Kinross Gold Corporation · TSX:K
Kinross Gold — BMO Capital Markets 29th Global Metals & Mining Conference 2020
65 slides from Kinross Gold's conference presentation, Feb 24, 2020
Slide 1: Delivering Value.
February 2020 Delivering Value. Kinross Gold Corporation
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 and responses to questions, including but not limited to any information as to the future performance of Kinross
Slide 3: Kinross Value Proposition
Kinross Value Proposition Operational Excellence Financial Strength & Flexibility Diverse portfolio of operating mines consistently Maintaining strong balance sheet continues to meeting or outperforming operational targets be a priority objective Repaid over $1.0 billion of debt 8 Consecutive Met or
Slide 4: Performance Highlights
February 2020 Performance Highlights 2019 was a strong year for Kinross INCREASED STRENGTHENED annual production portfolio & extended 2.5Moz. mine life RESPONSIBLE OPERATIONAL STRONG CASH FLOW PIPELINE OF MINING EXCELLENCE AND LIQUIDITY GROWTH PROJECTS Maintained strong Increased year-over- Generate
Slide 5: Corporate Responsibility
Corporate Responsibility 5 5
Slide 6: Our Approach
Corporate Responsibility February 2020 Our Approach At the heart of our success is our people and our four Core Values Our Values and Guiding Principles unite our global workforce Our approach to Corporate Responsibility can be distilled into four main areas: • Do no harm – We work to protect our wo
Slide 7: Health & Safety Highlights
Corporate Responsibility February 2020 Health & Safety Highlights Our strong track record of operational excellence goes hand-in-hand with best-in-class performance in health and safety • Total Reportable Injury Frequency Rate (TRIFR) of 0.27 is: Five-Year Safety Performance TRIFR1 Among the lowes
Slide 8: Managing our Environmental Footprint
Corporate Responsibility February 2020 Managing our Environmental Footprint We are a responsible steward of land and water during all stages of the mine’s life cycle Performance Highlights 2018-2019 Highlights • Complied with hundreds of permits and thousands of • Among the lowest GHG obligations, a
Slide 9: Responsible & Safe Tailings Management
Corporate Responsibility February 2020 Responsible & Safe Tailings Management All of our tailings facilities are designed and constructed to the highest engineering standards and meet or exceed regulatory and international requirements and standards of best practice • Tailings management programs in
Slide 10: Measuring Social Outcomes of Our Operations
Corporate Responsibility February 2020 Measuring Social Outcomes of Our Operations Kinross is one of the few mining companies that measures the social outcomes of our operations Studies at Tasiast show significant reductions in poverty levels Data show that Paracatu has advanced more and improved qu
Slide 11: Governance Highlights
Corporate Responsibility February 2020 Governance Highlights Kinross is committed to the highest standards of corporate governance and accountability • 8 of 9 Board members are • All directors are independent independent except for the Chief Executive • All of our board committees are Officer compos
Slide 12: Operational Excellence
Operational Excellence We remain focused on operational excellence, building a culture of continuous improvement, innovation and disciplined cost management 12
Slide 13: Diversified Portfolio of Assets
Operational Excellence February 2020 Diversified Portfolio of Assets ~55% of 2020E gold equivalent production expected from mines located in the Americas Dvoinoye, Russia Kupol, Fort Knox, USA Russia Chulbatkan, Russia Bald Mountain, USA Round Mountain, USA Tasiast, Mauritania 2020E Gold Equivalent
Slide 14: Eight Consecutive Years of Meeting Guidance
Operational Excellence February 2020 Eight Consecutive Years of Meeting Guidance Kinross has met or exceeded guidance targets for production, costs and capital expenditures for the past eight years 2012 2013 2014 2015 2016 2017 2018 2019 Met or exceeded annual production guidance Met
Slide 15: 2019 Operational Highlights
Operational Excellence February 2020 2019 Operational Highlights Our three largest operations produced over 60% of total production(1) with an average cost of sales of $626/oz.(3) Operation 2019 Performance(3) Highlights Paracatu, Brazil Production • Record annual production (Au. eq. oz.) 619,563 Co
Slide 16: Achieving Performance Improvements at Paracatu
Operational Excellence February 2020 Achieving Performance Improvements at Paracatu Realizing the benefits of asset optimization and continuous improvement efforts through strong performance and cost reduction Year-over-year performance • Record annual production in 2019 with a 19% reduction in cost
Slide 17: Strong Performance at Kupol-Dvoinoye
Operational Excellence February 2020 Strong Performance at Kupol-Dvoinoye Kupol-Dvoinoye continues to be a consistent, strong producer and again extended mine life, now to 2024 Quarter-over-quarter performance • Production increased by 8% year-over- $700 year, a result of higher grades 160k 140k $60
Slide 18: Record Performance at Tasiast
Operational Excellence February 2020 Record Performance at Tasiast Strong 2019 performance highlights the benefits of the Phase One expansion, 391k resulting in record production, throughput and costs • Throughput averaged over 14k t/d in 2019 Year-over-year performance Averaged a record 17.3k t/d
Slide 19: 2020E Outlook
Operational Excellence February 2020 2020E Outlook Forecasting another strong year in 2020, focused on delivering free cash flow and advancing high-quality projects and opportunities Kinross Total(1,2) Regional Guidance(2) 2.4 million Americas 2020E Guidance(2) 2020E Gold Equivalent Production (ounc
Slide 20: Financial Strength & Flexibility
Financial Strength & Flexibility With strong cash flow, we have the financial strength and flexibility to fund our pipeline of development projects 20
Slide 21: 2019 Financial Highlights
Financial Strength & Flexibility February 2020 2019 Financial Highlights Captured the benefits of strong production, improved cost performance and higher gold prices Year-over-year improvements Fourth quarter performance 37% • Generated robust free cash Adjusted operating cash flow (3) increase flow
Slide 22: Strong Liquidity Position
Financial Strength & Flexibility February 2020 Strong Liquidity Position Strong financial position to fund development portfolio and additional growth opportunities Financial Flexibility Liquidity Position ($ billion) • Available liquidity of over $2 billion • Portfolio of mines expected to generate
Slide 23: Manageable Debt Profile
Financial Strength & Flexibility February 2020 Manageable Debt Profile Debt Schedule Debt Ratings Agency Rating S&P BBB- (Positive) $500 $500 $500 Moody’s Ba1 (Positive) Fitch BBB- (Stable) $ millions Interest Rates Senior Notes (due 2021) 5.125% $250 Senior Notes (due 2024) 5.950% Senior Notes (due
Slide 24: Tasiast Project Financing
Financial Strength & Flexibility February 2020 Tasiast Project Financing Reflects comprehensive process of due diligence with lenders • Signed $300 million IFC-led project financing agreement in December 2019 o Initial draw down expected later in Q1 2020 Tasiast Project Financing Details o Non-recou
Slide 25: Development Projects & Exploration Highlights
Development Projects & Exploration Highlights We have a portfolio of development projects that we are progressing, and we are also focused on advancing a pipeline of future opportunities and high potential exploration targets 25
Slide 26: Tasiast 24k Project Feasibility Study Results
Development Projects February 2020 Tasiast 24k Project Feasibility Study Results Proceeding with value-enhancing Tasiast 24k project, which offers attractive returns, increased production and lower costs Operating Estimates Throughput capacity 24,000 t/d Average annual production (2022 – 2028) 563,0
Slide 27: Low-Capital Continuous Improvement Approach
Development Projects February 2020 Low-Capital Continuous Improvement Approach Increase to throughput through debottlenecking initiatives, plant upgrades and optimization of the mine plan and processing circuit Building off success of Phase One and Project Overview continued outperformance of the SA
Slide 28: Advancing the Tasiast 24k Project
Development Projects February 2020 Advancing the Tasiast 24k Project Well-positioned to execute the 24k project Low relative execution risk • Project plan leverages Kinross’ experience successfully building and operating Phase One • Less infrastructure requirements • Permits in place for the 24k pro
Slide 29: Positive Momentum in Mauritania
Development Projects February 2020 Positive Momentum in Mauritania Successfully operated in Mauritania for over 10 years Cumulative production of over 2 million gold equivalent ounces Established $300M political risk insurance policy with MIGA, a member of the World Bank Constructed Phase One ~$
Slide 30: Chulbatkan
Development Projects February 2020 Chulbatkan High-quality project with strong base case and significant upside potential • Near-surface, heap-leachable deposit; initial resource estimate of approximately 4 million ounces(6) • Confirmatory drilling results (not included in initial resource estimate)
Slide 31: Chulbatkan Project Location
Development Projects February 2020 Chulbatkan Project Location Khabarovsk is industrialized and has a well-established mining and exploration sector Mining-friendly jurisdiction Kupol Magadan • Several gold producers active in the region Khabarovsk Ten operating mines Fourth largest gold produci
Slide 32: Chulbatkan: Strong Base Case with Upside Potential
Development Projects February 2020 Chulbatkan: Strong Base Case with Upside Potential Expected to be a substantial open pit gold mine with a low all-in sustaining cost(3) • Preliminary estimates; scope of project may change following planned extensive drill program and technical studies and trade-of
Slide 33: Significant Upside Opportunities at Chulbatkan
Development Projects February 2020 Significant Upside Opportunities at Chulbatkan Kinross plans to undertake a robust exploration program with a focus of defining and further extending the resource • Confirmatory drill program(5) encountered a potential • Drill planning and execution to grow high-gr
Slide 34: Chulbatkan Regional Exploration Upside
Development Projects February 2020 Chulbatkan Regional Exploration Upside Numerous untested potential targets within the ~120km2 exploration license • Multiple structural environments analogous to Chulbatkan deposit • Multiple downstream placer gold occurrences indicate hard rock sources within lice
Slide 35: Fort Knox Gilmore
Development Projects February 2020 Fort Knox Gilmore Gilmore project expected to extend mine life to 2030 and strengthen long-term U.S. production profile 35
Slide 36: Gilmore Feasibility Study Results
Development Projects February 2020 Gilmore Feasibility Study Results Project expected to generate a 17% IRR at an assumed gold price of $1,200 per ounce Current mine plan + Gilmore estimates Average annual production (2018-2027) 245,000 gold ounces Production cost of sales(3) (2018-2027) $735 per go
Slide 37: Fort Knox Gilmore
Development Projects February 2020 Fort Knox Gilmore Encountered initial ore in Q4 2019, ahead of original plan • Project advancing on budget and on schedule • Stripping commenced in Q3 2019 and is expected to continue throughout 2020 • The Barnes Creek heap leach pad and related pumping and piping
Slide 38: Proceeding with La Coipa Restart Project
Development Projects February 2020 Proceeding with La Coipa Restart Project Restart project expected to generate strong returns in a familiar operating jurisdiction • 28% IRR(7) at $1,200/oz. gold and $17/oz. silver prices • 42% IRR(7) at $1,500/oz. gold and $17.50 silver prices • Leverages existing
Slide 39: Lobo-Marte
Development Projects February 2020 Lobo-Marte Evaluating potential synergies with La Coipa and a return to long-term production in Chile N • Scoping study completed in Q1 2019 with encouraging results, including: La Coipa Restart Total estimated production: 4.1M Au oz. at 1.2 g/t project Mine li
Slide 40: Nevada Projects Commenced Production
Development Projects February 2020 Nevada Projects Commenced Production Construction and commissioning of the Bald Mountain Vantage Complex and Round Mountain Phase W complete Bald Mountain Round Mountain • Vantage Complex ramped-up production in • Phase W ramped-up production in Q4 Q4 2019, resulti
Slide 41: Continued Mineral Reserve Additions
Exploration Highlights February 2020 Continued Mineral Reserve Additions Extended mine life at two operations, a result of another successful exploration program in 2019 Paracatu Kupol-Dvoinoye Chirano Offset depletion with the Mine life extended to 2024, Mine life extended to 2022, addition of ~828
Slide 42: Another 1-Year Mine Life Extension in Russia
Exploration Highlights February 2020 Another 1-Year Mine Life Extension in Russia (6) Continuing track record of adding reserves to offset depletion at Kupol Cumulative Production (Au eq.) Estimated Year (i) Proven and Probable Reserves (Au eq.) Mine Life • 2019 reserve addition of ~405,000 Au 2019
Slide 43: Chirano Exploration Highlights
Exploration Highlights February 2020 Chirano Exploration Highlights Production at Chirano is expected to extend to 2022, another 1-year extension • 2019 exploration focus continued to be on adding incremental ounces to mine life Focused on confirming the depth extensions at Akwaaba, Paboase and Ta
Slide 44: Compelling Relative Value
Compelling Relative Value Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities 44
Slide 45: 2020E Production & All-In Sustaining Cost
Compelling Relative Value February 2020 2020E Production & All-In Sustaining Cost 2020E Production 2020E All-In Sustaining Cost (million ounces) ($ per ounce) 7.0 $1,000 6.0 5.0 $800 4.0 $600 3.0 $400 2.0 $200 1.0 0.0 $0 Newmont Barrick Newmont Barrick Yamana Yamana AngloGold Newcrest Gold Fields An
Slide 46: 2020E Metrics
Compelling Relative Value February 2020 2020E Metrics Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities EV / 2020E EBITDA P / 2020E Operating CF 10.7 11.9 10.8 10.1 8.8 8.5 8.1 9.0 6.9 6.6 6.8 5.4 4.6 5.3 5.3
Slide 47: Continuing to Enhance Value
Compelling Relative Value February 2020 Continuing to Enhance Value Strong track record over past 8 years: Future Expectation(2): Production ~2.5 million Au eq. oz. per year ~2.5 million Au eq. oz. per year Costs and Reduced AISC by Further reduce AISC(3) and capital Capital ~$100/Au eq. oz. (1,3) e
Slide 48: Appendix
Appendix 48
Slide 49: 2020E Capital Expenditures
Appendix February 2020 2020E Capital Expenditures(2) • 2020 capital expenditures are expected to be $900 million (+/- 5%)(i) 2020E 2020E Total 2020E Capital Region Sustaining Capital Non-Sustaining Capital (+/- 5%) Americas $265M $270M $535M West Africa $35M $280M $315M Russia $25M $20M $45M Corpora
Slide 50: Currency & Oil Sensitivities
Appendix February 2020 Currency & Oil Sensitivities 2020 Budget Assumptions(2) 2020 Sensitivities (net of hedges)(2) Change from Estimated impact 2020 Budget Current Spot(i) Assumptions to cost of sales Gold $1,200 $1,617 FX 10% $14/oz. (per ounce) Russian rouble 10% $15/oz.(ii) Oil $65 $54 (per bar
Slide 51: Fort Knox, USA (100%)
Americas February 2020 Fort Knox, USA (100%) The Gilmore project is expected to extend mine life to 2030 • Successfully operating one of the world’s Operating Results(3) few cold weather heap leaches 2018 2019 • Estimated mine life: mill – 2020; mining – 2027; leaching – 2030 Production 255,569 200,
Slide 52: Summary of Feasibility Study Results
Fort Knox Gilmore February 2020 Summary of Feasibility Study Results Operating Estimates (current mine plan + Gilmore) Incremental Gilmore Estimates(i) Timeline Operational Metric Estimate Estimate Average annual tonnes mined 60 million Strip ratio 1.2 Strip ratio 1.2 Life of mine ore processed 183
Slide 53: Round Mountain, USA (100%)
Americas February 2020 Round Mountain, USA (100%) Strong cash flow generator with Phase W project extending mine life to 2027 • Phase W is expected to generate solid Operating Results(3) returns and extend mining 2018 2019 • Estimated mine life: 2024 (mining); 2027 (stockpile milling / residual leac
Slide 54: Summary of Feasibility Study Results
Round Mountain Phase W February 2020 Summary of Feasibility Study Results Operating Estimates (current mine plan + Phase W) Standalone Phase W Estimates Timeline Operational Metric Estimate Estimate Strip ratio 2.9 Life of mine production 1.5 million ounces Average grade processed 0.7 grams per tonn
Slide 55: Bald Mountain, USA (100%)
Americas February 2020 Bald Mountain, USA (100%) Forecasting strong near-term cash flow with significant upside potential • Large estimated mineral resource base with Operating Results(3) multiple sources of potential mineral reserve 2018 2019 additions • Estimated mine life: 2023 Production 284,646
Slide 56: Paracatu, Brazil (100%)
Americas February 2020 Paracatu, Brazil (100%) Large gold mine with a long mine life that extends to 2031 • Paracatu is among the world’s largest gold Operating Results(3) operations with annual throughput of ~60Mt 2018 2019 • Cornerstone asset in Kinross’ portfolio Production • Estimated mine life:
Slide 57: Kupol-Dvoinoye (100%)
Russia February 2020 Kupol-Dvoinoye (100%) Our Russian mines are a model for successfully operating in a remote location • High-grade, low-cost underground mines Operating Results(3) supported by one mill 2018 2019 • Estimated mine life: 2024, following another Production 1-year extension in 2019 48
Slide 58: Deep Experience In-Country
Russia February 2020 Deep Experience In-Country Kinross has a long and successful 25-year track record investing in Russia Significant operating experience 2018 Statistics: • Operated four mines, including the high-grade, low Kinross Investments in Russia cost Kupol and Dvoinoye mines 98.5% of emplo
Slide 59: Foreign Investment in Russia
Russia February 2020 Foreign Investment in Russia The world’s leading companies are Foreign Investment Advisory Council invested in Russia • Chaired by the Russian Prime Minister, includes CEOs from over 50 international companies 59
Slide 60: Tasiast, Mauritania (100%)
West Africa February 2020 Tasiast, Mauritania (100%) Low-cost mine with a large gold resource located in a prospective district • First full year operating the Phase One Operating Results(3) expansion in 2019 2018 2019 • Advancing the 24k project to further Production increase throughput (Au Eq. oz.
Slide 61: Feasibility Study Results: Operating Estimates
Tasiast 24k Project February 2020 Feasibility Study Results: Operating Estimates Results Highlights Life of Mine Estimates (2020-2033) Timeline Operational Metric Estimate Operational Metric Estimate Total material mined 375,900,000 Total tonnes mined 628,800,000 Strip ratio 5.9 Total ore mined (ton
Slide 62: Feasibility Study Results: Capital & Economics
Tasiast 24k Project February 2020 Feasibility Study Results: Capital & Economics Estimated Initial Capital Cost Estimated Sustaining Capital • Expected to be approximately $30M per year Estimate ($ millions) Life of Mine estimate ($ millions) Support infrastructure 47 Mobile maintenance 150 Process
Slide 63: Chirano, Ghana (90%)
West Africa February 2020 Chirano, Ghana (90%) Exploration success adding ounces to mineral reserves • Chirano is an underground and open pit Operating Results(1,3) operation located in southwestern Ghana 2018 2019 • Estimated mine life: 2022 Production 204,029 181,167 (Au Eq. oz.) Production cost o
Slide 64: Endnotes
Appendix February 2020 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 sales. Also unless otherwise noted, dollar per ounce ($/oz.) figures
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