Kinross Gold Corporation · TSX:K
Kinross Gold — 2017 BMO Capital Markets Global Mining & Metals Conference
49 slides from Kinross Gold's conference presentation, Feb 27, 2017
Slide 1: Kinross Gold Corporation
February 26-28 KINROSS GOLD CORPORATION 2017 BMO Capital Markets Global Mining & Metals Conference 11 www.kinross.com
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 EXCELLENT OPERATIONAL TRACK RECORD • Diverse portfolio of operating mines consistently meeting or outperforming our operational targets STRONG BALANCE SHEET & FINANCIAL FLEXIBILITY • $2.3B in liquidity with net debt to EBITDA ratio of 0.76x • No debt maturities prior to 202
Slide 4: 2016 Highlights
Delivered Operational Excellence Strengthened Balance Sheet $250M MET Debt repaid 5 or EXCEEDED $830M of cash at Dec.31 $1.4 $0.8 $2.3B billion Consecutive 0.8x billion Years Guidance Net debt to EBITDA Cash Available credit *Totals may not add up due to rounding. Advanced High-Quality Organic Devel
Slide 5: Operational Excellence
Operational Excellence 55 www.kinross.com
Slide 6: Diversified Portfolio of Operating Mines
OPERATIONAL EXCELLENCE DIVERSIFIED PORTFOLIO OF OPERATING MINES Over RUSSIA 60% of estimated 2017 gold equivalent production from mines located in the Americas AMERICAS Dvoinoye Kupol Fort Knox Kettle River-Buckhorn Bald Mountain Round Mountain 2017E GOLD EQUIVALENT PRODUCTION(2,3) Tasiast 22% Chira
Slide 7: Strong Operating Track Record
OPERATIONAL EXCELLENCE STRONG OPERATING TRACK RECORD Continuing our track record of meeting or outperforming our operational targets • Operations delivered solid results in 2016: FIVE consecutive years of meeting guidance RECORD production of 2.8M gold equivalent ounces(2) MET guidance for cos
Slide 8: 2017 Outlook
OPERATIONAL EXCELLENCE 2017 OUTLOOK(3) Production & Costs 2017 Forecast Production(2) Gold equivalent ounces 2.5 to 2.7 million Gold ounces 2.4 to 2.6 million Cost of sales (4) Co-product $660 to $720 per gold equivalent ounce By-product $650 to $710 per gold ounce All-in Sustaining Cost(5) Co-produ
Slide 9: Balance Sheet Strength
Balance Sheet Strength 99 www.kinross.com
Slide 10: Solid Financial Position
STRONG BALANCE SHEET SOLID FINANCIAL POSITION Maintaining balance sheet strength & financial flexibility remain priority objectives LIQUIDITY POSITION* MAINTAINING FINANCIAL FLEXIBILITY • Repaid $250M senior notes in September 2016 • Extended maturity dates of the $500M term loan and $1.5B credit fa
Slide 11: 2017 Capital Expenditures Outlook
FINANCIAL DISCIPLINE 2017 CAPITAL EXPENDITURES OUTLOOK(5) Leveraging strong financial position to invest in development projects & our future 2017E Capital Expenditures ($ millions) Region Sustaining Non-Sustaining Regional Total Americas $295 $65 $360 West Africa $80 $375 $455 Russia $40 $15 $55 Co
Slide 12: Manageable Debt Profile
FINANCIAL DISCIPLINE MANAGEABLE DEBT PROFILE No significant debt maturities prior to 2020 Debt Schedule Debt Ratings Term Loan Senior notes Agency Rating $500 $0 $500 $500 S&P BB+ (Positive) Moody’s Ba1 (Stable) Fitch BBB- (Stable) Interest Rates $250 Senior Notes due 2021 5.125% Senior Notes due 20
Slide 13: Attractive Organic Development Projects
Attractive Organic Development Projects 13 13 www.kinross.com
Slide 14: Advancing Our Organic Projects
ATTRACTIVE ORGANIC DEVELOPMENT PROJECTS ADVANCING OUR ORGANIC PROJECTS Organic projects spanning all 3 of our operating regions offer opportunities to expand production or extend mine life at our operations Q2 2018 Q1 2018 Tasiast Phase 1 Full production Q4 2017 Moroshka Mining expected to commence
Slide 15: Tasiast Two-Phased Mill Expansion
ATTRACTIVE ORGANIC DEVELOPMENT PROJECTS TASIAST TWO-PHASED MILL EXPANSION Combined Phase One and Two expansions expected to transform Tasiast into our largest producer with costs amongst the lowest in our portfolio Phase One Estimates(i) Phase Two Estimates(i) Average annual production 409,000 ounce
Slide 16: Tasiast Two-Phased Expansion
ATTRACTIVE ORGANIC DEVELOPMENT PROJECTS TASIAST TWO-PHASED EXPANSION Phase One construction ~20% complete; on track for full production in Q2 2018 Phase One progressing well • Engineering and procurement of all equipment packages mostly complete • Poured foundations for SAG mill & primary crusher •
Slide 17: Tasiast Phase One Progressing Well
ATTRACTIVE ORGANIC DEVELOPMENT PROJECTS TASIAST PHASE ONE PROGRESSING WELL Phase One on schedule and on budget with full production expected in Q2 2018 SAG mill New batch plant in operation Unloading SAG mill shell Installation of tailings pond liner 1717 www.kinross.com
Slide 18: Developing Bald Mountain's Potential
ATTRACTIVE ORGANIC DEVELOPMENT PROJECTS DEVELOPING BALD MOUNTAIN’S POTENTIAL Kinross envisions Bald Mountain as a long-life asset with significant upside potential and mineral resource growth 2016: Doubled mineral reserve estimates ahead 2017: Expect to double production and continue of schedule to
Slide 19: Doubled Bald Mountain Gold Reserves
ATTRACTIVE ORGANIC DEVELOPMENT PROJECTS DOUBLED BALD MOUNTAIN GOLD RESERVES Successfully doubled gold reserve estimates for Bald Mountain ahead of schedule Proven & Probable Mineral Reserve Estimates(1) South area 2,133 +568 North area (thousand ounces) +677 1,117 (229) 2016 depletion Year-end 2015
Slide 20: Bald Mountain Vantage Complex
ATTRACTIVE ORGANIC DEVELOPMENT PROJECTS BALD MOUNTAIN VANTAGE COMPLEX Vantage Complex (South area) Pre-Feasibility Study • Contemplates construction of a new heap leach facility and related infrastructure to develop Vantage Complex Combined 28 million tonnes of ore at average grade of 0.63 g/t D
Slide 21: Round Mountain Phase W
ATTRACTIVE ORGANIC DEVELOPMENT PROJECTS ROUND MOUNTAIN PHASE W Phase W is an opportunity to potentially extend estimated mine life For additional information, please see Kinross’ news release dated February 15, 2017 and Appendices A and B, which are available on our website at www.kinross.com, as we
Slide 22: Round Mountain Phase W
ATTRACTIVE ORGANIC DEVELOPMENT PROJECTS ROUND MOUNTAIN PHASE W Feasibility study expected to be complete in Q3 2017 • Drill program in support of the Phase W feasibility study ongoing during fourth quarter • Additional activities underway: Mine plan optimization Geologic modelling Metallurgica
Slide 23: Russia Satellite Deposits
ATTRACTIVE ORGANIC DEVELOPMENT PROJECTS RUSSIA SATELLITE DEPOSITS Development of satellite deposits located near Kupol and Dvoinoye in advanced stages September Northeast Moroshka • Located approximately 15 km northwest from • Located 4 km east of the Kupol mill Dvoinoye • Decline development and in
Slide 24: Kupol Vein System
EXPLORATION KUPOL VEIN SYSTEM Mineralization open in certain zones, with greatest potential for near-term extensions to the north and south • Comprehensive exploration review generated series of extension targets which were drilled during second half of 2016 • Continued drilling, geological interpre
Slide 25: Fort Knox East & South Wall
EXPLORATION FORT KNOX EAST & SOUTH WALL Positive intercepts were intersected during 2016 in the East and South Wall of the existing pit; additions to Fort Knox’s inferred resource estimate are expected in 2017 For additional information, please see Kinross’ news release dated February 15, 2017 and A
Slide 26: Kettle River: Curlew District
EXPLORATION KETTLE RIVER: CURLEW DISTRICT Promising opportunities in the Curlew District; infill drilling program planned for 2017 to test extensions of mineralized zones Plan Map of the Curlew District Cross Section Looking West N Historic K2 mine Workings For additional information, please see Kin
Slide 27: Compelling Relative Value
Compelling Relative Value 27 27 www.kinross.com
Slide 28: Strong Track Record
STRONG TRACK RECORD 2012 2013 2014 2015 2016 MET or EXCEEDED annual production guidance MET or came in UNDER annual cost of sales guidance MET or came in UNDER annual capital expenditures guidance Consistently Meeting or Outperforming Targets 2828 Compelling Relative Va
Slide 29: 2017E Production & All-In Sustaining Cost
COMPELLING RELATIVE VALUE 2017E PRODUCTION & ALL-IN SUSTAINING COST 2017E Gold Production 2017E All-In Sustaining Cost (million ounces) ($ per ounce) 6.0 $1,200 5.0 $1,000 4.0 $800 3.0 $600 2.0 $400 1.0 $200 0.0 $0 Barrick Barrick Newmont Newmont AngloGold Gold Fields Yamana AngloGold Yamana Kinross
Slide 30: Industry-Leading Balance Sheet
COMPELLING RELATIVE VALUE INDUSTRY-LEADING BALANCE SHEET Net debt to EBITDA ratio of 0.76x as of December 31, 2016 2.5 Net Debt to EBITDA (LTM) 1.8 1.7 1.5 1.3 0.9 0.8 0.8 0.8 Yamana Goldcorp IAMGold AngloGold Barrick Gold Fields Newmont Agnico Kinross Source: Company reports; Bloomberg – net debt t
Slide 31: 2017E Metrics
COMPELLING RELATIVE VALUE 2017E METRICS Attractive value opportunity relative to peers, considering Kinross’ annual production, cost structure, track record and growth opportunities EV / 2017E EBITDA P / 2017E OPERATING CF 13.8 12.1 10.7 11.0 8.4 8.9 8.0 8.2 6.9 7.1 6.1 5.1 4.4 5.1 5.1 3.1 3.6 3.0 N
Slide 32: Building Momentum for the Future
2020E Expected start-up of 2018E potential TASIAST PHASE TWO TASIAST PHASE 2017E ONE expected to ramp up to full 2016 Stronger year production expected at Delivered SOLID BALD MOUNTAIN PRODUCTION of 2.8Moz. Building Momentum for the Future 3232 www.kinross.com
Slide 33: Appendix
Appendix 3333 www.kinross.com
Slide 34: 2016 Production Results
APPENDIX 2016 PRODUCTION RESULTS Operation Production(2) Cost of Sales(4) (Au eq. oz.) ($ per Au eq. oz.) AMERICAS Fort Knox 409,844 $741 Round Mountain 378,264 $773 Bald Mountain 130,144 $1,182 Kettle River – Buckhorn 112,274 $652 Paracatu 483,014 $717 Maricunga 175,532 $827 RUSSIA Kupol-Dvoinoye 7
Slide 35: 2016 Financial Results
APPENDIX 2016 FINANCIAL RESULTS All figures in US$ millions, except ounces, per share and per ounce amounts 2016 2015 Attributable gold equivalent ounces (oz.)(2) Produced 2,789,150 2,594,652 Sold 2,758,306 2,608,870 Average realized gold price ($/oz.) $1,249 $1,159 Production cost of sales(4) Gold
Slide 36: Currency / Oil Benefits & Sensitivities
APPENDIX CURRENCY / OIL BENEFITS & SENSITIVITIES Well-positioned to benefit from favourable currency exchange and oil weakness • Benefits of favourable FX and oil prices 2017 Budget Assumptions & Sensitivities(3) partially offsetting lower gold prices Budget Spot(i) 110 Gold US$1,200 US$1,257 100 Oi
Slide 37: Fuel & Currency Hedges
APPENDIX FUEL & CURRENCY HEDGES Managing exposure to fluctuations in foreign currency and input commodity prices • Hedged rouble for first time since 2013 Entered into zero cost option hedge for approximately 20% of exposure at average put of 60, offset by call strike of 72 • Also hedged 35% of Br
Slide 38: Fort Knox, USA
AMERICAS FORT KNOX, USA (100%) Among the world’s few cold climate heap leach facilities • Impressive track record of operational excellence • Achieved its 2nd highest production level in 2015, Fort Knox’s 19th year in operation • Estimated mine life: mill – 2018; mining – 2020* OPERATING RESULTS(4)
Slide 39: Round Mountain, USA
AMERICAS ROUND MOUNTAIN, USA (100%) Strong cash flow generator with opportunities to extend mine life • Incremental, high-margin ounces from Process Solution ESTIMATED MINE LIFE* Management (PSM) 16 17 18 19 20 21 22 23 - 27 • Opportunity to extend mine life beyond current estimates Mining with Phas
Slide 40: Bald Mountain, USA
AMERICAS BALD MOUNTAIN, USA (100%) Forecasting strong near-term cash flow with significant upside potential • Acquired in January 2016 • Large estimated mineral resource base with multiple sources of potential mineral reserve additions • Production expected to double in 2017 with reduced costs OPERA
Slide 41: Paracatu, Brazil
AMERICAS PARACATU, BRAZIL (100%) Large gold mine with a long mine life that extends to 2030 • Paracatu is among the world’s largest gold operations with annual throughput of ~60Mt • Realizing benefits from weakness in the Brazilian real • Estimated mine life: 2030* OPERATING RESULTS(4) 2015 2016 Pro
Slide 42: Kupol-Dvoinoye
RUSSIA KUPOL-DVOINOYE (100%) Our Russian operations are a model for successfully operating in a remote location • High-grade, low-cost underground mines • Estimated mine life: Kupol – 2020; Dvoinoye – 2018* OPERATING RESULTS(4) 2015 2016 Production (Au. Eq. oz.) 758,563 734,143 Production cost of sa
Slide 43: Chirano, Ghana
WEST AFRICA CHIRANO, GHANA (90%) Cost reductions achieved at Chirano by transitioning to self-perform mining • Expecting higher production and lower costs in the second half of the year • Estimated mine life: 2021* OPERATING RESULTS(2,4) 2015 2016 Production (Au. Eq. oz.) 230,488 190,759 Production
Slide 44: Tasiast, Mauritania
WEST AFRICA TASIAST, MAURITANIA (100%) Operating mine with a large gold resource located in a prospective district • Proceeding with Phase One of the expansion, with Phase Two an option to further add significant production • Estimated mine life: Phase One – 2033; if we proceed with a Phase Two expa
Slide 45: Endnotes
ENDNOTES 1) Mineral reserves and mineral resources are estimates. For more information regarding Kinross’ 2016 mineral reserve and mineral resource estimates, please refer to our Annual Mineral Reserve and Mineral Resource Statement as at December 31, 2016 contained in our news release dated Februar
Slide 46: Explanatory Notes - Exploration
EXPLANATORY NOTES - EXPLORATION Kupol Exploration Results A total of 48 diamond drill core holes are reported from Kupol Minex and mine-area exploration activity in 2016. All diamond drill core holes reported are HQ in diameter. The majority of holes presented (18) were drilled at the Kupol Hanging
Slide 47: Explanatory Notes - Exploration
EXPLANATORY NOTES - EXPLORATION Fort Knox Exploration Results Results are reported for 15 diamond drill core holes completed on the East and South walls of the Fort Knox open pit. All 15 of these diamond drill core holes are of HQ3 core diameter . At Fort Knox, the dip of the drill holes are taken f
Slide 48: Explanatory Notes - Exploration
EXPLANATORY NOTES - EXPLORATION Kettle River (Curlew) Exploration Results All 16 drill holes reported from the Curlew district are diamond drill core holes of HQ core diameter. A number of targets in the area were drilled, with eight holes reported from the Lower Portal, three holes from K5, two hol
Slide 49: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 York Street, 17th Floor │Toronto, ON │ M5J 2V5 www.kinross.com 4949 www.kinross.com
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