Kinross Gold Corporation (TSX: K, NYSE: KGC) today announced its
results for the third-quarter ended September 30, 2019.(This news
release contains forward-looking information about expected future
events and financial and operating performance of the Company. We
refer to the risks and assumptions set out in our Cautionary
Statement on Forward-Looking Information located on page 19 of this
release. All dollar amounts are expressed in U.S. dollars, unless
otherwise noted.)
2019 third-quarter highlights:
|
Q3 2019 results |
First nine months 2019
results |
2019 guidance |
Gold
equivalent production1(ounces) |
608,033 |
1,862,315 |
2.5 million (+/- 5%) |
Production cost of sales2 ($ per Au eq. oz.) |
$735 |
$692 |
$730 (+/- 5%) |
All-in sustaining cost2($ per Au eq.
oz.) |
$1,028 |
$958 |
$995 (+/- 5%) |
Capital expenditures |
$265.5 million |
$807.0 million |
$1,050 million (+/- 5%) |
- Kinross remains on track to
meet 2019 annual guidance for production, cost of sales
per ounce, all-in sustaining cost per ounce and capital
expenditures. The Company is tracking towards the lower end of its
2019 production cost of sales guidance and the higher end of its
capital expenditure guidance.
- Operating cash
flow of $231.7 million, an 82% increase over Q3 2018, with
adjusted operating cash flow2 more than doubling
to $295.4 million compared with Q3 2018.
- Reported net
earnings3 of $60.9 million, or $0.05 per share, and
adjusted net earnings2,3 of $104.0 million, or
$0.08 per share.
- Cash and cash
equivalents of $358.0 million and total
liquidity of approximately $1.8 billion at September 30,
2019, with no debt maturities until 2021.
Operations and organic development
projects highlights:
- Kinross’ three largest producing
mines – Paracatu, Kupol and
Tasiast – which accounted for 62% of total company
production, achieved the lowest costs in the portfolio for Q3 and
the first nine months of 2019.
- The Company approved the
value-enhancing Tasiast 24k project and announced
the acquisition of the high-quality Chulbatkan
development project during the quarter.-- Tasiast 24k project
work has commenced, with detailed engineering now 65%
complete.-- The Chulbatkan acquisition is progressing as
anticipated and is on track to close early next year.
- Construction and commissioning of
the Round Mountain Phase W and Bald
Mountain Vantage Complex projects have been completed.
Both projects have been handed over to their respective Operations
teams.
- The Fort Knox
Gilmore project is proceeding on schedule and on budget,
with initial stripping commencing during the quarter.
CEO CommentaryJ. Paul Rollinson, President and
CEO, made the following comments in relation to 2019 third-quarter
results:
“Our portfolio of mines continued to perform
well during the third quarter, delivering higher production, lower
costs and more than doubling adjusted operating cash flow compared
with the same period last year. Paracatu, Kupol and Tasiast, our
largest producing mines, once again achieved our lowest costs. We
remain on track to meet our annual production guidance, and given
strong results year-to-date, are tracking towards the low end of
our cost of sales guidance.
“During the quarter, we announced we were
proceeding with the Tasiast 24k project and the acquisition of the
Chulbatkan project, two exciting opportunities that are expected to
add significant value to our Company. Tasiast 24k is expected to
generate strong free cash flow, attractive returns and further
unlock the mine’s substantial value, while Chulbatkan adds a
high-quality asset with upside potential to our project
pipeline.
“In our Americas region, we are making excellent
progress in advancing our projects. We completed the construction
and commissioning of both our Nevada projects, started stripping at
the Fort Knox Gilmore project and are targeting completion of the
La Coipa feasibility study in February.”
Financial results
Summary of financial and operating
results
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Three months ended |
Nine months ended |
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September 30, |
September 30, |
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(in millions, except ounces, per share amounts, and per ounce
amounts) |
2019 |
2018 |
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2019 |
2018 |
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Operating Highlights |
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Total gold equivalent ounces(1) |
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Produced(3) |
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612,697 |
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591,928 |
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1,877,546 |
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1,859,789 |
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Sold(3) |
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597,635 |
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623,854 |
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1,841,841 |
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1,891,811 |
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Attributable gold equivalent ounces(1) |
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Produced(3) |
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608,033 |
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586,260 |
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1,862,315 |
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1,842,246 |
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Sold(3) |
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592,689 |
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618,463 |
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1,826,373 |
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1,874,236 |
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Financial Highlights |
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Metal sales |
$ |
877.1 |
$ |
753.9 |
|
$ |
2,501.1 |
$ |
2,426.1 |
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Production cost of sales |
$ |
440.6 |
$ |
484.6 |
|
$ |
1,278.4 |
$ |
1,384.1 |
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Depreciation, depletion and amortization |
$ |
176.9 |
$ |
204.7 |
|
$ |
520.9 |
$ |
588.1 |
|
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Operating earnings (loss) |
$ |
162.6 |
$ |
(48.8 |
) |
$ |
422.3 |
$ |
175.4 |
|
|
Net earnings (loss) attributable to common shareholders |
$ |
60.9 |
$ |
(104.4 |
) |
$ |
197.1 |
$ |
4.1 |
|
|
Basic earnings (loss) per share attributable to common
shareholders |
$ |
0.05 |
$ |
(0.08 |
) |
$ |
0.16 |
$ |
0.00 |
|
|
Diluted earnings (loss) per share attributable to common
shareholders |
$ |
0.05 |
$ |
(0.08 |
) |
$ |
0.16 |
$ |
0.00 |
|
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Adjusted net earnings (loss) attributable to common
shareholders(2) |
$ |
104.0 |
$ |
(48.4 |
) |
$ |
266.9 |
$ |
114.6 |
|
|
Adjusted net earnings (loss) per share(2) |
$ |
0.08 |
$ |
(0.04 |
) |
$ |
0.21 |
$ |
0.09 |
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|
Net cash flow provided from operating activities |
$ |
231.7 |
$ |
127.2 |
|
$ |
816.3 |
$ |
605.2 |
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Adjusted operating cash flow(2) |
$ |
295.4 |
$ |
143.2 |
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$ |
813.9 |
$ |
738.4 |
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Capital expenditures |
$ |
265.5 |
$ |
276.4 |
|
$ |
807.0 |
$ |
770.4 |
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Average realized gold price per ounce(2) |
$ |
1,467 |
$ |
1,209 |
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$ |
1,358 |
$ |
1,283 |
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Consolidated production cost of sales per equivalent ounce(3)
sold(2) |
$ |
737 |
$ |
777 |
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$ |
694 |
$ |
732 |
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Attributable(1) production cost of sales per equivalent ounce(3)
sold(2) |
$ |
735 |
$ |
777 |
|
$ |
692 |
$ |
731 |
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|
Attributable(1) production cost of sales per ounce sold on a
by-product basis(2) |
$ |
716 |
$ |
768 |
|
$ |
677 |
$ |
719 |
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Attributable(1) all-in sustaining cost per ounce sold on a
by-product basis(2) |
$ |
1,016 |
$ |
1,046 |
|
$ |
949 |
$ |
960 |
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Attributable(1) all-in sustaining cost per equivalent ounce(3)
sold(2) |
$ |
1,028 |
$ |
1,049 |
|
$ |
958 |
$ |
967 |
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Attributable(1) all-in cost per ounce sold on a by-product
basis(2) |
$ |
1,305 |
$ |
1,360 |
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$ |
1,261 |
$ |
1,270 |
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Attributable(1) all-in cost per equivalent ounce(3) sold(2) |
$ |
1,309 |
$ |
1,356 |
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$ |
1,264 |
$ |
1,270 |
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(1) |
"Total" includes 100%
of Chirano production. "Attributable" includes Kinross' share of
Chirano (90%) production. |
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(2) |
The definition and
reconciliation of these non-GAAP financial measures is included on
pages 13 to 18 of this news release. |
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(3) |
“Gold equivalent
ounces” include silver ounces produced and sold converted to a gold
equivalent based on a ratio of the average spot market prices for
the commodities for each period. The ratio for the third quarter of
2019 was 86.73:1 (third quarter of 2018 - 80.80:1). The ratio for
the first nine months of 2019 was 86.13:1 (first nine months of
2018 - 79.65:1). |
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The following operating and financial results
are based on third-quarter 2019 gold equivalent production.
Production and cost measures are on an attributable basis:
Production: Kinross produced
608,033 attributable Au eq. oz. in Q3 2019, compared with 586,260
Au eq. oz. in Q3 2018.
Production cost of sales:
Production cost of sales per Au eq. oz.2 decreased to $735 in Q3
2019, compared with $777 for Q3 2018, mainly due to lower costs at
Paracatu, Tasiast and Kupol. Production cost of sales per Au oz. on
a by-product basis2 was $716 in Q3 2019, compared with $768 in Q3
2018, based on Q3 2019 attributable gold sales of 577,691 ounces
and attributable silver sales of 1,300,693 ounces.
All-in sustaining cost: All-in
sustaining cost per Au eq. oz. sold2 was $1,028 in Q3 2019,
compared with $1,049 in Q3 2018. All-in sustaining cost per Au oz.
sold on a by-product basis2 was $1,016 in Q3 2019, compared with
$1,046 in Q3 2018.
Revenue: Revenue from metal
sales increased to $877.1 million in Q3 2019, compared with $753.9
million during the same period in 2018, due to a higher average
realized gold price.
Average realized gold price4:
The average realized gold price in Q3 2019 was $1,467 per ounce, a
21% increase compared with $1,209 per ounce in Q3 2018.
Margins: Kinross’ attributable
margin per Au eq. oz. sold5 increased by 69% to $732 for Q3 2019,
compared with the Q3 2018 margin of $432 per Au eq. oz. sold, due
to an increase in average realized gold price and lower cost of
sales per ounce.
Operating cash flow: Adjusted
operating cash flow2 in Q3 2019 more than doubled to $295.4
million, compared with $143.2 million for Q3 2018, primarily due to
the increase in margins.
Net operating cash flow was $231.7 million for
Q3 2019, an 82% increase compared with $127.2 million for Q3
2018.
Earnings/loss: Adjusted net
earnings2,3 increased to $104.0 million, or $0.08 per share, for Q3
2019, compared with adjusted net loss2,3 of $48.4 million, or $0.04
per share, for Q3 2018.
Reported net earnings3 increased to $60.9
million, or $0.05 per share, for Q3 2019, compared with a net loss3
of $104.4 million, or $0.08 per share, in Q3 2018. The increase was
primarily a result of higher operating earnings, largely due to an
increase in margins and a decrease in depreciation, depletion and
amortization, partially offset by an increase in income tax
expense.
Capital expenditures: Capital
expenditures was $265.5 million for Q3 2019, compared with $276.4
million for the same period last year, mainly due to decreased
spending at Tasiast and Kupol, partially offset by increases at
Paracatu and Fort Knox.
Operating results Mine-by-mine summaries for Q3
2019 operating results may be found on pages eight and 12 of this
news release. Highlights include the following:
Americas
Paracatu continued to perform
well during the quarter, with production and cost of sales per
ounce sold both improving compared with the same period in 2018.
The mine continues to benefit from the more efficient operation of
the mill, and improved throughput and recovery. Production
decreased and cost of sales per ounce sold increased compared with
last quarter’s record results mainly due to the expected decrease
in grade.
At Round Mountain, production
was lower compared with the previous quarter and year mainly due to
the timing of ounces recovered from the heap leach pads and lower
mill grades. Production is expected to improve in Q4 2019 as
recoveries from the pads are expected to increase. Cost of sales
per ounce sold was largely in line year-over-year and was higher
quarter-over-quarter mainly due to higher processing costs and less
ounces recovered from the heap leach pads.
At Bald Mountain, production
was lower compared with the previous quarter and year mainly due to
the slower than expected ramp up at the Vantage Complex. Fewer
ounces were recovered from the heap leach pads, including from the
recently completed Vantage Complex pad, which also contributed to
the lower production. Cost of sales per ounce sold decreased
quarter-over-quarter mostly due to timing of ounces recovered from
the heap leach pads, and increased year-over-year mainly due to
fewer ounces recovered from the pads. Production is expected to
increase in Q4 2019, with costs expected to decrease, as the
Vantage Complex project continues to ramp up.
At Fort Knox, production was
largely in line with the previous quarter, and was higher compared
with the same period in 2018 mainly due to an increase in ounces
recovered from the heap leach pads and higher mill grades,
partially offset by a planned decrease in mill throughput. Cost of
sales per ounce sold increased compared with Q2 2019 and Q3 2018
mainly due to a larger proportion of production from the heap leach
pads, a planned mill liner replacement during the quarter and
higher maintenance costs.
At Maricunga, the rinsing of
heap materials placed on the pads prior to the suspension of mining
activities and the timing of ounces recovered from the pads
resulted in better than expected production during the quarter.
Cost of sales per ounce sold decreased compared with the previous
quarter mainly due to lower processing costs. Final Maricunga
production is expected in Q4 2019, as the mine transitions to care
and maintenance. For tax planning purposes, the sale of residual
gold ounces are expected to continue after the closure of the
mine.
Russia
Kupol and
Dvoinoye continued to achieve strong results with
production increasing quarter-over-quarter and year-over-year
mainly due to higher grades. Cost of sales per ounce sold increased
compared with the previous quarter mainly due to the timing of ore
processed through the mill, and was lower compared with Q3 2018
primarily as a result of higher grades.
West Africa
Tasiast’s strong performance
continued during the third quarter, with production increasing
slightly compared with the previous quarter mainly due to the
planned mining of higher grade ore. Cost of sales per ounce sold
was higher quarter-over-quarter primarily due to increased
maintenance costs. Production and cost of sales per ounce sold both
improved significantly year-over-year as a result of the benefits
realized from the Phase One expansion, which was completed in the
third quarter of 2018.
At Chirano, lower mill
throughput was the main contributor to the decrease in production
compared with Q2 2019 and Q3 2018. Cost of sales per ounce sold was
higher quarter-over-quarter and year-over-year mainly due to an
increase in operating waste mined associated with the return to
open pit mining.
Organic development projects and
opportunities
Tasiast 24k
On September 15, 2019, Kinross announced it was
proceeding with the Tasiast 24k project to incrementally increase
throughput capacity at the mine to 24,000 tonnes per day (t/d).
Initial work has commenced at the project,
including mobilization of construction teams to begin work on
additional onsite power generation and water supply. Detailed
engineering is 65% complete and several contracts and work packages
have been awarded. Stripping has ramped up, as the project is
expected to increase throughput to 21,000 t/d by the end of 2021,
and then to 24,000 t/d by mid-2023. In October 2019 the Company
also finalized a new three-year collective labour agreement with
unionized employees at Tasiast.
The Company remains on schedule to complete the
$300 million project financing for Tasiast from the International
Finance Corporation (IFC), Export Development Canada (EDC), and two
commercial banks before year end. While the financing remains
subject to completion of documentation and all lenders obtaining
final approvals, a key step was completed in October 2019 with the
IFC obtaining Board approval.
Round Mountain Phase W
Construction and commissioning of the Round
Mountain Phase W project have been completed, with the project now
fully transferred to the Operations team. Stripping and dewatering
activities continue to progress well and are expected to continue
until late 2020.
Bald Mountain Vantage
Complex
Construction and commissioning of the Bald
Mountain Vantage Complex project have been completed, with the
project now fully transferred to the Operations team.
Weather-related issues impacted project timing and ramp up of
production, as the heap leach pad was only fully completed in
September 2019.
Fort Knox Gilmore
The Fort Knox Gilmore project is progressing on
schedule and on budget, with heap leach construction
approximately 50% complete and dewatering activities planned
for 2019 now completed. Heap leach construction and dewatering will
re-commence in the spring of 2020. Stripping for the initial
project pushback commenced in the third quarter and is expected to
continue throughout 2020, with initial Gilmore ore expected to be
encountered later this year, ahead of schedule. Approximately 5% of
Gilmore ore is expected to be stacked on the existing Walter Creek
pad in early 2020, and 95% of Gilmore ore is expected to be stacked
on the new Barnes Creek heap leach pad, with stacking scheduled to
begin in late 2020.
La Coipa Restart and
Lobo-Marte
The La Coipa Restart project feasibility study
is now scheduled to be completed early next year, with study
results expected to be released in February 2020. The timing of the
completion of the feasibility study is not expected to have an
impact on the overall project timeline. The Lobo-Marte project
pre-feasibility study is progressing and is on schedule to be
completed in mid-2020. Both studies are evaluating the potential
for a return to long-term production in Chile based on the concept
of commencing Lobo-Marte production following the end of La Coipa’s
mine life.
Chulbatkan
On July 31, 2019, the Company announced the
acquisition of the high-quality Chulbatkan development project
located in the Chukotka region of Russia. The acquisition is
progressing as anticipated and is on track to close early next
year. On October 18, 2019, the Company was pleased to receive a
timely anti-monopoly approval from the Russian regulators.
Balance sheet and financial
flexibility
As of September 30, 2019, Kinross had cash and
cash equivalents of $358.0 million, compared with $349.0 million at
December 31, 2018.
The Company also had available credit of
$1,452.2 million, for total liquidity of approximately $1.8
billion, and no debt maturities until September 2021.
On October 11, 2019, Moody’s revised its outlook
for Kinross to positive from stable and reaffirmed its Ba1
rating.
OutlookThe following section of the news
release represents forward-looking information and users are
cautioned that actual results may vary. We refer to the risks and
assumptions contained in the Cautionary Statement on
Forward-Looking Information on page 19 of this news release.
Kinross is on track to meet its production
guidance of 2.5 million Au eq. oz. (+/- 5%) and all-in sustaining
cost guidance of $995 per Au eq. oz. (+/-5%) for 2019.
The Company is tracking towards the lower end of
its 2019 production cost of sales guidance of $730 per Au eq. oz.
(+/- 5%) and the higher end of its capital expenditure guidance of
$1,050 million (+/-5%).
The Company now expects its income tax expense
to be in the range of $175 - $195 million on an adjusted basis. The
change in forecasted tax expense from the previous guidance is
primarily a result of stronger gold prices and production mix.
Board update
The Board of Directors of Kinross has appointed
Ms. Elizabeth McGregor, CPA, CA as a Director. Ms. McGregor has
almost 20 years of financial experience and over 10 years of
experience in the mining sector. She was most recently the
Executive Vice-President and Chief Financial Officer of Tahoe
Resources Inc. and was previously at Goldcorp and KPMG earlier in
her career. Ms. McGregor has a wide variety of executive financial
experience, including debt financing, stakeholder management, board
reporting, and corporate, mine site and project management
experience. She has a B.A. (Hons) from Queen’s University and is a
Canadian Chartered Professional Accountant.
Conference call details
In connection with the release, Kinross will
hold a conference call and audio webcast on Thursday, November 7,
2019 at 8:00 a.m. ET. to discuss the results, followed by a
question-and-answer session. To access the call, please dial:
Canada & US toll-free –
(877) 201-0168; Conference ID: 9089414Outside of Canada
& US – +1 (647) 788-4901; Conference ID: 9089414
Replay (available up to 14 days after the
call):
Canada & US toll-free –
(800) 585-8367; Conference ID: 9089414Outside of Canada
& US – +1 (416) 621-4642; Conference ID: 9089414
You may also access the conference call on a
listen-only basis via webcast at our website www.kinross.com. The
audio webcast will be archived on www.kinross.com.
This news release should be read in conjunction
with Kinross’ 2019 third-quarter unaudited Financial Statements and
Management’s Discussion and Analysis report at www.kinross.com.
Kinross’ 2019 third-quarter unaudited Financial Statements and
Management’s Discussion and Analysis have been filed with Canadian
securities regulators (available at www.sedar.com) and furnished to
the U.S. Securities and Exchange Commission (available at
www.sec.gov). Kinross shareholders may obtain a copy of the
financial statements free of charge upon request to the
Company.
About Kinross Gold
Corporation
Kinross is a Canadian-based senior gold mining
company with mines and projects in the United States, Brazil,
Russia, Mauritania, Chile and Ghana. Kinross maintains listings on
the Toronto Stock Exchange (symbol:K) and the New York Stock
Exchange (symbol:KGC).
Media Contact Louie DiazSenior
Director, Corporate Communicationsphone:
416-369-6469louie.diaz@kinross.com
Investor Relations ContactTom
Elliott
Senior Vice-President, Investor Relations and Corporate
Developmentphone:
416-365-3390
tom.elliott@kinross.com
Review of operations
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Three months ended September 30, |
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Gold equivalent ounces |
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Produced |
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Sold |
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Production cost of sales ($millions) |
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Production cost of sales/equivalent ounce
sold |
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2019 |
2018 |
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2019 |
2018 |
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2019 |
2018 |
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2019 |
2018 |
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Fort Knox |
54,027 |
|
51,984 |
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|
51,606 |
|
52,197 |
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$ |
58.3 |
|
$ |
53.0 |
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$ |
1,130 |
$ |
1,015 |
Round Mountain |
82,195 |
|
94,153 |
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|
81,617 |
|
96,496 |
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|
57.5 |
|
|
69.0 |
|
|
|
705 |
|
715 |
Bald Mountain |
33,995 |
|
72,560 |
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|
37,644 |
|
90,931 |
|
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|
30.6 |
|
|
53.4 |
|
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|
813 |
|
587 |
Kettle River - Buckhorn |
- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
Paracatu |
146,396 |
|
126,515 |
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|
145,662 |
|
125,700 |
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|
99.5 |
|
|
97.6 |
|
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|
683 |
|
776 |
Maricunga |
18,016 |
|
10,808 |
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|
9,203 |
|
30,442 |
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|
7.0 |
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|
22.4 |
|
|
|
761 |
|
736 |
Americas Total |
334,629 |
|
356,020 |
|
|
325,732 |
|
395,766 |
|
|
|
252.9 |
|
|
295.4 |
|
|
|
776 |
|
746 |
|
|
|
|
|
|
|
|
|
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|
|
Kupol |
137,562 |
|
125,870 |
|
|
136,088 |
|
123,624 |
|
|
|
82.6 |
|
|
81.3 |
|
|
|
607 |
|
658 |
Russia Total |
137,562 |
|
125,870 |
|
|
136,088 |
|
123,624 |
|
|
|
82.6 |
|
|
81.3 |
|
|
|
607 |
|
658 |
|
|
|
|
|
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|
Tasiast |
93,865 |
|
53,363 |
|
|
86,357 |
|
50,549 |
|
|
|
55.1 |
|
|
66.2 |
|
|
|
638 |
|
1,310 |
Chirano (100%) |
46,641 |
|
56,675 |
|
|
49,458 |
|
53,915 |
|
|
|
50.0 |
|
|
41.7 |
|
|
|
1,011 |
|
773 |
West Africa Total |
140,506 |
|
110,038 |
|
|
135,815 |
|
104,464 |
|
|
|
105.1 |
|
|
107.9 |
|
|
|
774 |
|
1,033 |
|
|
|
|
|
|
|
|
|
|
|
|
Operations Total |
612,697 |
|
591,928 |
|
|
597,635 |
|
623,854 |
|
|
|
440.6 |
|
|
484.6 |
|
|
|
737 |
|
777 |
Less Chirano non-controlling interest (10%) |
(4,664 |
) |
(5,668 |
) |
|
(4,946 |
) |
(5,391 |
) |
|
|
(5.0 |
) |
|
(4.2 |
) |
|
|
|
Attributable Total |
608,033 |
|
586,260 |
|
|
592,689 |
|
618,463 |
|
|
$ |
435.6 |
|
$ |
480.4 |
|
|
$ |
735 |
$ |
777 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, |
|
Gold equivalent ounces |
|
|
|
|
|
|
|
|
Produced |
|
Sold |
|
Production cost of sales ($millions) |
|
Production cost of sales/equivalent ounce
sold |
|
2019 |
2018 |
|
2019 |
2018 |
|
2019 |
2018 |
|
2019 |
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
Fort Knox |
147,080 |
|
203,375 |
|
|
145,283 |
|
204,148 |
|
|
$ |
147.8 |
|
$ |
165.3 |
|
|
$ |
1,017 |
$ |
810 |
Round Mountain |
258,163 |
|
288,886 |
|
|
252,337 |
|
289,709 |
|
|
|
171.3 |
|
|
207.6 |
|
|
|
679 |
|
717 |
Bald Mountain |
121,814 |
|
237,435 |
|
|
112,421 |
|
249,803 |
|
|
|
86.8 |
|
|
127.2 |
|
|
|
772 |
|
509 |
Kettle River - Buckhorn |
- |
|
- |
|
|
- |
|
927 |
|
|
|
- |
|
|
- |
|
|
|
- |
|
- |
Paracatu |
479,339 |
|
375,941 |
|
|
478,579 |
|
371,022 |
|
|
|
301.2 |
|
|
313.9 |
|
|
|
629 |
|
846 |
Maricunga |
35,380 |
|
52,840 |
|
|
26,301 |
|
70,560 |
|
|
|
19.8 |
|
|
49.6 |
|
|
|
753 |
|
703 |
Americas Total |
1,041,776 |
|
1,158,477 |
|
|
1,014,921 |
|
1,186,169 |
|
|
|
726.9 |
|
|
863.6 |
|
|
|
716 |
|
728 |
|
|
|
|
|
|
|
|
|
|
|
|
Kupol |
395,334 |
|
366,469 |
|
|
391,375 |
|
370,427 |
|
|
|
230.8 |
|
|
219.5 |
|
|
|
590 |
|
593 |
Russia Total |
395,334 |
|
366,469 |
|
|
391,375 |
|
370,427 |
|
|
|
230.8 |
|
|
219.5 |
|
|
|
590 |
|
593 |
|
|
|
|
|
|
|
|
|
|
|
|
Tasiast |
288,124 |
|
159,417 |
|
|
280,863 |
|
159,461 |
|
|
|
180.0 |
|
|
167.8 |
|
|
|
641 |
|
1,052 |
Chirano (100%) |
152,312 |
|
175,426 |
|
|
154,682 |
|
175,754 |
|
|
|
140.7 |
|
|
133.2 |
|
|
|
910 |
|
758 |
West Africa Total |
440,436 |
|
334,843 |
|
|
435,545 |
|
335,215 |
|
|
|
320.7 |
|
|
301.0 |
|
|
|
736 |
|
898 |
|
|
|
|
|
|
|
|
|
|
|
|
Operations Total |
1,877,546 |
|
1,859,789 |
|
|
1,841,841 |
|
1,891,811 |
|
|
|
1,278.4 |
|
|
1,384.1 |
|
|
|
694 |
|
732 |
Less Chirano non-controlling interest (10%) |
(15,231 |
) |
(17,543 |
) |
|
(15,468 |
) |
(17,575 |
) |
|
|
(14.1 |
) |
|
(13.3 |
) |
|
|
|
Attributable Total |
1,862,315 |
|
1,842,246 |
|
|
1,826,373 |
|
1,874,236 |
|
|
$ |
1,264.3 |
|
$ |
1,370.8 |
|
|
$ |
692 |
$ |
731 |
Interim condensed consolidated balance
sheets
|
|
|
|
|
|
|
|
(unaudited
expressed in millions of United States dollars, except share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at |
|
|
|
|
September
30, |
|
December 31, |
|
|
|
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
358.0 |
|
|
$ |
349.0 |
|
|
|
Restricted cash |
|
|
12.9 |
|
|
|
12.7 |
|
|
|
Accounts receivable and other assets |
|
|
174.4 |
|
|
|
101.4 |
|
|
|
Current income tax recoverable |
|
|
40.0 |
|
|
|
79.0 |
|
|
|
Inventories |
|
|
1,033.6 |
|
|
|
1,052.0 |
|
|
|
Unrealized fair value of derivative assets |
|
|
5.7 |
|
|
|
3.8 |
|
|
|
|
|
|
1,624.6 |
|
|
|
1,597.9 |
|
|
|
Non-current assets |
|
|
|
|
|
|
Property, plant and equipment |
|
|
5,852.7 |
|
|
|
5,519.1 |
|
|
|
Goodwill |
|
|
158.8 |
|
|
|
162.7 |
|
|
|
Long-term investments |
|
|
181.1 |
|
|
|
155.9 |
|
|
|
Investments in joint ventures |
|
|
18.3 |
|
|
|
18.3 |
|
|
|
Unrealized fair value of derivative assets |
|
|
0.5 |
|
|
|
0.8 |
|
|
|
Other long-term assets |
|
|
577.1 |
|
|
|
564.1 |
|
|
|
Deferred tax assets |
|
|
30.9 |
|
|
|
45.0 |
|
|
|
Total assets |
|
$ |
8,444.0 |
|
|
$ |
8,063.8 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
466.2 |
|
|
$ |
465.9 |
|
|
|
Current income tax payable |
|
|
74.1 |
|
|
|
21.7 |
|
|
|
Current portion of provisions |
|
|
38.6 |
|
|
|
72.6 |
|
|
|
Other current liabilities |
|
|
19.8 |
|
|
|
52.2 |
|
|
|
|
|
|
598.7 |
|
|
|
612.4 |
|
|
|
Non-current liabilities |
|
|
|
|
|
|
Long-term debt and credit facilities |
|
|
1,836.8 |
|
|
|
1,735.0 |
|
|
|
Provisions |
|
|
837.7 |
|
|
|
816.4 |
|
|
|
Long-term lease liabilities |
|
|
37.2 |
|
|
|
- |
|
|
|
Unrealized fair value of derivative liabilities |
|
|
4.3 |
|
|
|
9.6 |
|
|
|
Other long-term liabilities |
|
|
102.0 |
|
|
|
97.9 |
|
|
|
Deferred tax liabilities |
|
|
241.5 |
|
|
|
265.2 |
|
|
|
Total liabilities |
|
|
3,658.2 |
|
|
|
3,536.5 |
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Common shareholders' equity |
|
|
|
|
|
|
Common share capital |
|
$ |
14,925.0 |
|
|
$ |
14,913.4 |
|
|
|
Contributed surplus |
|
|
239.1 |
|
|
|
239.8 |
|
|
|
Accumulated deficit |
|
|
(10,350.9 |
) |
|
|
(10,548.0 |
) |
|
|
Accumulated other comprehensive income (loss) |
|
|
(47.4 |
) |
|
|
(98.5 |
) |
|
|
Total common shareholders' equity |
|
|
4,765.8 |
|
|
|
4,506.7 |
|
|
|
Non-controlling interest |
|
|
20.0 |
|
|
|
20.6 |
|
|
|
Total equity |
|
|
4,785.8 |
|
|
|
4,527.3 |
|
|
|
Total liabilities and equity |
|
$ |
8,444.0 |
|
|
$ |
8,063.8 |
|
|
|
|
|
|
|
|
|
|
Common shares |
|
|
|
|
|
|
Authorized |
|
Unlimited |
|
|
Unlimited |
|
|
|
Issued and outstanding |
|
|
1,253,516,770 |
|
|
|
1,250,228,821 |
|
|
|
|
|
|
|
|
|
Interim condensed consolidated statements of
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited expressed in millions of United States dollars, except
share and per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Nine months ended |
|
|
|
|
|
September
30, |
|
September 30, |
|
September
30, |
|
September 30, |
|
|
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
Metal sales |
|
$ |
877.1 |
|
|
$ |
753.9 |
|
|
$ |
2,501.1 |
|
|
$ |
2,426.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
|
|
|
|
|
|
|
|
|
Production cost of sales |
|
|
440.6 |
|
|
|
484.6 |
|
|
|
1,278.4 |
|
|
|
1,384.1 |
|
|
|
|
Depreciation, depletion and amortization |
|
|
176.9 |
|
|
|
204.7 |
|
|
|
520.9 |
|
|
|
588.1 |
|
|
|
|
Total cost of sales |
|
|
617.5 |
|
|
|
689.3 |
|
|
|
1,799.3 |
|
|
|
1,972.2 |
|
|
|
|
Gross profit |
|
|
259.6 |
|
|
|
64.6 |
|
|
|
701.8 |
|
|
|
453.9 |
|
|
|
|
Other operating expense |
|
|
29.1 |
|
|
|
46.7 |
|
|
|
91.5 |
|
|
|
101.5 |
|
|
|
|
Exploration and business development |
|
|
35.6 |
|
|
|
32.5 |
|
|
|
83.5 |
|
|
|
76.8 |
|
|
|
|
General and administrative |
|
|
32.3 |
|
|
|
34.2 |
|
|
|
104.5 |
|
|
|
100.2 |
|
|
|
|
Operating earnings (loss) |
|
|
162.6 |
|
|
|
(48.8 |
) |
|
|
422.3 |
|
|
|
175.4 |
|
|
|
|
Other income (expense) - net |
|
|
5.2 |
|
|
|
(2.6 |
) |
|
|
5.3 |
|
|
|
5.1 |
|
|
|
|
Equity in (losses) earnings of joint ventures |
|
|
- |
|
|
|
(0.2 |
) |
|
|
0.1 |
|
|
|
(0.4 |
) |
|
|
|
Finance income |
|
|
2.3 |
|
|
|
2.5 |
|
|
|
6.3 |
|
|
|
9.1 |
|
|
|
|
Finance expense |
|
|
(23.8 |
) |
|
|
(22.1 |
) |
|
|
(77.4 |
) |
|
|
(73.7 |
) |
|
|
|
Earnings (loss) before tax |
|
|
146.3 |
|
|
|
(71.2 |
) |
|
|
356.6 |
|
|
|
115.5 |
|
|
|
|
Income tax expense - net |
|
|
(85.5 |
) |
|
|
(34.1 |
) |
|
|
(160.1 |
) |
|
|
(112.5 |
) |
|
|
|
Net earnings (loss) |
|
$ |
60.8 |
|
|
$ |
(105.3 |
) |
|
$ |
196.5 |
|
|
$ |
3.0 |
|
|
|
|
Net earnings (loss) attributable to: |
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interest |
|
$ |
(0.1 |
) |
|
$ |
(0.9 |
) |
|
$ |
(0.6 |
) |
|
$ |
(1.1 |
) |
|
|
|
Common shareholders |
|
$ |
60.9 |
|
|
$ |
(104.4 |
) |
|
$ |
197.1 |
|
|
$ |
4.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to common
shareholders |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.05 |
|
|
$ |
(0.08 |
) |
|
$ |
0.16 |
|
|
$ |
0.00 |
|
|
|
|
Diluted |
|
$ |
0.05 |
|
|
$ |
(0.08 |
) |
|
$ |
0.16 |
|
|
$ |
0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding
(millions) |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
1,252.8 |
|
|
|
1,250.2 |
|
|
|
1,251.9 |
|
|
|
1,249.2 |
|
|
|
|
Diluted |
|
|
1,263.9 |
|
|
|
1,250.2 |
|
|
|
1,261.7 |
|
|
|
1,258.7 |
|
|
|
Interim condensed consolidated statements of cash
flows
|
(unaudited
expressed in millions of United States dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Nine months ended |
|
|
|
|
|
September
30, |
|
September 30, |
|
September
30, |
|
September 30, |
|
|
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
Net inflow (outflow) of cash related to the following
activities: |
|
|
|
|
|
|
|
|
|
|
|
Operating: |
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) |
|
$ |
60.8 |
|
|
$ |
(105.3 |
) |
|
$ |
196.5 |
|
|
$ |
3.0 |
|
|
|
|
Adjustments to reconcile net earnings (loss) to net cash provided
from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
176.9 |
|
|
|
204.7 |
|
|
|
520.9 |
|
|
|
588.1 |
|
|
|
|
Equity in losses (earnings) of joint ventures |
|
|
- |
|
|
|
0.2 |
|
|
|
(0.1 |
) |
|
|
0.4 |
|
|
|
|
Share-based compensation expense |
|
|
3.3 |
|
|
|
3.7 |
|
|
|
10.9 |
|
|
|
11.2 |
|
|
|
|
Finance expense |
|
|
23.8 |
|
|
|
22.1 |
|
|
|
77.4 |
|
|
|
73.7 |
|
|
|
|
Deferred tax expense (recovery) |
|
|
15.3 |
|
|
|
7.8 |
|
|
|
(16.1 |
) |
|
|
35.1 |
|
|
|
|
Foreign exchange (gains) losses and other |
|
|
(1.4 |
) |
|
|
10.0 |
|
|
|
7.7 |
|
|
|
26.9 |
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable and other assets |
|
|
(76.2 |
) |
|
|
(74.0 |
) |
- |
|
(101.9 |
) |
|
|
(118.1 |
) |
|
|
|
Inventories |
|
|
(40.5 |
) |
|
|
15.9 |
|
|
|
9.5 |
|
|
|
14.1 |
|
|
|
|
Accounts payable and accrued liabilities |
|
|
131.6 |
|
|
|
65.0 |
|
|
|
174.0 |
|
|
|
49.0 |
|
|
|
|
Cash flow provided from operating activities |
|
|
293.6 |
|
|
|
150.1 |
|
|
|
878.8 |
|
|
|
683.4 |
|
|
|
|
Income taxes paid |
|
|
(61.9 |
) |
|
|
(22.9 |
) |
|
|
(62.5 |
) |
|
|
(78.2 |
) |
|
|
|
Net cash flow provided from operating
activities |
|
|
231.7 |
|
|
|
127.2 |
|
|
|
816.3 |
|
|
|
605.2 |
|
|
|
|
Investing: |
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and equipment |
|
|
(265.5 |
) |
|
|
(276.4 |
) |
|
|
(807.0 |
) |
|
|
(770.4 |
) |
|
|
|
Acquisitions |
|
|
- |
|
|
|
(253.7 |
) |
|
|
(30.0 |
) |
|
|
(288.8 |
) |
|
|
|
Net additions to long-term investments and other assets |
|
|
(0.6 |
) |
|
|
(6.0 |
) |
|
|
(12.9 |
) |
|
|
(36.2 |
) |
|
|
|
Net proceeds from the sale of property, plant and equipment |
|
|
0.8 |
|
|
|
0.8 |
|
|
|
2.9 |
|
|
|
4.8 |
|
|
|
|
Decrease (increase) in restricted cash |
|
|
0.6 |
|
|
|
(0.3 |
) |
|
|
(0.2 |
) |
|
|
(0.4 |
) |
|
|
|
Interest received and other |
|
|
1.1 |
|
|
|
1.5 |
|
|
|
3.2 |
|
|
|
6.5 |
|
|
|
|
Net cash flow used in investing activities |
|
|
(263.6 |
) |
|
|
(534.1 |
) |
|
|
(844.0 |
) |
|
|
(1,084.5 |
) |
|
|
|
Financing: |
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from issuance/drawdown of debt |
|
|
40.0 |
|
|
|
80.0 |
|
|
|
300.0 |
|
|
|
80.0 |
|
|
|
|
Repayment of debt |
|
|
(95.0 |
) |
|
|
(80.0 |
) |
|
|
(200.0 |
) |
|
|
(80.0 |
) |
|
|
|
Payment of lease liabilities |
|
|
(3.2 |
) |
|
|
- |
|
|
|
(10.4 |
) |
|
|
- |
|
|
|
|
Interest paid |
|
|
(26.6 |
) |
|
|
(27.8 |
) |
|
|
(55.0 |
) |
|
|
(57.8 |
) |
|
|
|
Dividend paid to non-controlling interest |
|
|
- |
|
|
|
(13.0 |
) |
|
|
- |
|
|
|
(13.0 |
) |
|
|
|
Other |
|
|
1.0 |
|
|
|
(1.8 |
) |
|
|
0.8 |
|
|
|
(1.4 |
) |
|
|
|
Net cash flow (used in) provided from financing
activities |
|
|
(83.8 |
) |
|
|
(42.6 |
) |
|
|
35.4 |
|
|
|
(72.2 |
) |
|
|
|
Effect of exchange rate changes on cash and cash
equivalents |
|
|
(1.7 |
) |
|
|
0.9 |
|
|
|
1.3 |
|
|
|
(4.2 |
) |
|
|
|
(Decrease) increase in cash and cash
equivalents |
|
|
(117.4 |
) |
|
|
(448.6 |
) |
|
|
9.0 |
|
|
|
(555.7 |
) |
|
|
|
Cash and cash equivalents, beginning of
period |
|
|
475.4 |
|
|
|
918.7 |
|
|
|
349.0 |
|
|
|
1,025.8 |
|
|
|
|
Cash and cash equivalents, end of period |
|
$ |
358.0 |
|
|
$ |
470.1 |
|
|
$ |
358.0 |
|
|
$ |
470.1 |
|
|
|
Operating Summary |
|
|
|
Mine |
Period |
Ownership |
Tonnes Ore Mined (1) |
Ore Processed (Milled) (1) |
Ore Processed (Heap Leach)
(1) |
Grade (Mill) |
Grade (Heap Leach) |
Recovery (2) |
Gold Eq Production (5) |
Gold Eq Sales (5) |
Production cost of sales |
Production cost of sales/oz |
Cap Ex (7) |
DD&A |
|
|
|
|
(%) |
('000 tonnes) |
('000 tonnes) |
('000 tonnes) |
(g/t) |
(g/t) |
(%) |
(ounces) |
(ounces) |
($ millions) |
($/ounce) |
($ millions) |
($ millions) |
|
Americas |
Fort Knox |
Q3 2019 |
100 |
7,094 |
2,097 |
5,250 |
0.52 |
0.21 |
83 |
% |
54,027 |
51,606 |
$ |
58.3 |
$ |
1,130 |
$ |
40.9 |
$ |
24.7 |
|
Q2 2019 |
100 |
4,829 |
1,811 |
3,440 |
0.59 |
0.20 |
81 |
% |
55,440 |
55,740 |
|
50.7 |
$ |
910 |
|
35.0 |
|
22.6 |
|
Q1 2019 |
100 |
5,796 |
1,556 |
4,295 |
0.72 |
0.22 |
84 |
% |
37,613 |
37,937 |
|
38.8 |
$ |
1,023 |
|
28.9 |
|
18.0 |
|
Q4 2018 |
100 |
5,645 |
2,856 |
2,927 |
0.44 |
0.19 |
83 |
% |
52,194 |
51,889 |
|
49.1 |
$ |
946 |
|
30.5 |
|
21.9 |
|
Q3 2018 |
100 |
5,306 |
2,718 |
3,262 |
0.42 |
0.19 |
81 |
% |
51,984 |
52,197 |
|
53.0 |
$ |
1,015 |
|
32.6 |
|
26.0 |
|
Round Mountain |
Q3 2019 |
100 |
7,128 |
1,004 |
7,557 |
1.05 |
0.32 |
85 |
% |
82,195 |
81,617 |
$ |
57.5 |
$ |
705 |
$ |
48.3 |
$ |
9.1 |
|
Q2 2019 |
100 |
4,074 |
909 |
3,910 |
1.17 |
0.33 |
86 |
% |
90,833 |
87,106 |
|
57.8 |
$ |
664 |
|
58.9 |
|
10.2 |
|
Q1 2019 |
100 |
3,904 |
845 |
3,557 |
1.31 |
0.38 |
86 |
% |
85,135 |
83,614 |
|
56.0 |
$ |
670 |
|
64.2 |
|
7.9 |
|
Q4 2018 |
100 |
4,386 |
987 |
4,172 |
1.38 |
0.43 |
83 |
% |
96,715 |
91,769 |
|
70.0 |
$ |
763 |
|
68.0 |
|
9.6 |
|
Q3 2018 |
100 |
5,023 |
980 |
4,410 |
1.43 |
0.42 |
82 |
% |
94,153 |
96,496 |
|
69.0 |
$ |
715 |
|
47.1 |
|
12.7 |
|
Bald Mountain (8) |
Q3 2019 |
100 |
6,494 |
- |
6,494 |
- |
0.41 |
nm |
33,995 |
37,644 |
$ |
30.6 |
$ |
813 |
$ |
44.0 |
$ |
14.8 |
|
Q2 2019 |
100 |
3,725 |
- |
4,138 |
- |
0.36 |
nm |
40,564 |
31,547 |
|
27.0 |
$ |
856 |
|
57.5 |
|
12.2 |
|
Q1 2019 |
100 |
2,659 |
- |
2,836 |
- |
0.48 |
nm |
47,255 |
43,230 |
|
29.2 |
$ |
675 |
|
64.6 |
|
16.2 |
|
Q4 2018 |
100 |
4,929 |
- |
5,406 |
- |
0.47 |
nm |
47,211 |
68,288 |
|
46.9 |
$ |
687 |
|
40.4 |
|
22.4 |
|
Q3 2018 |
100 |
7,106 |
- |
5,806 |
- |
0.38 |
nm |
72,560 |
90,931 |
|
53.4 |
$ |
587 |
|
44.2 |
|
29.3 |
|
Paracatu |
Q3 2019 |
100 |
12,442 |
14,731 |
- |
0.38 |
- |
78 |
% |
146,396 |
145,662 |
$ |
99.5 |
$ |
683 |
$ |
39.0 |
$ |
39.5 |
|
Q2 2019 |
100 |
12,307 |
14,439 |
- |
0.48 |
- |
80 |
% |
186,167 |
186,520 |
|
106.8 |
$ |
573 |
|
34.6 |
|
45.2 |
|
Q1 2019 |
100 |
12,393 |
14,283 |
- |
0.38 |
- |
80 |
% |
146,776 |
146,397 |
|
94.9 |
$ |
648 |
|
16.5 |
|
35.9 |
|
Q4 2018 |
100 |
11,680 |
13,479 |
- |
0.44 |
- |
81 |
% |
145,634 |
152,395 |
|
116.6 |
$ |
765 |
|
33.3 |
|
41.7 |
|
Q3 2018 |
100 |
12,565 |
13,547 |
- |
0.38 |
- |
76 |
% |
126,515 |
125,700 |
|
97.6 |
$ |
776 |
|
25.1 |
|
42.2 |
|
Maricunga (8) |
Q3 2019 |
100 |
- |
- |
- |
- |
- |
nm |
18,016 |
9,203 |
$ |
7.0 |
$ |
761 |
$ |
- |
$ |
0.4 |
|
Q2 2019 |
100 |
- |
- |
- |
- |
- |
nm |
6,648 |
9,474 |
|
8.0 |
$ |
844 |
|
- |
|
0.5 |
|
Q1 2019 |
100 |
- |
- |
- |
- |
- |
nm |
10,716 |
7,624 |
|
4.8 |
$ |
630 |
|
- |
|
0.4 |
|
Q4 2018 |
100 |
- |
- |
- |
- |
- |
nm |
7,226 |
19,399 |
|
16.1 |
$ |
830 |
|
- |
|
0.6 |
|
Q3 2018 |
100 |
- |
- |
- |
- |
- |
nm |
10,808 |
30,442 |
|
22.4 |
$ |
736 |
|
- |
|
1.1 |
|
Russia |
Kupol (3)(4)(6) |
Q3 2019 |
100 |
338 |
431 |
- |
9.65 |
- |
95 |
% |
137,562 |
136,088 |
$ |
82.6 |
$ |
607 |
$ |
7.8 |
$ |
32.2 |
|
Q2 2019 |
100 |
431 |
432 |
- |
9.23 |
- |
94 |
% |
127,684 |
124,873 |
|
70.2 |
$ |
562 |
|
8.2 |
|
30.7 |
|
Q1 2019 |
100 |
362 |
425 |
- |
9.62 |
- |
93 |
% |
130,088 |
130,414 |
|
78.0 |
$ |
598 |
|
8.2 |
|
27.4 |
|
Q4 2018 |
100 |
400 |
425 |
- |
8.77 |
- |
95 |
% |
123,478 |
124,408 |
|
68.7 |
$ |
552 |
|
19.4 |
|
30.1 |
|
Q3 2018 |
100 |
412 |
439 |
- |
8.69 |
- |
95 |
% |
125,870 |
123,624 |
|
81.3 |
$ |
658 |
|
22.0 |
|
32.0 |
|
West Africa |
Tasiast |
Q3 2019 |
100 |
1,010 |
1,297 |
- |
2.37 |
- |
97 |
% |
93,865 |
86,357 |
$ |
55.1 |
$ |
638 |
$ |
74.3 |
$ |
32.0 |
|
Q2 2019 |
100 |
819 |
1,281 |
- |
2.19 |
- |
97 |
% |
92,901 |
94,748 |
|
58.9 |
$ |
622 |
|
75.2 |
|
32.2 |
|
Q1 2019 |
100 |
1,962 |
1,269 |
- |
2.37 |
- |
97 |
% |
101,358 |
99,758 |
|
66.0 |
$ |
662 |
|
75.7 |
|
31.0 |
|
Q4 2018 |
100 |
3,267 |
1,301 |
- |
2.19 |
- |
94 |
% |
91,548 |
83,780 |
|
69.5 |
$ |
830 |
|
71.1 |
|
28.5 |
|
Q3 2018 |
100 |
2,187 |
947 |
924 |
1.72 |
0.42 |
91 |
% |
53,363 |
50,549 |
|
66.2 |
$ |
1,310 |
|
98.1 |
|
29.1 |
|
Chirano - 100% |
Q3 2019 |
90 |
714 |
801 |
- |
2.02 |
- |
92 |
% |
46,641 |
49,458 |
$ |
50.0 |
$ |
1,011 |
$ |
4.8 |
$ |
22.0 |
|
Q2 2019 |
90 |
619 |
904 |
- |
1.95 |
- |
92 |
% |
53,349 |
51,141 |
|
46.7 |
$ |
913 |
|
2.7 |
|
23.8 |
|
Q1 2019 |
90 |
499 |
908 |
- |
1.97 |
- |
92 |
% |
52,322 |
54,083 |
|
44.0 |
$ |
814 |
|
3.3 |
|
25.4 |
|
Q4 2018 |
90 |
527 |
840 |
- |
2.08 |
- |
92 |
% |
51,273 |
49,173 |
|
39.5 |
$ |
803 |
|
5.7 |
|
28.3 |
|
Q3 2018 |
90 |
505 |
908 |
- |
2.10 |
- |
92 |
% |
56,675 |
53,915 |
|
41.7 |
$ |
773 |
|
6.9 |
|
30.8 |
|
Chirano - 90% |
Q3 2019 |
90 |
714 |
801 |
- |
2.02 |
- |
92 |
% |
41,977 |
44,512 |
$ |
45.0 |
$ |
1,011 |
$ |
4.3 |
$ |
19.8 |
|
Q2 2019 |
90 |
619 |
904 |
- |
1.95 |
- |
92 |
% |
48,014 |
46,027 |
|
42.0 |
$ |
913 |
|
2.4 |
|
21.4 |
|
Q1 2019 |
90 |
499 |
908 |
- |
1.97 |
- |
92 |
% |
47,090 |
48,675 |
|
39.6 |
$ |
814 |
|
3.0 |
|
22.9 |
|
Q4 2018 |
90 |
527 |
840 |
- |
2.08 |
- |
92 |
% |
46,146 |
44,255 |
|
35.5 |
$ |
802 |
|
5.1 |
|
25.5 |
|
Q3 2018 |
90 |
505 |
908 |
- |
2.10 |
- |
92 |
% |
51,007 |
48,524 |
|
37.6 |
$ |
775 |
|
6.2 |
|
27.7 |
|
(1) |
Tonnes of ore mined and processed represent 100% Kinross for all
periods presented. |
(2) |
Due to the nature of
heap leach operations, recovery rates at Maricunga and Bald
Mountain cannot be accurately measured on a quarterly basis.
Recovery rates at Fort Knox, Round Mountain and Tasiast represent
mill recovery only. |
(3) |
The Kupol segment
includes the Kupol and Dvoinoye mines. |
(4) |
Kupol silver grade and
recovery were as follows: Q3 2019: 67.44 g/t, 87.8%; Q2 2019: 75.29
g/t, 84.9%; Q1 2019: 69.61 g/t, 82.1%; Q4 2018: 73.35 g/t, 83.5%;
Q3 2018: 72.38 g/t, 85.5%. |
(5) |
Gold equivalent ounces
include silver ounces produced and sold converted to a gold
equivalent based on the ratio of the average spot market prices for
the commodities for each period. The ratios for the quarters
presented are as follows: Q3 2019: 86.73:1; Q2 2019: 87.98:1; Q1
2019: 83.74:1; Q4 2018: 84.42:1; Q3 2018: 80.80:1. |
(6) |
Dvoinoye ore processed
and grade were as follows: Q3 2019: 113,497, 9.82 g/t; Q2 2019:
113,872, 9.24 g/t; Q1 2019: 135,529, 7.46 g/t; Q4 2018: 104,495,
9.82 g/t; Q3 2018: 106,918, 10.03 g/t. |
(7) |
Capital expenditures
are presented on a cash basis, consistent with the statement of
cash flows. |
(8) |
"nm" means not
meaningful. |
|
|
Reconciliation of non-GAAP financial
measures
The Company has included certain non-GAAP
financial measures in this document. These measures are not defined
under International Financial Reporting Standards (IFRS) and should
not be considered in isolation. The Company believes that these
measures, together with measures determined in accordance with
IFRS, provide investors with an improved ability to evaluate the
underlying performance of the Company. The inclusion of these
measures is meant to provide additional information and should not
be used as a substitute for performance measures prepared in
accordance with IFRS. These measures are not necessarily standard
and therefore may not be comparable to other issuers.
Adjusted net earnings attributable to common
shareholders and adjusted net earnings per share are non-GAAP
measures which determine the performance of the Company, excluding
certain impacts which the Company believes are not reflective of
the Company’s underlying performance for the reporting period, such
as the impact of foreign exchange gains and losses, reassessment of
prior year taxes and/or taxes otherwise not related to the current
period, impairment charges (reversals), gains and losses and other
one-time costs related to acquisitions, dispositions and other
transactions, and non-hedge derivative gains and losses. Although
some of the items are recurring, the Company believes that they are
not reflective of the underlying operating performance of its
current business and are not necessarily indicative of future
operating results. Management believes that these measures, which
are used internally to assess performance and in planning and
forecasting future operating results, provide investors with the
ability to better evaluate underlying performance, particularly
since the excluded items are typically not included in public
guidance. However, adjusted net earnings and adjusted net earnings
per share measures are not necessarily indicative of net earnings
and earnings per share measures as determined under IFRS.
The following table provides a reconciliation of
net earnings (loss) to adjusted net earnings (loss) for the periods
presented:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Earnings (loss) |
|
(in millions, except per share amounts) |
Three months
ended |
|
Nine months ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) attributable to common shareholders - as
reported |
$ |
60.9 |
|
$ |
(104.4 |
) |
|
$ |
197.1 |
|
$ |
4.1 |
|
|
Adjusting items: |
|
|
|
|
|
|
|
Foreign
exchange (gains) losses |
|
(8.6 |
) |
|
2.7 |
|
|
|
(6.6 |
) |
|
(1.2 |
) |
|
|
Foreign
exchange losses on translation of tax basis and foreign exchange on
deferred income taxes within income tax expense |
|
20.7 |
|
|
25.4 |
|
|
|
13.9 |
|
|
53.7 |
|
|
|
Taxes in
respect of prior periods |
|
22.0 |
|
|
3.6 |
|
|
|
33.4 |
|
|
23.6 |
|
|
|
Reclamation
and remediation expense |
|
- |
|
|
- |
|
|
|
- |
|
|
4.5 |
|
|
|
Tasiast
Phase One commissioning costs |
|
- |
|
|
- |
|
|
|
- |
|
|
6.4 |
|
|
|
Fort Knox
pit wall slide related costs |
|
5.7 |
|
|
21.4 |
|
|
|
17.1 |
|
|
21.4 |
|
|
|
Restructuring costs |
|
3.0 |
|
|
- |
|
|
|
12.2 |
|
|
- |
|
|
|
Other |
|
2.7 |
|
|
4.2 |
|
|
|
4.9 |
|
|
5.2 |
|
|
|
Tax effect
of the above adjustments |
|
(2.4 |
) |
|
(1.3 |
) |
|
|
(5.1 |
) |
|
(3.1 |
) |
|
|
|
|
43.1 |
|
|
56.0 |
|
|
|
69.8 |
|
|
110.5 |
|
|
Adjusted net earnings (loss) attributable to common
shareholders |
$ |
104.0 |
|
$ |
(48.4 |
) |
|
$ |
266.9 |
|
$ |
114.6 |
|
|
Weighted average number of common shares outstanding - Basic |
|
1,252.8 |
|
|
1,250.2 |
|
|
|
1,251.9 |
|
|
1,249.2 |
|
|
Adjusted net earnings (loss) per share |
$ |
0.08 |
|
$ |
(0.04 |
) |
|
$ |
0.21 |
|
$ |
0.09 |
|
|
|
|
|
|
|
|
|
|
|
|
The Company makes reference to a non-GAAP
measure for adjusted operating cash flow. Adjusted operating cash
flow is defined as cash flow from operations excluding certain
impacts which the Company believes are not reflective of the
Company’s regular operating cash flow, and excluding changes in
working capital. Working capital can be volatile due to numerous
factors, including the timing of tax payments, and in the case of
Kupol, a build-up of inventory due to transportation logistics. The
Company uses adjusted operating cash flow internally as a measure
of the underlying operating cash flow performance and future
operating cash flow-generating capability of the Company. However,
the adjusted operating cash flow measure is not necessarily
indicative of net cash flow from operations as determined under
IFRS.
The following table provides a reconciliation of
adjusted operating cash flow for the periods presented:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Cash Flow |
|
(in millions) |
Three months
ended |
|
Nine months ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Net cash flow provided from operating activities - as reported |
$ |
231.7 |
|
$ |
127.2 |
|
|
$ |
816.3 |
|
$ |
605.2 |
|
|
|
|
|
|
|
|
|
|
Adjusting items: |
|
|
|
|
|
|
|
Tax payments
in respect of prior years |
|
16.7 |
|
|
- |
|
|
|
16.7 |
|
|
- |
|
|
|
Working
capital changes: |
|
|
|
|
|
|
|
Accounts receivable and other assets |
|
76.2 |
|
|
74.0 |
|
|
|
101.9 |
|
|
118.1 |
|
|
|
Inventories |
|
40.5 |
|
|
(15.9 |
) |
|
|
(9.5 |
) |
|
(14.1 |
) |
|
|
Accounts payable and other liabilities, including income taxes
paid |
|
(69.7 |
) |
|
(42.1 |
) |
|
|
(111.5 |
) |
|
29.2 |
|
|
|
|
|
63.7 |
|
|
16.0 |
|
|
|
(2.4 |
) |
|
133.2 |
|
|
Adjusted operating cash flow |
$ |
295.4 |
|
$ |
143.2 |
|
|
$ |
813.9 |
|
$ |
738.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated production cost of sales per gold
equivalent ounce sold is a non-GAAP measure and is defined as
production cost of sales as per the consolidated financial
statements divided by the total number of gold equivalent ounces
sold. This measure converts the Company’s non-gold production into
gold equivalent ounces and credits it to total production.
Attributable production cost of sales per gold
equivalent ounce sold is a non-GAAP measure and is defined as
attributable production cost of sales divided by the attributable
number of gold equivalent ounces sold. This measure converts the
Company’s non-gold production into gold equivalent ounces and
credits it to total production.
Management uses these measures to monitor and
evaluate the performance of its operating properties. The following
table presents a reconciliation of consolidated and attributable
production cost of sales per equivalent ounce sold for the periods
presented:
|
|
|
|
|
|
|
|
|
|
Consolidated and Attributable Production Cost of Sales Per
Equivalent Ounce Sold |
|
(in millions, except ounces and production cost of sales per
equivalent ounce) |
Three months ended |
|
Nine months ended |
|
September 30, |
|
September 30, |
|
|
|
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Production cost of sales - as reported |
$ |
440.6 |
|
$ |
484.6 |
|
|
$ |
1,278.4 |
|
$ |
1,384.1 |
|
|
Less: portion attributable to Chirano non-controlling
interest(1) |
|
(5.0 |
) |
|
(4.1 |
) |
|
|
(14.1 |
) |
|
(13.3 |
) |
|
Attributable(2) production cost of sales |
$ |
435.6 |
|
$ |
480.5 |
|
|
$ |
1,264.3 |
|
$ |
1,370.8 |
|
|
|
|
|
|
|
|
|
|
Gold equivalent ounces sold |
|
597,635 |
|
|
623,854 |
|
|
|
1,841,841 |
|
|
1,891,811 |
|
|
Less: portion attributable to Chirano non-controlling
interest(10) |
|
(4,946 |
) |
|
(5,391 |
) |
|
|
(15,468 |
) |
|
(17,575 |
) |
|
Attributable(2) gold equivalent ounces sold |
|
592,689 |
|
|
618,463 |
|
|
|
1,826,373 |
|
|
1,874,236 |
|
|
Consolidated production cost of sales per equivalent ounce
sold |
$ |
737 |
|
$ |
777 |
|
|
$ |
694 |
|
$ |
732 |
|
|
Attributable(2) production cost of sales per equivalent ounce
sold |
$ |
735 |
|
$ |
777 |
|
|
$ |
692 |
|
$ |
731 |
|
|
|
|
|
|
|
|
|
|
|
|
Attributable production cost of sales per ounce
sold on a by-product basis is a non-GAAP measure which calculates
the Company’s non-gold production as a credit against its per ounce
production costs, rather than converting its non-gold production
into gold equivalent ounces and crediting it to total production,
as is the case in co-product accounting. Management believes that
this measure provides investors with the ability to better evaluate
Kinross’ production cost of sales per ounce on a comparable basis
with other major gold producers who routinely calculate their cost
of sales per ounce using by-product accounting rather than
co-product accounting.
The following table provides a reconciliation of
attributable production cost of sales per ounce sold on a
by-product basis for the periods presented:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable Production Cost of Sales Per Ounce Sold on a
By-Product Basis |
|
(in millions, except ounces and production cost of sales per
ounce) |
Three months ended |
|
Nine months ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Production cost of sales - as reported |
$ |
440.6 |
|
$ |
484.6 |
|
|
$ |
1,278.4 |
|
$ |
1,384.1 |
|
|
Less: portion attributable to Chirano non-controlling
interest(1) |
|
(5.0 |
) |
|
(4.1 |
) |
|
|
(14.1 |
) |
|
(13.3 |
) |
|
Less: attributable(2) silver revenue(3) |
|
(22.1 |
) |
|
(15.7 |
) |
|
|
(54.7 |
) |
|
(51.2 |
) |
|
Attributable(2) production cost of sales net of silver by-product
revenue |
$ |
413.5 |
|
$ |
464.8 |
|
|
$ |
1,209.6 |
|
$ |
1,319.6 |
|
|
|
|
|
|
|
|
|
|
Gold ounces sold |
|
582,629 |
|
|
610,630 |
|
|
|
1,801,660 |
|
|
1,851,687 |
|
|
Less: portion attributable to Chirano non-controlling
interest(10) |
|
(4,938 |
) |
|
(5,386 |
) |
|
|
(15,444 |
) |
|
(17,548 |
) |
|
Attributable(2) gold ounces sold |
|
577,691 |
|
|
605,244 |
|
|
|
1,786,216 |
|
|
1,834,139 |
|
|
Attributable(2) production cost of sales per ounce sold on a
by-product basis |
$ |
716 |
|
$ |
768 |
|
|
$ |
677 |
|
$ |
719 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In November 2018, the World Gold Council (“WGC”)
published updates to its guidelines for reporting all-in sustaining
costs and all-in costs to address how the costs associated with
leases, after a company’s adoption of IFRS 16 “Leases”, should be
treated. Although the WGC is not a mining industry regulatory
organization, it worked closely with its member companies to
develop these non-GAAP measures. Adoption of the all-in
sustaining cost and all-in cost metrics is voluntary and not
necessarily standard, and therefore, these measures presented by
the Company may not be comparable to similar measures presented by
other issuers. The Company believes that the all-in
sustaining cost and all-in cost measures complement existing
measures reported by Kinross.
All-in sustaining cost includes both operating
and capital costs required to sustain gold production on an ongoing
basis. The value of silver sold is deducted from the total
production cost of sales as it is considered residual
production. Sustaining operating costs represent expenditures
incurred at current operations that are considered necessary to
maintain current production. Sustaining capital represents
capital expenditures at existing operations comprising mine
development costs and ongoing replacement of mine equipment and
other capital facilities, and does not include capital expenditures
for major growth projects or enhancement capital for significant
infrastructure improvements at existing operations.
All-in cost is comprised of all-in sustaining
cost as well as operating expenditures incurred at locations with
no current operation, or costs related to other non-sustaining
activities, and capital expenditures for major growth projects or
enhancement capital for significant infrastructure improvements at
existing operations.
Attributable all-in sustaining cost and all-in
cost per ounce sold on a by-product basis are calculated by
adjusting total production cost of sales, as reported on the
consolidated statement of operations, as follows:
|
|
|
|
|
|
|
|
|
|
Attributable All-In Sustaining Cost and All-In Cost Per
Ounce Sold on a By-Product Basis |
|
|
|
|
(in millions, except ounces and costs per ounce) |
Three months
ended |
|
Nine months ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Production cost of sales - as reported |
$ |
440.6 |
|
$ |
484.6 |
|
|
$ |
1,278.4 |
|
$ |
1,384.1 |
|
|
Less: portion attributable to Chirano non-controlling
interest(1) |
|
(5.0 |
) |
|
(4.1 |
) |
|
|
(14.1 |
) |
|
(13.3 |
) |
|
Less: attributable(2) silver revenue(3) |
|
(22.1 |
) |
|
(15.7 |
) |
|
|
(54.7 |
) |
|
(51.2 |
) |
|
Attributable(2) production cost of sales net of silver by-product
revenue |
$ |
413.5 |
|
$ |
464.8 |
|
|
$ |
1,209.6 |
|
$ |
1,319.6 |
|
|
Adjusting items on an attributable(2) basis: |
|
|
|
|
|
|
|
General and
administrative(4) |
|
29.3 |
|
|
34.2 |
|
|
|
92.3 |
|
|
100.2 |
|
|
|
Other
operating expense - sustaining(5) |
|
4.9 |
|
|
10.0 |
|
|
|
16.4 |
|
|
26.4 |
|
|
|
Reclamation
and remediation - sustaining(6) |
|
11.9 |
|
|
11.8 |
|
|
|
35.2 |
|
|
40.6 |
|
|
|
Exploration
and business development - sustaining(7) |
|
18.5 |
|
|
15.0 |
|
|
|
50.6 |
|
|
40.9 |
|
|
|
Additions to
property, plant and equipment - sustaining(8) |
|
106.2 |
|
|
97.1 |
|
|
|
282.4 |
|
|
232.8 |
|
|
|
Lease
payments - sustaining(9) |
|
2.8 |
|
|
- |
|
|
|
9.2 |
|
|
- |
|
|
All-in Sustaining Cost on a by-product basis - attributable(2) |
$ |
587.1 |
|
$ |
632.9 |
|
|
$ |
1,695.7 |
|
$ |
1,760.5 |
|
|
|
Other
operating expense - non-sustaining(5) |
|
12.5 |
|
|
11.8 |
|
|
|
40.7 |
|
|
33.4 |
|
|
|
Reclamation
and remediation - non-sustaining(6) |
|
1.7 |
|
|
2.9 |
|
|
|
5.2 |
|
|
5.6 |
|
|
|
Exploration
- non-sustaining(7) |
|
16.7 |
|
|
17.3 |
|
|
|
32.2 |
|
|
35.5 |
|
|
|
Additions to
property, plant and equipment - non-sustaining(8) |
|
135.6 |
|
|
158.2 |
|
|
|
478.1 |
|
|
495.0 |
|
|
|
Lease
payments - non-sustaining(9) |
|
0.4 |
|
|
- |
|
|
|
1.2 |
|
|
- |
|
|
All-in Cost on a by-product basis - attributable(2) |
$ |
754.0 |
|
$ |
823.1 |
|
|
$ |
2,253.1 |
|
$ |
2,330.0 |
|
|
Gold ounces sold |
|
582,629 |
|
|
610,630 |
|
|
|
1,801,660 |
|
|
1,851,687 |
|
|
Less: portion attributable to Chirano non-controlling
interest(10) |
|
(4,938 |
) |
|
(5,386 |
) |
|
|
(15,444 |
) |
|
(17,548 |
) |
|
Attributable(2) gold ounces sold |
|
577,691 |
|
|
605,244 |
|
|
|
1,786,216 |
|
|
1,834,139 |
|
|
Attributable(2) all-in sustaining cost per ounce sold on a
by-product basis |
$ |
1,016 |
|
$ |
1,046 |
|
|
$ |
949 |
|
$ |
960 |
|
|
Attributable(2) all-in cost per ounce sold on a by-product
basis |
$ |
1,305 |
|
$ |
1,360 |
|
|
$ |
1,261 |
|
$ |
1,270 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company also assesses its all-in sustaining
cost and all-in cost on a gold equivalent ounce basis. Under these
non-GAAP measures, the Company’s production of silver is converted
into gold equivalent ounces and credited to total production.
Attributable all-in sustaining cost and all-in
cost per equivalent ounce sold are calculated by adjusting total
production cost of sales, as reported on the interim condensed
consolidated statement of operations, as follows:
|
|
|
|
|
|
|
|
|
|
Attributable All-In Sustaining Cost and All-In Cost Per
Equivalent Ounce Sold |
|
(in millions, except ounces and costs per equivalent ounce) |
Three months
ended |
|
Nine months ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Production cost of sales - as reported |
$ |
440.6 |
|
$ |
484.6 |
|
|
$ |
1,278.4 |
|
$ |
1,384.1 |
|
|
Less: portion attributable to Chirano non-controlling
interest(1) |
|
(5.0 |
) |
|
(4.1 |
) |
|
|
(14.1 |
) |
|
(13.3 |
) |
|
Attributable(2) production cost of sales |
$ |
435.6 |
|
$ |
480.5 |
|
|
$ |
1,264.3 |
|
$ |
1,370.8 |
|
|
Adjusting items on an attributable(2) basis: |
|
|
|
|
|
|
|
General and
administrative(4) |
|
29.3 |
|
|
34.2 |
|
|
|
92.3 |
|
|
100.2 |
|
|
|
Other
operating expense - sustaining(5) |
|
4.9 |
|
|
10.0 |
|
|
|
16.4 |
|
|
26.4 |
|
|
|
Reclamation
and remediation - sustaining(6) |
|
11.9 |
|
|
11.8 |
|
|
|
35.2 |
|
|
40.6 |
|
|
|
Exploration
and business development - sustaining(7) |
|
18.5 |
|
|
15.0 |
|
|
|
50.6 |
|
|
40.9 |
|
|
|
Additions to
property, plant and equipment - sustaining(8) |
|
106.2 |
|
|
97.1 |
|
|
|
282.4 |
|
|
232.8 |
|
|
|
Lease
payments - sustaining(9) |
|
2.8 |
|
|
- |
|
|
|
9.2 |
|
|
- |
|
|
All-in Sustaining Cost - attributable(2) |
$ |
609.2 |
|
$ |
648.6 |
|
|
$ |
1,750.4 |
|
$ |
1,811.7 |
|
|
|
Other
operating expense - non-sustaining(5) |
|
12.5 |
|
|
11.8 |
|
|
|
40.7 |
|
|
33.4 |
|
|
|
Reclamation
and remediation - non-sustaining(6) |
|
1.7 |
|
|
2.9 |
|
|
|
5.2 |
|
|
5.6 |
|
|
|
Exploration
- non-sustaining(7) |
|
16.7 |
|
|
17.3 |
|
|
|
32.2 |
|
|
35.5 |
|
|
|
Additions to
property, plant and equipment - non-sustaining(8) |
|
135.6 |
|
|
158.2 |
|
|
|
478.1 |
|
|
495.0 |
|
|
|
Lease
payments - non-sustaining(9) |
|
0.4 |
|
|
- |
|
|
|
1.2 |
|
|
- |
|
|
All-in Cost - attributable(2) |
$ |
776.1 |
|
$ |
838.8 |
|
|
$ |
2,307.8 |
|
$ |
2,381.2 |
|
|
Gold equivalent ounces sold |
|
597,635 |
|
|
623,854 |
|
|
|
1,841,841 |
|
|
1,891,811 |
|
|
Less: portion attributable to Chirano non-controlling
interest(10) |
|
(4,946 |
) |
|
(5,391 |
) |
|
|
(15,468 |
) |
|
(17,575 |
) |
|
Attributable(2) gold equivalent ounces sold |
|
592,689 |
|
|
618,463 |
|
|
|
1,826,373 |
|
|
1,874,236 |
|
|
Attributable(2) all-in sustaining cost per equivalent ounce
sold |
$ |
1,028 |
|
$ |
1,049 |
|
|
$ |
958 |
|
$ |
967 |
|
|
Attributable(2) all-in cost per equivalent ounce sold |
$ |
1,309 |
|
$ |
1,356 |
|
|
$ |
1,264 |
|
$ |
1,270 |
|
|
|
|
|
|
|
|
|
|
1) |
The portion
attributable to Chirano non-controlling interest represents the
non-controlling interest (10%) in the production cost of sales for
the Chirano mine. |
2) |
“Attributable” includes Kinross' share of Chirano (90%)
production. |
3) |
“Attributable silver revenue” represents the attributable
portion of metal sales realized from the production of the
secondary or by-product metal (i.e. silver). Revenue from the sale
of silver, which is produced as a by-product of the process used to
produce gold, effectively reduces the cost of gold production. |
4) |
“General and administrative” expenses is as reported on the
interim condensed consolidated statement of operations, net of
certain restructuring expenses. General and administrative expenses
are considered sustaining costs as they are required to be absorbed
on a continuing basis for the effective operation and governance of
the Company. |
5) |
“Other operating expense – sustaining” is calculated as “Other
operating expense” as reported on the interim condensed
consolidated statement of operations, less other operating and
reclamation and remediation expenses related to non-sustaining
activities as well as other items not reflective of the underlying
operating performance of our business. Other operating expenses are
classified as either sustaining or non-sustaining based on the type
and location of the expenditure incurred. The majority of other
operating expenses that are incurred at existing operations are
considered costs necessary to sustain operations, and are therefore
classified as sustaining. Other operating expenses incurred at
locations where there is no current operation or related to other
non-sustaining activities are classified as non-sustaining. |
6) |
“Reclamation and remediation - sustaining” is calculated as
current period accretion related to reclamation and remediation
obligations plus current period amortization of the corresponding
reclamation and remediation assets, and is intended to reflect the
periodic cost of reclamation and remediation for currently
operating mines. Reclamation and remediation costs for development
projects or closed mines are excluded from this amount and
classified as non-sustaining. |
7) |
“Exploration and business development – sustaining” is
calculated as “Exploration and business development” expenses as
reported on the interim condensed consolidated statement of
operations, less non-sustaining exploration expenses. Exploration
expenses are classified as either sustaining or non-sustaining
based on a determination of the type and location of the
exploration expenditure. Exploration expenditures within the
footprint of operating mines are considered costs required to
sustain current operations and so are included in sustaining costs.
Exploration expenditures focused on new ore bodies near existing
mines (i.e. brownfield), new exploration projects (i.e. greenfield)
or for other generative exploration activity not linked to existing
mining operations are classified as non-sustaining. Business
development expenses are considered sustaining costs as they are
required for general operations. |
8) |
“Additions to property, plant and equipment – sustaining”
represents the majority of capital expenditures at existing
operations including capitalized exploration costs, periodic
capitalized stripping and underground mine development costs,
ongoing replacement of mine equipment and other capital facilities
and other capital expenditures and is calculated as total additions
to property, plant and equipment (as reported on the interim
condensed consolidated statements of cash flows), less capitalized
interest and non-sustaining capital. Non-sustaining capital
represents capital expenditures for major projects, including major
capital stripping projects at existing operations that are expected
to materially benefit the operation, as well as enhancement capital
for significant infrastructure improvements at existing operations.
Non-sustaining capital expenditures during the three and nine
months ended September 30, 2019, primarily relate to major projects
at Tasiast, Round Mountain, Bald Mountain, and Fort Knox.
Non-sustaining capital expenditures during the three and nine
months ended September 30, 2018, primarily related to major
projects at Tasiast, Round Mountain, and Bald Mountain. |
9) |
“Lease payments – sustaining” represents the majority of lease
payments as reported on the interim condensed consolidated
statements of cash flows and is made up of the principal and
financing components of such cash payments, less non-sustaining
lease payments. Lease payments for development projects or closed
mines are classified as non-sustaining. |
10) |
“Portion attributable to Chirano non-controlling interest”
represents the non-controlling interest (10%) in the ounces sold
from the Chirano mine. |
11) |
“Average realized gold price per ounce” is a non-GAAP financial
measure and is defined as gold metal sales divided by the total
number of gold ounces sold. This measure is intended to enable
Management to better understand the price realized in each
reporting period. The realized price measure does not have any
standardized definition under IFRS and should not be considered a
substitute for measure of performance prepared in accordance with
IFRS. |
Cautionary statement on forward-looking
information
All statements, other than statements of
historical fact, contained or incorporated by reference in this
news release including, but not limited to, any information as to
the future financial or operating performance of Kinross,
constitute ‘‘forward-looking information’’ or ‘‘forward-looking
statements’’ within the meaning of certain securities laws,
including the provisions of the Securities Act (Ontario) and the
provisions for ‘‘safe harbor’’ under the United States Private
Securities Litigation Reform Act of 1995 and are based on
expectations, estimates and projections as of the date of this news
release. Forward-looking statements contained in this news release,
include, but are not limited to, those under the headings (or
headings that include) “2019 third-quarter highlights”, “Operations
and organic development project highlights”, “CEO Commentary”,
“Operating results”, “Organic development projects and
opportunities” and “Outlook” as well as statements with
respect to our guidance for production, production costs of sales,
all-in sustaining cost and capital expenditures; the schedules and
budgets for the Company’s development projects; mine life;
and continuous improvement initiatives, as well as references
to other possible events, the future price of gold and silver, the
timing and amount of estimated future production, costs of
production, capital expenditures, costs and timing of the
development of projects and new deposits, estimates and the
realization of such estimates (such as mineral or gold reserves and
resources or mine life), success of exploration, development and
mining, currency fluctuations, capital requirements, project
studies, mine life extensions, government regulation permit
applications and conversions, restarting suspended or disrupted
operations; environmental risks and proceedings; and resolution of
pending litigation. The words “advance”, “anticipate”, “believe”,
“budget”, “continue”, “develop”, “encouraging”, “enhancement”,
“estimates”, “expects”, “explore”, “forecast”, “focus”, “future”,
“goal”, “guidance”, “intend”, “measures”, “on budget”, “on
schedule”, “on target”, “on track”, “opportunity”, “optimize”,
“outlook”, “phased”, “plan”, “potential”, “progress”, “project”,
“promising”, “schedule”, “seek”, “study”, “target”, or
variations of or similar such words and phrases or statements that
certain actions, events or results may, could, should or will be
achieved, received or taken, or will occur or result and similar
such expressions identify forward-looking statements.
Forward-looking statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable by
Kinross as of the date of such statements, are inherently subject
to significant business, economic and competitive uncertainties and
contingencies. The estimates, models and assumptions of Kinross
referenced, contained or incorporated by reference in this news
release, which may prove to be incorrect, include, but are not
limited to, the various assumptions set forth herein and in our
Management’s Discussion and Analysis (“MD&A”) for the year
ended December 31, 2018 and the quarter ended September 30, 2019,
and the Annual Information Form dated March 29, 2019 as well as:
(1) there being no significant disruptions affecting the operations
of the Company, whether due to extreme weather events (including,
without limitation, excessive or lack of rainfall, in particular,
the potential for further production curtailments at Paracatu
resulting from insufficient rainfall and the operational challenges
at Fort Knox and Bald Mountain resulting from excessive rainfall,
which can impact costs and/or production) and other or related
natural disasters, labour disruptions (including but not limited to
workforce reductions), supply disruptions, power disruptions,
damage to equipment, pit wall slides (in particular that the
effects of the pit wall slides at Fort Knox and Round Mountain are
consistent with the Company’s expectations) or otherwise; (2)
permitting, development, operations and production from the
Company’s operations and development projects being consistent with
Kinross’ current expectations including, without limitation: the
maintenance of existing permits and approvals and the timely
receipt of all permits and authorizations necessary for the
operation of the Tasiast Phase One expansion, and the development
and operation of the 24k Project; operation of the SAG mill at
Tasiast; land acquisitions and permitting for the construction and
operation of the new tailings facility, water and power supply and
continued operation of the tailings reprocessing facility at
Paracatu; implementation of fire permitting upgrades required at
Paracatu; and the renewal of the Chirano mining permit in a manner
consistent with the Company’s expectations; (3) political and legal
developments in any jurisdiction in which the Company operates
being consistent with its current expectations including, without
limitation, the impact of any political tensions and uncertainty in
the Russian Federation and Ukraine or any related sanctions and any
other similar restrictions or penalties imposed, or actions taken,
by any government, including but not limited to amendments to the
mining laws, and potential power rationing and tailings facility
regulations in Brazil, potential amendments to water laws and/or
other water use restrictions and regulatory actions in Chile, new
dam safety regulations, and potential amendments to minerals and
mining laws and energy levies laws, and the enforcement of labour
laws in Ghana, new regulations relating to work permits, potential
amendments to customs and mining laws (including but not limited to
amendments to the VAT) and the pending implementation of revisions
to the tax code in Mauritania, and satisfactory resolution of the
discussions with the Mauritanian government regarding the Company’s
activities in Mauritania including those related to Tasiast Sud,
VAT and fuel duty exonerations, the European Union’s General Data
Protection Regulation or similar legislation in other jurisdictions
and potential amendments to and enforcement of tax laws in Russia
(including, but not limited to, the interpretation, implementation,
application and enforcement of any such laws and amendments
thereto), and the impact of any trade tariffs being consistent with
Kinross’ current expectations; (4) the completion of studies,
including optimization studies, scoping studies and prefeasibility
and feasibility studies, on the timelines currently expected and
the results of those studies being consistent with Kinross’ current
expectations, including the completion of the La Coipa feasibility
study and the Lobo-Marte pre-feasibility study; (5) the exchange
rate between the Canadian dollar, Brazilian real, Chilean peso,
Russian rouble, Mauritanian ouguiya, Ghanaian cedi and the U.S.
dollar being approximately consistent with current levels; (6)
certain price assumptions for gold and silver; (7) prices for
diesel, natural gas, fuel oil, electricity and other key supplies
being approximately consistent with current levels; (8) production
and cost of sales forecasts for the Company meeting expectations;
(9) the accuracy of the current mineral reserve and mineral
resource estimates of the Company (including but not limited to ore
tonnage and ore grade estimates), mine plans for the Company’s
mining operations, and the Company’s internal models; (10) labour
and materials costs increasing on a basis consistent with Kinross’
current expectations; (11) the terms and conditions of the legal
and fiscal stability agreements for the Tasiast and Chirano
operations being interpreted and applied in a manner consistent
with their intent and Kinross’ expectations and without material
amendment or formal dispute (including without limitation the
application of tax, customs and duties exemptions and royalties);
(12) goodwill and/or asset impairment potential; (13) the
regulatory and legislative regime regarding mining, electricity
production and transmission (including rules related to power
tariffs) in Brazil being consistent with Kinross’ current
expectations; (14) access to capital markets, including but not
limited to maintaining our current credit ratings consistent with
the Company’s current expectations; (15) that the Brazilian power
plants will operate in a manner consistent with our current
expectations; (16) that the Tasiast project financing will proceed
in a manner consistent with our current expectations; (17) that the
Chulbatkan acquisition will proceed in a manner consistent with the
Company’s expectations; and (18) litigation and regulatory
proceedings and the potential ramifications thereof being concluded
in a manner consistent with the Company’s expectations (including
without limitation the ongoing litigation in Chile relating to the
alleged damage of wetlands and the scope of any remediation plan or
other environmental obligations arising therefrom and the ongoing
litigation with the Russian tax authorities regarding dividend
withholding tax). Known and unknown factors could cause actual
results to differ materially from those projected in the
forward-looking statements. Such factors include, but are not
limited to: sanctions (any other similar restrictions or penalties)
now or subsequently imposed, other actions taken, by, against, in
respect of or otherwise impacting any jurisdiction in which the
Company is domiciled or operates (including but not limited to the
Russian Federation, Canada, the European Union and the United
States), or any government or citizens of, persons or companies
domiciled in, or the Company’s business, operations or other
activities in, any such jurisdiction; fluctuations in the currency
markets; fluctuations in the spot and forward price of gold or
certain other commodities (such as fuel and electricity); changes
in the discount rates applied to calculate the present value of net
future cash flows based on country-specific real weighted average
cost of capital; changes in the market valuations of peer group
gold producers and the Company, and the resulting impact on market
price to net asset value multiples; changes in various market
variables, such as interest rates, foreign exchange rates, gold or
silver prices and lease rates, or global fuel prices, that could
impact the mark-to-market value of outstanding derivative
instruments and ongoing payments/receipts under any financial
obligations; risks arising from holding derivative instruments
(such as credit risk, market liquidity risk and mark-to-market
risk); changes in national and local government legislation,
taxation (including but not limited to income tax, advance income
tax, stamp tax, withholding tax, capital tax, tariffs, value-added
or sales tax, capital outflow tax, capital gains tax, windfall or
windfall profits tax, royalty, excise tax, customs/import or export
taxes/duties, asset taxes, asset transfer tax, property use or
other real estate tax, together with any related fine, penalty,
surcharge, or interest imposed in connection with such taxes),
controls, policies and regulations; the security of personnel and
assets; political or economic developments in Canada, the United
States, Chile, Brazil, Russia, Mauritania, Ghana, or other
countries in which Kinross does business or may carry on business;
business opportunities that may be presented to, or pursued by, us;
our ability to successfully integrate acquisitions and complete
divestitures; operating or technical difficulties in connection
with mining or development activities; employee relations;
litigation or other claims against, or regulatory investigations
and/or any enforcement actions, administrative orders or sanctions
in respect of the Company (and/or its directors, officers, or
employees) including, but not limited to, securities class action
litigation in Canada and/or the United States, environmental
litigation or regulatory proceedings or any investigations,
enforcement actions and/or sanctions under any applicable
anti-corruption, international sanctions and/or anti-money
laundering laws and regulations in Canada, the United States or any
other applicable jurisdiction; the speculative nature of gold
exploration and development including, but not limited to, the
risks of obtaining necessary licenses and permits; diminishing
quantities or grades of reserves; adverse changes in our credit
ratings; and contests over title to properties, particularly title
to undeveloped properties. In addition, there are risks and hazards
associated with the business of gold exploration, development and
mining, including environmental hazards, industrial accidents,
unusual or unexpected formations, pressures, cave-ins, flooding and
gold bullion losses (and the risk of inadequate insurance, or the
inability to obtain insurance, to cover these risks). Many of these
uncertainties and contingencies can directly or indirectly affect,
and could cause, Kinross’ actual results to differ materially from
those expressed or implied in any forward-looking statements made
by, or on behalf of, Kinross, including but not limited to
resulting in an impairment charge on goodwill and/or assets. There
can be no assurance that forward-looking statements will prove to
be accurate, as actual results and future events could differ
materially from those anticipated in such statements.
Forward-looking statements are provided for the purpose of
providing information about management’s expectations and plans
relating to the future. All of the forward-looking statements made
in this news release are qualified by this cautionary statement and
those made in our other filings with the securities regulators of
Canada and the United States including, but not limited to, the
cautionary statements made in the “Risk Analysis” section of our
MD&A for the year ended December 31, 2018 and the quarter ended
September 30, 2019 and the Annual Information Form dated March 29,
2019. These factors are not intended to represent a complete list
of the factors that could affect Kinross. Kinross disclaims any
intention or obligation to update or revise any forward-looking
statements or to explain any material difference between subsequent
actual events and such forward-looking statements, except to the
extent required by applicable law.
Key Sensitivities
Approximately 70%-80% of the Company's costs are
denominated in U.S. dollars.
A 10% change in foreign currency exchange rates
would be expected to result in an approximate $18 impact on
production cost of sales per ounce6.
Specific to the Russian rouble, a 10% change in
the exchange rate would be expected to result in an approximate $19
impact on Russian production cost of sales per ounce.
Specific to the Brazilian real, a 10% change in
the exchange rate would be expected to result in an approximate $46
impact on Brazilian production cost of sales per ounce.
A $10 per barrel change in the price of oil
would be expected to result in an approximate $3 impact on
production cost of sales per ounce.
A $100 change in the price of gold would be
expected to result in an approximate $5 impact on production cost
of sales per ounce as a result of a change in royalties.
Other information
Where we say "we", "us", "our", the "Company", or "Kinross" in
this presentation, we mean Kinross Gold Corporation and/or one or
more or all of its subsidiaries, as may be applicable.
The technical information about the Company’s mineral properties
contained in this presentation has been prepared under the
supervision of Mr. John Sims, an officer of the Company who is a
“qualified person” within the meaning of National Instrument
43-101.
Source: Kinross Gold Corporation
________________________________
1 Unless otherwise stated, production figures in
this news release are based on Kinross’ 90% share of Chirano
production.2 These figures are non-GAAP financial measures and are
defined and reconciled on pages 13 to 18 of this news
release. 3 Net earnings (loss) figures in this release
represent “net earnings (loss) from continuing operations
attributable to common shareholders”. 4 Average realized gold
price is a non-GAAP financial measure and is defined as gold metal
sales divided by the total number of gold ounces sold.5
Attributable margin per equivalent ounce sold is a non-GAAP
financial measure defined as “average realized gold price per
ounce” less “attributable production cost of sales per gold
equivalent ounce sold.”6 Refers to all of the currencies in the
countries where the Company has mining operations, fluctuating
simultaneously by 10% in the same direction, either appreciating or
depreciating, taking into consideration the impact of hedging and
the weighting of each currency within our consolidated cost
structure.
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