All dollar amounts are expressed in US dollars, unless otherwise noted.
TORONTO, Nov. 21 /CNW/ - Kinross Gold Corporation (TSX-K; NYSE-KGC)
("Kinross" or the "Company") announced today that gold equivalent production
for the third quarter 2005 was 406,192 gold equivalent ounces, bringing year-
to-date production to an on-plan total of 1,230,272 gold equivalent ounces.
Kinross has released preliminary unaudited restated results for 2003, and
preliminary, unaudited results for 2004, however the Company has not yet filed
its audited financial statements for the year ended December 31, 2004 as a
result of the review of the accounting treatment for the goodwill associated
with the TVX Gold/Echo Bay merger. Kinross is currently working with its
auditors to finalize these financial statements and believes that it will file
them within the next two weeks. Kinross will then file its interim financial
statements for 2004 and 2005, in sequence, followed by other required filings.
As a result, Kinross is not yet in a position to deliver financial statements
for the third quarter. Kinross will continue to provide bi-weekly updates on
our progress with filing the financial statements until such a time as the
Company is current with all filing obligations.
<<
Operations Update
NROSS' SHARE OF GOLD EQUIVALENT PRODUCTION
% Third Quarter Year-to-date
Ownership 2005 2004 2005 2004
----------------------- -----------------------
Fort Knox 100% 88,298 84,738 248,677 239,725
Round Mountain 50% 98,357 107,599 294,495 302,137
Porcupine JV 49% 38,747 45,079 143,112 150,171
Kubaka 98.1% 37,749 16,603 119,885 84,983
Paracatu(1) 100% 48,366 23,374 132,227 69,810
La Coipa 50% 27,701 35,129 92,077 108,132
Crixas 50% 24,055 23,858 72,400 69,809
Musselwhite 32% 20,877 19,020 61,824 56,171
New Britannia 50% - 9,079 - 23,652
Kettle River 100% 15,811 21,698 54,446 69,407
Lupin 100% - 23,485 - 48,382
Refugio 50% 6,234 2,532 11,129 6,921
----------------------- -----------------------
406,192 412,196 1,230,272 1,229,300
----------------------- -----------------------
----------------------- -----------------------
(1) Operating information for 2004 reflects the 49% ownership interest of
Paracatu. The remaining 51% was purchased on December 31, 2004.
The forecast for full year production in 2005 remains at 1.6 million gold
equivalent ounces. Aggregate production costs are currently forecast to be
approximately $440 million, which would result in a total cash cost of
approximately $275 per ounce.
Tye Burt, President and C.E.O., said, "I am pleased to see the operations
continuing to meet planned production rates. Costs are higher than plan
primarily due to rising energy costs and a one-time event at La Coipa. On the
growth front, the drilling program at Paracatu has been a great success, and I
am looking forward to reviewing the expansion plans for this operation early
next year."
Earlier this year, Kinross' Board of Directors approved funding for basic
engineering for a semi-autogenous grinding ("SAG") mill expansion project at
the Paracatu mine in Brazil. The mill is planned to be expanded over a four-
year period from its current capacity of 17 million tonnes per year. SNC
Lavalin Engineers & Constructors and Minerconsult Engenharia have been
commissioned to complete the basic engineering, currently underway in Belo
Horizonte, Brazil. After basic engineering is completed in early 2006, a final
capital cost estimate will form the basis for a final decision by Kinross'
Board of Directors in 2006.
At Round Mountain, pre-stripping for a new layback program has begun in
order to expand the Round Mountain open pit. Ore from this layback is expected
to benefit production in late 2006. Meanwhile, Round Mountain will continue to
mine the existing pit and stockpiles. Work is also proceeding on the
underground decline to allow for exploration drilling of targets below the
Round Mountain pit. This exploration decline is expected to reach its
anticipated depth in three to six months and once exploration drilling
commences, it is expected to last into the fourth quarter of 2006.
At the Porcupine Joint Venture, Pamour open pit development has been
completed. The bridge was completed in the third quarter and highway
construction is scheduled to be completed in 2006. Capital expenditures for
the Pamour project are now estimated to be $90.8 million to 100%. The Winze
project at the Hoyle Pond underground mine was commissioned in the third
quarter of 2005.
At the La Coipa mine in Chile, pre-stripping at the Puren deposit is
going well, with ore production expected in the third quarter of 2006. Ore is
still being mined from the Coipa Norte pit. After a recent series of rock
slides, geotechnical engineering was initiated with a consulting firm in order
to develop a plan that ensures pit wall stability in the Coipa Norte and
Breccia Norte pits. This plan will be completed in the near future. As a
result of the pit wall remediation activity, costs at La Coipa are running
well ahead of plan. It is anticipated that approximately 40,000 gold
equivalent ounces (to 100%) contained in the Breccia Norte pit may not be
recoverable after remedial work is completed.
Commissioning of the expanded facilities at the Refugio mine in Chile
continues to ramp up. The mine is expected to achieve its continuous
production rate of 40,000 tonnes per day by year end 2005. The plant has
processed in excess of 40,000 tonnes on a number of days during the quarter.
Total capital costs for the recommissioning are anticipated to be $100
million, plus $34 for the lease of a new mining fleet (to 100%).
Cash balances are approximately $82 million and available credit on our
revolving facility is approximately $38 million.
Capital Expenditures (Kinross' account)
To September 31, 2005, the status of major capital programs for the
Company (US millions):
YTD Forecast
Sept. 31, Full Year
2005 2005 Description
------------------------------------------------------------
Fort Knox $ 33 $ 45 Phase VI development
Refugio 26 30 Final re-start capital
Porcupine JV 21 22 Hoyle Pond Winze, underground
development, Pamour development
Paracatu 16 30 Ball mill refurbishment, expansion
engineering
Other 16 38
------------------------------------------------------------
Total $ 112 $ 165
------------------------------------------------------------
------------------------------------------------------------
Reserves Increase at Paracatu, Brazil
The drilling program at Paracatu which began in January has increased
estimated proven and probable reserves to 13.3 million ounces based on a gold
price of $400 per ounce, an increase of 4.8 million ounces compared to
December 31, 2004 reported reserves.
"The drilling program at Paracatu in the target zone west of Rico Creek
has delivered the tonnes, grade, and ultimately the ounces that we expected
when we began the program in January, right after we purchased the remaining
51% of the property", said Ron Stewart, Senior Vice President Exploration for
Kinross. "We expect to have additional results from deepening the shallow
holes in the existing open pit, and from some additional targets, which would
be incorporated into our future plans."
Paracatu Estimated Resource and Reserve Update as at October 31, 2005
Contained
Classification Price Ore Grade Ounces
-------------------------------------------------------------------------
(tonnes x
($US) 1,000) g/t
Proven and Probable $ 400 946,974 0.44 13,280,000
Measured and Indicated $ 450 121,906 0.43 1,677,000
Resources and Reserves assume a foreign exchange rate of 2.65 Reais per
US dollar.
-------------------------------------------------------------------------
Paracatu Estimated Resource and Reserve as at December 31, 2004
Contained
Classification Price Ore Grade Ounces
-------------------------------------------------------------------------
(tonnes x
($US) 1,000) g/t
Proven and Probable $ 350 604,411 0.44 8,463,000
Measured and Indicated $ 400 2,292 0.30 22,000
Resources and Reserves assume a foreign exchange rate of 3.13 Reais per
US dollar.
-------------------------------------------------------------------------
Estimated Difference - December 31, 2004 to October 31, 2005
Contained
Classification Price Ore Grade Ounces
-------------------------------------------------------------------------
(tonnes x
($US) 1,000) g/t
Proven and Probable $ 400 342,563 0.44 4,817,000
Measured and Indicated $ 450 119,614 0.43 1,655,000
Resources are exclusive of reserves
-------------------------------------------------------------------------
In addition to the estimated measured and indicated resources at a gold
price of $450 at October 31, 2005, estimated inferred resources total
122,981,000 tonnes at an average grade of 0.43 grams per tonne. This is
compared to estimated inferred resources of 71,881,000 tonnes averaging 0.40
grams per tonne at a gold price of $400 at December 31, 2004.
Other Developments
On November 4, 2005, the Company settled the litigation associated with
the Alpha group regarding the Hellenic mines for $8 million. The estimated
cost for settlement of the litigation was provided for in the preliminary
unaudited December 31, 2004 financial statements which Kinross released on
October 20, 2005.
Mineracao Serra Grande S.A., the operator of the Crixas mine in Brazil,
has received assessments from the State of Goias Tax Inspection related to
payments of sales taxes on gold deliveries for export. Kinross' share of the
assessment is approximately $29 million. Kinross' joint venture partner,
AngloGold Ashanti, the operator of the mine, and their counsel, believe the
assessments are in violation of Federal legislation on sales taxes and that
there is a remote chance of success for the State of Goias. The assessment has
been appealed.
Conference Call Details
Kinross will host a conference call on Tuesday, November 22, 2005 at 1:15
pm EST to discuss the third quarter press release.
To access the call, please dial:
Toronto and internationally - (416) 644-3414
Toll free in North America - 1-800-814-4860
Replay: (available Nov 22 - Dec 8, 2005) Passcode - 21163976 (followed by
number sign)
Toronto and internationally - (416) 640-1917
Toll free in North America - 1-877-289-8525
The conference call will be available on a listen-only basis and will
also be archived at www.kinross.com.
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This press release includes certain "Forward-Looking Statements" within
the meaning of section 21E of the United States Securities Exchange Act of
1934, as amended. All statements, other than statements of historical fact,
included herein, including without limitation, statements regarding Kinross'
financial statements for its fiscal year ended December 31, 2003, potential
mineralization and reserves, exploration results and future plans and
objectives of Kinross Gold Corporation, are forward-looking statements that
involve various risks and uncertainties. There can be no assurance that such
statements will prove to be accurate and actual results and future events
could differ materially from those anticipated in such statements. Any
restatement of historical financial statements is dependant on the outcome of
the independent valuation of the acquired assets, and Kinross does not know
what that outcome will be. Other important factors that could cause actual
results to differ materially from Kinross' expectations are disclosed under
the heading "Risk Factors" and elsewhere in Kinross' documents filed from time
to time with the Canadian Securities Regulators, the United States Securities
and Exchange Commission and other regulatory authorities.
Technical information contained in this press release has been reviewed
by Rod Cooper, Vice President, Technical Services for Kinross, who is a
"Qualified Person" under National Instrument 43-101.
Total cash costs are a non-GAAP measure intended to provide investors
with information about the operating efficiency of current mining operations.
Management uses this measure for the same purpose and for monitoring
performance of its gold mining operations. Total cash costs per ounce is a
standard gold mining industry measure that was developed in conjunction with
the Gold Institute in an effort to provide a level of comparability among
precious metals producers. This measure differs from earnings determined in
accordance with Generally Accepted Accounting Principles ("GAAP") and should
not be considered in isolation or a substitute for measures of performance
determined in accordance with GAAP. Total cash costs may reflect adjustments
for items that are recurring such as change in inventory and site restoration
cost accruals. A reconciliation of total cash costs with operating costs per
the consolidated financial statements will be published by the Company once
its December 31, 2004 year end financial statements are available.
Production Summary Table
As At: September 30, 2005
100% Basis
-----------------------------------------
Ore Ore
Mine Interest Year mined processed Grade Recovery
------------------------------- -----------------------------------------
(000 (000
tonnes) tonnes) (g/t) (%)
North America
-------------------------------------------------------------------------
Fort Knox 100% 2005 YTD 9,641 9,716 0.91 87.2%
2004 10,927 13,239 0.94 84.2%
Round
Mountain 50% 2005 YTD 22,503 46,011 0.75
2004 35,820 67,065 0.65 66.0%
Porcupine 49% 2005 YTD 11,593 3,201 2.97 92.9%
2004 13,752 3,995 3.35 91.8%
Musselwhite 32% 2005 YTD 1,345 1,089 5.70 95.2%
2004 2,340 1,459 5.30 95.8%
Kettle River 100% 2005 YTD 222 223 8.70 90.1%
2004 318 341 9.80 89.7%
South America
-------------------------------------------------------------------------
Paracatu 100%(x) 2005 YTD 12,753 12,367 0.40 77.5%
49% 2004 17,281 17,342 0.4 76.8%
La Coipa 50% 2005 YTD 2,248 4,805 1.00 80.0%
2004 3,769 6,562 1.1 81.2%
Crixas 50% 2005 YTD 562 562 8.40 95.4%
2004 746 746 8.2 95.4%
Refugio 50% 2005 YTD 3,521 2,713 0.87 68.0%
2004 - - - -
Other
-------------------------------------------------------------------------
Kubaka 98.1% 2005 YTD 343 646 5.93 97.4%
2004 178 778 5.1 97.2%
Other Locations 2004
-------------------------------------------------------------------------
Est. Reserve and Resource
Kinross' share Summary(1) (K share)
-------------- --------------------------
Gold equiv. Proven & Measured &
Mine Interest Year production Probable Indicated
------------------------------- -------------- --------------------------
(ounces) (000 (000
ounces) ounces)
North America
-------------------------------------------------------------------------
Fort Knox 100% 2005 YTD 248,677
2004 338,334 2,858 842
Round
Mountain 50% 2005 YTD 294,495
2004 387,785 1,475 620
Porcupine 49% 2005 YTD 143,112
2004 193,799 1,685 1,668
Musselwhite 32% 2005 YTD 61,824
2004 76,640 607 152
Kettle River 100% 2005 YTD 54,446
2004 96,789 54 -
South America
-------------------------------------------------------------------------
Paracatu 100%(x) 2005 YTD 132,227
49% 2004 92,356 13,280 1,677
La Coipa 50% 2005 YTD 92,077
2004 150,887 506 442
Crixas 50% 2005 YTD 72,402
2004 93,540 432 110
Refugio 50% 2005 YTD 11,129 1,717 797
2004 9,809
Other
-------------------------------------------------------------------------
Kubaka 98.1% 2005 YTD 119,880
2004 123,616 258 12
Other Locations 2004 90,229 1,356 3,522
-------------------------------------------------------------------------
(x) Kinross increased it's ownership in Paracatu to 100% on December 31,
2004.
(1) Reserves (Au $350/oz) and resources (Au $400/oz) are as at December
31, 2004, except for Paracatu (2P -Au $400/oz; M&I - Au $450/oz),
which is as of October 31, 2005. Please note: Paracatu reserves
include production depletion from January - October, 2005 where the
other mines do not include production depletion for that period.
>>
%SEDAR: 00002968E
