Lobo-Marte Project • Scoping study completed in Q1 2019 with e
Slide 32: Kupol-Dvoinoye Exploration Highlights
Exploration Highlights January 2020 Kupol-Dvoinoye Exploration Highlights 2019 exploration program continues to Kupol West Licence N progress well NE-EXT • Kupol exploration program focused on Kupol Mining Licence high potential targets NE NU Kupol main and hanging wall zones: Kupol Mine NZ result
Slide 33: Another 1-Year Mine Life Extension in Russia
Exploration Highlights January 2020 Another 1-Year Mine Life Extension in Russia Continuing our track record of adding reserves to offset depletion at Kupol and Dvoinoye (4) Cumulative Production (Au eq.) Proven and Probable Reserves (Au eq.) 7.4 2.1 2018 • Estimated mill production extended to 6.9
Slide 34: Chirano Exploration Highlights
Exploration Highlights January 2020 Chirano Exploration Highlights Production at Chirano is expected to extend to 2021, a 1-year extension • 2018 exploration focus continued to be adding incremental ounces to mine life Focused on infill drilling the depth potential at Akwaaba and Paboase • Followi
Slide 35: Compelling Relative Value
Compelling Relative Value Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities 35
Slide 36: 2018A Production & All-In Sustaining Cost
Compelling Relative Value January 2020 2018A Production & All-In Sustaining Cost 2018A Production 2018A 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 Yamana AngloGold Gold Fields Gold Fields A
Slide 37: 2020E Metrics
Compelling Relative Value January 2020 2020E Metrics Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities EV / 2020E EBITDA 16.6 P / 2020E Operating CF 15.4 11.4 10.8 10.6 9.5 7.8 7.7 6.6 6.4 5.9 5.8 5.8 5.6 5.6
Slide 38: Appendix
Appendix 38
Slide 39: Responsible & Safe Tailings Management
Appendix January 2020 Responsible & Safe Tailings Management All of our tailings facilities are designed and constructed to the highest engineering standards and meet or exceed regulatory and international requirements and standards of best practice • Tailings management programs incorporate Paracat
Slide 40: 2019E Capital Expenditures
Appendix January 2020 2019E Capital Expenditures(2) • 2019 capital expenditures are expected to be $1,050 million (+/- 5%), including estimated capitalized interest of $65 million 2019E 2019E Total 2019E Capital Region Sustaining Capital Non-Sustaining Capital (+/- 5%) Americas $375 $295 $670 West A
Slide 41: Currency & Oil Sensitivities
Appendix January 2020 Currency & Oil Sensitivities 2019 Budget Assumptions(2) 2019 Sensitivities (net of hedges)(2) Change from Estimated impact 2019 Budget Current Spot(i) Assumptions to cost of sales Gold US$1,200 US$1,571 FX 10% US$18/oz. (per ounce) Russian rouble 10% US$19/oz.(ii) Oil US$65 US$
Slide 42: Fort Knox, USA (100%)
Americas January 2020 Fort Knox, USA (100%) The Gilmore project is expected to extend mine life to 2030 • Successfully operating one of the world’s Operating Results(3) few cold weather heap leaches 2018 YTD 2019 • Estimated mine life: mill – 2020; mining – 2027; leaching – 2030 Production 255,569 1
Slide 43: Summary of Feasibility Study Results
Fort Knox Gilmore January 2020 Summary of Feasibility Study Results Operating Estimates (current mine plan + Gilmore) Incremental Gilmore Estimates(i) Timeline Operational Metric Estimate Estimate Average annual tonnes mined 60 million Strip ratio 1.2 Strip ratio 1.2 Life of mine ore processed 183 m
Slide 44: Round Mountain, USA (100%)
Americas January 2020 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(3) returns and extend mining 2018 YTD 2019 • Estimated mine life: 2024 (mining); 2027 (stockpile milling / residual l
Slide 45: Summary of Feasibility Study Results
Round Mountain Phase W January 2020 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
Slide 46: Bald Mountain, USA (100%)
Americas January 2020 Bald Mountain, USA (100%) Forecasting strong near-term cash flow with significant upside potential • Large estimated mineral resource base with Operating Results(3) multiple sources of potential mineral reserve 2018 YTD 2019 additions • Estimated mine life: 2023 Production 284,
Slide 47: Paracatu, Brazil (100%)
Americas January 2020 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(3) operations with annual throughput of ~60Mt 2018 YTD 2019 • Cornerstone asset in Kinross’ portfolio Production • Estimated mine li
Slide 48: La Coipa Restart Project PFS Results (2015)
Americas January 2020 La Coipa Restart Project PFS Results (2015) 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 commencement of stripping Processing expected to commence 1.5 years after pre-
Slide 49: Kupol-Dvoinoye (100%)
Russia January 2020 Kupol-Dvoinoye (100%) Our Russian mines are a model for successfully operating in a remote location • High-grade, low-cost underground mines Operating Results(3) supported by 1 mill 2018 YTD 2019 • Estimated mine life: 2023, following another Production 1-year extension in 2018 4
Slide 50: Chulbatkan Project Location
Russia January 2020 Chulbatkan Project Location Khabarovsk is industrialized and has a well-established mining and exploration sector Mining-friendly jurisdiction Kupol Magadan • Several gold producers active in the region Khabarovsk Ten operating mines Fourth largest gold producing region in Ru
Slide 51: Deep Experience In-Country
Russia January 2020 Deep Experience In-Country Kinross has a long and successful 24-year track record investing in Russia Significant operating experience 2018 Statistics: Kinross • Operated 4 mines, including the high-grade, low cost investments in Russia Kupol and Dvoinoye mines 98.5% of employees
Slide 52: Foreign Investment in Russia
Russia January 2020 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 52
Slide 53: Tasiast, Mauritania (100%)
West Africa January 2020 Tasiast, Mauritania (100%) Operating mine with a large gold resource located in a prospective district • Successfully completed the Phase One Operating Results(3) expansion in 2018 2018 YTD 2019 • Advancing the 24k project to further Production increase throughput (Au Eq. oz
Slide 54: Feasibility Study Results: Operating Estimates
Tasiast 24k Project January 2020 Feasibility Study Results: Operating Estimates Results Highlights Life of Mine Estimates (2020-2033) Timeline Operational Metric Estimate Operational Metric Estimate Total material mined 375,900,000 Total tonnes mined 628,800,000 Strip ratio 5.9 Total ore mined (tonn
Slide 55: Feasibility Study Results: Capital & Economics
Tasiast 24k Project January 2020 Feasibility Study Results: Capital & Economics Estimated Initial Capital Cost Estimated Sustaining Capital • Expected to be approximately $30M per year Estimate ($ millions) Life of Mine estimate ($ millions) Support infrastructure 47 Mobile maintenance 150 Process p
Slide 56: Chirano, Ghana (90%)
West Africa January 2020 Chirano, Ghana (90%) Cost reduction achieved at Chirano by transitioning to self-perform • Chirano is an underground and open pit Operating Results(1,3) operation located in southwestern Ghana 2018 YTD 2019 • Estimated mine life: 2021 Production 204,029 137,087 (Au Eq. oz.)
Slide 57: Endnotes
Appendix January 2020 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. Also unless otherwise noted, dollar per ounce ($/oz.) figures i
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