Kinross Gold Corporation · TSX:K
Kinross Gold — Investor Presentation (March 2019)
54 slides from Kinross Gold's investor presentation, March 2019
Slide 1: Delivering Value.
March 2019 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 Maintaining strong balance sheet continues to meeting or outperforming operational targets be a priority objective Repaid over $1.0 billion of debt 7 Consecutive Met or
Slide 4: Enterprise Value Versus Production
Compelling Relative Value March 2019 Enterprise Value Versus Production Market capitalization does not reflect significant scale of production and history of achieving guidance Enterprise Value(i) Net Debt to Historical Production (Moz)(iii) Consensus Production Estimates (Moz) (US$M) EBITDA(ii) Pas
Slide 5: Operational Excellence
Operational Excellence We remain focused on operational excellence, building a culture of continuous improvement, innovation and disciplined cost management 5
Slide 6: Diversified Portfolio of Assets
Operational Excellence March 2019 Diversified Portfolio of Assets ~60% of 2019E gold equivalent production expected from mines located in the Americas Dvoinoye, Russia Kupol, Russia Fort Knox, USA Bald Mountain, USA Round Mountain, USA Tasiast, Mauritania 2019E Gold Equivalent Production(1,2) 20% Ch
Slide 7: Seven Consecutive Years of Meeting Guidance
Operational Excellence March 2019 Seven Consecutive Years of Meeting Guidance Kinross has met or exceeded guidance targets for production, costs and capital expenditures for the past seven years 2012 2013 2014 2015 2016 2017 2018 Met or exceeded annual production guidance Met or came i
Slide 8: 2018 Operating Results Highlights
Operational Excellence March 2019 2018 Operating Results Highlights Record annual production at Paracatu and Bald Mountain, while Tasiast achieved a record quarter in Q4 • Strong results from the overall 2018 Achievements portfolio, achieving guidance for: • Record annual Production production C
Slide 9: 2019E Outlook
Operational Excellence March 2019 2019E Outlook We are forecasting another strong year in 2019, with production and cost of sales in-line with 2018 2018 Guidance 2018 Results 2019 Guidance(2) (+/- 5%) (+/- 5%) Gold equivalent production (ounces.)(1) 2.5 million 2.45 million 2.5 million Production co
Slide 10: 2019E Production and Costs
Operational Excellence March 2019 2019E Production and Costs(2) Kinross Total(1) Regional Guidance 2019E Unit Costs ($ per gold equivalent ounce) 2.5 million Americas Cost of sales(1,3) $730/oz. (+/- 5%) (+/- 5%) 1.44 million 2019E Gold Equivalent Production (ounces) (+/- 5%) All-in sustaining cost(
Slide 11: Strong Balance Sheet & Financial Flexibility
Strong Balance Sheet & Financial Flexibility With strong cash flow and no debt maturities until 2021, we have the financial strength and flexibility to fund our pipeline of development projects 11
Slide 12: Solid Financial Position
Strong Balance Sheet & Financial Flexibility March 2019 Solid Financial Position Strong position to finance organic development projects with existing liquidity and cash flow generation Strategic investments to add value to our portfolio Liquidity Position ($ billion) • Completed the Phase One expan
Slide 13: 2019E Capital Expenditures
Strong Balance Sheet & Financial Flexibility March 2019 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 (+/-
Slide 14: Manageable Debt Profile
Strong Balance Sheet & Financial Flexibility March 2019 Manageable Debt Profile No debt maturities prior to 2021 Debt Schedule Debt Ratings Agency Rating $500 $500 $500 S&P BBB- (Stable) Moody’s Ba1 (Stable) Fitch BBB- (Stable) $ millions Interest Rates $250 Senior Notes due 2021 5.125% Senior Notes
Slide 15: 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 15
Slide 16: Project Milestones for 2019
Development Projects March 2019 Project Milestones for 2019 First Quarter Second Quarter Third Quarter Bald Mountain Vantage Complex Round Mountain Phase W La Coipa Restart Project Expected to initiate mining in the Expected to extend mining until 2027 Studying potential synergies between South Area
Slide 17: Tasiast Phase One Exceeds Expectations
Development Projects March 2019 Tasiast Phase One Exceeds Expectations Benefits of Phase One expansion result in record quarterly production in Q4 • Strong Q4 production: 91,548 gold equivalent ounces • Exceeding throughput & recovery expectations Average Q4 throughput: 14,100 t/d Average Q4 rec
Slide 18: Tasiast Expansion Update
Development Projects March 2019 Tasiast Expansion Update Phase Two continues to be a viable option as we complete our evaluation of alternative approaches to optimize further increases to Tasiast’s throughput • Incorporating strong Phase One results into analysis of throughput alternatives • Objecti
Slide 19: Tasiast Phase One Project Financing Update
Development Projects March 2019 Tasiast Phase One Project Financing Update Project financing has progressed, with strong interest from multilateral organizations and commercial banks • Targeting approximately $300 million in financing • Have now signed mandate letter with IFC, a division of the Worl
Slide 20: Kinross Remains in Discussions with the Government of Mauritania
Development Projects March 2019 Kinross Remains in Discussions with the Government of Mauritania Topics under discussion Multi-lateral partnerships Upcoming election • Discussions have been • Involvement of the World • It is expected there will be a focused on matters generally Bank: Presidential el
Slide 21: Round Mountain Phase W Overview
Development Projects March 2019 Round Mountain Phase W Overview The Phase W project is expected to extend mining by 5 years at one of Kinross’ top performing mines located in one of the world’s best mining jurisdictions 21
Slide 22: Phase W Feasibility Study Results
Development Projects March 2019 Phase W Feasibility Study Results Project expected to generate a 13% IRR at an assumed gold price of $1,200 per ounce Current mine plan + Phase W Estimates Average annual production (2018-2024) 341,000 gold ounces Production cost of sales (2018-2024) $765 per gold equ
Slide 23: Round Mountain Phase W
Development Projects March 2019 Round Mountain Phase W The Phase W project is progressing well; expect to commission the processing circuit in Q2 2019 • Detailed engineering for all major infrastructure is now complete • Pre-stripping is advancing well; encountered initial Phase W ore ahead of sched
Slide 24: Fort Knox Gilmore
Development Projects March 2019 Fort Knox Gilmore Gilmore project expected to extend mine life to 2030 and strengthen long-term U.S. production profile 24
Slide 25: Gilmore Feasibility Study Results
Development Projects March 2019 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) $735 per gold equ
Slide 26: Fort Knox Gilmore
Development Projects March 2019 Fort Knox Gilmore Initial production from Gilmore is expected in early 2020 • Project includes: The first two phases of a potential multi-phase layback of the Fort Knox pit; and Construction of a new heap leach pad • Engineering of the new heap leach is now comple
Slide 27: Bald Mountain Vantage Complex
Development Projects March 2019 Bald Mountain Vantage Complex Vantage Complex project in the South Area of Bald Mountain is proceeding well and is expected to begin commissioning in late Q1 2019 • Heap leach pad is ~85% complete • New VCIC plant is ~30% complete • Support infrastructure, including t
Slide 28: Bald Mountain Exploration Highlights
Development Projects March 2019 Bald Mountain Exploration Highlights Kinross envisions Bald Mountain as a long-life asset with significant upside potential and mineral resource growth • 2018 drill program was focused on near-mine opportunities to increase the resource base and provide a direct impac
Slide 29: Russia Satellite Deposits
Development Projects March 2019 Russia Satellite Deposits Development of satellite deposits which are expected to contribute high-grade ore feed to the Kupol mill Moroshka Dvoinoye Zone 1 • Located 4km east of the Kupol mill • Development of Dvoinoye Zone 1 continues on schedule • Project is now com
Slide 30: Kupol Exploration Highlights
Exploration Highlights March 2019 Kupol Exploration Highlights Many targets identified along the main Kupol West Licence N Kupol trend NE-EXT • In 2018, primary objective was to test Kupol Mining Licence depth and north extensions of the main NE Kupol vein system NU • Drill intercepts continued to c
Slide 31: Another 1-Year Mine Life Extension in Russia
Exploration Highlights March 2019 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 2.
Slide 32: Chile Projects
Development Projects March 2019 Chile Projects We are evaluating the potential for a return to production in Chile La Coipa Restart Project • Initiated a feasibility study on the Phase 7 deposit Expected to be complete in Q3 2019 Lobo-Marte Project • Located 80km from La Coipa • Measured & indicat
Slide 33: Chirano Exploration Highlights
Exploration Highlights March 2019 Chirano Exploration Highlights Production at Chirano is now 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 • Follo
Slide 34: Compelling Relative Value
Compelling Relative Value Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities 34
Slide 35: 2018A Production & All-In Sustaining Cost
Compelling Relative Value March 2019 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 Goldcorp Yamana AngloGold Gold Fields Gold F
Slide 36: Balance Sheet Strength
Compelling Relative Value March 2019 Balance Sheet Strength Net debt to EBITDA ratio of 1.4x as at December 31, 2018 Net Debt to EBITDA (LTM) 2.3 1.9 1.5 1.4 1.4 1.4 0.4 -1.1 Yamana Agnico AngloGold Barrick Kinross Gold Fields Newmont IAMGold Source: Company reports; Bloomberg – net debt to trailing
Slide 37: 2019E Metrics
Compelling Relative Value March 2019 2019E Metrics Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities EV / 2019E EBITDA P / 2019E Operating CF 13.4 11.7 9.3 8.7 8.2 8.0 7.1 6.8 5.5 5.2 5.2 5.1 4.7 4.6 4.6 4.1
Slide 38: Appendix
Appendix 38
Slide 39: Currency & Oil Sensitivities
Appendix March 2019 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$1,323 FX 10% US$15/oz. (per ounce) Russian rouble 10% US$19/oz.(ii) Oil US$65 US$57
Slide 40: Fort Knox, USA (100%)
Americas March 2019 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 2017 2018 • Estimated mine life: mill – 2020; mining – 2027; leaching – 2030 Production 381,115 255,569
Slide 41: Summary of Feasibility Study Results
Fort Knox Gilmore March 2019 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 mil
Slide 42: Round Mountain, USA (100%)
Americas March 2019 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 2017 2018 • Estimated mine life: 2024 (mining); 2027 (stockpile milling / residual leach)
Slide 43: Summary of Feasibility Study Results
Round Mountain Phase W March 2019 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 L
Slide 44: Bald Mountain, USA (100%)
Americas March 2019 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 2017 2018 additions • In 2018, achieved record production; lowest Pro
Slide 45: Paracatu, Brazil (100%)
Americas March 2019 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 2017 2018 • Cornerstone asset in Kinross’ portfolio Production • Estimated mine life: 20
Slide 46: La Coipa Restart Project PFS Results (2015)
Americas March 2019 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 receipt of permits and commencement of stripping Processing expected to commence
Slide 47: Kupol-Dvoinoye (100%)
Russia March 2019 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 2017 2018 • Estimated mine life: 2023, following another Production 1-year extension in 2018 580,451
Slide 48: Foreign Investment in Russia
Russia March 2019 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 48
Slide 49: Tasiast, Mauritania (100%)
West Africa March 2019 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 2017 2018 • Performance exceeding expectations; Production record quarterly production in Q4 201
Slide 50: Summary of Feasibility Study Results
Tasiast Expansion Project March 2019 Summary of Feasibility Study Results Operating Estimates (Phase One & Two combined) Standalone Phase Two Estimates Timeline Operational Metric Estimate Estimate Total tonnes mined 438 million Initial capital $590 million Strip ratio 6.4 2020-2024 Average CIL grad
Slide 51: Mauritania Highlights
West Africa March 2019 Mauritania Highlights Kinross has successfully operated in Mauritania since 2010 • Democratic republic that gained independence Country Statistics in 1960 (2017 estimates unless otherwise indicated) • Mining-friendly jurisdiction: Population 3.7M Well-developed, competitive
Slide 52: Chirano, Ghana (90%)
West Africa March 2019 Chirano, Ghana (90%) Cost reduction achieved at Chirano by transitioning to self-perform • Chirano is an underground and open pit Operating Results(1,3) operation located in southwestern Ghana 2017 2018 • Estimated mine life: 2021 Production 221,424 204,029 (Au. Eq. oz.) Produ
Slide 53: Endnotes
Appendix March 2019 Endnotes 1) Unless otherwise noted, gold equivalent production, gold equivalent ounces sold and production cost of sales figures in this presentation are based on Kinross’ 90% share of Chirano production and sales. Also unless otherwise noted, dollar per ounce ($/oz.) figures in
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