Kinross Gold Corporation · TSX:K
Kinross Gold — Merrill Lynch 11th Annual Mining, Metals & Steel Conference 2004
29 slides from Kinross Gold's conference presentation, Sep 16, 2004
Slide 1: Merrill Lynch Mining Conference
dedicated to being world class Merrill Lynch Mining Conference September 16, 2004 Robert M. Buchan President & Chief Executive Officer
Slide 2: Forward Looking Statement
Forward Looking Statement 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 resul
Slide 3: Why Kinross?
Why Kinross? • Very liquid senior gold producer • Strong balance sheet • Total cash costs similar to other senior gold producers • No gold hedging • Experienced management team • Part of S&P TSX 60, S&P TSX Capped Gold Index, XAU Index, HUI Index challenging opportunities require innovative strategi
Slide 4: Kinross at a Glance
Kinross at a Glance Key Facts Key Attributes • Senior gold producer, • Excellent spread of 2004 gold equivalent geopolitical risk production of 1.7 million • Modern, low cost asset ozs @ $230 total cash base cost • Exciting pipeline of • ~3,600 employees in 6 development projects countries and explo
Slide 5: Highly liquid, undervalued stock
Highly liquid, undervalued stock 3.5 3.0 Glamis P rice / N A V 2.5 Newmont 2.0 Placer Meridian Barrick Goldcorp Cambior 1.5 Kinross 1.0 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% 0.8% 0.9% 1.0% Liquidity challenging opportunities require innovative strategies
Slide 6: Kinross Today
Kinross Today Kinross is now a major gold producer, focused in the Americas Concerns addressed: ¾ Financial leverage – strong balance sheet challenging opportunities require innovative strategies
Slide 7: Balance Sheet (at December 31, 1999)
Balance Sheet (at December 31, 1999) Assets Liabilities $ millions $ millions Cash 113.9 Current liabilities 50.5 Other working capital 101.2 Property, plant and equipment 632.6 Total debt 397.7 Other long term assets 34.7 Site restoration costs 58.5 Future Taxes 7.3 Common Shareholders Equity 368.4
Slide 8: Balance Sheet (at June 30, 2004)
Balance Sheet (at June 30, 2004) Assets Liabilities $ millions $ millions Cash 189.0 Current liabilities 79.6 Other working capital 182.7 Property, plant and equipment 778.8 Total debt 31.5 Goodwill 918.0 Site restoration costs 128.4 Other long term assets 51.7 Future taxes 52.4 Common shareholders
Slide 9: From Net Debt to Net Cash
From Net Debt to Net Cash 200 100 $ millions 0 ~$478M -100 -200 -300 E 98 99 00 01 02 03 04 Estimated 19 19 20 20 20 20 20 net cash at year end 2004 challenging opportunities require innovative strategies
Slide 10: Kinross Today
Kinross Today Kinross is now a major gold producer, focused in the Americas Concerns addressed: ¾ Financial leverage – strong balance sheet 9 ¾ Cash costs – comparable to other North American seniors challenging opportunities require innovative strategies
Slide 11: Total Cash Costs
Total Cash Costs How Kinross has improved relative to other producers over time? 400 350 Total Cash Costs 2000 Total Cash Costs 2004E 300 250 US dollars 200 150 100 50 0 Newmont Harmony Anglo Agnico Eagle Placer Kinross Glamis Goldcorp Meridian Cambior Barrick challenging opportunities require innov
Slide 12: Kinross Today
Kinross Today Kinross is now a major gold producer, focused in the Americas Concerns addressed: ¾ Financial leverage – strong balance sheet 9 ¾ Cash costs – comparable to other North American seniors 9 ¾ Deliver on production and cost targets challenging opportunities require innovative strategies
Slide 13: Share Price Performance
Share Price Performance Aug. 11/ 03 Redeemed Jan. 31/ 03 convertible Philadelphia Gold Index Completed Kinross Share Price debentures 14 merger with TVX 120 and Echo Bay June 10/ 02 12 Announced deal with TVX and 100 Echo Bay 10 April 11/ 02 80 Announced PJV US dollars 8 deal with Placer US dollars
Slide 14: Deliverables… Production - Budget
Deliverables… 600 Production - Budget 245 Production - Actual Total Cash Costs 240 500 235 000s gold equivalent ounces 400 230 US dollars 225 300 220 200 215 210 100 205 0 200 Q1 2003 Q2 2003 Q3 2003 Q4 2003 Q1 2004 Q2 2004 Q3 2004E Q4 2004E challenging opportunities require innovative strategies
Slide 15: Kinross Today
Kinross Today Kinross is now a major gold producer, focused in the Americas Concerns addressed: ¾ Financial leverage – strong balance sheet 9 ¾ Cash costs – comparable to other North American seniors 9 ¾ Deliver on production and cost targets 9 ¾ Reserve life – increasing year over year challenging
Slide 16: Low Price/NAV due to short mine life?
Low Price/NAV due to short mine life? 20 3.5 Reserve mine life 18 Price/NAV 3 16 2.5 14 Price / NAV multiple 12 2 Years 10 1.5 8 6 1 4 0.5 2 0 0 Harmony Barrick Agnico Placer Glamis Anglo Meridian Newmont GoldCorp Kinross Cambior Eagle challenging opportunities require innovative strategies
Slide 17: Reserve Replacement - 2003
Reserve Replacement - 2003 16 14.1 2.7 13.2 (1.8) 12 Millions of ounces 8 4 0 31-Dec-02 Depletion New Discoveries 31-Dec-03 challenging opportunities require innovative strategies
Slide 18: Reserve Replacement – 2004E
Reserve Replacement – 2004E 16 0.8 0.5 16.0 (2.1) 2.7 14.1 12 Millions of ounces 8 4 0 31-Dec-03 Depletion New Acquisitions Gold Price 31-Dec-04E ($325) Discoveries ($350) challenging opportunities require innovative strategies
Slide 19: Current Project Pipeline
Current Project Pipeline Exploration Pre-feasibility Feasibility Construction Production Refugio Pamour Birkachan Paracatu Exp. Puren Gurupi Gold Hill PQ Deeps Measured & Indicated Resources Proven & Probable Reserves Emanuel North Progress January 03 to September 04 New Discovery Forquilha Sul Pend
Slide 20: Cash Flow Supporting Capex
Cash Flow Supporting Capex 200 Cash flow Capex 160 Millions US dollars 120 80 40 0 93 94 95 96 97 98 99 00 01 02 03 E 04 19 19 19 19 19 19 19 20 20 20 20 20 challenging opportunities require innovative strategies
Slide 21: 2004 Capex Summary Project
2004 Capex Summary 50 45 40 35 Project Millions US dollars 30 Sustaining 25 20 15 10 5 0 Refugio Fort Knox Porcupine Kubaka Round Other Mountain challenging opportunities require innovative strategies
Slide 22: 2004 Capex
2004 Capex Fort Knox • Investment - $74 million over three years to complete pit laybacks on phase 5 and phase 6 of mine plan • Liberates 1.4 million oz of gold to be produced in 2005 – 2009 timeframe Porcupine • Investment $33 million spread over 2004 – 2005 to bring Pamour mine into operation • En
Slide 23: 2004 Capex
2004 Capex Refugio • $56 million (Kinross’ share) to retrofit and restart plant that has been idle since 2001 • Produce 210,000 to 230,000 oz/year (100% basis) @ $220 to $240 challenging opportunities require innovative strategies
Slide 24: Reserve Growth 2005
Reserve Growth 2005 ¾ Round Mountain ¾ Fort Knox ¾ Kettle River challenging opportunities require innovative strategies
Slide 25: Round Mountain / Gold Hill
Round Mountain / Gold Hill Deep HG Feeder Target S325 Pit Outline Mt Jefferson Caldera Margin Target Mt. Jefferson Caldera East Surprise Target Quaternary Cover South Gold Hill Target Completed drilling Q2 Proposed drilling Caldera boundary Fault half mile
Slide 26: Round Mountain Pit Expansion
Round Mountain Pit Expansion LEGEND Inferred Target Blocks Inferred Blocks Drill Hole Bench Drill Targeting Intercept Target Concept Current Ultimate Pit Outline Direction Bench 5590
Slide 27: Fort Knox Drill Targets
Fort Knox Drill Targets A A' SECTION 10,600 E Looking West Cu rre FFC-04-716 nt U Pi 65 feet @ 0.316 OPT Au lt t im at e 35 feet @ 0.273 OPT Au Pi t Pit Expansion Target 5ft @ 0.09 OPT Au 5ft @ 0.16 OPT Au 5ft @ 0.20 OPT Au 5ft @ 0.18 OPT Au 5ft @ 0.45 OPT Au Rejected Assays 5ft @ 0.33 OPT Au 5ft @
Slide 28: Kinross Today
Kinross Today Kinross is now a major gold producer, focused in the Americas Concerns addressed: ¾ Financial leverage – strong balance sheet 9 ¾ Cash costs – comparable to other North American seniors 9 ¾ Deliver on production and cost targets 9 ¾ Reserve life – increasing year over year 9 challengin
Slide 29: dedicated to being world class
dedicated to being world class Shares outstanding: 345.6 million KGC: NYSE K: TSX K.U: TSX (US dollar trading symbol) K.WT: TSX www.kinross.com Kinross Gold Corporation 40 King Street West, 52nd Floor Scotia Plaza Toronto, ON M5H 3Y2 416-365-5123 416-363-6622 866-561-3636 info@kinross.com
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