Kinross Gold Corporation · TSX:K
Kinross Gold — Investor Presentation (May 2004)
80 slides from Kinross Gold's investor presentation, May 11, 2004
Slide 1: Kinross Investor Presentation
dedicated to being world class Kinross Investor Presentation May 11, 2004
Slide 2: Forward Looking Statement
Forward Looking Statement Certain statements set forth in this presentation constitute "forward looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties and other factors that may cause the actual resul
Slide 3: Meeting Agenda
Meeting Agenda Corporate Bob Buchan President & Chief Executive Officer Operations Scott Caldwell Executive Vice President and Chief Operating Officer Fort Knox John Wild Vice President and General Manager, Fort Knox Round Mountain Mike Iannacchione Vice President and General Manager, Round Mountain
Slide 4: Bob Buchan
DEDICATED TO BEING WORLD CLASS Bob Buchan President & Chief Executive Officer
Slide 5: Bench Strength - Corporate
Bench Strength - Corporate Bob Buchan President & Chief Executive Officer Brian Penny John Ivany Scott Caldwell Chris Hill Ron Stewart VP, Finance/Chief Financial Officer Executive VP Executive VP, Chief Operating Officer VP, Investor Relations VP, Exploration
Slide 6: Bench Strength - Operations
Bench Strength - Operations Kinross Gold Corporation Operations Management Organization Scott Caldwell Executive Vice President & Chief Operating Officer Rick Baker Mike Doyle Alan Edwards Andy Kaczmarek Al Schoening Jerry Danni Rod Cooper VP, Operations VP, Operations VP, Operations VP, Project Dev
Slide 7: Going Forward
Going Forward • Out of Greece • Approved Refugio restart, construction underway • Moving ahead with Pamour project in Timmins • Fort Knox pit layback approved and underway • Paracatu SAG Mill • Buckhorn transaction • Hedge Book now expected to be eliminated in Q2/04
Slide 8: Kinross Today
Kinross Today Kinross is now a major gold producer, focused in the Americas Concerns addressed: ¾ Financial leverage – strong balance sheet 9 ¾ Cash costs – comparable to other North American seniors 9 ¾ Reserve life – increasing year over year 9 ¾ Execution risk – None 9 ¾ Deliver on the deliverabl
Slide 9: Corporate Mission…Strategy
Corporate Mission…Strategy “DEDICATED TO BEING WORLD CLASS” ¾ Work the current portfolio to its potential ¾ Continue expanding the reserve base ¾ Go back to the drill bit ¾ Find and retain quality employees ¾ Meet or exceed Corporate Governance standards
Slide 10: Looking Ahead - 2004 Goals
Looking Ahead - 2004 Goals 1. Replace and increase reserves • Paracatu expansion; Buckhorn • Increase average mine life from 7 to 8 years in 2004 2. Use excess capital to advantage • Kinross has cash on hand, strong cash flows and is virtually debt free 3. Deliver on the deliverables • Kinross will
Slide 11: Scott Caldwell
DEDICATED TO BEING WORLD CLASS Scott Caldwell Executive Vice President & Chief Operating Officer
Slide 12: Bench Strength
Bench Strength Kinross Gold Corporation Operations Management Organization Scott Caldwell Executive Vice President & Chief Operating Officer Rick Baker Mike Doyle Alan Edwards Andy Kaczmarek Al Schoening Jerry Danni Rod Cooper VP, Operations VP, Operations VP, Operations VP, Project Develpment VP, H
Slide 13: Strategy
Strategy Growth from within Paracatu expansion, Gurupi, Refugio Optimize cash starved assets - Attention to assets Round Mountain, Kettle River Strengthen management team Bench Strength by attracting and retaining quality employees Proven transactional Corporate transactions where capabilities syner
Slide 14: John Wild
DEDICATED TO BEING WORLD CLASS John Wild Vice President & General Manager, Fort Knox
Slide 15: Fort Knox
Fort Knox
Slide 16: Operating Statistics
Operating Statistics 2003 2004E Q1 2004 Gold production (ounces) 303,999 340,000 75,980 Total cash costs ($/ounce) 244 220 291 Tonnes mined(000) 39,214 48,392 7,884 Tonnes milled (000) 13,685 13,524 3,216 Average grade (grams/tonne) 1.07 0.929 0.905 Capital costs ($ millions) 26.6 43.4 7.2
Slide 17: Mining Progress
Mining Progress << PHASE 4 Waste to Pearl Creek Causeway 2004 Actual Target MAR 800 kt 375 kt APR 300 kt 375 kt MAY 0 kt 350 kt Total 1,100 kt 1,100 kt PHASE 5 >> Mining Tons 2004 Actual Target JAN 396 kt 500 kt FEB 933 kt 350 kt MAR 1,100 kt 522 kt Total 2,429 kt 1,372 kt << PHASE 6 >> Mining Tons
Slide 18: Opportunities
Opportunities – DRILL AND BLAST • actual drill time % • Drill pattern and blast design • Ongoing product testing • Mill throughput optimization – GRADE CONTROL • Pattern preparation and cleanup • Shovel operator feedback reports • Increased technical support
Slide 19: Opportunities
Opportunities • EQUIPMENT EFFICIENCY • Flexibility (broken muck inventory, equipment avail%) • Bottlenecks (crusher flow, waste dump alternatives) • Crew exchange and scheduled downtime • Supervisor training and pre-/post-project review • Lost opportunity tracking (minutes, tons, ozs, $)
Slide 20: Improved Mining Results
Improved Mining Results Total Tonnes Moved, 17% increase 48.3 43.7 41.8 2003 2004 25.4 11.0 6.0 3.4 1.7 $1.32 2003 Fort Knox True North Rehandle Total 2004 $1.15 $1.04 $0.89 $0.85 $0.82 Decrease mining unit costs 8% Fort Knox True North Total
Slide 21: Improved Equipment Availability
Improved Equipment Availability 10,000 9,128 2001 2002 2003 2004 7,598 7,700 7,000 6,743 6,600 6,1635,792 6,000 4,873 0 0 0 0 0 CAT 777 CAT 785 MT3700 CAT 789 Tire Hour Life, 10% increase Drill Productivity, 14% increase 2003 120 115 2004 80% 66% Drill Time, % Pen. Rate, fph
Slide 22: Better Availability via Maintenance
Better Availability via Maintenance – Technical training – Team building with NC Machinery – ALPM April, 2004 – Improved efficiency in-pit fuel and servicing – Planning and Supervision – Planned vs. actual maintenance – JD Edwards interface
Slide 23: Exploration
Exploration 2004 OBJECTIVES – Add 100,000 oz to the Gil (Placer Target) – Test remaining Ft. Knox in-pit and pit expansion targets. Potential to add 50-100,000 oz – Ft Knox mine plan optimized, potential to add 200,000 oz. to reserves. - Test additional exploration targets between Ft Knox and Gil, p
Slide 24: Fort Knox
Fort Knox
Slide 25: Mike Iannacchione
DEDICATED TO BEING WORLD CLASS Mike Iannacchione Vice President & General Manager, Round Mountain
Slide 26: Mine Overview
Mine Overview Town Reusable Pad Pit Tailings Dam Dedicated Pad
Slide 27: Mine Overview
Mine Overview
Slide 28: Mine Overview
Mine Overview
Slide 29: Mine Overview
Mine Overview
Slide 30: Mine Overview
Mine Overview
Slide 31: Operating Statistics
Operating Statistics 2003 2004E Q1 2004 Gold production (ounces) 399,854 367,500 94,985 Total cash costs ($/ounce) 201 223 191 Tonnes mined (000) 44,566 39,000 8,684 Tonnes milled (000) 2,459 3,300 802 Tonnes placed – Reusable pad (000) 6,453 7,200 2,175 Tonnes placed – Dedicated pad (000) 48,486 47
Slide 32: Exploration Program Summary
Exploration Program Summary • Round Mountain Pit Expansion – 2 million ounce potential, $3.1 MM drill cost (Phase I) • Round Mountain Underground Development – 1 million ounce potential, $13.0 million • Gold Hill Reserve Expansion – 1 million ounce potential, $1.05 MM (first phase) • Gold Hill Under
Slide 33: Round Mountain Pit Expansion
Round Mountain Pit Expansion Ultimate Pit Current Pit Crest Potential Pit Expansion 1000
Slide 34: Round Mountain Pit Expansion
Round Mountain Pit Expansion A A` Current Ultimate Pit Outline Outline of the $500 MI & I Optimized Shell Inferred Resource > 0.006 opt A` Au External to $500 Shell Line n e c tio S A
Slide 35: Gold Hill Ore Body
Gold Hill Ore Body Main Gold Hill Area Shallow Resource Deep Resource - Potential Current $325 Reserve Pit Design Surprise M-Ace Area Resource > 0.006 opt Au Mt Jefferson Caldera Margin Scale 0 1000
Slide 36: Gold Hill Underground Opportunity
Gold Hill Underground Opportunity Target • “Midas-style” high grade veins or vein swarms – Rapidly thickening hot springs sinter-filled basins are a guide to high grade feeder zones – Potential for + 1 million ounces • Drill four deep holes testing section below the thickest areas of the sinter basi
Slide 37: Gold Hill Exploration Concepts
Gold Hill Exploration Concepts Current $325 Reserve Pit Design Sinter Basins Midas-style veins Ca neral Mi lde iza ra Ma ion r gi 1000 t n Resource > 0.006 opt Au Mt Jefferson Resource is open towards the Caldera Margin South-West and at Depth 0 1000
Slide 38: Gold Hill Project
0 2,000' 4,000' Feet Limits of Known Sinter N $325 Pit Outline Mt. Jefferson Caldera Margin Target Gold Hill Project East Surprise Target South Gold Hill Mt. Jefferson Caldera Target Mt Jefferson Caldera Margin Fault Dry Canyon Caldera Margin Fault t ul Fa nt ro eF ng Ra Dry Canyon Caldera Jefferson
Slide 39: Fred Mason
DEDICATED TO BEING WORLD CLASS Fred Mason Vice President and General Manager, Compania Minera Maricunga
Slide 40: Refugio —- Arial View
Refugio —- Arial View
Slide 41: Mineral Reserves (US $350)
Mineral Reserves (US $350) TONNES GRADE GOLD (t x 1000) (Au g/t) (ounces) VERDE 77,578 0.88 2,203,000 PANCHO 46,476 0.82 1,230,000 TOTAL 124,054 0.86 3,433,000
Slide 42: Rebuilding Refugio
Rebuilding Refugio Key Projects Include: New Mining Fleet Rehabilitation of Man Camp New Power Line (instead of generators) ADR and PAD Rehabilitation Re-design/Rebuild crushing & conveying system Phased Leach Pad Construction to maximize gold release and efficient pad loading schedules
Slide 43: Rebuilding Refugio
Rebuilding Refugio Key Projects to cost $46.5 Million Power Line Construction Crusher and Conveyor Rebuild Water System Delivery Upgrade General Projects (Including Ponds, Earth Works, Dust Control etc) Upgrade of Maintenance Shop / Wash Bay
Slide 44: Current Project Status
Current Project Status Summary 60 % Completion of Engineering Key Long Lead Time Items Procured Equipment Selected and Purchased On schedule for Q4 2004 start-up Capital costs of $102 million Estimated annual production of 230,000 - 240,000 ounces Average total cash costs of $225 - $23
Slide 45: Bob Taylor
DEDICATED TO BEING WORLD CLASS Bob Taylor Vice President & General Manager, Kettle River
Slide 46: Kettle River
Kettle River
Slide 47: Operating Statistics
Operating Statistics 2003 2004E Q1 2004 Gold production (ounces) n/a 100,000 25,347 Total cash costs ($/ounce) n/a 208 228 Tonnes mined (000) 29,544 336,300 73,625 Tonnes milled (000) n/a 359,500 96,862 Average grade (grams/tonne) n/a 8.74 8.24 Capital expenditures ($ millions) 9.4 1.5 0.5
Slide 48: Kettle River Operation
Resistivity Anomaly and N-S Fault(s) (?) ult Fa NB97- 4 (-70/250 TD 1,509 ft) 11 ft @ 0.113 Au OPT In Sanpoil Fm. EMANUEL NORTH KETTLE MINE EAST VEIN EMANUEL CREEK VEIN K2 MINE Phase 1 5 Core Holes Emanuel North EXPLANATION CURLEW AREA Phase I Surface Core Holes (3) Resistivity Anomaly - High (Silic
Slide 49: Kettle River – Curlew District Prospects
Kettle River – Curlew District Prospects A A’ West Kettle Area 4500 EL 4500 EL Scale in Feet 7000 feet 0 1000 2000 3500 EL sparsely drilled 3500 EL 2500 EL 2500 EL illing 97 Dr 1995- Fos Ba Klondike Mtn. Fm. te K2-East Vein co 1500 EL 1500 EL r Fa e Kettle Mine 288,000 oz. surfac n Paleo Fault 64,00
Slide 50: Emanuel North Exploration Drilling Plan
Bjornson Surface Drill Sites Surface Drill Target: Emanuel North I J Northern continuation Emanuel North of Emanuel North Exploration Drilling PlanE D Growth Potential • 4 Surface Holes April-June 2004 • 6160 Feet C • $26/Ft Explanation Fault, dashed where B speculative lt Fau Mineralized potential
Slide 51: Kettle River – Emanuel Creek Deposit
Kettle River – Emanuel Creek Deposit Looking West 1100 EL 1055 Level 990 1000 EL Level 925 Level 900 EL 860 Level 810 Level 800 EL A E G I K M Emanuel Creek Grade Shell Stopes Completed Printed 03-10-04
Slide 52: Buckhorn Mountain Surface Geology Plan
CANADA UNITED STATES BUCKHORN MOUNTAIN PROJECT BUCKHORN MOUNTAIN PROJECT Seattle Spokane SURFACE GEOLOGY PLAN WASHINGTON Tertiary Portland, OR Andesite Cretaceous - Tertiary Skarn (ore host) Gold Bowl Zones Late Porphyry Dikes SW Zone Diorite - Buckhorn Pluton Granodiorite - Buckhorn Pluton Extent o
Slide 53: SW Zone Cross-Section (Looking N)
BUCKHORN MOUNTAIN PROJECT Figure SW Zone Cross-Section (Looking N) 56 W E 1.10 / 17’ 0.89 / 10’ 1.28 / 10’ 1.52 / 20’ 2.26 / 15.5’ 0.96 / 15’ 2.03 / 10’ 1.42 / 20’ 0.48 / 5’ 0.29 / 35’ N Lo ok 0.31 / 35’ 0.35 / 30’ o ut Fa u 0.43 / 20’ 0.28 / 30’ lt 1.42 / 20’ Au-opt / Feet 0.46 / 30’ SOURCE: Crown
Slide 54: Buckhorn Mountain – Reserves and Resources
Buckhorn Mountain – Reserves and Resources Metric Grade Contained Tonnes (gms/tonne) Gold (ounces) Probable Reserves SW Zone 2,241,800 11.7 840,200 Gold Bowl 548,400 8.6 151,100 Total 2,790,200 11.1 991,300 Indicated Resources Gold Bowl 110,200 19.2 68,000 Reserves calculated by Crown Resources Inc.
Slide 55: Ron Stewart
DEDICATED TO BEING WORLD CLASS Ron Stewart Vice President, Exploration
Slide 56: Exploration Strategy
Exploration Strategy 1. Replace Reserves at Existing Mines 2. Advance Projects Within The Current Pipeline 3. Identify & Acquire New High-Quality Exploration and Development Projects.
Slide 57: Achievements 2003 / Q1 2004
Achievements 2003 / Q1 2004 • Reserve growth in 2003 • Reserves defined at new deposits - Emanuel Creek, Pancho, Gold Hill, Tsokol • New discoveries at Kettle River (Emanuel North), Crixas (Forquilha Sul), Hoyle Pond (A Vein & UM Zone), La Coipa (Puren) • Advancing projects – Gurupi, Aquarius, Gil,
Slide 58: Drilling Activity – Q1 2004
Drilling Activity – Q1 2004 Mwhte R. Mtn. PJV LaCoipa Crixas Kubaka YTD Mar Gurupi Broads Dam Lupin m (000's) 0 5000 10000 15000 20000 25000 30000
Slide 59: LaCoipa MDO JV (50% Kinross)
LaCoipa MDO JV (50% Kinross) North Dump • Puren (65% MDO, 35% Codelco) • 3 drills – 11,525 m drilled in Q1 ase Phase • Significant Results in Q1 Ph W 1 N • Infill: 42m @ 2.36 g/t Au, 79.4 g/t Ag; 128m @ 1.56g/t Au, 294 g/t Ag; 148m @ 0.65 g/t Au, 256 g/t Ag, 80m @ 2.60 g/t Au, 72 g/t Ag; • NW Discov
Slide 60: Puren – Section 700 NE
Puren – Section 700 NE 4,400m 200 metres Proposed Pit Upper Volcanics 1.87 / 114 4,200m Lower 2.19/98 Soledad Volcanics 1.42/36 2.32/126 1.24/100 29.7/20 99.8/62 Isidora 104.4/52 34.4/66 1.94/94 4,000m Karla Fault Drill hole Intersection - Gold, Silver Maite Overburden Silica Cap Argillic Alteration
Slide 61: Puren – Section 1050 NE
Puren – Section 1050 NE 4,400m 200 metres Proposed Pit 575.3/150 1.54/52 Upper Volcanics 0.95/84 1.37/142 4,200m Lower 257.0/154 Volcanics 1.82/90 749.0/84 369.9/168 Isidora 4,000m Karla Fault Drill hole Intersection - Gold, Silver Overburden Silica Cap Argillic Alteration Silica-Argillic Alteration
Slide 62: Puren – Section 1300 NE
Puren – Section 1300 NE 4,400m 200 metres Upper Volcanics 213.4/90 Isidora 4,200m Lower 288.5/36 Volcanics 641.7/90 4,000m Karla Karla Fault Drill hole Intersection - Gold, Silver Maite Overburden Silica Cap Argillic Alteration Silica-Argillic Alteration Silica Alteration Unaltered 1.94/94 Grade (g/
Slide 63: Porcupine JV (49% Kinross)
Porcupine JV (49% Kinross) • 6 drills active 17,121m drilled in Q1 • New high-grade discovery called the UM zone at Hoyle Pond • Significant Results in Q1 • UM Discovery: 0.8m @ 253.4 g/t; 6.1m @ 43.37 g/t; 3.4m @ 17.88 g/t; 11.75m @ 81.24 g/t • A Vein:0.35m @ 2772.9 g/t; 0.9m @ 148.6 g/t; 0.35m 579
Slide 64: Hoyle Pond – A Vein
Hoyle Pond – A Vein Drilling in Progress Longitudinal Section 540mL Indicated Looking NW 22.49/1.2m HMW 580mL 14,871t @ 20.02g/t Dec 31, 2003 620mL Reserves & Resources Proven & Probable 660mL Diabase Dike (Oblique) Q1 04 Production Proven & Probable 740 & 700 700 Indicated development Development 2
Slide 65: Gurupi (100% Kinross)
Gurupi (100% Kinross) Goldfields 10 kilometres S.A. • 4 drills – 5,016m completed Brazil Kinross • 2.7 M oz indicated resource in Holdings Gurupi Property Cipoeiro and Chega Tudo Rio de Janeiro • Significant Results in Q1 Cipoeiro • Cipoeiro 36m @ 2.82 g/t; 17m @ 1.24 Chega g/t; 14m @ 1.19 g/t; 49m
Slide 66: Gurupi – Cipoeiro Deposit
Gurupi – Cipoeiro Deposit 9,751,000 Explanat Ion Existing Drill Hole Metasediments Blanket (pre-Kinross) Zone Sectio Kinross Infill Hole n 11A Sectio Deposit Outline n 10 Sectio n9 n6 Sectio Sectio n8 9,750,000 ion 5 Sect Tonalite n4 Sectio Contact Zone N Scale (meters) 0 100 200 300 400 500 364,000
Slide 67: Cipoeiro – Composite Section
Cipoeiro – Composite Section 1.53/18 2.04/32 2.40/30 1.11/6 1.14/18 2.13/17 1.14/5 0.87/10 0.76.13 1.08/19 1.02/10 1.52.43 Assays 0.87/8 pending 2.30/6 0.57/20 1.05/19 1.52/21 1.23/16 KCP- 275 1.19/15 0.53/36 KCP-258 0.27/8 KCP-259 0.70/9 1.34/68 0.51/11 KCP-271 Assays 1.19/51 1.51/48 pending 0.69/1
Slide 68: Chega Tudo – Composite Section
Chega Tudo – Composite Section 1.00/58 0.63/36 0.63/22 KCT-260 1.60/44 0.71/8.0 1.38/10 3.32/14 0.74/14 1.92/11 1.75/15 2.46/10 1.59/9 0.56/11 KCT-261 1.81/15 1.19/33 Gabbro 1.51/39 Saprolite 0.55/36 1.01/20 Metasediments 0.53/28 Metavolcanics 0.63/16 1.04/33 Mineralized Zone 0.62/19 Kinross Drill H
Slide 69: Kubaka (98.1% Kinross)
Kubaka (98.1% Kinross) • 3 drills active 6,789m drilled in Q1 • Birkachan U/G potential being evaluated • Significant Results in Q1 • Birkachan: 3.8m @ 14.81 g/t; 2.9 @ 11.62 g/t; 1.7m @ 42.03 g/t; 4.3 @ 148.3 g/t • 24,500m drilling approved for Birkachan and Tsokol
Slide 70: Wind River (Kinross Option)
Wind River (Kinross Option) Vein No.5 Cross-Section 2400 FT Looking N 15º 2400 FT • Option to purchase finalized in Q2 E 0.90 / 10ft 0.51 / 16ft 2300 FT • Tertiary low sulphidation 2300 FT WR-9 0.41 / 16ft epithermal vein 0.68 / 20ft 2200 FT 2200 FT • Three known veins, mine PROPOSED CORE HOLES deve
Slide 71: Wind River Option
Wind River Option 0.468 / 30’ 0.366 / 30’ 0.825 / 33’ (Looking West) 0.38 / 7.7’ 0 400 ft 0.546 / 50’ 0.51 / 16’ 0.35 / 10’ 0.90 / 20’ 0.35 / 10’ 0.351 / 25’ 0.574 / 20’ 0.19 / 14’ 0.64 / 19’ 0.68 / 19.5’ 0.325 / 12.5’ 0.21 / 11’ 0.32 / 11’ 0.27 / 8’ 0.20 / 11’ 0.53 / 17’ 2.22 / 2.5’ WR 2002 RC Hole
Slide 72: Summary
Summary • Focus on reserve growth, advancing the pipeline and acquiring new high quality projects • Major new exploration campaigns approved at Round Mountain, Kettle River, Fort Knox, Kubaka and Gurupi • 2004 budget of $20 million
Slide 73: Jerry Danni
DEDICATED TO BEING WORLD CLASS Jerry Danni Vice President, Environmental, Health and Safety
Slide 74: World Class EH&S Program
“World Class” EH&S Program Core Business Functions: • Exploration • Acquisition • Development • Operations • Closure
Slide 75: EHS Organizational Structure
EHS Organizational Structure Scott Caldwell Chief Operating Officer Vice President Board of Directors Environment, Health and Safety EHS Committee (Jerry Danni) Vice President Vice President Vice President General Manager Project Manager VP/GM Health & Safety Environmental Regluatory and Gov't Affai
Slide 76: Closure Property Schedule
Closure Property Schedule 2003 2004 2005 2006 2007 + Guanaco Haile Hayden Hill Delamar QR Sleeper Sunnyside Mineral Hill Wind Mountain Candelaria Lupin New Britannia
Slide 77: Closure Property Spending
Closure Property Spending ($US millions) 2004 2005 2006 2007 + Care and Maintenance 0.52 0.43 0.58 Delamar 7.44 4.17 3.41 0.61 Haile 4.50 1.79 0.23 0.17 Hayden Hill 0.53 0.70 0.17 0.21 Mineral Hill (1.16) 0.27 0.24 0.41 Sunnyside 0.22 0.21 0.02 0.00 Wind Mountain 0.01 0.01 0.01 0.05 Total Reclamatio
Slide 78: Total Closure Property Obligation
Total Closure Property Obligation 45,000 40,000 35,000 US$ thousands 30,000 25,000 20,000 15,000 10,000 5,000 0 -5,000 2003 2004 2005 2006 2007 2008 2009 2010 2011+
Slide 79: Closure Property Financial Assurance
Closure Property Financial Assurance 50,000 45,000 40,000 US$ thousands 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011+
Slide 80: Kinross
dedicated to being world class Kinross Investor Presentation May 11, 2004