Kinross Gold Corporation · TSX:K
Kinross Gold — Investor Presentation (September 2006)
45 slides from Kinross Gold's investor presentation, Sep 12, 2006
Slide 1: TD Securities
TD Securities September 12, 2006 1
Slide 2: Forward-looking statements
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, performance or achieve
Slide 3: Global Position
Global Position Kubaka we Fort Knox Musselwhite @ Porcupine Crixas wa Coipa Paracatu Refugio
Slide 4: Kinross: A Major Gold Producer
Kinross: A Major Gold Producer 2006 estimated: • Gold equivalent production – 1.44 million ounces • Cost of sales1 – est. $305 – $315 per ounce ~3,700 employees in 5 countries Straight-forward balance sheet • Simple debt structure • No gold hedging Continuing reserve growth • 24.7 million ou
Slide 5: Prospective & Stable Geography
Prospective & Stable Geography Geographical breakdown of 2005 reserves 9% 64% 17% 10% US Canada Brazil Chile 24.7 million ounces of gold at Dec. 31, 2005, an increase of 27% over 2004 Reserves located in politically stable countries 5
Slide 6: Secure Production Base
Secure Production Base Geographical breakdown of 2005 production 16% 17% 48% 10% 9% US Canada Brazil Chile Other 64% of production is North American based 60% of costs are U.S. dollar-based Large U.S. base offers security, lowers foreign exchange risk 6
Slide 7: Four-Point Plan
Four-Point Plan Objective: Enhance net asset value and cash flow per share GROWTH FROM BUILDING BLOCKS BEST PEOPLE NEW OPPORTUNITIES THE CORE FOR THE FUTURE Regionally streamlined Strengthened management Crown Resources Paracatu expansion approach team & Board transaction Round Mountain Round Mounta
Slide 8: Core Fundamentals
Core Fundamentals Strengthened management team New merger accounting methodology Strong operating fundamentals Clear four-point strategic plan Dramatic increase in gold reserves Growth profile in production and cash flow through 2009 8
Slide 9: Continued Reserve Growth
Continued Reserve Growth Gold Reserves and Resources 35,000 Measured and Indicated 30,000 Proven and Probable 25,000 '000 ounces gold 20,000 15,000 10,000 5,000 - 2001 2002 2003 2004 2005 $300/$325 $300/$325 $325/$350 $350/$400 $400/$450 Reserves at Dec. 31, 2004 19.4 Less: Assets sold/reclassified
Slide 10: Second Quarter 2006
Second Quarter 2006 Gold equivalent production was 385,514 ounces On-target for ’06 est. 1.44 million gold equivalent ounces Revenue of $252.3 million Average realized price: $625 per ounce of gold sold Cost of sales1 of $311 per ounce on 403,507 gold equivalent ounces sold 1. Cost of sale
Slide 11: Second Quarter 2006 (cont…)
Second Quarter 2006 (cont…) Net earnings of $65.6 million, or $0.19 per share Cash flow from operating activities of $94.9 million Capital expenditures of $41.8 million Cash position of $149.0 million; total debt of $163.2 million Exploration and business development spending at $9.4 milli
Slide 12: Refining Portfolio
Refining Portfolio Non-core assets sold: George/Goose Lake 9 E-Crete 9 Norseman 9 Lupin (in process) 9 Aquarius 9 Blanket 9 Equity positions 9 12 12
Slide 13: Cash Margin – Senior Producers
Cash Margin – Senior Producers 250 Barrick 200 New mont US$/ounce Kinross 150 100 50 2000 2001 2002 2003 2004 2005 Cash Margin Per Ounce Produced 2000 2001 2002 2003 2004 2005 CAGR Barrick 191 164 165 191 179 214 2% Newmont 111 87 124 163 181 182 10% Kinross 96 103 105 136 158 170 12% Source: Compan
Slide 14: Refugio, Chile (50%, operator)
Refugio, Chile (50%, operator) 14
Slide 15: Refugio, Chile
Refugio, Chile Ownership: 50% (Kinross operated) Reserves: 2,158,000 gold ozs (as at Dec. 31, 2005) Highlights: Restart is complete, producing as planned Drilling commenced on nearby Pancho deposit Q2 2006 Operating Results Production: 26,711 gold eq. ozs Cost of sales: $ 379 / oz YTD 2006 Operating
Slide 16: Exploration Map
Exploration Map Compania Minera Maricunga Claims 130 claims for 650 hectares Pancho Deposit Verde Volcanic and REFUGIO Intrusive Complex Refugio Volcanics (undivided) Pancho Diorite & Volcanics Laguna Tuff Mesozoic Rocks Leach Pad Process Chile Plant Verde West East & Mines Buffer Zone 0 2km Grade (
Slide 17: Round Mountain, USA (50%, operator)
Round Mountain, USA (50%, operator) 17
Slide 18: Round Mountain, USA
Round Mountain, USA Ownership: 50% (Kinross operated) Reserves: 2,338,000 gold ozs (as at Dec. 31, 2005) Highlights: - Pre-stripping commenced for a pit layback, ore from layback expected to contribute in late 2006 - Exploration drilling to begin on underground in 2H/06 Q2 2006 Operating Results Pro
Slide 19: District/Exploration Map
District/Exploration Map Nevada Key 2006 Exploration Targets N Round Reno Mountain Rd Mtn Underground Drifting and drilling Moores Creek Las Caldera Vegas Rd Mtn – Gold Hill Trend Jefferson Geophysical survey and drilling Caldera GOLD HILL SVCO Area of Mutual Interest Gold Hill Jefferson ROUND
Slide 20: Paracatu, Brazil (100%)
Paracatu, Brazil (100%) ZZ i i | \ ev
Slide 21: Paracatu, Brazil
Paracatu, Brazil Ownership: 100% Kinross Reserves: 15,210,000 gold ozs (as at Dec. 31, 2005) Highlights: $470 million expansion project approved, expansion will contribute 2008 and beyond Q2 2006 Operating Results Production: 44,465 gold eq. ozs Cost of sales: $ 335 / oz YTD 2006 Operating Results P
Slide 22: Paracatu – A World-class Mine
Paracatu – A World-class Mine 35 Reserves (millions of ounces) 30 25 20 15 10 5 0 Cortez Veladero Goldstrike Laronde Lagunas Norte Paracatu Yanacocha Largest Operating Mines in North and South America 22
Slide 23: Paracatu Expansion Project
Paracatu Expansion Project $470 million expansion project is expected to be completed in 2008 LOM 2009 - 2013 2009 - 2018 2009 - 2036 Average throughput (mtpa) 58.4 51.2 40.9 Average grade (g/t) 0.37 0.37 0.40 Average recovery (%) 80.3 80.0 79.6 Average annual gold production (oz) 556,700 489,800
Slide 24: Brasilia Belt- Aeromagnetic Image
Brasilia Belt- Aeromagnetic Image Paracatu Formation Vazante Formation Thrust Front 8 MAIN MAGNETIC TRENDS SELECTED NS mag ON THE BRASILIA anomaly Pit BELT FOR FOLLOW outline 2005 Drill UP Program SW-NE Mag Anomaly reflects Ore Boundary mineralization SPI image Depth of mag source Total Magnetic Fie
Slide 25: Capital Projects Drive New Growth
Capital Projects Drive New Growth Contributes First Full Year 1. Puren Q3 2006 2007 2. Round Mtn. Layback Q4 2006 2007 3. Buckhorn Q2 2007 2008 4. Paracatu Exp. Q2 2008 2009 25
Slide 26: Kinross Driving Forward
Kinross Driving Forward Production rising from approximately 1.44 million ounces to 1.8-1.9 million ounces in 2009 1.9 Expected range of Gold equivalent production 1.8 production (millions of ounces) 1.7 1.6 1.5 1.4 1.3 1.2 2006E 2007E 2008E 2009E 2006 - 2009 Forecast 26
Slide 27: Four Exploration Focus Regions
Four Exploration Focus Regions Alaska, B.C., Nevada, Mexico Far NE Russia Chile Brazil Producing Assets Exploration Targets 27
Slide 28: Positioned For Success
Positioned For Success Fourth largest primary gold producer in North America, eighth largest in the world Strong production and growth profile through 2009 Eight mines globally, focused in North and South America “Cleared decks” for the future Exploration expertise: track record of replaci
Slide 29: Kinross Outperforms
Kinross Outperforms 2.50 2.00 Relative Performance +78% 1.50 +31% +16% 1.00 0.50 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 May-06 Jun-06 Jul-06 Sep-05 Apr-06 Aug-06 Major Gold Producers (Average) Kinross Gold Price Major gold producers includes: Barrick, Newmont, Goldfields and AngloGold Ashanti All
Slide 30: Shares outstanding and market cap
Shares outstanding: 362 million Market cap.: US$4.6 billion (at September 11, 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
Slide 31: Appendix
Appendix 31
Slide 32: 2005 Production Statistics
2005 Production Statistics Reserves Cost of Ow nership @ 12/31/05 Production sales/oz (millio ns) Fort Knox 100% 1,953 329,300 $ 275 Round Mountain 50% 2,338 373,900 $ 255 La Coipa 50% 397 126,000 $ 346 Crixas 50% 379 96,200 $ 151 Paracatu 100% 15,210 181,000 $ 281 Musselw hite 32% 639 79,900 $ 330
Slide 33: Musselwhite, Canada
Musselwhite, Canada (32%, Goldcorp operated) 33 33
Slide 34: Musselwhite, Canada
Musselwhite, Canada Ownership: 32% Kinross Reserves: 639,000 gold ozs (as at Dec. 31, 2005) Q2 2006 Operating Results Production: 17,631 gold eq. ozs Cost of sales: $ 367 / oz YTD 2006 Operating Results Production: 33,799 gold eq. ozs Cost of sales: $ 421 / oz 34
Slide 35: Fort Knox, USA (100%)
Fort Knox, USA (100%) 35 35
Slide 36: Fort Knox, USA
Fort Knox, USA Ownership: 100% Kinross Reserves: 1,953,000 gold ozs (as at Dec. 31, 2005) Highlights: Heap leach scenario being evaluated Q2 2006 Operating Results Production: 99,437 gold eq. ozs Cost of sales: $ 267 / oz YTD 2006 Operating Results Production: 179,114 gold eq. ozs Cost of sales: $ 2
Slide 37: Porcupine JV, Canada
Porcupine JV, Canada (49%, Goldcorp operated) 37 37
Slide 38: Porcupine JV, Canada
Porcupine JV, Canada Ownership: 49% Kinross Reserves: 1,653,000 gold ozs (as at Dec. 31, 2005) Highlights: Pamour pit now contributing to production Q2 2006 Operating Results Production: 39,713 gold eq. ozs Cost of sales: $ 379 / oz YTD 2006 Operating Results Production: 69,845 gold eq. ozs Cost of
Slide 39: La Coipa, Chile
La Coipa, Chile (50%, Goldcorp operated) 39 39
Slide 40: La Coipa, Chile
La Coipa, Chile Ownership: 50% Kinross Reserves: 397,000 gold ozs (as at Dec. 31, 2005) 24,389,000 silver ozs (as at Dec. 31, 2005) Highlights: Puren deposit pre-strip underway for contribution in Q3/06 Q2 2006 Operating Results Production: 32,519 gold eq. ozs Cost of sales: $ 324 / oz YTD 2006 Oper
Slide 41: Crixas, Brazil
Crixas, Brazil (50%, AngloGold operated) 41 41
Slide 42: Crixas, Brazil
Crixas, Brazil Ownership: 50% Kinross Reserves: 379,000 gold ozs (as at Dec. 31, 2005) Q2 2006 Operating Results Production: 24,424 gold ozs Cost of sales: $ 202 / oz YTD 2006 Operating Results Production: 48,545 gold ozs Cost of sales: $ 195 / oz 42
Slide 43: Kettle River, USA (100%)
Kettle River, USA (100%) 43 43
Slide 44: Kettle River, USA
Kettle River, USA Ownership: 100% Kinross Highlights: Buckhorn Mountain and Crown transaction: - Acquisition completed September 2006 - Permitting is ongoing - Construction expected to begin in late 2006, production expected late 2007 2005 Operating Results Production: 68,100 gold ozs Cost of sales:
Slide 45: Shares outstanding and market cap
Shares outstanding: 347.7 million Market cap.: US$4.6 billion (at September 11, 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 3Y
Kinross Gold — Investor Presentation (September 2006) on 6ix