Kinross Gold Corporation · TSX:K
Kinross Gold — Q1 2010 Earnings Presentation
27 slides from Kinross Gold's earnings presentation, May 5, 2010
Slide 1: Delivering Disciplined Growth
Delivering Disciplined Growth Q1 2010 Financial and Operation Results Webcast May 5, 2010
Slide 2: Speakers
Speakers Tye Burt Thom Boehlert Tim Baker Ken Thomas President & CEO Executive Vice‐President Executive Vice‐President Senior Vice‐President, & CFO & COO Projects 2
Slide 3: 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 this presentation, including any information as to the future financial or operating performance of Kinross, constitute “forward‐looking information
Slide 4: Tye Burt, President & CEO
Tye Burt President & CEO 4
Slide 5: Q1 2010 Results
Q1 2010 Results ( millions,, except (in p ounces and per p Q1'09 Q1'10 % Change • Revenue increased 23% share amounts) • Margins increased 26% Gold equivalent production (1) 526,888 544,134 3% • Cash increased to $1.1 bn (ounces) • Agreement to acquire 100% Gold equivalent sales of the high-grade Dv
Slide 6: Growing margins and cash flow per share
Growing margins and cash flow per share Cost of Sales margin Adjusted operating cash flow(2,3) ($/oz )(4) ($/oz.) $604 $226.3 $214.9 $478 Q1'09 Q1'10 Q1'09 Q1'10 6
Slide 7: Performance improvements at Paracatu
Performance improvements at Paracatu Production Cost of Sales ((ounces)) ($/oz.))(5) ($/ $764 117,472 $648 108,421 27% $556 37% 85,772 , Q3'09 Q4'09 Q1'10 Q3'09 Q4'09 Q1'10 7
Slide 8: Portfolio Optimizations
Portfolio Optimizations • Acquiring 100% of the Dvoinoye deposit and Vodorazdelnaya concession o High‐grade deposit located ~100 km from Kupol o Exploration potential at Vodorazdelnaya • Sale of half of our 50% interest in Cerro Casale o Closed March 31st, 2010; total transaction value ~$474 million
Slide 9: New Investment in Red Back Mining
New Investment in Red Back Mining • C$600 $ mm for 9.4% of p pro‐forma equity q y ownership p o C$25.00 per share • Right to appoint one member to Red Back’s Board of Directors • Anti‐dilution provisions p • Investment from Kinross’ existing $1.1 bn cash balance 9
Slide 10: Rationale for Red Back Mining Investment
Rationale for Red Back Mining Investment This investment ggives Kinross: • Disciplined entry to West Africa – highly prospective and fast growing region • A high‐quality, proven management team with a great track record • Strategic window into two high‐growth gold mines with excellent potential • In
Slide 11: Q1 2010 Results
Q1 2010 Results ( millions,, except (in p ounces and per p Q1'09 Q1'10 % Change • Revenue increased 23% share amounts) • Margins increased 26% Gold equivalent production (1) 526,888 544,134 3% • Cash increased to $1.1 bn (ounces) • Agreement to acquire 100% Gold equivalent sales of the high-grade Dv
Slide 12: Thom Boehlert, Executive Vice-President & CFO
Thom Boehlert Executive Vice‐President & CFO 12
Slide 13: Q1 2010 Results
Q1 2010 Results Q1'09 Q1'10 % Change (in millions, except ounces and per share amounts) (1) Gold equivalent production (ounces) 526,888 544,134 3% (1) Gold equivalent sales (ounces) 526,807 567,097 8% Revenue $532 7 $532.7 $657 6 $657.6 23% (2,3) Adjusted operating cash flow $214.9 $226.3 5% per sha
Slide 14: 2010 Guidance
2010 Guidance(6) Production and Costs Production Cost of Sales / Country Ounces (000s) % of 2010e total oz. Chile 460 – 480 21% $500 – 520 Brazil 510 – 580 24% $490 – 555 Russia(6) 495 – 525 23% $340 – 365 USA 690 – 745 32% $480 – 520 Total Kinross: 2.2 mm oz. $460 ‐ 490 Other 2010e (mm) Capital exp
Slide 15: Tim Baker, Executive Vice-President & COO
Tim Baker Executive Vice‐President & COO 15
Slide 16: Operating Results
Operating Results Production Cost of Sales (oz ) (oz.) (US$/oz ) (US$/oz.) Fort Knox 69,640 $524 Round Mountain 45,629 $622 Kettle River 48,405 $280 Kupol 144,691 $314 Paracatu 117 472 117,472 $556 Crixas 18,856 $432 La Coipa 47,664 $511 Maricunga 51,777 $568 (1) Total Kinross: 544,134 $461 (1) Refe
Slide 17: Dr. Ken Thomas, Senior Vice-President, Projects
Dr. Ken Thomas Senior Vice‐President, Projects 17
Slide 18: Paracatu: At-site expansion
Paracatu: At‐site expansion 3rd Ball Mill • Installing 3rd ball mill to increase throughput • Procurement commitments at 40%; construction commenced • On schedule for completion and installation in H1 2010 Desulphurization p Circuit • Installing a $30 mm desulphurization circuit to reduce sulphur co
Slide 19: Pouring concrete foundation for 3rd ball mill at Paracatu
Pouring concrete foundation for 3rd ball mill at Paracatu 19
Slide 20: Paracatu: At-site expansion
Paracatu: At‐site expansion 3rd Ball Mill • Installing 3rd ball mill to increase throughput • Procurement commitments at 40%; construction commenced • On schedule for completion and installation in H1’2010 Desulphurization p Circuit • Installing a $30 mm desulphurization circuit to reduce sulphur co
Slide 21: Maricunga Optimization
Maricunga Optimization Expansion • Scoping study completed late 2008 • Feasibility study expected in first half of 2010 • Concept: update mining fleet; construct new primary crusher and conveyor; increase capacity of existing crushing plant • Potential to increase ore processing and ounce production
Slide 22: Lobo-Marte, Chile
Lobo‐Marte, Chile • Completed pre‐feasibility study La Coipa • Capital estimate: $575 – $650 million • 47,000 tpd heap leach with SART plant Lobo‐Marte ~110 km • Operating costs expected to be $11.00‐$12.00 per tonne Maricunga • Annual production: 350‐400k oz. per year (first five years of full prod
Slide 23: Fruta del Norte, Ecuador
Fruta del Norte, Ecuador • 18,000 metre drill campaign completed Quito • Pre‐feasibility P f ibilit expected t d by b year‐end d • Land titles approved by government authorities as required under new mining law • Permitting process underway for geotechnical drilling and construction of an exploratio
Slide 24: Tye Burt, President & CEO
Tye Burt President & CEO 24
Slide 25: 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 investment in Red Back Mining Complete acquisition of Underworld Res
Slide 26: Kinross Gold Corporation
Kinross Gold Corporation 25 York Street, 17th Floor Toronto, ON M5H 2V5 Tel: 416 416‐365‐5123 365 5123 Toll‐Free: 1‐866‐561‐3636 www.kinross.com 26
Slide 27: Endnotes
Endnotes 1) Unless otherwise stated, gold equivalent production, gold equivalent ounces sold and cost of sales figures in this presentation are based on Kinross’ share of Kupol production (75%). 2) Unless otherwise stated, all cash flow and cash flow per share figures in this presentation are adjust