Kinross Gold Corporation · TSX:K
Kinross Gold — The CIS Precious Metals and Stones Summit 2006
25 slides from Kinross Gold's conference presentation, Feb 13, 2006
Slide 1: The CIS Precious Metals and Stones Summit
The CIS Precious Metals and Stones Summit Hugh Agro Sr. Vice President, Corporate Development Kinross Gold Corporation Moscow 13 February 2006
Slide 2: Legal Notice
Legal Notice Certain statements set forth in this presentation constitute "forward looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such statements involve risks, uncertainties and other factors that may cause the actual results, performan
Slide 3: Overview
Overview • Kinross Gold Corporation • Kinross in Russia • Why Russia? • Kinross Strategic Considerations 3
Slide 4: Kinross Gold Corporation
Kinross Gold Corporation 4
Slide 5: Kinross: A Major Gold Producer
Kinross: A Major Gold Producer • 4th largest North American-based gold producer • $4.5 billion market value – top performer past 6 months relative to peers • NYSE and TSE listed – recent volume of 6 million shares per day • 2005 estimate • Gold production – 52 tonnes (1.6 MM oz) • Total Cash Costs –
Slide 6: Americas Focus, Global Reach
Americas Focus, Global Reach Fort Knox (100%) Kubaka (98.1%) Magadan, Russia (Open Pit, U/G) Alaska, USA (Open Pit) Musselwhite (32%) Ontario, Canada (U/G) Porcupine (49%) Kettle River (100%) Ontario, Canada (Open Pit, U/G) Washington, USA (U/G) Round Mountain (50%) Nevada, USA (Open Pit) La Coipa (
Slide 7: Kinross in Russia
Kinross in Russia 7
Slide 8: Kinross in Russia
Kinross in Russia Omolon Gold1 • Kinross2 first visited Russia in 1990 • In mid-1993, Omolon won bid for the Kubaka • Located in the Magadan Oblast about 300 km south of the Arctic Circle, 700 km northeast of Magadan Notes: (1) 98.1% owned Kinross subsidiary, (2) As predecessor company, Amax Gold 8
Slide 9: Kinross in Russia
Kinross in Russia Kubaka Mine • Opened in early 1997 • Biggest gold mining operation in Russia in the late 1990s • From 1997 to 2005, Kubaka produced 93 tonnes of gold • Mining now completed; currently processing low grade stockpiles 9
Slide 10: Kinross in Russia
Kinross in Russia • A well regarded corporate citizen 10
Slide 11: Kinross in Russia
Kinross in Russia Focus on Exploration • 416 staff at YE05; 81 in exploration • 2006 planned activities: ¾ Kubaka reclamation ¾ Evaluation of Birkachan low grade heap leach potential ¾ Expanded exploration program – 30,500 meters drilling in Magadan Oblast 11
Slide 12: Why Russia?
Why Russia? 12
Slide 13: Why do we like Russia?
Why do we like Russia? • Home to 5th largest gold resource in the world CANADA 800 RUSSIA CHINA 700 9,100t* 800 U.S. 600 800 8,100t* 700 800 500 600 700 5,216t* 600 700 13,200t* 400 500 500 600 300 400 400 500 200 300 300 400 100 200 200 300 0 Canada 100 100 200 129 t 0 Russia 0 169 t 100 0 71 yrs 2
Slide 14: Top Undeveloped Gold Projects
Top Undeveloped Gold Projects • 130 undeveloped primary • Excluding those controlled by gold projects over 2.5 MM major gold companies or in high oz Au, 22% located in CIS risk countries, 32% located in CIS Top 71 Primary Gold Projects* Top 130 Primary Gold Projects* (Excl. Major Gold Co. Holdings &
Slide 15: Contrasting Regions
Contrasting Regions Russia • Strong and stable federal government • Growing economy; relatively high inflation; stable exchange rate • Powerful domestic competitors – Norilsk/Polyus, PolyMetal, etc. • Maturing legal framework, not consistently applied outside Moscow • Competitive environment for spe
Slide 16: Contrasting Regions
Contrasting Regions Chile • Progressive political system; new president promises to sustain growth • Strong, growing economy; modest level of inflation; appreciating Peso • Many state institutions privatized; Codelco is one significant exception • Highly competitive; but activity of intermediate and
Slide 17: Contrasting Regions
Contrasting Regions Brazil • Popular President marred by scandals; elections in October 2006 • Resource dominated export economy boom; high inflation • High interest rates; appreciating Real – impact on costs, planning • Kinross presence – produces +/-30% of Brazil’s primary Au production • Skilled
Slide 18: Kinross Strategic Considerations
Kinross Strategic Considerations 18
Slide 19: Kinross Strategic Focus
Kinross Strategic Focus • Growth from Core Operating assets • Exit non-core assets • Focus on quality mines, Kinross as operator • Enhanced greenfield/district exploration • Corporate development through acquisitions 19
Slide 20: Corporate Geographic Priorities
Corporate Geographic Priorities • Geographic focus on the Americas and select other regions High Priority Medium Priority Low Priority 20
Slide 21: Corporate Acquisition Criteria
Corporate Acquisition Criteria • Focus on precious metals (gold and silver) • Cornerstone assets • High margin projects that offer operating flexibility • Emphasis on mid-stage or better development assets • Emphasis on district exploration potential • Ability to enhance the Corporation’s sustainabi
Slide 22: Pursuing Opportunities in Russia
Pursuing Opportunities in Russia • Kinross reinitiated corporate development activities in Russia in 2005 • Proceeding carefully • Key issues: ¾ Competition ¾ Transparency of process ¾ Ability to complete ‘western style’ due diligence ¾ Kinross shareholders’ desire for balance in the portfolio ¾ Pri
Slide 23: Market Commentary
Market Commentary Russian Discount Market’s Tolerance for Risk • One year forward P/E’s1: ¾ Russian Index – 8.7x ¾ Brazil Index – 11.6x ¾ N.A. Indices – 17.4x • Gold Sector P/NAVs2 ¾ Companies with CIS exposure – 1.8x NAV ¾ N.A. Golds – 2.4x NAV Source: Scotia Capital Emerging Market Research Notes:
Slide 24: Closing Comments
Closing Comments • There are tremendous opportunities in the CIS • Kinross is experienced in the region • We manage risks by taking a disciplined approach to corporate development • With success, the region will be as much a part of our future as it has been a part of our past 24
Slide 25: Kinross Gold Corporation
Shares outstanding: 345.3 million Market cap.: US$4.5 billion (at Feb. 1, 2006) KGC: NYSE (Common shares) K: TSX (Common shares) K.U: TSX (US dollar trading symbol) K.WT: TSX (Warrants expiring 05/12/07) Kinross Gold Corporation 40 King Street West, 52nd Floor Scotia Plaza Toronto, ON M5H 3Y2 416-36
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