Kinross Gold Corporation · TSX:K
Kinross Gold — 2013 GMP Mining Conference
41 slides from Kinross Gold's conference presentation, Nov 20, 2013
Slide 1: Kinross Gold Corporation 2013 GMP Mining Conference
November 20 - 21 KINROSS GOLD CORPORATION 2013 GMP MINING CONFERENCE 11 www.kinross.com
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: Principles for Building Value
PRINCIPLES FOR BUILDING VALUE • Focus on operational excellence • Quality over quantity • Disciplined capital allocation • Maintaining a strong balance sheet 33 www.kinross.com
Slide 4: Operating Mines in 4 Core Regions
OPERATIONAL EXCELLENCE OPERATING MINES IN 4 CORE REGIONS • Diversified portfolio of assets located in some of the world’s best gold producing districts RUSSIA Dvoinoye Kupol Fort Knox Kettle River - Buckhorn Round Mountain WEST AFRICA NORTH AMERICA Tasiast Chirano 2013 OUTLOOK(1,2) Paracatu La Coipa
Slide 5: Delivering Strong Operating Performance
OPERATIONAL EXCELLENCE DELIVERING STRONG OPERATING PERFORMANCE • Priority focus on operational excellence and delivering on commitments • Five consecutive quarters of strong operating performance GOLD EQUIVALENT PRODUCTION COST OF ALL-IN SUSTAINING PRODUCTION(1) SALES(3) COST(4) $1,124 1,984,858 1,8
Slide 6: Focus on Maximizing Margins & Cash Flow
OPERATIONAL EXCELLENCE FOCUS ON MAXIMIZING MARGINS & CASH FLOW • Success in reducing both operating costs and capital expenditures since launching the Kinross Way Forward in H2 2012 • Prioritizing cash flow 1. MINE PLAN OPTIMIZATION • Optimizing pushback widths, mine sequencing • Exploiting zero / l
Slide 7: North America
NORTH • 2013 regional guidance(2): 680 – 720koz. at $635 – 675/oz. AMERICA • Well-run, stable open-pit and underground operations 77 (2) Refer to endnote #2. www.kinross.com
Slide 8: North America
OPERATIONAL EXCELLENCE NORTH AMERICA • Region expected to exceed its 2013 production guidance and to be Fort Knox at the low end of its cost of sales guidance Q3 2013 RESULTS Kettle River - Buckhorn Round Mountain • Record quarterly production at Fort Knox: NORTH AMERICA Improved heap leach perfor
Slide 9: South America
SOUTH • 2013 regional guidance(2): 800 – 870koz. at $870 – $940/oz. AMERICA • Largest operating region accounting for ~33% of annual production 99 (2) Refer to endnote #2. www.kinross.com
Slide 10: South America
OPERATIONAL EXCELLENCE SOUTH AMERICA • Region expected be at the high end of its 2013 production guidance and to be within its cost of sales guidance Paracatu Q3 2013 RESULTS La Coipa Maricunga • Paracatu achieved record quarterly production and mill throughput • Lower production at Maricunga a resu
Slide 11: Encouraging Exploration Potential
SOUTH AMERICA ENCOURAGING EXPLORATION POTENTIAL PHASE 7 (POMPEYA) • Significant gold and silver discovery Catalina • Located 3 km northeast of La Coipa mill Phase 7 CATALINA • Oxide mineralization has been identified 800 m southeast of La Coipa Phase 7 La Coipa mill • Further drilling is underway to
Slide 12: West Africa
WEST • 2013 regional production(2): 415 – 480koz. at $890 – $950/oz. AFRICA • Strong focus on optimizing efficiency and performance in the region 1212 (2) Refer to endnote #2. www.kinross.com
Slide 13: West Africa
OPERATIONAL EXCELLENCE WEST AFRICA • Region expected to be at the high end of its 2013 production Tasiast guidance and within its cost of sales guidance Chirano Q3 2013 RESULTS WEST AFRICA 2013E(2): 415-480koz. • Q3 production at Tasiast slightly impacted by employee strike at $890-950/oz. and a rar
Slide 14: Tasiast Site Infrastructure Update
WEST AFRICA TASIAST SITE INFRASTRUCTURE UPDATE 20 MW POWER PLANT • Completed construction of basic site infrastructure at Tasiast: 20 MW power plant Reverse osmosis plant Sewage treatment plant Maintenance facilities NEW TRUCK SHOP • Feasibility study on a potential mill expansion expected t
Slide 15: Tasiast District Exploration
WEST AFRICA TASIAST DISTRICT EXPLORATION C616 Fennec C613 C614 C69 C67 Aoueouat C615 C68 C611 C612 Tamaya C23 80 Km 1515 www.kinross.com
Slide 16: Russia
• 2013 regional guidance(2): 505 – 535koz. at $550 – $580/oz. RUSSIA • Model for successfully operating in a remote region 1616 www.kinross.com (2) Refer to endnote #2.
Slide 17: Russia
OPERATIONAL EXCELLENCE RUSSIA • Region expected to exceed its 2013 production guidance and to be at the Dvoinoye Kupol low end of its cost of sales guidance Q3 2013 RESULTS • Expansion of the mill to 4,500 tpd successfully completed in July RUSSIA 2013E(2): 505-535koz. • Dvoinoye project completed o
Slide 18: Commercial Production at Dvoinoye
RUSSIA COMMERCIAL PRODUCTION AT DVOINOYE • Commenced production on time and on budget • 2013 production: ~30 thousand gold equivalent ounces(2) • Fourth mine Kinross has operated in Russia 1818 www.kinross.com (2) Refer to endnote #2.
Slide 19: Moroshka Target
RUSSIA MOROSHKA TARGET • Located 5 km southeast of Kupol Kupol Moroshka trend • Presence of high-grade (geochemistry) mineralization over a strike length of 300 m and a Moroshka vein vertical range of 150 m • Similar geology to Kupol North 1919 www.kinross.com
Slide 20: Targeting Margins & Cash Flow
QUALITY OVER QUANTITY TARGETING MARGINS & CASH FLOW • This principle emphasizes choosing margins and cash flow over production volume • Applies to all aspects of the business: Exploration Mine planning Production and resource strategies EXAMPLES • Strategic decision to maintain gold price assu
Slide 21: Additional Capital Reductions
DISCIPLINED CAPITAL ALLOCATION ADDITIONAL CAPITAL REDUCTIONS(2) Actual 2012 spend 1.9 Initial 2013 estimate Identified $150 mm in savings Additional 1.6 savings Capital Expenditures ($ billions) 1.45 1.4 Expecting a significant reduction from 2013 0.8 – 0.9 Full-year Original 2013 Revised 2013 Revis
Slide 22: Solid Financial Position
MAINTAINING A STRONG BALANCE SHEET SOLID FINANCIAL POSITION • Balance sheet strength continues to be a priority • Extended maturity date of $1.0 billion term loan and $1.5 billion revolving credit facility Term loan has no mandatory amortization payments Tangible net worth covenant for the credi
Slide 23: Financial Flexibility
MAINTAINING A STRONG BALANCE SHEET FINANCIAL FLEXIBILITY • Modest net debt position of $1.1 billion at September 30, 2013 • No material debt maturities prior to 2016 SCHEDULED DEBT REPAYMENTS $1,000 $750 $ MILLIONS $270 $20 $60 $60 $250 $30 2013 2014 2015 2016 2017 2018 & Term loan Senior notes Kupo
Slide 24: Cost Review & Reduction
ACCELERATING THE KINROSS WAY FORWARD COST REVIEW & REDUCTION • Expected $230 million in savings in 2013(2) Reduced capital expenditures to $1.4 billion Exploration budget reduced by $30 million by refocusing on higher priority targets • Forecasting another significant reduction of capital spendi
Slide 25: Consolidating the Americas
COST REVIEW & REDUCTION CONSOLIDATING THE AMERICAS • Integrating North & South America into one region – the Americas • Opportunity to streamline regional administration Fort Knox • Integration simplifies organization Kettle River - Buckhorn Round Mountain • Enhances ability to share best practices,
Slide 26: Principles for Building Value
PRINCIPLES FOR BUILDING VALUE • Focus on operational excellence • Quality over quantity • Disciplined capital allocation • Maintaining a strong balance sheet 2626 www.kinross.com
Slide 27: Relative Valuation
RELATIVE VALUATION GOLD PRODUCTION(i) ALL-IN SUSTAINING COSTS(ii) EV / 2014E EBITDA(iii) YTD Q3 2013 YTD Q3 2013 (million ounces) ($/oz.) 10.2 5.5 9.3 $1,137 $1,136 7.6 7.6 $1,045 3.6 $974 6.7 $919 5.7 $834 1.9 1.9 0.8 0.8 ABX NEM GG KGC AEM AUY NEM GG KGC AEM ABX AUY GG AEM AUY NEM ABX KGC (i) Sour
Slide 28: Appendix
APPENDIX 2828 www.kinross.com
Slide 29: Third Quarter 2013 Highlights: Guidance Update
THIRD QUARTER 2013 HIGHLIGHTS GUIDANCE UPDATE(2) 2013 GUIDANCE UPDATE ORIGINAL GUIDANCE UPDATE Gold equivalent production 2.4 - 2.6 million ounces 2.6 - 2.65 million ounces Production cost of sales Expected to be in the low end of $740 - $790 ($ per gold equivalent ounce) guidance range All-in susta
Slide 30: Third Quarter 2013 Financial Results Highlights
THIRD QUARTER 2013 FINANCIAL RESULTS HIGHLIGHTS (in millions, except ounces and per share AVERAGE REALIZED GOLD amounts) Q3 2012 Q3 2013 % Change PRICE $1,649 Gold equivalent production(1) 672,173 680,580 +1% $1,331 (ounces) $ per gold ounce Gold equivalent sales(1) 665,251 651,104 -2% (ounces) Reve
Slide 31: Fort Knox, Alaska
UNITED STATES FORT KNOX, ALASKA (100%) • Production commenced in 1997 • Heap leach production commenced in late 2009 OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) OF SALES ($/oz.)(3) YTD Q3 2013 318,029 $562 FY 2012 359,948 $663 2012 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (th
Slide 32: Round Mountain
UNITED STATES ROUND MOUNTAIN (50%) • Kinross-operated JV with Barrick • Bulk tonnage open-pit operation • Commercial production began in 1977 OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) OF SALES ($/oz.) (3) YTD Q3 2013 122,510 $810 FY 2012 192,330 $717 2012 GOLD RESERVES AND RESOURCES(
Slide 33: Kettle River – Buckhorn
UNITED STATES KETTLE RIVER – BUCKHORN (100%) • Entered production in Q4 2008 • Small foot-print, underground mine • Near-mine exploration targets OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) OF SALES ($/oz.)(3) YTD Q3 2013 119,515 $532 FY 2012 156,093 $482 2012 GOLD RESERVES AND RESOURC
Slide 34: Kupol
RUSSIA KUPOL (100%) • High-grade underground mine • Upgrades to mill increased throughput from 3,500 tpd to 4,500 tpd OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) OF SALES ($/oz.)(3) YTD Q3 2013 396,659 $523 FY 2012 578,252 $472 2012 GOLD RESERVES AND RESOURCES(6) TONNES GRADE OUNCES (t
Slide 35: Paracatu
BRAZIL PARACATU (100%) • Plant 2 expansions now complete: 3rd ball mill commissioned in Q2 2011 4th ball mill commissioned in Q3 2012 OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) OF SALES ($/oz.)(3) YTD Q3 2013 375,686 $818 FY 2012 466,709 $881 2012 GOLD RESERVES AND RESOURCES(6) TO
Slide 36: La Coipa
CHILE LA COIPA (100%) • Ceased mining of the existing orebody at the end of October • Continuing to assess the future potential of La Coipa Phase 7 (Pompeya) Drilling additional exploration targets, such as Catalina (located 800m from Phase 7) OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. o
Slide 37: Maricunga
CHILE MARICUNGA (100%) • Located in the highly prospective Maricunga District • High-altitude heap leach operation OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) OF SALES ($/oz.)(3) YTD Q3 2013 142,220 $1,156 FY 2012 236,369 $779 2012 GOLD RESERVES AND RESOURCES(6) TONNES GRADE OUNCES (th
Slide 38: Tasiast
MAURITANIA TASIAST (100%) • Open-pit mine ~300 km north of the city of Nouakchott • Remote, flat, sparsely populated desert OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz.) OF SALES ($/oz.)(3) YTD Q3 2013 184,855 $1,021 FY 2012 185,334 $889 2012 GOLD RESERVES AND RESOURCES(6) TONNES GRADE O
Slide 39: Chirano
GHANA CHIRANO (90%) • 90% owned by Kinross; Government of Ghana holds a 10% carried interest • 9 open-pits and 2 recently-discovered underground deposits • Achieved first gold pour in 2005 OPERATING RESULTS(1) PRODUCTION(1) PRODUCTION COST (Au eq. oz.) OF SALES ($/oz.)(3) YTD Q3 2013 179,716 $772 FY
Slide 40: Endnotes
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 do not include production from Crixas, due to the sale of Kinross’ 50% ownership completed J
Slide 41: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 York Street, 17th Floor │Toronto, ON │ M5J 2V5 www.kinross.com 4141 www.kinross.com