Kinross Gold Corporation · TSX:K
Kinross Gold — Q1 2016 Earnings Presentation
26 slides from Kinross Gold's earnings presentation, May 11, 2016
Slide 1: Q1 2016 Results Conference Call & Webcast
May 11 KINROSS GOLD CORPORATION 2016 Q1 2016 Results Conference Call & Webcast 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: Q1 2016 Results Highlights
Q1 2016 RESULTS HIGHLIGHTS 33 www.kinross.com
Slide 4: Delivering Strong Performance
FIRST QUARTER 2016 HIGHLIGHTS DELIVERING STRONG PERFORMANCE Production increased while costs were lower year-over-year Gold Equivalent Production(1) Production Cost of Sales(2) All-in Sustaining Cost(3) (millions) ($ per ounce) ($ per ounce) 687,463 $964 $963 629,360 $709 $694 Q1 2015 Q1 2016 Q1 201
Slide 5: 2016 Production & Cost Outlook
FIRST QUARTER 2016 HIGHLIGHTS 2016 PRODUCTION & COST OUTLOOK(4) On track to meet 2016 guidance targets Gold Equivalent Production(1) Production Cost of Sales(2) All-in Sustaining Cost(3) (millions) ($ per ounce) ($ per ounce) 2.7 – 2.9 $975 $890 to $990 2.6 $675 to $735 $696 2015 2016E 2015 2016E 20
Slide 6: Operating Highlights
FIRST QUARTER 2016 HIGHLIGHTS OPERATING HIGHLIGHTS PARACATU FORT KNOX • Lowest cost of sales per ounce since • Better seasonal heap leach performance Q3 2011, benefits of favourable FX due to relatively mild winter weather KUPOL-DVOINOYE ROUND MOUNTAIN • Continued strong performance • Higher grades,
Slide 7: Tasiast Performance Improvements
FIRST QUARTER 2016 HIGHLIGHTS TASIAST PERFORMANCE IMPROVEMENTS Continuous improvement initiatives resulting in significantly improved throughput CONTINUOUS IMPROVEMENT BENEFITS Ore processed (milled) • Comprehensive review of crushing and (‘000 tonnes) grinding circuit to identify opportunities for
Slide 8: Advancing Tasiast Phase One
ATTRACTIVE GROWTH OPPORTUNITIES ADVANCING TASIAST PHASE ONE Phase One expected to ramp up to full production in Q1 2018 PHASE ONE PROJECT PROGRESSING WELL • Experienced project team in place • Engineering and procurement 55% complete Expected to reach 80% by end of July 2016 • Major earthworks sch
Slide 9: Phase One Feasibility Study Results
ATTRACTIVE GROWTH OPPORTUNITIES PHASE ONE FEASIBILITY STUDY RESULTS Phase One expected to reduce cost per ounce by ~50% and to increase annual production by ~90% Metric / Estimate Estimates Average annual production (2018-2027) 409,000 ounces Production cost of sales (2018-2027) $535 per ounce All-i
Slide 10: Phase Two Pre-Feasibility Study Results
ATTRACTIVE GROWTH OPPORTUNITIES PHASE TWO PRE-FEASIBILITY STUDY RESULTS Combined Phase One and Two expansion expected to transform Tasiast into Kinross’ largest mine with estimated costs amongst the lowest in our portfolio Metric Estimates (Phase One and Two combined) Average annual production (2020
Slide 11: Bald Mountain Update
ATTRACTIVE GROWTH OPPORTUNITIES BALD MOUNTAIN UPDATE Quality producing mine with significant exploration potential NORTH ZONE (100% Kinross) 2016 Priority Exploration Targets ~15km • Drilling to focus on converting estimated mineral resources to mineral reserves and extending delineation of known or
Slide 12: Maricunga Update
DISCIPLINED CAPITAL ALLOCATION MARICUNGA UPDATE Evaluating Maricunga in context of overall strategic priorities • Assessing Maricunga’s future cost structure and capital requirements • Contemplating a potential suspension of mining activities by the end of October Under the closure plan, heap leac
Slide 13: Kinross Value Proposition
KINROSS VALUE PROPOSITION EXCELLENT OPERATIONAL TRACK RECORD • Continuing to meet or outperform our operational targets STRONG BALANCE SHEET • $2.3B in liquidity with net debt to EBITDA ratio of 1.2x ATTRACTIVE FUTURE GROWTH OPPORTUNITIES • Proceeding with TASIAST PHASE ONE; expected to reach full p
Slide 14: Financial Highlights
FINANCIAL HIGHLIGHTS 1414 www.kinross.com
Slide 15: Financial Results
FIRST QUARTER 2016 FINANCIAL RESULTS Q1 2015 Q1 2016 Attributable gold equivalent ounces (oz.)(1) Produced 629,360 687,463 Sold 634,565 659,397 Average realized gold price ($/oz.) $1,218 $1,179 Production cost of sales ($/oz.)(2) Gold equivalent $709 $694 By-product $696 $682 All-in sustaining cost
Slide 16: Solid Financial Position $2.3B
STRONG BALANCE SHEET SOLID FINANCIAL POSITION Maintaining balance sheet strength & financial flexibility remain priority objectives LIQUIDITY POSITION MAINTAINING FINANCIAL FLEXIBILITY • Equity financing completed in March 2016 Net proceeds of $276M $0.8 • Generated $75M of free cash flow from ope
Slide 17: Fuel & Currency Hedges
FINANCIAL DISCIPLINE FUEL & CURRENCY HEDGES Managing exposure to fluctuations in foreign currency and input commodity prices • Strategic decision to hedge 50% of the Tasiast Phase One project’s fuel oil requirements at $46/bbl for next 36 months Will look for additional opportunities to hedge an a
Slide 18: Operating Highlights
OPERATING HIGHLIGHTS 1818 www.kinross.com
Slide 19: Diversified Portfolio of Operating Mines
OPERATIONAL EXCELLENCE DIVERSIFIED PORTFOLIO OF OPERATING MINES Over RUSSIA 60% of estimated 2016 gold equivalent production from mines located in the Americas AMERICAS AMERICAS Dvoinoye Kupol Fort Knox RUSSIA Kettle River-Buckhorn Bald Mountain Round Mountain 2016E GOLD EQUIVALENT PRODUCTION(1,4) T
Slide 20: Americas
OPERATIONAL EXCELLENCE AMERICAS • Strong performances at FORT KNOX, ROUND • PARACATU production lower quarter-over- MOUNTAIN, MARICUNGA and KETTLE- quarter due to a partial curtailment of milling RIVER BUCKHORN activities due to reduced rainfall • BALD MOUNTAIN production lower than Region receive
Slide 21: West Africa
OPERATIONAL EXCELLENCE WEST AFRICA • Strong cost performance at TASIAST Continuous improvement efforts resulting in significantly increased throughput Averaged over 8,000 t/d in Q1 2016, compared to 7,500 t/d in Q4 2015 • CHIRANO production decreased as site transitions from mining in the Awkaab
Slide 22: Russia
OPERATIONAL EXCELLENCE RUSSIA KUPOL-DVOINOYE • Q1 production cost of sales decreased to $445/oz. Lowest level since Q3 2011 Benefiting from increased production, higher grades and favourable foreign exchange MOROSHKA PROJECT • Construction of ore haulage road underway • Mining expected to begin
Slide 23: Track Record Over the Past Four Years
LOWERED annual capex by MET $1.9 $1.3B guidance $1.3 Consecutive targets $0.6 $0.6 years Produced over 2012 2013 2014 2015 10Moz. DECREASED MAINTAINED gold equivalent all-in a strong $700M balance sustaining Debt repaid sheet 10% cost $2.3 BILLION Liquidity position TRACK RECORD OVER THE PAST 2323 F
Slide 24: Appendix
APPENDIX 24 24 www.kinross.com
Slide 25: Endnotes
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. 2) Attributable production cost of sales per gold equivalent ounce sold and per gold
Slide 26: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 York Street, 17th Floor │Toronto, ON │ M5J 2V5 www.kinross.com 2626 www.kinross.com