Kinross Gold Corporation · TSX:K
Kinross Gold — Q4 2011 Earnings Presentation
23 slides from Kinross Gold's earnings presentation, Feb 16, 2012
Slide 1: Delivering Disciplined Growth
DELIVERING DISCIPLINED GROWTH FOURTH QUARTER & FULL YEAR 2011 FINANCIAL & OPERATING RESULTS WEBCAST February 16, 2012 1
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, including any information as to the future performance of Kinross, constitute “forward looking statements” with
Slide 3: Tye Burt, President & CEO
TYE BURT President & CEO TYE BURT PRESIDENT & CHIEF EXECUTIVE OFFICER 3
Slide 4: Mapping the Path Forward
MAPPING THE PATH FORWARD 1. Strong financial and operating performance 2. Tasiast remains the cornerstone of Kinross’ long-term growth strategy 3. Stringent approach to project development and capital allocation 4 4
Slide 5: Optimization Process: Key Decisions to Date
OPTIMIZATION PROCESS: KEY DECISIONS TO DATE 1. Reorganized management structure to integrate and align Projects & Operations 2. Focus on Tasiast as Kinross’ key growth priority 3. Exploring processing of options at Tasiast with increased understanding of the orebody 4. Developed more stringent param
Slide 6: Delivering Strong Financial Results
DELIVERING STRONG FINANCIAL RESULTS • Record financial results in 2011 • Non-cash goodwill impairment reduced reported net earnings by approximately $2.9 billion Revenue Adjusted Operating Cash Adjusted Net Earnings(1) +31% 1800 Flow(1) 2 +79% 1.2 $3,943 +44% $1,599 1600 1.9 $872 1.1 1.8 1 1400 US$
Slide 7: Capital Allocation
CAPITAL ALLOCATION • Limit for total annual capital spending will be based on a conservative estimate of existing liquidity, cash flow availability and gold price • Capital allocation using these parameters for 2012 is expected to be approximately: Sustaining capital and development for existing o
Slide 8: Project Prioritization
PROJECT PRIORITIZATION TASIAST • 60,000 tpd mill-only option base case scenario, continuing to analyze alternate process options • Expected to make a preliminary selection of processing option at the end of Q2 2012 • Construction expected to start mid-2013; in either case, targeting ramp-up at new f
Slide 9: Paul Barry, Chief Financial Officer
PAUL BARRY CHIEF FINANCIAL OFFICER 9
Slide 10: Q4 2011 Results
Q4 2011 RESULTS Realized Margin(2,3) (in millions, except ounces and per Q4 2010 Q4 2011 % Change Gold Price +23% share amounts) +20% $965/oz $1,601/oz Gold equivalent production(4) 676,635 643,288 -5% (ounces) Gold equivalent sales (4) 647,494 601,159 -7% (ounces) Revenue $920.4 $949.3 3% Productio
Slide 11: FY2011 Results
FY2011 RESULTS Realized Margin(2,3) (in millions, except ounces and per FY2010 FY2011 % Change Gold Price +32% share amounts) +26% $906/oz $1,502/oz Gold equivalent production(4) 2,334,104 2,610,373 12% (ounces) Gold equivalent sales (4) 2,343,505 2,611,287 11% (ounces) Revenue $3,010.1 $3,943.3 31%
Slide 12: Goodwill Impairment
GOODWILL IMPAIRMENT • As a result of annual impairment testing, an aggregate non-cash goodwill impairment charge of ~$2.9 billion was recorded for Tasiast and Chirano • Result of changes in market conditions and growing understanding of Tasiast project parameters • Tasiast represents ~$2.5 billion a
Slide 13: Brant Hinze, Chief Operating Officer
BRANT HINZE CHIEF OPERATING OFFICER 13
Slide 14: Q4 & FY2011 Operating Results
Q4 & FY2011 OPERATING RESULTS Q4 2011 FY2011 Gold equivalent Production cost Gold equivalent Production cost production(4) of sales(2) production(4) of sales(2) (oz.) (US$/oz.) (oz.) (US$/oz) Fort Knox 70,759 $747 289,794 $692 Round Mountain 43,584 $597 187,444 $697 Kettle River 42,003 $446 175,292
Slide 15: Overview of Tasiast Orebody
OVERVIEW OF TASIAST OREBODY Figure 1: Plan (A) and long section (B) panels of the Tasiast mine corridor illustrating drill hole pierce points projected to surface and vertical planes, respectively. Colours are assigned by grade X thickness intervals as indicated in the legend. A West Branch Piment P
Slide 16: Tasiast Project Optimization
TASIAST PROJECT OPTIMIZATION • Measured & Indicated mineral resources(5) increased by 9 million ounces since year- end 2010, including an increase of 2.1 mm oz since August 2011 update • Continuing to analyze existing Tasiast mineral resource estimate according to a potential split between CIL, dump
Slide 17: Tasiast Site Enhancements
TASIAST SITE ENHANCEMENTS NEW ADR PLANT – COMPLETED Q4 2011 STRIPPING AT WEST BRANCH NEW WEST BRANCH DUMP LEACH FACILITY EXPANDING CAMP SIZE 17
Slide 18: Tasiast, Mauritania
TASIAST, MAURITANIA • Basic infrastructure and pre-production development continuing in parallel with project optimization in 2012: Expansion of existing camp: expect to complete build-out to ~3,000 beds in Q1 Development of interim water pipeline and wellfield: currently underway Incremental
Slide 19: Dvoinoye, Russia
DVOINOYE, RUSSIA • Key development activities continue on schedule • Completed ~1,320 m of underground development as of end of Q4 2011, ahead of plan • Additional mining equipment en route to support accelerated rate of development for 2012 • Expanding temporary camp to accommodate personnel requir
Slide 20: Tye Burt, President & CEO
TYE BURT President & CEO TYE BURT PRESIDENT & CHIEF EXECUTIVE OFFICER 20
Slide 21: Mapping the Path Forward
MAPPING THE PATH FORWARD 1. Strong financial and operating performance 2. Tasiast remains the cornerstone of Kinross’ long-term growth strategy 3. Stringent approach to project development and capital allocation 21 21
Slide 22: Endnotes
ENDNOTES 1) Adjusted net earnings attributed to common shareholders and adjusted operating cash flow numbers are non-GAAP financial measures which are meant to provide additional information and should not be used as a substitute for performance measures prepared in accordance with GAAP. For more in
Slide 23: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 YORK STREET, 17TH FLOOR TORONTO, ON M5J 2V5 WWW.KINROSS.COM 23