Kinross Gold Corporation · TSX:K
Kinross Gold — Investor Presentation (January 2011)
49 slides from Kinross Gold's investor presentation, Jan 13, 2011
Slide 1: Delivering Disciplined Growth
Delivering Disciplined Growth Credit Suisse Sales Desk Presentation January 13, 2011
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, including any information as to the future performance of Kinross, constitute “forward looking statements” with
Slide 3: I. Why Gold Now?
I. Why Gold Now? 3
Slide 4: Increasing Demand for Gold
Increasing Demand for Gold $170 $1,450 Investment / Other $160 Total Fabrication $150 Gold Price (US$/oz) $1,250 $140 Current gold price Demand (US$ billions) $130 $1,050 $120 Gold Price (US$/ozz.) $110 $850 $100 $90 $650 $80 $70 Total Gold D $450 $60 $50 $40 $250 $30 $20 $50 $10 $0 ‐$150 1999 2000
Slide 5: Declining world supply from mine production
Declining world supply from mine production 2001: Peak Production 3,000 Other Big Four* 2,500 2 000 2,000 Tonnes 1,500 1,000 500 0 1969 1974 1979 1984 1989 1994 1999 2004 2009e 2009 * South Africa, United States, Australia, Canada Source: GFMS World Gold Survey 2010 5
Slide 6: Major Gold Discoveries: 1997 - Present
Major Gold Discoveries: 1997 ‐ Present 3,500 90 ding of Major Au Disccoveries (MM oz.) 80 Grassroots + Late Stage Spend 3 000 3,000 70 2,500 60 2 000 2,000 50 (US$ MM) 1,500 40 30 1,000 Year Average o ar Average of G 20 500 10 - 0 3Y 3 Yea 1997 Present # of Major 10 8 5 6 5 2 3 7 5 2 0 Gold Discover
Slide 7: II. Why Kinross Now?
II. Why Kinross Now? 7
Slide 8: Continuing the Kinross Transformation
Continuing the Kinross Transformation Kinross Yesterday Kinross Now(1) 4.5 – 4.9 Gold equivvalent production (mm oz) Gold equivvalent production (mm oz) 2.6* 2.2 16 1.6 2005 2009 2010e 2015e (1) Please refer to endnote #1. * Figure represents Kinross’ 2010 production estimate, including estimated fu
Slide 9: World Gold Reserves and Resources
World Gold Reserves and Resources Total Reserves & Resources Top Countries (mm oz.) (mm oz.) Total Reserves & Brazil Chile Country % Resources United States 1. South Africa 997 29.7% Russia South Africa 2. Russia 225 6.7% 3. Australia 193 5.8% Mexico 4. Indonesia 193 5.8% Canada 5. U.S 177 5.3% 6 Ca
Slide 10: Focused in the World's Best Gold Districts
Focused in the World’s Best Gold Districts Strong North American Fort Knox asset base in the Tintina High grade epithermal district High‐grade Dvoinoye gold belt, Nevada and with exploration upside Kupol White Gold Washington Kettle River‐ Buckhorn Round Mountain Tasiast Cornerstone assets in a high
Slide 11: Track Record of Gold Reserve Growth
Track Record of Gold Reserve Growth Tasiast & Kinross Chirano Today s (mm oz)(2) Exploration & 8.2 53.4 Development 33.2 33 ble Gold Reserves Mined oven and Probab 20.8 13.3 Acquired Divested 20.0 15.3 Pro 2004 Current (2) Please refer to endnote #2. Totals may not add due to rounding 11
Slide 12: Strong Balance Sheet
Strong Balance Sheet • Cash on hand: ~$1.4 bn • Long‐term Long term investments: $713 mm o Includes equity investment portfolio valued at ~$292 mm As at September 30, 2010 $1,381 US$ millions $713 $524 Cash and cash equivalents Long‐term investments Long‐term debt 12
Slide 13: Q3 2010 Highlights
Q3 2010 Highlights • Continuing to deliver strong financial results Adjusted Operating Cash Revenue Adjusted Net Earnings(4) Flow(3,4) +26% +28% $ $736 $261 $124 $582 $203 ons US$ millio $2 Q3/09 Q3/10 Q3/09 Q3/10 Q3/09 Q3/10 (3) Please refer to endnote #3. (4) Please refer to endnote #4. 13
Slide 14: Q3 2010 Highlights
Q3 2010 Highlights • Production: 575,065 ounces (up 7% from Q3/09) • Cost of sales margin(5,6) of $673/oz. (up 37% from Q3/09) • Paracatu outperforms expectations; 4th ball mill approved • Closed acquisition of Red Back Mining • Appointment of Brant Hinze as COO, effective October 1st, 2010 • Sold H
Slide 15: Q3 2010 Results
Q3 2010 Results Realized COS (in millions, except ounces and per Q3/09 Q3/10 % Change Gold Price Margin(6) share amounts) +24% +37% Gold equivalent production $1,190/oz $673/oz 537,440 575,065 7% (ounces) (8) Gold equivalent sales (8) 554,232 576,955 4% (ounces) Revenue $582.3 $735.5 26% Cost of (3,
Slide 16: Paracatu Continues to Perform Ahead of Plan
Paracatu Continues to Perform Ahead of Plan 130 000 130,000 129,257 , $700 $650 125,000 production (ounces) $600 120 000 120,000 117 472 117,472 118 101 118,101 $ $550 Cost of Saales ($/oz) $500 115,000 $450 108 421 108,421 Gold equivalent p 110 000 110,000 $400 105,000 $350 $300 100 000 100,000 $25
Slide 17: Expanding Margins
Expanding Margins 2004 – YTD Q3 2010: $648 • Average realized gold price: +182% • Kinross’ attributable cost of sales margin(6): +302% $530 +302% Cost of Sales Margin ($/oz..) $436 $329 $279 $161 $170 FY/04 FY/05 FY/06 FY/07 FY/08 FY/09 YTD Q3/10 (6) Please refer to endnote #6. 17
Slide 18: Growing Cash Flow per Share
Growing Cash Flow per Share • Record high operating cash flow in 2009 (+35% vs. 2008) • 5‐yr CAGR : 25% $1.36 YTD/09 vs. YTD/10 US$)(4) $1.05 w per Share (U $ $1.01 $0.93 $0.80 Adjussted Cash Flow $0.56 $0.51 $0.45 FY/04 FY/05 FY/06 FY/07 FY/08 FY/09 YTD Q3/09 YTD Q3/10 (4) Please refer to endnote #
Slide 19: 2010 Outlook
2010 Outlook(1) Production and Costs Country Production (000 ounces ) Cost of Sales / oz. USA 690 – 745 $480 – 520 R i (8) Russia 495 – 525 $340 – 365 Brazil 510 – 580 $490 – 555 Chile 350 – 380 $700 – 720 Kinross (w/o West Africa) 2.2 mm oz. $495 – 510 West Africa(8,9) 135 – 155 $650 – 675 Total Ki
Slide 20: III. New Project Portfolio
III. New Project Portfolio 20
Slide 21: Kinross Project Portfolio
Kinross Project Portfolio 2011 2012 2013 2014 2015 Paracatu 3rd Ball Mill Paracatu Desulphurization Maricunga SART Plant Paracatu 4th Ball Mill Dvoinoye Tasiast Lobo Marte Lobo‐Marte Fruta del Norte Cerro Casale Conceptual timeline based on current Company estimates. 21
Slide 22: Paracatu: 3rd Ball Mill Update
Paracatu: 3rd Ball Mill Update Lifting mill feed end to mill shell Mill feed end lifted to mill shell 22
Slide 23: Paracatu: At-site Expansion
Paracatu: At‐site Expansion 3rd Ball Mill • Installing 3rd ball mill to increase throughput • Procurement commitments at 90% • Total project 60% complete; construction at site 40% complete • On schedule for completion and commissioning in H1 2011 4th Ball Mill • Allows Paracatu to sustain planned th
Slide 24: Exploration Update at Tasiast
Exploration Update at Tasiast • Added 11 drills; 22 rigs currently on‐site o 16 currently on West Branch • 64,682 m drilled in Q3 2010; 156,784 m drilled YTD • Kinross plans an additional 50,000 m for rest of the year, plus 20,000 m beyond 8 km mine corridor • Q4/10 exploration spending: ~$20.6 mill
Slide 25: Plan View of Drilling at Tasiast
Plan View of Drilling at Tasiast 25
Slide 26: Greenschist Target
Greenschist Target Aug.’09: 17 m at 1.69 g/t Jan’10: 84 m at 1.92 g/t Aug. ’09: 21 m at 1.74 g/t Jan.’10: 85 m at 2.42 g/t Jan.’10: 94 m at 2.78 g/t Sep.’10: 81 m at 3.00g/t Sep.’10: 45 m at 4.26 g/t Sep.’10: 74 m at 4.52 g/t Scale 100 m Felsic Volcanic Banded Iron Formation Volcaniclastic G
Slide 27: Resource Growth at Tasiast
Resource Growth at Tasiast • 3.2 mm oz of Inferred Resource added in November 2010 5.1 Ounces (millionss)(7,10) 1.9 1.4 0.8 92 9.2 93 9.3 5.4 3.7 Year‐end 2008 November 2009 September 2010 November 2010 Measured & Indicated Mineral Resources Inferred Mineral Resources Note: Mineral Resources are rep
Slide 28: Tasiast: Conceptual Pit Shell
Tasiast: Conceptual Pit Shell 5 mm oz reserve pit 20 mm oz exploration target pit
Slide 29: District Targets
District Targets C67 34m at 1 1.71g/t 71g/t 4m at 11.10g/t 19m at 1.19g/t Aoeouat 12m at 2.18g/t 15m at 3.72g/t 6m at 10.62g/t 9m at 7.41g/t Prolongation 13m at 4.08g/t 6m at 2.61g/t C69 6m at 13.0g/t 13m at 3.89/t 21m at 0.88g/t 15m at 1.72g/t 12m at 11.1g/t 12m at 1.07g/t 10m 29at 1.66g/t 10km 29
Slide 30: District Potential – 82 x 25 km Archean Greenstone Belt
District Potential – 82 x 25 km Archean Greenstone Belt Tasiast Geology Timmins Geology with Major Au Mines & Au Occurrences(i) Tasiast 25 km 25 km (i) Source: Ontario Geological Survey 30
Slide 31: Dvoinoye, Russia
Dvoinoye, Russia • Closed acquisition August 27, 2010 Pevek • Completed over 10,000 m of linear drilling Dvoinoye deposit & Vodorazdelnaya y • Completed road connection between site and concession paved highway to Pevek • Clearing of old mine infrastructure well underway ~100 km • Targeted to commen
Slide 32: Fruta del Norte, Ecuador
Fruta del Norte, Ecuador • Pre‐feasibility expected to be complete by year‐end Quito • Geotechnical and hydrogeological drilling on La Zarza and Colibri concessions • EIA for La Zarza exploration decline submitted • Approval expected in H1 2011 • Water permit granted in August • Expect to submit an
Slide 33: Fruta del Norte/Condor (100%)
Fruta del Norte/Condor (100%) • Exploration to date has located a number of epithermal and porphyry‐style targets which will be the focus of continued regional FDN exploration • FDN NI 43‐101 Technical Report: Describes major exploration targets in area of Suarez pull‐apart basin Pull-apart basin •
Slide 34: Lobo-Marte, Chile
Lobo‐Marte, Chile • Updated pre‐feasibility study to be complete in Q4 2010 La Coipa • Geotechnical h l drilling d ll complete; l condemnation, d hydrological and infill drilling expected to be complete Lobo‐Marte ~110 km by year‐end Maricunga • P Permit i approvall ffor additional ddi i l 20,000 20
Slide 35: Key Objectives for 2010
Key Objectives for 2010 Declare increased reserves Complete Lobo Lobo‐Marte Marte pre‐feasibility pre feasibility study Close sale of 25% of Cerro Casale Complete 18,000 drill program at Fruta del Norte Complete l investment in Red d Backk Mining Complete acquisition of Underwo
Slide 36: Why Kinross Now?
Why Kinross Now? 1 High 1. High‐growth growth major 2. Strong cash flow from pure gold production 3. Attractive valuation 36
Slide 37: Endnotes
Endnotes 1) For more information regarding Kinross’ production and cost outlook for 2010, including Kinross’ production and cost estimate for the West African assets acquired through the acquisition of Red Back Mining, the please refer to the news release dated November 3, 2010, available on our web
Slide 38: Appendix
Appendix 38
Slide 39: Fort Knox, USA (100%)
Fort Knox,, USA (100%) ( ) • Located in Alaska • Expansion and new heap leach to extend mine life • Material being stacked on new pads Operating Results Production Cost of Sales (Au eq. oz) ($/oz) YTD Q3 2010 264 590 264,590 $550 YTD Q3 2009 176,646 $596 2009 Gold Reserves and Resources(2) Tonnes Gr
Slide 40: Round Mountain, USA (50%)
Round Mountain,, USA ((50%)) • Kinross‐operated JV with Barrick • Located in Nevada, USA • Open pit mine Operating Results Production Cost of Sales (Au eq. oz) ($/oz) YTD Q3 2010 141 033 141,033 $614 YTD Q3 2009 160,873 $527 2009 Gold Reserves and Resources(2) Tonnes Grade oz (thousands) (g/t) (thou
Slide 41: Kettle River, USA (100%)
Kettle River,, USA ((100%)) • Entered production in Q4’08 • Small foot‐print, underground mine • Near‐mine exploration targets Operating Results Production Cost of Sales (Au eq. oz) ($/oz) YTD Q3 2010 145 555 145,555 $318 YTD Q3 2009 111,192 $308 2009 Gold Reserves and Resources(2) Tonnes Grade oz (
Slide 42: Kupol, Russia (75%)
Kupol, p , Russia (75%) ( ) • 3,000 tpd mill with open‐pit and underground • 2009 first full year of production Operating Results Production P d i Cost off SSales C l (Au eq. oz) ($/oz) YTD Q3 2010 404,504 $318 YTD Q3 2009 529,421 $255 2009 Reserves and Resources(2) Tonnes Grade Ounces (thousands) (
Slide 43: Paracatu, Brazil (100%)
Paracatu, Brazil (100%) • Recoveries near target • Major expansion commissioning • Adding 3rd and 4th ball mills Operating Results Production Cost of Sales (Au eq. oz) ($/oz) YTD Q3 2010 364,830 $528 YTD Q3 2009 245,975 $711 2009 Gold Reserves and Resources(2) Tonnes Grade Ounces (thousands) (g/t) (
Slide 44: Crixas, Brazil (50%)
Crixas,, Brazil (50%) ( ) • JV with AngloGold Ashanti • Underground mine located in the Brazil Operating Results Production Cost of Sales (Au eq. oz) ($/oz) YTD Q3 2010 56,798 $477 YTD Q3 2009 52 624 52,624 $430 Reserves and Resources(2) Tonnes Grade Ounces (thousands) (g/t) (thousands) 2P Reserves
Slide 45: La Coipa, Chile (100%)
La Coipa, p , Chile ((100%)) • Gold/silver mine in the Maricunga district • Comprehensive exploration program Operating Results Production Cost of Sales (Au eq. oz) ($/oz) YTD Q3 2010 136,310 $666 YTD Q3 2009 174,384 $409 2009 Reserves and Resources(2) Tonnes Grade Ounces (thousands) (g/t) (thousand
Slide 46: Maricunga, Chile (100%)
Maricunga, g , Chile ((100%)) • Located the highly prospective Maricunga District • Open pit, heap leach operation Operating Results Production Cost of Sales (Au eq. oz) ($/oz) YTD Q3 2010 123,611 $682 YTD Q3 2009 173,692 $525 2009 Gold Reserves and Resources(2) Tonnes Grade Ounces (thousands) (g/t)
Slide 47: Tasiast, Mauritania (100%)
Tasiast, Mauritania (100%) • Open-pit mine located in Mauritania, ~300 km north of the capital city of Nouakchott • Situated in remote, flat, sparsely populated desert • Commercial production commenced in January 2008 • 2.5 Mtpa CIL mill and 4.5 Mtpa dump leach operation • 2010e production(1): ~185-
Slide 48: Chirano, Ghana (90%)
Chirano, Ghana (90%) • Open‐pit and underground mining operation • 90% owned by Red Back; Government of Ghana holds a 10% carried interest • 9 open‐pits and 2 recently‐discovered underground d dd deposits it • 2010e production of ~215‐225 k oz(1) • Current estimated mine life of 10+ years Gold Reser
Slide 49: Kinross Gold Corporation
Kinross Gold Corporation 25 York Street, 17th Floor Toronto, ON M5J 2V5 Tel: 416 416‐365‐5123 365 5123 Toll‐Free: 1‐866‐561‐3636 www.kinross.com 49