Kinross Gold Corporation · TSX:K
Kinross Gold — Investor Presentation (August 2011)
58 slides from Kinross Gold's investor presentation, Aug 17, 2011
Slide 1: Delivering Disciplined Growth
DELIVERING DISCIPLINED GROWTH GMP SECURITIES SALES DESK PRESENTATION 1 August 17, 2011
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 Gold? Why Kinross? Why Now?
WHY GOLD? WHY KINROSS? WHY NOW? 3
Slide 4: Industry Production Declining
INDUSTRY PRODUCTION DECLINING • Forecasted world production from gold mining likely to decline 2,800 2,700 Gold Production (Tonnes) 2,600 2,500 2,400 2,300 2,200 2,100 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: GFMS 10 Year Outlook on Gold (December 2010) 4
Slide 5: Increasing Demand for Gold
INCREASING DEMAND FOR GOLD $275 $1,800 Investment / Other $250 Total Fabrication Gold Price (US$/oz) $1,600 $225 Current gold price $1,400 $200 $1,200 Total Gold Demand (US$ billions) Gold Price (US$/oz.) $175 $150 $1,000 $125 $800 $100 $600 $75 $400 $50 $200 $25 $0 $0 1999 2000 2001 2002 2003 2004
Slide 6: Fewer Gold Discoveries
FEWER GOLD DISCOVERIES Total gold ounces discovered (mm oz.) 3,500 90 Gold exploration spending (US$ mm) 80 3,000 Gold exploration spending (US$ mm) 70 Ounces discovered (mm oz.) 2,500 60 2,000 50 1,500 40 30 1,000 20 500 10 - 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source
Slide 7: Why Kinross?
WHY GOLD? WHY KINROSS? WHY NOW? 7
Slide 8: Why Kinross?
WHY KINROSS? 1. Industry-leading growth from a senior gold producer 2. World-class projects with experienced teams and financial resources to build them 3. Attractive valuation 8
Slide 9: Continuing the Kinross Transformation
CONTINUING THE KINROSS TRANSFORMATION Kinross Gold Production Yesterday Kinross Gold Production Now(1) 4.5 – 4.9 Gold equivalent production (mm oz) Gold equivalent production (mm oz) 2.3 2.6 – 2.7 1.6 2005 2010 2011e 2015e (revised upwards) (1) Refer to endnote #1. 9
Slide 10: 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 10
Slide 11: 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 $0.20/sh $0.40/sh $0.36/sh $0.16/sh Q2 2010 Q2 2011 Q2 2010 Q2 2011 Q2 2010 Q2 2011 (2) Refer to endnote #2. 11
Slide 12: 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. 12
Slide 13: 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 $0.51 2005 2006 2007 2008 2009 2010 H1 2011 (2) Refer to endnote #2. 13
Slide 14: Increasing Gold Resources
INCREASING GOLD RESOURCES(5) 110 Inferred Mineral Resources 140 Measured & Indicated Mineral Resources 100 Proven and Probable Mineral Reserves 20.0 120 Total resource ounce per 1,000 shares 24.0 90 Gold resource oz per 1,000 shares 80 100 Gold resources (mm oz.) 16.2 24.7 70 17.7 20.7 7.0 80 60 16.
Slide 15: Improving Grade Profile
IMPROVING GRADE PROFILE Kinross Barrick Goldcorp Newmont 1.5 Proven and Probable Reserve Grade Growth 1.4 1.3 1.2 (2005 index = 1) 1.1 1.0 0.9 0.8 0.7 0.6 0.5 2005 2006 2007 2008 2009 2010 Source: Company reports 15
Slide 16: 2011 Outlook Unchanged
2011 OUTLOOK UNCHANGED • Costs expected to be toward the lower end of guidance range Production % of Total Production Cost of Sales(2) Region (000 ounces ) Production ($/oz) South America 1,000 – 1,070 39% $585 - $650 North America 590 – 630 23% $625 - $685 West Africa 440 – 500 18% $595 - $655 (att
Slide 17: Strong Balance Sheet
STRONG BALANCE SHEET • Equity pipeline investment portfolio valued at $104 million • Revolving credit facility of $1.2 billion • Commitments received for $200 million non-recourse Kupol financing • Completed $1.0 billion debt financing $1,080 As at June 30, 2011 US$ millions $591 $466 Cash and cash
Slide 18: Project Pipeline
PROJECT PIPELINE Project 2011E 2012E 2013E 2014E 2015E Paracatu desulphurization Organic growth Paracatu 3rd ball mill Maricunga SART plant Paracatu 4th ball mill Dvoinoye Tasiast Development Lobo-Marte Fruta del Norte Cerro Casale Conceptual timeline based on current Company estimates. 18
Slide 19: 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 20: Tasiast, Mauritania
TASIAST, % HET ty AR 21 PRR ma a nara
Slide 21: 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 22: Tasiast, Mauritania
TASIAST, MAURITANIA Greenstone Rocks • Expanded drilling program Banded Iron Fm Intrusives focused around existing Tasiast Felsic Volcanics Greenschist mine Tenements Tasiast Shear 2010 Resource Shell • Only 8 km of 80 km strike length tested 20.0 km 22
Slide 23: Resource Growth at Tasiast
RESOURCE GROWTH AT TASIAST(5,6) 4.6 Ounces (millions) 8.6 5.1 9.1 1.9 2.1 1.4 0.8 9.2 9.3 7.6 7.6 5.4 3.7 Year-end 2008 November 2009 September 2010 November 2010 Year-end 2010 June 2011 Inferred Mineral Resources Measured & Indicated Mineral Resources Measured & Indicated Mineral Resources (inclusi
Slide 24: Exploration Update at Tasiast
EXPLORATION UPDATE AT TASIAST • 15 core and 8 RC drill rigs in operation • Drilled 124,000 metres in Q2; 250,000 metres drilled year-to-date • Drilling encountering a number of new opportunities: Potential new Greenschist-style mineralization identified 500 strike metres from West Branch Potenti
Slide 25: 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 26: 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
Slide 27: Tasiast Scoping Study
TASIAST SCOPING STUDY • Scoping study complete • New processing plant with expected 60,000 tpd throughput – total 68,600 tpd 1 SAG and 2 ball mills ordered • 16-year mine life • Expected avg. annual production of 1.5 mm oz (first 8 full yrs) Expected avg. grade of 2 g/t Expected avg. recoverie
Slide 28: Tasiast, Mauritania
TASIAST, MAURITANIA • Expansion project remains on schedule: Construction expected to start mid-2012 Project start-up of 60,000 tpd mill is targeted for early 2014 • New opportunities to optimize the project to be considered as part of the feasibility study Exploring natural gas / LNG options
Slide 29: Fruta del Norte, Ecuador
FRUTA DEL NORTE, ECUADOR e Se
Slide 30: 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 Expected avg. gold grade of 8.07 g/t Expected avg. gold recovery of 93% • LOM avg. cost of sales expected to
Slide 31: Fruta del Norte, Ecuador
FRUTA DEL NORTE, ECUADOR • Advancing the exploration decline: Construction of the portal high wall is complete and 70 metres of the exploration decline has been developed to date On target to develop 600 metres by year-end 2011 Exploration decline is expected to be complete in 2013 • Advancing
Slide 32: Lobo-Marte, Chile
LOBO-MARTE, CHILE 32
Slide 33: Lobo-Marte, Chile
LOBO-MARTE, CHILE • Completed pre-feasibility study update • 10-year mine life • Expected 47,000 tpd heap leach with SART plant • Annual production estimate: 350k oz. per year Expected avg. grade: 1.17 g/t Expected avg. recovery: 60-70% • Cost of sales estimate: ~$500/oz; Lobo Final Pit Includ
Slide 34: Lobo-Marte, Chile
LOBO-MARTE, CHILE • 20,000 metre drill campaign 70% complete Geotechnical drilling has been completed Geotechnical and mine block models expected to be completed in Q3 2011 • Environmental Impact Assessment was submitted in June, ahead of schedule • Feasibility study expected in Q4 2011 • Expect
Slide 35: Kupol & Dvoinoye, Russia
KUPOL & DVOINOYE, RUSSIA 35
Slide 36: 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 To be financed through proceeds of Harry Winston share sale and non-recourse debt facility of $200 million • Consolidates K
Slide 37: 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 • Initial capital estimate: ~$300 million • Development of exploration decline advance
Slide 38: Why Now?
WHY GOLD? WHY KINROSS? WHY NOW? 38
Slide 39: GMP: P / NAV
GMP: P / NAV 1.4 1.4 1.2 1.1 1.0 0.9 AGNICO BARRICK YAMANA GOLDCORP NEWMONT KINROSS Source: GMP research – August 16, 2011 39
Slide 40: GMP: P / 2011e CFPS
GMP: P / 2011e CFPS 15.0 14.2 13.7 9.0 8.9 8.7 AGNICO KINROSS GOLDCORP YAMANA NEWMONT BARRICK Source: GMP research – August 16, 2011 40
Slide 41: Reserve Ounces per $1,000 Invested
RESERVE OUNCES PER $1,000 INVESTED Ounce of Proven and Probable Reserves Acquired per $1,000 3.4 3.2 2.8 invested (oz/$1,000) 2.3 1.9 1.9 1.5 1.0 KINROSS NEWMONT BARRICK NEWCREST AGNICO YAMANA GOLDCORP IAMGOLD Source: Company reports and Bloomberg L.P. – August 15, 2011 41
Slide 42: Total Resource Ounces per $1,000 Invested
TOTAL RESOURCE OUNCES PER $1,000 INVESTED 5.8 Ounce of Total Resources Acquired per $1,000 invested 5.0 4.6 4.3 4.0 3.4 (oz/$1,000) 2.9 2.6 KINROSS BARRICK NEWMONT NEWCREST YAMANA AGNICO IAMGOLD GOLDCORP Source: Company reports and Bloomberg L.P. – August 15, 2011 42
Slide 43: 2011e Production per $1,000 Invested
2011e PRODUCTION PER $1,000 INVESTED Ounces of Estimated 2011 Production per $1,000 invested 0.18 0.15 0.14 (oz/$1,000) 0.10 0.10 0.08 0.06 0.06 NEWMONT BARRICK KINROSS AGNICO YAMANA NEWCREST GOLDCORP IAMGOLD Source: Company reports and Bloomberg L.P. – August 15, 2011 43
Slide 44: Key Objectives for 2011
KEY OBJECTIVES FOR 2011 Complete Tasiast scoping study Declare NI 43-101 resource at Dvoinoye Complete Fruta del Norte pre-feasibility study Complete Dvoinoye scoping study Complete purchase of Kupol minority interest Commence construction on La Zarza exploration decline at F
Slide 45: Why Kinross?
WHY KINROSS? 1. Industry-leading growth from a senior gold producer 2. World-class projects with experienced teams and financial resources to build them 3. Attractive valuation 45
Slide 46: Appendix
APPENDIX 46
Slide 47: Fort Knox, USA (100%)
FORT KNOX, USA (100%) • Located in Alaska • Expansion and new heap leach to extend mine life OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) H1 2011 142,774 $655 H1 2010 155,910 $582 2010 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thousands) (g/t) (thousands) 2P Reserves 253
Slide 48: Round Mountain, USA (50%)
ROUND MOUNTAIN, USA (50%) • Kinross-operated JV with Barrick • Located in Nevada, USA • Open-pit mine OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) H1 2011 89,272 $764 H1 2010 92,556 $562 2010 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thousands) (g/t) (thousands) 2P Reser
Slide 49: Kettle River-Buckhorn, USA (100%)
KETTLE RIVER-BUCKHORN, USA (100%) • Entered production in Q4/08 • Small foot-print, underground mine • Near-mine exploration targets OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) H1 2011 92,089 $389 H1 2010 98,868 $295 2010 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thousa
Slide 50: Kupol, Russia (100%)
KUPOL, RUSSIA (100%) • Completed transaction increasing ownership to 100% from 75% on April 27, 2011 • 3,000 tpd mill with open-pit and underground • Mill to process high-grade ore from nearby Dvoinoye deposit OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) H1 2011 323,726 $335 H1 20
Slide 51: Paracatu, Brazil (100%)
PARACATU, BRAZIL (100%) • Recoveries near target • Major expansion commissioning • 3rd ball mill commissioned; 4th ball mill to be operational in H1 2012 OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) H1 2011 200,320 $744 H1 2010 235,573 $540 2010 GOLD RESERVES AND RESOURCES(5) TONN
Slide 52: Crixas, Brazil (50%)
CRIXAS, BRAZIL (50%) • JV with AngloGold Ashanti • Underground mine located in the Brazil OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) H1 2011 30,251 $796 H1 2010 36,932 $474 2010 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thousands) (g/t) (thousands) 2P Reserves 3,283 3.
Slide 53: La Coipa, Chile (100%)
LA COIPA, CHILE (100%) • Gold/silver mine in the Maricunga district • Comprehensive exploration program OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) H1 2011 105,313 $651 H1 2010 82,839 $635 2010 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thousands) (g/t) (thousands) 2P Re
Slide 54: Maricunga, Chile (100%)
MARICUNGA, CHILE (100%) • Located the highly prospective Maricunga District • Open pit, heap leach operation OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) H1 2011 128,845 $445 H1 2010 94,767 $620 2010 GOLD RESERVES AND RESOURCES(5) TONNES GRADE OUNCES (thousands) (g/t) (thousands)
Slide 55: Tasiast, Mauritania (100%)
TASIAST, MAURITANIA (100%) • Open-pit mine ~300 km north of the city of Nouakchott • Remote, flat, sparsely populated desert OPERATING RESULTS PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) H1 2011 98,570 $616 Kinross acquired the Tasiast mine on September 17, 2010. 2010 GOLD RESERVES AND RESOURCES(5
Slide 56: Chirano, Ghana (90%)
CHIRANO, GHANA (90%) • 90% owned by Kinross; Government of Ghana holds a 10% carried interest • 9 open-pits and 2 recently- discovered underground deposits OPERATING RESULTS (90%) PRODUCTION PRODUCTION COST (Au eq. oz) ($/oz) H1 2011 107,942 $684 Kinross acquired the Chirano mine on September 17, 20
Slide 57: 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 58: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 YORK STREET, 17TH FLOOR TORONTO, ON M5J 2V5 WWW.KINROSS.COM 58