Kinross Gold Corporation · TSX:K
Kinross Gold — Denver Gold Forum 2011
56 slides from Kinross Gold's conference presentation, Sep 19, 2011
Slide 1: A High-Growth Pure Gold Producer
A HIGH-GROWTH PURE GOLD PRODUCER DENVER GOLD FORUM Colorado Springs, CO September 18 – 21, 2011 1
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: Why Kinross?
WHY KINROSS? 1. Pure gold, high-growth senior producer 2. Robust operating cash flow from 10 operating mines today 3. Attractive valuation: leveraged cash flow, growth and exploration 3
Slide 4: Growth Through Project Development
GROWTH THROUGH PROJECT DEVELOPMENT 4.5 – 4.9 Gold equivalent production (mm oz.) 2.3 2.6 – 2.7 1.5 (1) (1) 2006 2010 2011e 2015e (1) Please refer to endnote #1. 4
Slide 5: Kinross Today
KINROSS TODAY 5
Slide 6: Kinross Today
KINROSS TODAY • US$20 bn market capitalization* • 2.6 – 2.7 mm oz. Au eq. in 2011e growing to 4.5 – 4.9 mm oz. in 2015e(1) • Strong liquidity position: ~$2.1 bn cash on balance sheet • Proven developer in emerging gold districts * Market capitalization as of market close September 12, 2011. (1) Plea
Slide 7: Focused in the World's Best Districts
FOCUSED IN THE WORLD’S BEST DISTRICTS Dvoinoye Kupol Fort Knox Kettle River-Buckhorn Round Mountain Tasiast Chirano Fruta del Norte Crixas Paracatu La Coipa Lobo-Marte Maricunga Cerro Casale 10 operating mines 5 development projects 7
Slide 8: Q2 2011 Results: Continuing to Deliver
Q2 2011 RESULTS: CONTINUING TO DELIVER Revenue Adjusted Operating Cash Adjusted Net Earnings(2) +42% Flow(2) +103% +46% $413 $227 $988 $283 US$ millions $697 $111 $0.40/sh $0.20/sh $0.36/sh $0.16/sh Q2 2010 Q2 2011 Q2 2010 Q2 2011 Q2 2010 Q2 2011 (2) Refer to endnote #2. 8
Slide 9: 2011 Outlook
2011 OUTLOOK • Costs expected to be toward the lower end of the guidance range Production % of Total Production Cost of Sales(3) Region (000 ounces ) Production ($/oz) South America 1,000 – 1,070 39% $585 - $650 North America 590 – 630 23% $625 - $685 West Africa 440 – 500 18% $595 - $655 (attributa
Slide 10: Financial Strength & Discipline
FINANCIAL STRENGTH & DISCIPLINE • $1.2 bn line of credit • $810 mm of adjusted cash flow(2) in first six months of 2011 MARKET CAP CASH AND CASH EQUIVALENTS ADJUSTED CASH FLOW(2) (US$ bn) (US$ mm) (US$ mm) $20 $1,403 Proceeds from debt offering Cash & cash equivalents ~$1,000 $1,080 $3 $176 $98 2005
Slide 11: Delivering Expanding Margins
DELIVERING EXPANDING MARGINS 2005 – H1 2011: $828 • Average realized gold price: +212% • Kinross’ attributable margin(3,4): +387% $683 +387% Attributable Margin (US$/oz) $530 $436 $329 $279 $170 2005 2006 2007 2008 2009 2010 H1 2011 (3) Refer to endnote #3. (4) Refer to endnote #4. 11
Slide 12: Staking Districts, Adding Resources, Improving Grade
STAKING DISTRICTS, ADDING RESOURCES, IMPROVING GRADE GOLD RESOURCES(5) 2P GOLD GRADE(5) EXPLORATION SPEND (mm oz.) (g/t) ($ mm) Proven & Probable Mineral Gold Reserves Measured & Indicated Mineral Gold Resources Inferred Gold Resources +220% +41% 0.72 +992% $185 - $195 20.0 0.51 24.7 2.9 63.3 6.1 $1
Slide 13: Improving Grade Profile
IMPROVING GRADE PROFILE Barrick Goldcorp Newmont Kinross 1.5 1.4 Proven and Probable Reserve Grade Growth 1.3 1.2 (2005 index = 1) 1.1 1.0 0.9 0.8 0.7 0.6 0.5 2005 2006 2007 2008 2009 2010 Source: Company reports 13
Slide 14: Transforming Kinross
TRANSFORMING KINROSS 14
Slide 15: Project Pipeline
PROJECT PIPELINE Project 2011E 2012E 2013E 2014E 2015E Organic growth Maricunga SART plant Paracatu 4th ball mill Dvoinoye Tasiast Development Lobo-Marte Fruta del Norte Cerro Casale Conceptual timeline based on current Company estimates. 15
Slide 16: Tasiast
TASIAST, % HET ty AR 21 PRR ma a nara
Slide 17: Tasiast, Mauritania
TASIAST, MAURITANIA Greenstone Rocks • Expanded drilling program focused Banded Iron Fm around existing Tasiast mine Intrusives Felsic Volcanics Greenschist Tenements • Only 8 km of 80 km strike length tested Tasiast Shear 2010 Resource Shell • Mining license area: 312 km2 • Total exploration licens
Slide 18: Tasiast District
TASIAST DISTRICT • Regional soil geochemistry and drilling C67 • Highly prospective district, large scale mineral system Drilling now focused on: • Testing extensions of mineralization intersected in previous drilling at the C69 and Charlize targets • Awaiting assay results on C67 to guide further w
Slide 19: Tasiast Long-Section
TASIAST LONG-SECTION TA05154RD TA05152RD 45m @1.22 g/t Au 61m @ 1.75 g/t Au GXM >= 250 TA05148DD 22m @ 4.49 g/t Au, and 200 to 250 13m @ 0.95 g/t Au 150 to 200 100 to 150 50 to 100 TA05149DD 25 to 50 9m @ 4.32 g/t Au Assays pending < 25 TA05162RD $1300 Pit 56m @ 1.55 g/t Au Shell TA05155ARD 0 2000 I
Slide 20: Resource Growth at Tasiast
RESOURCE GROWTH AT TASIAST(5,7) +173% 4.6 Gold ounces (millions) 8.6 5.1 9.1 1.9 2.1 1.3 1.4 0.8 9.2 9.3 6.5 7.6 7.6 5.4 3.7 Year-end November August September November Year-end June 2008 2009 2010 2010 2010 2010 2011 (Offer made) Inferred Mineral Resources Measured & Indicated Mineral Resources Mea
Slide 21: Tasiast, Mauritania
TASIAST, MAURITANIA • Expansion project remains on schedule: Feasibility study extended to Q1 2012 Construction expected to start mid-2012 Project start-up of 60,000 tpd mill is targeted for early 2014 • 16-year mine life with expected avg. annual production of 1.5 mm oz. (first 8 full yrs.) •
Slide 22: Fruta del Norte, Ecuador
FRUTA DEL NORTE, ECUADOR e Se
Slide 23: Fruta del Norte, Ecuador
FRUTA DEL NORTE, ECUADOR • Prepared pre-feasibility study and technical report • Underground operation estimated 16-year mine life • LOM avg. production estimate : 410k Au eq. oz. / year • Phased commissioning: Plant expected to process 2,500 tpd initially Underground Mine Layout POX circuit add
Slide 24: Fruta del Norte, Ecuador
FRUTA DEL NORTE, ECUADOR • Exploration decline under development • Advancing permitting: EIA for building FDN submitted in Q2 2011 EIA for advanced exploration at Colibri was approved • Negotiations continue on exploitation agreement • Feasibility study expected in H2 2011 • Expected to commissi
Slide 25: Lobo-Marte, Chile
LOBO-MARTE, CHILE 25
Slide 26: Lobo-Marte, Chile
LOBO-MARTE, CHILE • Expected 47,000 tpd heap leach with SART plant • 10-year mine life with estimated production of 350k oz. / year • EIA submitted in June, ahead of schedule • Drilling on Valy deposit located 5 km south of the Lobo deposit encountering strong mineralization Lobo Final Pit • Feasibi
Slide 27: Kupol – Dvoinoye, Russia
KUPOL – DVOINOYE, RUSSIA 27
Slide 28: Dvoinoye, Russia
DVOINOYE, RUSSIA • Underground mine with an expected 8-year mine life Expected avg. output of 900 tonnes per day (2013-2020) • Ore to be processed at the Kupol mill Throughput expected to increase to 4,000 tpd • Development of exploration decline advanced 250 metres at end of Q2 • Feasibility st
Slide 29: Kinross Now
KINROSS NOW 29
Slide 30: Total Resource Ounces per $1,000 Invested
TOTAL RESOURCE OUNCES PER $1,000 INVESTED 5.6 5.0 Ounces of Total Resources Acquired per $1,000 invested 4.8 4.2 3.9 3.3 (oz./$1,000) 2.9 2.6 0.6 KINROSS NEWCREST BARRICK NEWMONT YAMANA AGNICO RANDGOLD GOLDCORP GOLD ETF Source: Company reports and Bloomberg L.P. – September 15, 2011 30
Slide 31: 2011e Production per $1,000 Invested
2011e PRODUCTION PER $1,000 INVESTED 0.17 Ounces of Estimated 2011 Production per $1,000 invested 0.15 0.14 0.10 (oz./$1,000) 0.09 0.09 0.08 0.06 NEWMONT BARRICK KINROSS NEWCREST AGNICO YAMANA RANDGOLD GOLDCORP Source: Company reports and Bloomberg L.P. – September 15, 2011 31
Slide 32: Key Objectives
KEY OBJECTIVES ADVANCING OUR PROJECTS Complete Tasiast scoping study Complete Fruta Del Norte pre-feasibility Complete Dvoinoye scoping study Complete Lobo-Marte feasibility study Complete Fruta del Norte feasibility study OPTIMIZING THE ASSET BASE Declare NI 43-101 mineral gold re
Slide 33: Why Kinross?
WHY KINROSS? 1. Pure gold, high-growth senior producer 2. Robust operating cash flow from 10 operating mines today 3. Attractive valuation: leveraged cash flow, growth and exploration 33
Slide 34: Appendix
APPENDIX 34
Slide 35: Fort Knox, USA (100%)
FORT KNOX, USA (100%) • Located in Alaska • Expansion and new heap leach to extend mine life OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) H1 2011 142,774 $655 FY 2010 349,729 $550 2010 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thousands) (g/t) (thousands) 2P Reserves 2
Slide 36: Round Mountain, USA (50%)
ROUND MOUNTAIN, USA (50%) • Kinross-operated JV with Barrick • Located in Nevada, USA • Open-pit mine OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) H1 2011 89,272 $764 FY 2010 184,554 $657 2010 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thousands) (g/t) (thousands) 2P Re
Slide 37: Kettle River-Buckhorn, USA (100%)
KETTLE RIVER-BUCKHORN, USA (100%) • Entered production in Q4/08 • Small foot-print, underground mine • Near-mine exploration targets OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) H1 2011 92,089 $389 FY 2010 198,810 $330 2010 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (tho
Slide 38: Kupol, Russia (100%)
KUPOL, RUSSIA (100%) • Completed transaction increasing ownership to 100% from 75% on April 27, 2011 • 3,000 tpd mill with open-pit and underground OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) H1 2011 323,726 $335 FY 2010 554,008 $319 Kinross increased its ownership in the Kupol
Slide 39: Paracatu, Brazil (100%)
PARACATU, BRAZIL (100%) • Recoveries near target • Major expansion commissioning • 3rd ball mill commissioned; 4th ball mill to be operational in H1 2012 OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) H1 2011 200,320 $744 FY 2010 482,397 $535 2010 GOLD RESERVES AND RESOURCES(5) TO
Slide 40: Crixas, Brazil (50%)
CRIXAS, BRAZIL (50%) • JV with AngloGold Ashanti • Underground mine located in the Brazil OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) H1 2011 30,251 $796 FY 2010 74,777 $486 2010 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thousands) (g/t) (thousands) 2P Reserves 3,283
Slide 41: La Coipa, Chile (100%)
LA COIPA, CHILE (100%) • Gold/silver mine in the Maricunga district • Comprehensive exploration program OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) H1 2011 105,313 $651 FY 2010 196,330 $648 2010 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thousands) (g/t) (thousands) 2P
Slide 42: Maricunga, Chile (100%)
MARICUNGA, CHILE (100%) • Located the highly prospective Maricunga District • Open pit, heap leach operation OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) H1 2011 128,845 $445 FY 2010 156,590 $746 2010 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thousands) (g/t) (thousand
Slide 43: Tasiast, Mauritania (100%)
TASIAST, MAURITANIA (100%) • Open-pit mine ~300 km north of the city of Nouakchott • Remote, flat, sparsely populated desert OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) H1 2011 98,570 $616 FY 2010 56,611 $755 2010 production and costs for Tasiast reflect Kinross’ ownership peri
Slide 44: Chirano, Ghana (90%)
CHIRANO, GHANA (90%) • 90% owned by Kinross; Government of Ghana holds a 10% carried interest • 9 open-pits and 2 recently-discovered underground deposits OPERATING RESULTS (90%) PRODUCTION PRODUCTION COST (Au eq. oz.) ($/oz.) H1 2011 107,942 $684 FY 2010 80,298 $610 Production and costs for Chirano
Slide 45: Supplemental Information
SUPPLEMENTAL INFORMATION 45
Slide 46: The Evolution of Kinross
THE EVOLUTION OF KINROSS • DIVESTED non-core assets • STRENGTHENED operations, project development, exploration, permitting, government relations • STAKED best gold districts with undiscovered potential • EXPANDED exploration teams and drilling programs • BUILDING new gold mines to drive growth • IN
Slide 47: Growing Cash Flow per Share
GROWING CASH FLOW PER SHARE • 5-yr CAGR : 21% $1.36 $1.32 Adjusted Cash Flow per Share (US$)(2) $1.01 $0.80 $0.71 $0.56 $0.51 2005 2006 2007 2008 2009 2010 H1 2011 (2) Refer to endnote #2. 47
Slide 48: Increasing Gold Resources
INCREASING GOLD RESOURCES(5) 110 Inferred Mineral Resources 140 Measured & Indicated Mineral Resources 100 Proven and Probable Mineral Reserves 20.0 120 Total resource ounce per 1,000 shares 24.0 90 Gold resource oz per 1,000 shares 80 100 Gold resources (mm oz.) 16.2 24.7 70 17.7 20.7 7.0 80 60 16.
Slide 49: Track Record of Reserve Growth
TRACK RECORD OF RESERVE GROWTH(5) Proven and Probable Gold Reserves (mm oz.) 31.5 63.3 33.8 11.9 19.4 9.5 2004 Mined Divested Acquired Exploration and Kinross Today Development 49
Slide 50: Leading Development in New Regions
LEADING DEVELOPMENT IN NEW REGIONS • FIRST North American gold mining company to develop a mine in Russia • LARGEST precious metals producer in Brazil and Chile • PIONEERING development in Washington State and Alaska • ESTABLISHED and expanding government relations and corporate social responsibilit
Slide 51: Gold Production from New Projects
GOLD PRODUCTION FROM NEW PROJECTS +1.3(i) Estimated average annual gold production (mm oz) +0.41(ii) +0.35(ii) Tasiast Expansion Fruta del Norte Lobo-Marte (i) Does not include current Tasiast production; estimated average annual production for first full 8 years (ii) Estimated average annual life o
Slide 52: Mauritania: Key Facts
MAURITANIA: KEY FACTS • Among most sparsely-populated countries Tasiast (Kinross) - Au Askaf (Xstrata) – Iron Ore • Gained independence from France in 1960 Guelb el Aouj (Xstrata) – Iron Ore Lebtheinia (Xstrata) – Iron Ore • Islamic state and democratic republic President Aziz elected in July 2009
Slide 53: Increasing Kupol Ownership to 100%
INCREASING KUPOL OWNERSHIP TO 100% • Kinross increased Kupol ownership to 100% Includes the Kupol East-West exploration licenses • Total consideration: approx. $350 million Financed through proceeds of Harry Winston share sale and non-recourse debt facility of $200 million • Consolidates Kinross
Slide 54: $1 bn Three-Tranche Debt Offering
$1 BN THREE-TRANCHE DEBT OFFERING • Kinross inaugural US bond issuance • Weighted average cost of capital: 5.28% $500 US$ millions $250 $250 5-YEAR 10-YEAR 30-YEAR 54
Slide 55: Endnotes
ENDNOTES 1) For more information regarding Kinross’ production and cost forecasts for 2011, please refer to the press release dated August 10, 2011. For Kinross’ production target for 2015, please refer to the press release dated February 16, 2011. Both news releases are available on our website at
Slide 56: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 YORK STREET, 17TH FLOOR TORONTO, ON M5J 2V5 WWW.KINROSS.COM 56