Kinross Gold Corporation · TSX:K
Kinross Gold — Q4 2012 Earnings Presentation
27 slides from Kinross Gold's earnings presentation, Feb 14, 2013
Slide 1: Kinross Gold Corporation 2013 Q4 & 2012 Results Conference Call & Webcast
February 14 KINROSS GOLD CORPORATION 2013 Q4 & 2012 Results Conference Call & Webcast 1 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, including any information as to the future performance of Kinross, constitute “forward looking statements” with
Slide 3: J. Paul Rollinson, Chief Executive Officer
J. PAUL ROLLINSON CHIEF EXECUTIVE OFFICER 33 www.kinross.com
Slide 4: Kinross Exceeds 2012 Production Guidance
FOURTH QUARTER & FULL-YEAR 2012 KINROSS EXCEEDS 2012 PRODUCTION GUIDANCE • Production of 2.62 mm gold equivalent ounces exceeded 2012 production guidance • Production cost of sales of $706/oz. was in-line with guidance GOLD EQUIVALENT PRODUCTION(1) PRODUCTION COST OF SALES(2) 724,510 $740 672,173 $7
Slide 5: Full-Year 2012 Financial Results Highlights
FULL-YEAR 2012 FINANCIAL RESULTS HIGHLIGHTS REVENUE ADJUSTED CASH FLOW(3) ADJUSTED NET EARNINGS(3) +12% -2% +3% $1,562 $1,527 $879 $4,311 $851 $3,843 $0.77/sh $1.37/sh $0.75/sh $1.34/sh US$ millions 2011 2012 2011 2012 2011 2012 (3) Refer to endnote #3. 55 www.kinross.com
Slide 6: Non-Cash Impairment Charge
FOURTH QUARTER & FULL-YEAR 2012 NON-CASH IMPAIRMENT CHARGE • Recorded a $3.2 billion after-tax non-cash impairment charge for 2012 relating to Tasiast and Chirano • Impairment test for Tasiast was based on a 30,000 tonne per day optimized mill model • The resulting non-cash charge was due to a numbe
Slide 7: Focus on Margin Improvement & Cash Flow
THE KINROSS WAY FORWARD FOCUS ON MARGIN IMPROVEMENT & CASH FLOW 2013 OUTLOOK(4) • Outlook shaped by continued focus on cost control, margin improvement and cash flow • Production expected to be 2.4 – 2.6 mm oz. at a cost of sales of $740 - $790/oz. • Total capital expenditures expected to be $1.6 bi
Slide 8: Capital Discipline Continues in 2013
THE KINROSS WAY FORWARD CAPITAL DISCIPLINE CONTINUES IN 2013 2012 estimate following project resequence Identified $200 mm of capital $2.2 reductions Actual 2012 spend Continued focus $2.0 $1.9 on disciplined spending Capital Expenditures (US$ millions) $1.6 February Q2 - Q3 Full-year Expected 2012
Slide 9: Update on Projects & Exploration
FOURTH QUARTER 2012 UPDATE ON PROJECTS & EXPLORATION DVOINOYE • Project continues to advance on budget and on schedule • Expect to deliver first ore to the nearby Kupol mill in second half of 2013 TASIAST EXPANSION PROJECT • Expect to complete pre-feasibility study on CIL mill in the range of 30k tp
Slide 10: Tony Giardini, EVP & Chief Financial Officer
TONY GIARDINI EXECUTIVE VICE-PRESIDENT & CHIEF FINANCIAL OFFICER 1010 www.kinross.com
Slide 11: Financial Results Fourth Quarter 2012
FOURTH QUARTER 2012 FINANCIAL RESULTS Realized Margin(7) (in millions, except ounces and per share amounts) Q4 2011 Q4 2012 % Gold Price +6% Change $1,707/oz. $1,021/oz. Gold equivalent production(1) 622,507 724,510 16% (ounces) Gold equivalent sales(1) 583,780 687,162 18% (ounces) Revenue $919.8 $1
Slide 12: Financial Results Full-Year 2012
FULL-YEAR 2012 FINANCIAL RESULTS Realized Margin(7) (in millions, except ounces and per share amounts) FY 2011 FY 2012 % Gold Price +3% Change $1,643/oz. $937/oz. Gold equivalent production(1) 2,543,790 2,617,813 3% (ounces) Gold equivalent sales(1) 2,547,530 2,591,478 2% (ounces) Revenue $3,842.5 $
Slide 13: Maintaining a Strong Balance Sheet
AS AT DECEMBER 31, 2012 MAINTAINING A STRONG BALANCE SHEET • Cash and cash equivalents and short term investments: $1,983 million • Up to $460 million may be used to repurchase the senior convertible notes on March 15, 2013 STRONG LIQUIDITY POSITION (US$ millions) As at December 31, 2012 Cash and ca
Slide 14: 2013 Outlook: Production & Costs
2013 OUTLOOK PRODUCTION & COSTS(4) • 2013 outlook shaped by continued focus on cost control, margin improvement and cash flow • 2013 all-in sustaining cost(8) expected to be $1,100 - $1,200 per gold equivalent ounce Gold Production % of Total Production Cost of Sales Region (000 oz. Au eq.) Producti
Slide 15: 2013 Outlook: Capital Expenditures
2013 OUTLOOK CAPITAL EXPENDITURES(4) EXISTING MINES Region Sustaining Opportunity Regional Total South America $255 $10 $265 North America $170 $50 $220 West Africa $105 $75 $180 Russia $60 $25 $85 Corporate – $10 $10 Total: $590 $170 $760 GROWTH PROJECTS Project Total Description Tasiast expansion
Slide 16: Brant Hinze, President & Chief Operating Officer
BRANT HINZE PRESIDENT & CHIEF OPERATING OFFICER 1616 www.kinross.com
Slide 17: Operating Results Fourth Quarter & Full-Year 2012
FOURTH QUARTER & FULL-YEAR 2012 OPERATING RESULTS Production (oz. Au eq.)(1) Production cost of sales(2) ($/oz. Au eq.) Q4 2012 2012 Q4 2012 2012 Fort Knox 119,582 359,948 $493 $663 Round Mountain 41,220 192,330 $788 $717 Kettle River – Buckhorn 33,548 156,093 $463 $482 North America total: 194,350
Slide 18: Dvoinoye on Budget & On Schedule
RUSSIA DVOINOYE ON BUDGET & ON SCHEDULE • First shipment of ore to the Kupol mill expected Site infrastructure development in the second half of 2013 • Underground development continues to progress ahead of plan Main ventilation fans installed • Surface infrastructure construction 60% complete Fue
Slide 19: Update on Tasiast Pre-Feasibility Study
MAURITANIA UPDATE ON TASIAST PRE-FEASIBILITY STUDY • PFS on a mid-size, expandable CIL mill in the 30k tpd range is expected to be complete at the end of March Not proceeding with a 60k tpd mill option • A smaller mill at Tasiast offers a number of anticipated benefits which are consistent with th
Slide 20: Update on Tasiast Optimization
MAURITANIA UPDATE ON TASIAST OPTIMIZATION INFRASTRUCTURE DEVELOPMENT • Operational as of Q4 2012: New tailing pumping system West Branch dump leach pads Interim water supply On-Site Power Plant Other non-process buildings • Permanent camp nearing completion and progress continues on power st
Slide 21: Mineral Reserve and Resource Update
AS AT DECEMBER 31, 2012 MINERAL RESERVE AND RESOURCE UPDATE(5) • Reductions to 2012 mineral reserve and resource estimates driven by: Maintaining the gold price assumption used for reserve and resource estimation in 2011 Continued cost escalation • Demonstrates commitment to higher quality, high
Slide 22: Glen Masterman, SVP Exploration & Chief Geoscientist
GLEN MASTERMAN SENIOR VICE-PRESIDENT, EXPLORATION & CHIEF GEOSCIENTIST 2222 www.kinross.com
Slide 23: Tasiast District Exploration
2012 EXPLORATION PROGRAM TASIAST DISTRICT EXPLORATION(6) • Drilling at step-out targets confirm presence of narrow, high- Fennec grade veins at C67, Fennec and C68 C67 C67 & FENNEC C68E C68W • Drilling at the Fennec target, 300 m northwest of C67 • Further drilling planned for Q1 2013 to assess size
Slide 24: Kupol-West Moroshka
2012 EXPLORATION PROGRAM KUPOL-WEST MOROSHKA(6) • Additional high-grade mineralization discovered at the Moroshka target Kupol located 5 km southeast of Kupol Moroshka trend (geochemistry) • Presence of high-grade mineralization Moroshka over a strike length of 300 metres and vein a vertical range o
Slide 25: Operating Mines in 4 Core Regions
KINROSS TODAY OPERATING MINES IN 4 CORE REGIONS • Diversified portfolio of assets located in some of the world’s best gold districts producing 2.4 – 2.6 mm oz. in 2013(4) RUSSIA 2013E: 505-535k oz. Kupol Fort Knox Kettle River - Buckhorn Round Mountain WEST AFRICA 2013E: 415-480k oz. FOUNDATION FOR
Slide 26: 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 75% of Kupol production up to April 27, 2011 (100% thereafter), and do not include productio
Slide 27: Kinross Gold Corporation
KINROSS GOLD CORPORATION 25 York Street, 17th Floor │Toronto, ON │ M5J 2V5 www.kinross.com 27 www.kinross.com