Kinross Gold Corporation · TSX:K
Kinross Gold — Investor Presentation (April 2012)
46 slides from Kinross Gold's investor presentation, Apr 12, 2012
Slide 1: Delivering Disciplined Growth
DELIVERING DISCIPLINED GROWTH KINROSS GOLD CORPORATION April 2012 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: Kinross: Mapping the Path Forward
KINROSS: MAPPING THE PATH FORWARD 1. Strong financial and operating position 2. Tasiast is the cornerstone of Kinross’ long-term growth strategy 3. Stringent approach to project development and capital allocation MAPPING THE PATH FORWARD 1. Strong financial and operating performance 2. Tasiast remai
Slide 4: Strong Operating & Financial Foundation
STRONG OPERATING & FINANCIAL FOUNDATION 4
Slide 5: 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 5
Slide 6: Delivering Strong Financial Results
DELIVERING STRONG FINANCIAL RESULTS • Record operating results in 2011 • Production: 2.6 mm gold equivalent ounces (up 12% from 2011) • Non-cash goodwill impairment reduced reported net earnings by approximately $2.9 billion Revenue Adjusted Operating Cash Flow(1) 1800 2 Adjusted Net Earnings(1) 1.2
Slide 7: 2012 Outlook
2012 OUTLOOK(2) PRODUCTION & COSTS Production(3) % of Total Production cost of Sales(4) Region (000 ounces) Production ($/oz) South America 930 – 1,030 36% $780 – $850 North America 620 - 660 24% $620 – $660 West Africa 500 – 560 20% $740 – $800 (attributable) Russia 525 – 565 20% $470 – $495 Gold e
Slide 8: Delivering Expanding Margins
DELIVERING EXPANDING MARGINS FY2005 – FY2011: $906 • Average realized gold price: +238% • Kinross’ attributable margin(4,5): +433% • 5-yr CAGR: 27% $685 +495% +433% Attributable Margin (US$/oz) $530 $436 $329 $279 $170 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 Canadian GAAP IFRS (4) Refer to
Slide 9: Growing Cash Flow per Share
GROWING CASH FLOW PER SHARE • 5-yr CAGR: 12% $1.41 $1.36 $1.35 Adjusted cash flow per share ($/sh)(1) $1.01 $0.80 $0.56 $0.51 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 Canadian GAAP IFRS (1) Refer to endnote #1. 9
Slide 10: Financial Strength & Discipline
FINANCIAL STRENGTH & DISCIPLINE • Received investment grade credit ratings from all three major rating agencies • Approximately $1.6 bn of adjusted cash flow(1) in 2011. MARKET CAP CASH AND CASH EQUIVALENTS ADJUSTED CASH FLOW(1) (US$ bn) (US$ mm) (US$ mm) $11 $1,599 $1,766 $3 $176 $98 2005 Now 2005
Slide 11: Liquidity & Capital Resources
LIQUIDITY & CAPITAL RESOURCES • Cash on hand at December 31, 2011: $1.8 billion • $1.2 billion revolving credit facility As at December 31, 2011 $1,766 US$ millions $1,145 $582 Cash and cash equivalents Available lines of credit Long-term investments & investments in associates 11
Slide 12: Portfolio Upgrades
PORTFOLIO UPGRADES Assets Rationalized Portfolio Additions New Project Pipeline • Kubaka (98%) • Paracatu (50%) • Tasiast expansion (100%) • Julietta (90%) • Buckhorn (100%) • Dvoinoye (100%) • Lupin (100%) • La Coipa (50%) • Lobo-Marte (100%) • New Britannia (50%) • Maricunga (50%) • FDN (100%) • A
Slide 13: Staking Districts, Adding Resources, Improving Grade
STAKING DISTRICTS, ADDING RESOURCES, IMPROVING GRADE GOLD RESOURCES(6) 2P GOLD RESERVE EXPLORATION SPEND (mm oz.) GRADE(6) ($ mm) Proven & Probable Gold Reserves (g/t) Measured & Indicated Gold Resources Inferred Gold Resources +221% +43% 0.73 +13x $220 20.1 0.51 25.4 2.9 62.6 6.1 $17 24.7 2005 2011
Slide 14: High Quality Growth Projects
HIGH QUALITY GROWTH PROJECTS 14
Slide 15: Capital Allocation Framework
CAPITAL ALLOCATION FRAMEWORK • Rationale: multiple projects to build amidst tight project construction environment • Total annual capital spending will be based on a conservative estimate of existing liquidity, cash flow availability and gold price • Capital allocation using these parameters for 201
Slide 16: Tasiast Expansion, Mauritania
TASIAST EXPANSION, MAURITANIA 16
Slide 17: Tasiast, Mauritania
TASIAST, MAURITANIA Greenstone Rocks • Expanded drilling program focused Banded Iron Fm around existing Tasiast mine Intrusives Felsic Volcanics Greenschist Tenements • 8 km of 80 km structure length tested Tasiast Shear 2010 Resource Shell • Mining license area: 312 km2 • Total exploration licenses
Slide 18: Tasiast District
TASIAST DISTRICT • Highly prospective district, large scale mineral system C67 • Near-surface sulphide mineralization has been identified over 1,200 strike meters at C67 • Further drilling to test continuity of mineralized zones along strike & target possible extensions at depth Mining Mining Licens
Slide 19: Tasiast, Mauritania
TASIAST, MAURITANIA • Tasiast expansion is key growth priority • 60,000 tpd mill-only option base case scenario • Continuing to analyze alternate process options • Expect to make a preliminary selection of processing option at the end of Q2 2012 • Construction expected to start mid-2013 • Targeting
Slide 20: West Branch / Piment Orebodies
WEST BRANCH / PIMENT OREBODIES Plan (A) and long section (B) panels of the Tasiast mine corridor illustrating drill hole pierce points projected to surface and vertical planes, respectively. Colours are assigned by grade X thickness intervals as indicated in the legend. A West Branch Piment Piment P
Slide 21: Tasiast Project Optimization
TASIAST PROJECT OPTIMIZATION • Continuing to analyze existing Tasiast mineral resource estimate according to a potential split between CIL, dump leach and heap leach processing options(6): Measured & Indicate Mineral Resource Inferred Mineral Resource Material Process Gold cut-off Tonnes Gold grade
Slide 22: Tasiast Site Enhancements
TASIAST SITE ENHANCEMENTS NEW ADR PLANT COMPLETED Q4 2011 NEW ADR PLANT – COMPLETED Q4 2011 22
Slide 23: Tasiast Site Enhancements
TASIAST SITE ENHANCEMENTS NEW WEST BRANCH DUMP LEACH FACILITY 23
Slide 24: Tasiast Site Enhancements
TASIAST SITE ENHANCEMENTS STRIPPING AT WEST BRANCH 24
Slide 25: Tasiast Site Enhancements
TASIAST SITE ENHANCEMENTS EXPANDING CAMP SIZE 25
Slide 26: Tasiast, Mauritania
TASIAST, MAURITANIA • Basic infrastructure and pre-production development continuing in parallel with project optimization in 2012: Expansion of existing camp: expect to complete build-out to ~3,000 beds Development of interim water pipeline and wellfield: currently underway Incremental additi
Slide 27: Kupol - Dvoinoye, Russia
KUPOL - DVOINOYE, RUSSIA == ean
Slide 28: Dvoinoye, Russia
DVOINOYE, RUSSIA • Key development activities continue on schedule • Completed ~1,320 m of underground development as of end of Q4 2011, ahead of plan • Additional mining equipment en route to support accelerated rate of development for 2012 • Expanding temporary camp to accommodate construction per
Slide 29: Lobo-Marte, Chile
LOBO-MARTE, CHILE 29
Slide 30: Lobo-Marte, Chile
LOBO-MARTE, CHILE • Expected heap leach operating with SART plant • Continuing with further drilling at nearby Valy target • Re-evaluating various project configurations as part of ongoing project optimization • Approval of the Environmental Impact Assessment targeted for year-end 2012 • Completion
Slide 31: Fruta del Norte, Ecuador
FRUTA DEL NORTE, ECUADOR KINROSS
Slide 32: Fruta del Norte, Ecuador
FRUTA DEL NORTE, ECUADOR • Continuing negotiations with Ecuadorian government on enhanced economic package • Expect to proceed only when satisfied with terms of final agreements and have positive construction decision following completion of feasibility work • Exploring opportunities to lower future
Slide 33: Mapping the Path Forward
KINROSS: MAPPING THE PATH FORWARD 1. Strong financial and operating position 2. Tasiast is the cornerstone of Kinross’ long-term growth strategy 3. Stringent approach to project development and capital allocation MAPPING THE PATH FORWARD 1. Strong financial and operating performance 2. Tasiast remai
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.) OF SALES ($/oz.) FY 2011 289,794 $692 FY 2010 349,729 $543 2011 GOLD RESERVES AND RESOURCES(6) TONNES GRADE OUNCES (thousands) (g/t) (thousands) 2P R
Slide 36: Round Mountain, USA (50%)
ROUND MOUNTAIN, USA (50%) • Kinross-operated JV with Barrick • Located in Nevada, USA • Open-pit mine OPERATING RESULTS PRODUCTION PRODUCTION COST OF (Au eq. oz.) SALES ($/oz.) FY 2011 187,444 $697 FY 2010 184,554 $625 2011 GOLD RESERVES AND RESOURCES(6) TONNES GRADE OUNCES (thousands) (g/t) (thousa
Slide 37: Kettle River-Buckhorn, USA (100%)
KETTLE RIVER-BUCKHORN, USA (100%) • Entered production in Q4/08 • Small foot-print, underground mine • Near-mine exploration targets OPERATING RESULTS PRODUCTION PRODUCTION COST OF (Au eq. oz.) SALES ($/oz.) FY 2011 175,292 $420 FY 2010 198,810 $330 2011 GOLD RESERVES AND RESOURCES(6) TONNES GRADE O
Slide 38: Kupol, Russia (100%)
KUPOL, RUSSIA (100%) • Completed transaction increasing ownership to 100% from 75% on April 27, 2011 • 3,000 tpd mill with open-pit and underground OPERATING RESULTS PRODUCTION PRODUCTION COST OF (Au eq. oz.) SALES ($/oz.) FY 2011 587,048 $378 FY 2010 554,008 $319 Kinross increased its ownership in
Slide 39: Paracatu, Brazil (100%)
PARACATU, BRAZIL (100%) • Plant 2 expansions: 3rd ball mill commissioned in Q2 2011 4th ball mill expected to be operational in Q3 2012 OPERATING RESULTS PRODUCTION PRODUCTION COST OF (Au eq. oz.) SALES ($/oz.) FY 2011 453,396 $720 FY 2010 482,397 $535 2011 GOLD RESERVES AND RESOURCES(6) TONNES
Slide 40: Crixas, Brazil (50%)
CRIXAS, BRAZIL (50%) • JV with AngloGold Ashanti • Underground mine located in the Brazil OPERATING RESULTS PRODUCTION PRODUCTION COST OF (Au eq. oz.) SALES ($/oz.) FY 2011 66,583 $789 FY 2010 74,777 $486 2010 GOLD RESERVES AND RESOURCES(6) TONNES GRADE OUNCES (thousands) (g/t) (thousands) 2P Reserv
Slide 41: La Coipa, Chile (100%)
LA COIPA, CHILE (100%) • Gold/silver mine in the Maricunga district • Comprehensive exploration program • Recent discovery at Pompeya (75% Kinross), located 3 km from mill OPERATING RESULTS PRODUCTION PRODUCTION COST OF (Au eq. oz.) SALES ($/oz.) FY 2011 178,287 $762 FY 2010 196,330 $648 2011 GOLD R
Slide 42: Maricunga, Chile (100%)
MARICUNGA, CHILE (100%) • Located in the highly prospective Maricunga District • Open pit, heap leach operation OPERATING RESULTS PRODUCTION PRODUCTION COST OF (Au eq. oz.) SALES ($/oz.) FY 2011 236,249 $457 FY 2010 156,590 $746 2011 GOLD RESERVES AND RESOURCES(6) TONNES GRADE OUNCES (thousands) (g/
Slide 43: Tasiast, Mauritania (100%)
TASIAST, MAURITANIA (100%) • Open-pit mine ~300 km north of the city of Nouakchott • Remote, flat, sparsely populated desert OPERATING RESULTS PRODUCTION PRODUCTION COST OF (Au eq. oz.) SALES ($/oz.) FY 2011 200,619 $702 FY 2010 56,611 $790 2010 production and costs for Tasiast reflect Kinross’ owne
Slide 44: Chirano, Ghana (90%)
CHIRANO, GHANA (90%) • 90% owned by Kinross; Government of Ghana holds a 10% carried interest • 9 open-pits and 2 recently-discovered underground deposits OPERATING RESULTS PRODUCTION PRODUCTION COST OF (Au eq. oz.) SALES ($/oz.) FY 2011 235,661 $693 FY 2010 80,298 $605 Production and costs for Chir
Slide 45: Endnotes
ENDNOTES 1) Adjusted net earnings attributed to common shareholders and adjusted operating cash flow numbers are non-GAAP financial measures which are meant to provide additional information and should not be used as a substitute for performance measures prepared in accordance with GAAP. For more in
Slide 46: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 YORK STREET, 17TH FLOOR TORONTO, ON M5J 2V5 WWW.KINROSS.COM 46