Kinross Gold Corporation (TSX:K)(NYSE:KGC) today announced its
results for the first quarter ended March 31, 2013.
(This news release contains forward-looking information subject
to the risks and assumptions set out in our Cautionary Statement on
Forward-Looking Information located on page six of this release.
All dollar amounts in this release are expressed in U.S. dollars,
unless otherwise noted. The comparative figures have been recast to
exclude Crixas due to its disposal.)
Financial and operating highlights:
-- Production(1): 648,897 gold equivalent ounces (Au eq. oz.), compared
with 588,358 ounces in Q1 2012.
-- Revenue: $1,058.1 million, compared with $1,005.1 million in Q1 2012.
-- Production cost of sales(2): $729 per Au eq. oz., compared with $738 in
Q1 2012.
-- All-in sustaining cost(2): $1,038 per Au oz. sold, compared with $1,180
in Q1 2012.
-- Attributable margin(3): $895 per ounce sold, compared with $906 in Q1
2012.
-- Adjusted operating cash flow(2): $411.8 million, or $0.36 per share,
compared with $319.3 million, or $0.28 per share, in Q1 2012.
-- Adjusted net earnings(2), (4): $170.5 million, or $0.15 per share,
compared with $196.1 million, or $0.17 per share, in Q1 2012.
-- Reported net earnings(4): $160.5 million, or $0.14 per share, compared
with net earnings of $99.6 million, or $0.09 per share, for Q1 2012.
-- Outlook: The Company expects to be within its 2013 forecast guidance for
production (2.4-2.6 million attributable gold equivalent ounces),
production cost of sales ($740-$790 per gold equivalent ounce), all-in
sustaining cost ($1,100-$1,200 per gold ounce sold) and capital
expenditures ($1.6 billion).
Development projects:
-- The Company announced results of the Tasiast expansion project pre-
feasibility study on April 29, 2013. The Company is proceeding to a full
feasibility study on a 38,000 tonne per day (tpd) mill. The feasibility
study is expected to be completed in the first quarter of 2014.
-- Dvoinoye remains on schedule to commence full production in the second
half of the year.
Board of Directors:
-- On April 3, 2013, Kinross announced the appointments of Mr. John Macken,
Ms. Una Power, and Ms. Ruth Woods to its Board of Directors.
CEO Commentary
J. Paul Rollinson, CEO, made the following comments in relation
to first-quarter 2013 results:
"Our continued focus on operational fundamentals contributed to
solid results in the first quarter, as production was higher and
cost of sales per ounce was lower than the same period last year.
We are on target to meet our annual guidance for production and
cost of sales at each of our regions, and company-wide.
"We continue to focus on margin and cash flow, versus production
at any cost, in our mine planning and production decisions. At the
same time, we continue to pursue opportunities to reduce capital
spending and operating costs across our operations.
"During the quarter, we made excellent development progress at
Dvoinoye, and completed the Tasiast pre-feasibility study on
schedule. We are proceeding to a feasibility study at Tasiast, and
plan to make a decision on whether to proceed with construction of
an expanded operation following completion of the study."
Financial results
Summary of financial and operating results
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Three months ended
March 31,
----------------------
(dollars in millions, except per share and per ounce
amounts) 2013 2012
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Total gold equivalent ounces(a)(e) - Produced (c) 655,610 611,838
Total gold equivalent ounces(a)(e) - Sold (c) 652,197 629,505
Gold equivalent ounces from continuing operations
(a)(d) - Produced (c) 655,610 595,949
Gold equivalent ounces from continuing operations
(a)(d) - Sold (c) 652,197 612,352
Total attributable gold equivalent ounces(a)(e) -
Produced (c) 648,897 604,247
Total attributable gold equivalent ounces(a)(e) - Sold
(c) 645,252 621,680
Attributable gold equivalent ounces from continuing
operations (a)(d) - Produced (c) 648,897 588,358
Attributable gold equivalent ounces from continuing
operations (a)(d) - Sold (c) 645,252 604,527
Financial Highlights from Continuing Operations (d)
Metal sales $ 1,058.1 $ 1,005.1
Production cost of sales $ 475.7 $ 451.7
Depreciation, depletion and amortization $ 227.7 $ 142.5
Operating earnings $ 250.9 $ 301.2
Net earnings from continuing operations attributable
to common shareholders $ 160.5 $ 99.6
Basic earnings per share from continuing operations
attributable to common shareholders $ 0.14 $ 0.09
Diluted earnings per share from continuing operations
attributable to common shareholders $ 0.14 $ 0.09
Adjusted net earnings from continuing operations
attributable to common shareholders(b) $ 170.5 $ 196.1
Adjusted net earnings from continuing operations per
share(b) $ 0.15 $ 0.17
Net cash flow of continuing operations provided from
operating activities $ 358.1 $ 380.0
Adjusted operating cash flow from continuing
operations(b) $ 411.8 $ 319.3
Adjusted operating cash flow from continuing
operations per share(b) $ 0.36 $ 0.28
Average realized gold price per ounce from continuing
operations $ 1,624 $ 1,644
Consolidated production cost of sales from continuing
operations per equivalent ounce(c) sold(b) $ 729 $ 738
Attributable(a) production cost of sales from
continuing operations per equivalent ounce(c) sold(b) $ 729 $ 738
Attributable(a) production cost of sales from
continuing operations per ounce sold on a by-product
basis(b) $ 674 $ 655
Attributable(a) all-in sustaining cost from continuing
operations per ounce sold on a by-product basis(b) $ 1,038 $ 1,180
(a) Total includes 100% of Chirano production. "Attributable" includes
Kinross' share of Chirano (90%) production.
(b) The definition and reconciliation of these non-GAAP financial measures
is included on pages eight to 10 of this news release.
(c) "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
first quarter of 2013 was 54.19:1, compared with 51.82:1 for the first
quarter of 2012.
(d) The comparative figures have been recast to exclude Crixas' results due
to its disposal.
(e) The total gold equivalent ounces and total attributable gold equivalent
ounces include Crixas.
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The following operating and financial results are based on
first-quarter 2013 attributable gold equivalent production from
continuing operations:
Production: Kinross produced 648,897 attributable gold
equivalent ounces from continuing operations in the first quarter
of 2013, a 10% increase over the first quarter of 2012, mainly due
to production increases at Tasiast and Fort Knox.
Production cost of sales: Production cost of sales per gold
equivalent ounce(2) was $729 for the first quarter of 2013,
compared with $738 for the first quarter of 2012. The decrease was
mainly due to the continued focus on cost management and the
increase in gold ounces sold. Production cost of sales per gold
ounce on a by-product basis was $674 in the first quarter of 2013,
compared with $655 in Q1 2012, based on Q1 2013 attributable gold
sales of 606,767 ounces and attributable silver sales of 2,085,425
ounces.
All-in sustaining cost: Attributable all-in sustaining cost per
gold ounce sold(2) was $1,038 in Q1 2013, compared with $1,180 in
Q1 2012, mainly as a result of increased ounces sold and the timing
of sustaining capital spending. The Company expects all-in
sustaining cost per gold ounce sold to be within the previously
disclosed guidance range of $1,100 to $1,200 for the year.
Revenue: Revenue from metal sales was $1,058.1 million in the
first quarter of 2013, compared with $1,005.1 million during the
same period in 2012, an increase of 5%, mainly due to an increase
in gold equivalent ounces sold. The average realized gold price was
$1,624 per ounce in Q1 2013, compared with $1,644 per ounce for Q1
2012.
Margins: Kinross' margin per gold equivalent ounce sold(3) was
$895 for the first quarter of 2013, a decrease of 1% compared with
Q1 2012 margin of $906 per gold equivalent ounce.
Operating cash flow: Adjusted operating cash flow(2) was $411.8
million for the quarter, or $0.36 per share, compared with $319.3
million, or $0.28 per share, for Q1 2012.
Cash balance: Cash and cash equivalents and short-term
investments were $1,420.8 million as at March 31, 2013, compared
with $1,982.5 million as at December 31, 2012.
Earnings: Adjusted net earnings(2), (4) were $170.5 million, or
$0.15 per share, for Q1 2013, compared with $196.1 million, or
$0.17 per share, for Q1 2012.
Reported net earnings(4) were $160.5 million, or $0.14 per
share, for Q1 2013, compared with earnings of $99.6 million, or
$0.09 per share, for Q1 2012.
Capital expenditures: Capital expenditures were $317.8 million
for Q1 2013, compared with $529.3 million for the same period last
year, a decrease due mainly to timing of expenditures at the
Tasiast expansion project, and the completion of the fourth ball
mill at Paracatu and SART plant at Maricunga in 2012.
Operating results
Mine-by-mine summaries for first-quarter operating results may
be found on pages 11 and 15 of this news release. Highlights
include the following:
North America: Performance was strong in the first quarter, and
the region is on track to meet both production and production cost
of sales guidance for the year. Regional production was higher
compared with Q1 2012, but lower compared with the previous
quarter, mainly due to the expected winter slow-down of production
from the heap leach at Fort Knox, and lower mill output as a result
of harder ore and slightly lower grade. The harder ore Fort Knox
encountered during the quarter is not expected to continue in Q2.
Kettle River-Buckhorn had an outstanding quarter, as throughput
increased compared with the previous quarter, while Round Mountain
performed as anticipated during the quarter.
Russia: The region is on target to meet both production and
production cost of sales guidance for the year. First quarter
production at Kupol was largely in line with Q1 2012, but was lower
compared with Q4 2012 as a result of expected lower grades. Mill
throughput and recoveries remained strong.
West Africa: Performance was strong during the first quarter and
the region is on target to meet both production and production cost
of sales guidance for the year. Tasiast achieved its highest
quarterly production since being acquired by Kinross. The
production increase was mainly due to higher mining rates and
expected higher grades entering the mill, along with improved
performance from the dump leach. Chirano performed ahead of
expectations for the quarter, but production was lower than Q4 2012
as a result of expected lower grades and a slight reduction in mill
throughput.
South America: The region is on target to meet both production
and production cost of sales guidance for the year. Paracatu
achieved record mill throughput and continued to achieve higher
mill recoveries. Production at Paracatu was lower than the previous
quarter mainly due to expected lower grades at both mills,
particularly at Plant 2. Maricunga's decrease in production was a
result of less favourable heap performance, and lower grades from
transitional ore as the bottom of the current phase is mined. Due
to anticipated lower grades, La Coipa's production decreased
relative to Q4 2012. As previously disclosed, the Company expects
to suspend mining of the existing orebody at La Coipa in the second
half of the year.
Project update and new developments
The forward-looking information contained in this section of the
release is subject to the risks and assumptions contained in the
Cautionary Statement on Forward-Looking Information on page six of
this news release.
Tasiast expansion project
On April 29, 2013, Kinross announced the results of its
pre-feasibility (PFS) study for the Tasiast expansion. Based on the
PFS study results, the Company is proceeding to a full feasibility
study on an expanded Tasiast operation with a 38,000 tpd mill. The
feasibility study is scheduled for completion in the first quarter
of 2014.
Following completion of the feasibility study, the Company will
make a decision on whether to complete engineering and proceed with
construction. The decision will depend on a range of factors,
including gold price assumptions and projections, expected economic
returns, and various technical and other considerations.
During the first quarter, work on a large part of the basic
infrastructure improvements at Tasiast neared completion, including
the power station, truck shop and other facilities. The new camp
was completed in the quarter, and permitting, engineering and
bidding for a permanent seawater supply system are progressing as
expected.
Dvoinoye
Underground development at Dvoinoye progressed ahead of plan,
with 1,567 metres completed. All necessary permits for the current
scope of underground development and construction activities are in
place, including approval of the mine design. Infrastructure
construction progressed on schedule, including advancing the
installation of the permanent man camp, truck shop and
administrative building.
Expansion of Kupol's mill capacity to 4,500 tpd is well
underway, with final completion expected to take place in the third
quarter.
The project remains on schedule and on budget and is expected to
commence full production in the second half of the year.
Fruta del Norte
As previously disclosed, the Company is engaged in negotiations
with the Ecuadorian government regarding exploitation and
investment protection agreements for the Fruta Del Norte (FDN)
project, and thus far the parties have been unable to reach
agreement on certain key economic and legal matters.
The Company respects the sovereign authority of the Ecuadorian
government, and a meeting with the newly appointed Minister for
Non-Renewable Natural Resources has been requested with a view to
continuing dialogue on the key outstanding matters.
The Company can give no assurances that an agreement acceptable
to the parties can be reached within the required time
frame(5).
Outlook
The forward-looking information contained in this section is
subject to the risk factors and assumptions contained in the
Cautionary Statement on Forward-Looking Information located on page
six of this news release.
As previously announced on February 13, 2013, Kinross expects to
produce approximately 2.4-2.6 million gold equivalent ounces for
the year, and meet regional production guidance.
The Company expects to be within its regional production cost of
sales guidance and meet its company-wide production cost of sales
range of $740-$790 per gold equivalent ounce and its all-in
sustaining costs range of $1,100-$1,200 per gold ounce sold on a
by-product basis in 2013.
The Company also expects to meet its 2013 capital expenditures
forecast of approximately $1.6 billion.
Other developments
Board of Directors appointments
Kinross announced the appointments of Mr. John Macken, Ms. Una
Power, and Ms. Ruth Woods to its Board of Directors, effective
April 3, 2013. Mr. Macken, Ms. Power, and Ms. Woods will be
nominated as Directors for election by shareholders at the Kinross
Annual Meeting of Shareholders on May 8, 2013. The appointments
bring membership on the Kinross Board of Directors to 12, following
the retirement of Mr. George Michals in 2012.
Convertible senior notes
On March 15, 2013, the Company repurchased convertible senior
notes totaling $454.6 million that were tendered by the holders
under their right to require Kinross to repurchase the convertible
senior notes on March 15, 2013.
On April 30, 2013, the Company redeemed, in cash, the remaining
$5.4 million of convertible senior notes.
Conference call details
In connection with the release, Kinross will hold a conference
call and audio webcast on Wednesday, May 8, 2013 at 7:45 a.m. ET to
discuss the results, followed by a question-and-answer session. To
access the call, please dial:
Canada & US toll-free - 1-800-319-4610
Outside of Canada & US - 1-604-638-5340
Replay (available up to 14 days after the call):
Canada & US toll-free - 1-800-319-6413; Passcode - 3310 followed by #.
Outside of Canada & US - 1-604-638-9010; Passcode - 3310 followed by #.
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 our website at www.kinross.com.
Kinross will hold its Annual Meeting of Shareholders on
Wednesday, May 8, 2013, at 10 a.m. ET at the Design Exchange, 234
Bay Street, Toronto, Ontario, Canada. A live audio webcast
(listen-only mode) of the Annual Meeting of Shareholders will be
available at www.kinross.com.
This release should be read in conjunction with Kinross' 2013
first quarter Financial Statements and Management's Discussion and
Analysis report at www.kinross.com.
Kinross' unaudited 2013 first quarter Financial Statements and
Management's Discussion and Analysis have been filed with Canadian
securities regulators (available at www.sedar.com) and furnished
with 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 gold mining company with mines and
projects in Brazil, Canada, Chile, Ecuador, Ghana, Mauritania,
Russia and the United States, employing approximately 9,000 people
worldwide. Kinross maintains listings on the Toronto Stock Exchange
(symbol:K) and the New York Stock Exchange (symbol:KGC).
Cautionary statement on forward-looking information
All statements, other than statements of historical fact,
contained or incorporated by reference in this news release, 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 harbour" 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 include, without
limitation, statements with respect to: possible events, the future
price of gold and silver, the estimation of mineral reserves and
mineral resources, the realization of mineral reserve and mineral
resource estimates, the timing and amount of estimated future
production, costs of production, capital expenditures, costs and
timing of the development of projects and new deposits, success of
exploration, development and mining activities, permitting
timelines, currency fluctuations, requirements for additional
capital, government regulation of mining operations, environmental
risks, unanticipated reclamation expenses, title disputes or claims
and limitations on insurance coverage. The words "anticipates",
"plans", "expects", "indicative", "intend", "scheduled",
"timeline", "estimates", "forecasts", "guidance", "opportunity",
"outlook", "potential", "projected", "pursue", "seek", "strategy",
"study", "targets", "models", or "believes", or variations of or
similar such words and phrases or statements that certain actions,
events or results "may", "could", "would", or "should", "might", or
"will be taken", "occur" or "be achieved" and similar 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
most recently filed Annual Information Form and our full-year 2012
Management's Discussion and Analysis as well as: (1) there being no
significant disruptions affecting the operations of the Company or
any entity in which it now or hereafter directly or indirectly
holds an investment, whether due to labour disruptions, supply
disruptions, power disruptions, damage to equipment or otherwise;
(2) permitting, development, operations and expansion at Paracatu
(including, without limitation, land acquisitions and permitting
for the construction and operation of the new tailings facility)
being consistent with our current expectations; (3) the viability,
permitting and development of the Fruta del Norte deposit, and its
continuing ownership by the Company, being consistent with Kinross'
current expectations; (4) political and legal developments in any
jurisdiction in which the Company, or any entity in which it now or
hereafter directly or indirectly holds an investment, operates
being consistent with its current expectations including, without
limitation, the implementation of Ecuador's mining and investment
laws (and prospective amendment to these laws) and related
regulations and policies, being consistent with Kinross' current
expectations;
(5) negotiation of an exploitation contract and an investment
protection contract for Fruta del Norte with the Ecuadorian
government being successfully concluded, including but not limited
to Kinross and the government jointly declaring a phase change from
economic evaluation to exploitation prior to August 1, 2013 (or any
government approved extension of up to 1.5 years or up to a two
year suspension of commencement of the exploitation phase) and
entering into an exploitation agreement with the government within
six months of such declared phase change or such suspension, the
failure of which will likely result in the extinguishment of the
FDN concession and forfeiture of related project infrastructure to
the government, with a corresponding non-cash charge equal to the
carrying value of FDN being recorded by the Company; (6) 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; (7)
certain price assumptions for gold and silver; (8) prices for
diesel, natural gas, fuel oil, electricity and other key supplies
being approximately consistent with current levels; (9) production
and cost of sales forecasts for the Company, and entities in which
it now or hereafter directly or indirectly holds an investment,
meeting expectations;
(10) 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) and any entity in which it now or
hereafter directly or indirectly holds an investment; (11) labour
and materials costs increasing on a basis consistent with Kinross'
current expectations; (12) permitting, development and operations
at Dvoinoye (including, without limitation, renewal of the subsoil
license) being consistent with Kinross' expectations; (13)
permitting, development, operations and expansion at Tasiast and
Chirano (including but not limited to, at Tasiast, the expansion
feasibility study and project optimization, the impact of ore
tonnage and grade variability reconciliation analysis and, as
required, conversion of exploration licences to mining licences)
being consistent with Kinross' current expectations; (14) 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; (15)
goodwill and/or asset impairment potential; and (16) access to
capital markets, including but not limited to maintaining an
investment grade debt rating and securing partial project financing
for the Dvoinoye, Fruta del Norte and the Tasiast expansion
projects, being consistent with the Company's current
expectations.
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: fluctuations in the
currency markets; fluctuations in the spot and forward price of
gold or certain other commodities (such as diesel fuel and
electricity); increases in the discount rates applied to present
value net future cash flows based on country-specific real weighted
average cost of capital; declines 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 interest
rates or gold or silver lease rates that could impact the
mark-to-market value of outstanding derivative instruments and
ongoing payments/receipts under any interest rate swaps and
variable rate debt 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,
Ecuador, Mauritania, Ghana, or other countries in which Kinross, or
entities in which it now or hereafter directly or indirectly holds
an interest, do 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;
commencement of litigation against the Company including, but not
limited to, securities class actions in Canada and/or the United
States; 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 rating; 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 these cautionary statements 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 Factors" section of our most recently
filed Annual Information Form and full-year 2012 and Q1 2013
Management Discussion and Analysis. 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 60%-70% of the Company's costs are denominated in
US dollars.
A 10% change in foreign exchange could result in an approximate
$9 impact in production cost of sales per ounce(6).
A $10 per barrel change in the price of oil could result in an
approximate $2 impact on production cost of sales per ounce.
The impact on royalties of a $100 change in the gold price could
result in an approximate $3 impact on cost of sales per ounce.
Other information
Where we say "we", "us", "our", the "Company", or "Kinross" in
this news release, 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 material mineral
properties contained in this news release has been prepared under
the supervision of and verified by Mr. James K. Fowler, an officer
of the Company who is a "qualified person" within the meaning of
National Instrument 43-101.
Reconciliation of non-GAAP financial measures
The Company has included certain non-GAAP financial measures in
this document. These measures are not defined under 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, 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
from continuing operations to adjusted net earnings from continuing
operations for the periods presented:
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GAAP to Adjusted
Earnings from
Continuing Operations
Reconciliation
------------------------
Three months ended
(in millions, except share and per share amounts) March 31,
------------------------
2013 2012
------------------------
Net earnings from continuing operations attributable
to common shareholders - as reported $ 160.5 $ 99.6
------------------------
Adjusting items:
Foreign exchange losses (gains) 3.6 (7.5)
Non-hedge derivatives gains - net of tax - (10.1)
Gains on sale of other assets - net of tax (0.6) -
Foreign exchange loss (gain) on translation of tax
basis and foreign exchange on deferred income
taxes within income tax expense (2.6) 2.5
Change in deferred income tax due to a change in
statutory corporate income tax rate - 110.3
Taxes in respect of prior years 4.0 1.3
Impairment of investments 5.6 -
------------------------
10.0 96.5
------------------------
Net earnings from continuing operations attributable
to common shareholders - Adjusted $ 170.5 $ 196.1
------------------------
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Weighted average number of common shares outstanding
- Basic 1,140.6 1,138.1
------------------------
Net earnings from continuing operations per share -
Adjusted $ 0.15 $ 0.17
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The Company makes reference to a non-GAAP measure for adjusted
operating cash flow and adjusted operating cash flow per share.
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, adjusted operating cash flow and adjusted
operating cash flow per share measures are not necessarily
indicative of net cash flow from operations as determined under
IFRS.
The following table provides a reconciliation of adjusted
operating cash flow from continuing operations for the periods
presented:
----------------------------------------------------------------------------
GAAP to Adjusted
Operating Cash Flow
from Continuing
Operations
------------------------
Three months ended
(in millions, except share and per share amounts) March 31,
------------------------
2013 2012
------------------------
Net cash flow of continuing operations provided from
operating activities - as reported $ 358.1 $ 380.0
------------------------
Adjusting items:
Close out and early settlement of derivative
instruments - (28.4)
Working capital changes:
Accounts receivable and other assets (28.7) 28.5
Inventories 34.9 (1.2)
Accounts payable and other liabilities,
including taxes 47.5 (59.6)
------------------------
53.7 (60.7)
------------------------
Adjusted operating cash flow from continuing
operations $ 411.8 $ 319.3
------------------------
------------------------
Weighted average number of common shares outstanding
- Basic 1,140.6 1,138.1
------------------------
Adjusted operating cash flow from continuing
operations per share $ 0.36 $ 0.28
------------------------
------------------------
----------------------------------------------------------------------------
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.
----------------------------------------------------------------------------
Consolidated and
Attributable Cost of
Sales from Continuing
Operations Per
Equivalent Ounce Sold
------------------------
------------------------
(in millions, except ounces and production cost of Three months ended
sales per equivalent ounce) March 31,
------------------------
2013 2012
------------------------
Production cost of sales from continuing operations
- as reported(1) $ 475.7 $ 451.7
Less: portion attributable to Chirano non-
controlling interest (5.1) (5.4)
------------------------
Attributable production cost of sales from
continuing operations $ 470.6 $ 446.3
------------------------
------------------------
Gold equivalent ounces sold from continuing
operations 652,197 612,352
Less: portion attributable to Chirano non-
controlling interest (6,945) (7,825)
------------------------
Attributable gold equivalent ounces sold from
continuing operations 645,252 604,527
------------------------
------------------------
Consolidated production cost of sales from
continuing operations per equivalent ounce sold $ 729 $ 738
Attributable production cost of sales from
continuing operations per equivalent ounce sold $ 729 $ 738
----------------------------------------------------------------------------
(1) "Production cost of sales" is equivalent to "Total cost of sales" per
the interim financial statements less depreciation, depletion and
amortization and impairment charges.
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 Cost of
Sales from Continuing
Operations Per Ounce
Sold on a By-Product
Basis
------------------------
(in millions, except ounces and production cost of Three months ended
sales per ounce) March 31,
------------------------
2013 2012
------------------------
Production cost of sales from continuing operations
- as reported(1) $ 475.7 $ 451.7
Less: portion attributable to Chirano non-
controlling interest (5.1) (5.4)
Less: attributable silver sales from continuing
operations (61.9) (83.7)
------------------------
Attributable production cost of sales from
continuing operations net of silver by-product
revenue $ 408.7 $ 362.6
------------------------
------------------------
Gold ounces sold from continuing operations 613,683 561,152
Less: portion attributable to Chirano non-
controlling interest (6,916) (7,800)
------------------------
Attributable gold ounces sold from continuing
operations 606,767 553,352
------------------------
------------------------
Attributable production cost of sales from
continuing operations per ounce sold on a by-
product basis $ 674 $ 655
------------------------
----------------------------------------------------------------------------
(1) "Production cost of sales" is equivalent to "Total cost of sales" per
the interim financial statements less depreciation, depletion and
amortization and impairment charges.
All-in sustaining cost - attributable is a non-GAAP measure that
the Company has defined to include attributable production cost of
sales from continuing operations net of silver by-product credits;
general and administrative expenses; sustaining business
development and exploration costs; sustaining capital (including
related capitalized interest); and a portion of other operating
costs. Management uses this measure internally and believes that it
provides investors with the ability to better evaluate the cost of
sustaining gold production.
----------------------------------------------------------------------------
Attributable All-in
Sustaining Cost from
Continuing Operations
Per Ounce Sold on a By-
Product Basis
------------------------
Three months ended
March 31,
------------------------
(in millions, except ounces and production cost of
sales per ounce) 2013 2012
------------------------
Production cost of sales from continuing operations
- as reported(1) $ 475.7 $ 451.7
Less: portion attributable to Chirano non-
controlling interest (5.1) (5.4)
Less: attributable silver sales from continuing
operations (61.9) (83.7)
------------------------
Attributable production cost of sales from
continuing operations net of silver by-product
revenue $ 408.7 $ 362.6
------------------------
------------------------
Adjusting items on an attributable basis:
General and administrative 39.5 39.7
Exploration and business development - sustaining 30.2 55.4
Other operating expense - sustaining 15.3 7.9
Additions to property, plant and equipment -
sustaining 133.5 181.3
Capitalized interest and exploration 2.8 6.3
------------------------
All-in Sustaining Cost - attributable $ 630.0 $ 653.2
------------------------
------------------------
Gold ounces sold from continuing operations 613,683 561,152
Less: portion attributable to Chirano non-
controlling interest (6,916) (7,800)
------------------------
Attributable gold ounces sold from continuing
operations 606,767 553,352
------------------------
------------------------
Attributable all-in sustaining cost from continuing
operations per ounce sold on a by-product basis $ 1,038 $ 1,180
----------------------------------------------------------------------------
(1) "Production cost of sales" is equivalent to "Total cost of sales" per
the interim financial statements less depreciation, depletion and
amortization and impairment charges.
Review of Operations
----------------------------------------------------------------------------
Three months ended March 31, Gold equivalent ounces
--------------------------------------
Produced Sold
--------------------------------------
2013 2012 2013 2012
--------------------------------------
Fort Knox 93,252 61,716 118,034 60,365
Round Mountain 39,421 44,758 38,796 43,551
Kettle River - Buckhorn 39,870 42,618 39,673 39,321
--------------------------------------
North America Total 172,543 149,092 196,503 143,237
Kupol (100%) 124,498 126,970 83,799 126,735
--------------------------------------
Russia Total 124,498 126,970 83,799 126,735
Paracatu 119,891 104,618 122,028 110,527
La Coipa 53,729 37,740 57,242 43,712
Maricunga 55,062 63,989 54,791 69,063
--------------------------------------
South America Total 228,682 206,347 234,061 223,302
Tasiast 62,757 37,634 68,381 40,827
Chirano (100%) 67,130 75,906 69,453 78,251
--------------------------------------
West Africa Total 129,887 113,540 137,834 119,078
--------------------------------------
Continuing operations 655,610 595,949 652,197 612,352
Discontinued operations(2) - 15,889 - 17,153
--------------------------------------
Operations Total 655,610 611,838 652,197 629,505
Less Chirano non-controlling interest
(10%) (6,713) (7,591) (6,945) (7,825)
--------------------------------------
Attributable - Continuing operations 648,897 588,358 645,252 604,527
--------------------------------------
Attributable Total 648,897 604,247 645,252 621,680
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three months ended March 31,
Production
cost of Production
sales(1) cost of
($millions) sales(1)/oz
--------------------------------------
2013 2012 2013 2012
--------------------------------------
Fort Knox $ 65.9 $ 52.0 $ 558 $ 861
Round Mountain 31.2 37.3 804 856
Kettle River - Buckhorn 20.3 18.9 512 481
--------------------------------------
North America Total 117.4 108.2 597 755
Kupol (100%) 45.9 61.2 548 483
--------------------------------------
Russia Total 45.9 61.2 548 483
Paracatu 101.4 105.4 831 954
La Coipa 40.3 43.6 704 997
Maricunga 59.8 43.7 1,091 633
--------------------------------------
South America Total 201.5 192.7 861 863
Tasiast 60.2 35.9 880 879
Chirano (100%) 50.7 53.7 730 686
--------------------------------------
West Africa Total 110.9 89.6 805 752
--------------------------------------
Continuing operations 475.7 451.7 729 738
Discontinued operations(2) - 13.8 - 805
--------------------------------------
Operations Total $ 475.7 $ 465.5 $ 729 $ 739
Less Chirano non-controlling interest
(10%) (5.1) (5.4)
--------------------------------------
Attributable - Continuing operations $ 470.6 $ 446.3 $ 729 $ 738
--------------------------------------
Attributable Total $ 470.6 $ 460.1 $ 729 $ 740
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) "Production cost of sales" is equivalent to "Total cost of sales" per
the interim financial statements less depreciation, depletion and
amortization and impairment charges.
(2) On June 28, 2012, the Company completed the sale of its 50% interest in
the Crixas gold mine.
----------------------------------------------------------------------------
Consolidated balance sheets
(unaudited, expressed in millions of United States dollars, except share
amounts)
----------------------------------------------------------------------------
As at
------------------------------------------------
March 31, December 31, January 1,
2013 2012 2012
------------------------------------------------
Assets
Current assets
Cash and cash
equivalents $ 1,420.8 $ 1,632.7 $ 1,724.8
Restricted cash 58.1 58.1 56.1
Short-term investments - 349.8 1.3
Accounts receivable and
other assets 233.4 280.9 304.7
Inventories 1,278.1 1,254.9 961.7
Unrealized fair value of
derivative assets 15.0 15.0 2.8
------------------------------------------------
3,005.4 3,591.4 3,051.4
------------------------------------------------
Non-current assets
Property, plant and
equipment 9,082.0 8,968.1 8,855.0
Goodwill 1,136.7 1,136.7 3,382.3
Long-term investments 40.8 49.1 79.3
Investments in associate
and joint ventures 537.1 536.1 654.9
Unrealized fair value of
derivative assets 8.3 9.6 1.1
Deferred charges and
other long-term assets 579.5 545.5 403.1
Deferred tax assets 53.3 46.1 21.8
------------------------------------------------
Total assets $ 14,443.1 $ 14,882.6 $ 16,448.9
------------------------------------------------
Liabilities
Current liabilities
Accounts payable and
accrued liabilities $ 607.1 $ 636.2 $ 562.0
Current tax payable 76.5 93.2 67.6
Current portion of long-
term debt 66.3 516.2 31.9
Current portion of
provisions 40.3 42.0 37.6
Current portion of
unrealized fair value
of derivative
liabilities 11.4 22.0 66.7
------------------------------------------------
801.6 1,309.6 765.8
------------------------------------------------
Non-current liabilities
Long-term debt 2,087.7 2,116.4 1,599.4
Provisions 727.6 720.4 584.0
Unrealized fair value of
derivative liabilities 5.3 10.5 32.7
Other long-term
liabilities 142.1 125.6 132.4
Deferred tax liabilities 666.8 674.4 863.9
----------------
Total liabilities 4,431.1 4,956.9 3,978.2
------------------------------------------------
Equity
Common shareholders'
equity
Common share capital and
common share purchase
warrants $ 14,712.9 $ 14,692.5 $ 14,656.6
Contributed surplus 79.8 89.9 81.4
Accumulated deficit (4,867.9) (4,937.1) (2,249.9)
Accumulated other
comprehensive income
(loss) 10.1 4.9 (97.7)
------------------------------------------------
Total common shareholders'
equity 9,934.9 9,850.2 12,390.4
------------------------------------------------
Non-controlling interest 77.1 75.5 80.3
------------------------------------------------
Total equity 10,012.0 9,925.7 12,470.7
------------------------------------------------
Commitments and
contingencies
Subsequent events
------------------------------------------------
Total liabilities and equity $ 14,443.1 $ 14,882.6 $ 16,448.9
------------------------------------------------
Common shares
Authorized Unlimited Unlimited Unlimited
Issued and outstanding 1,141,664,089 1,140,132,123 1,137,732,344
----------------------------------------------------------------------------
Consolidated statements of operations
(unaudited, expressed in millions of United States dollars, except per
share and share amounts)
----------------------------------------------------------------------------
Three months ended
March 31, March 31,
2013 2012
------------------------
Revenue
Metal sales $ 1,058.1 $ 1,005.1
Cost of sales
Production cost of sales 475.7 451.7
Depreciation, depletion and amortization 227.7 142.5
------------------------
Total cost of sales 703.4 594.2
------------------------
Gross profit 354.7 410.9
------------------------
Other operating expense 24.5 11.5
Exploration and business development 39.8 58.5
General and administrative 39.5 39.7
------------------------
Operating earnings 250.9 301.2
------------------------
Other income (expense) - net (8.5) 12.5
Equity in losses of associate and joint venture (0.9) -
Finance income 2.0 1.0
Finance expense (8.6) (9.8)
------------------------
Earnings before taxes 234.9 304.9
Income tax expense - net (72.8) (214.1)
------------------------
Earnings from continuing operations after tax 162.1 90.8
Earnings from discontinued operations after tax - 6.1
------------------------
------------------------
Net earnings $ 162.1 $ 96.9
------------------------
------------------------
Net earnings (loss) from continuing operations
attributable to:
Non-controlling interest $ 1.6 $ (8.8)
------------------------
------------------------
Common shareholders $ 160.5 $ 99.6
------------------------
------------------------
Net earnings (loss) attributable to:
------------------------
------------------------
Non-controlling interest $ 1.6 $ (8.8)
------------------------
------------------------
Common shareholders $ 160.5 $ 105.7
------------------------
------------------------
Earnings per share from continuing operations
attributable to common shareholders
Basic $ 0.14 $ 0.09
Diluted $ 0.14 $ 0.09
Earnings per share attributable to common
shareholders
Basic $ 0.14 $ 0.09
Diluted $ 0.14 $ 0.09
Weighted average number of common shares outstanding
(millions)
Basic 1,140.6 1,138.1
Diluted 1,147.2 1,143.6
----------------------------------------------------------------------------
Consolidated statements of cash flows
(unaudited, expressed in millions of United States dollars)
----------------------------------------------------------------------------
Three months ended
March 31, March 31,
2013 2012
------------------------
Net inflow (outflow) of cash related to the
following activities:
Operating:
Net earnings from continuing operations $ 162.1 $ 90.8
Adjustments to reconcile net earnings from
continuing operations to net cash provided from
(used in) operating activities:
Depreciation, depletion and amortization 227.7 142.5
Gains on sale of other assets - net (0.8) -
Equity in losses of associate and joint venture 0.9 -
Non-hedge derivative gains - net - (10.1)
Settlement of derivative instruments 0.2 28.4
Share-based compensation expense 8.7 9.5
Accretion expense 5.4 5.4
Deferred tax (recovery) expense (20.8) 97.4
Foreign exchange (gains) losses and other 28.4 (16.2)
Changes in operating assets and liabilities:
Accounts receivable and other assets 28.7 (28.5)
Inventories (34.9) 1.2
Accounts payable and accrued liabilities 28.1 118.1
------------------------
Cash flow provided from operating activities 433.7 438.5
------------------------
Income taxes paid (75.6) (58.5)
------------------------
Net cash flow of continuing operations provided from
operating activities 358.1 380.0
------------------------
Investing:
Additions to property, plant and equipment (317.8) (529.3)
Net proceeds from the sale of long-term
investments and other assets - 0.2
Additions to long-term investments and other
assets (24.5) (12.7)
Net proceeds from the sale of property, plant and
equipment 1.3 -
Disposals of short-term investments 349.8 1.1
Decrease in restricted cash - 0.9
Interest received 2.1 0.9
Other - (0.3)
------------------------
Net cash flow of continuing operations provided from
(used in) investing activities 10.9 (539.2)
------------------------
Financing:
Issuance of common shares on exercise of options
and warrants 1.6 1.9
Proceeds from issuance of debt - 127.4
Repayment of debt (487.0) (151.8)
Interest paid (1.5) (3.2)
Dividends paid to common shareholders (91.3) (91.1)
Other - (0.7)
------------------------
Net cash flow of continuing operations used in
financing activities (578.2) (117.5)
------------------------
Effect of exchange rate changes on cash and cash
equivalents of continuing operations (2.7) 2.6
------------------------
Decrease in cash and cash equivalents (211.9) (274.1)
Cash and cash equivalents, beginning of period 1,632.7 1,724.8
------------------------
Cash and cash equivalents, end of period $ 1,420.8 $ 1,450.7
------------------------
------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating Summary
----------------------------------------------------------------------------
Ore
Tonnes Ore Processed
Ore Processed (Heap
Mined (Milled) Leach) Grade
Mine Period Ownership (1) (1) (1) (Mill)
----------------------------------------------------------------------------
(%) ('000 ('000 ('000
tonnes) tonnes) tonnes) (g/t)
----------------------------------------------------------------------------
North Fort Knox
America Q1 2013 100 7,361 2,894 536 0.88
----------------------------------------------------------
Q4 2012 100 7,805 3,273 6,530 1.03
Q3 2012 100 7,998 3,238 12,873 0.76
Q2 2012 100 5,115 3,452 9,632 0.51
Q1 2012 100 5,019 3,241 915 0.46
--------------------------------------------------------------------
Round
Mountain Q1 2013 50 6,474 936 6,468 0.64
----------------------------------------------------------
Q4 2012 50 3,820 867 3,864 0.68
Q3 2012 50 5,376 1,026 5,118 0.72
Q2 2012 50 5,186 922 3,752 0.82
Q1 2012 50 6,240 810 4,310 0.91
--------------------------------------------------------------------
Kettle
River Q1 2013 100 91 121 - 13.21
----------------------------------------------------------
Q4 2012 100 101 87 - 13.96
Q3 2012 100 81 95 - 15.23
Q2 2012 100 93 111 - 11.52
Q1 2012 100 111 112 - 12.81
----------------------------------------------------------------------------
Russia Kupol
(4)(5) Q1 2013 100 338 328 - 10.57
----------------------------------------------------------
Q4 2012 100 337 329 - 11.89
Q3 2012 100 302 332 - 12.34
Q2 2012 100 320 329 - 12.23
Q1 2012 100 301 309 - 11.76
--------------------------------------------------------------------
South Paracatu
America Q1 2013 100 13,971 14,068 - 0.37
----------------------------------------------------------
Q4 2012 100 15,791 13,692 - 0.39
Q3 2012 100 13,336 13,386 - 0.38
Q2 2012 100 12,544 12,988 - 0.38
Q1 2012 100 13,329 12,910 - 0.35
--------------------------------------------------------------------
La Coipa
(3) Q1 2013 100 990 1,400 - 0.97
----------------------------------------------------------
Q4 2012 100 1,298 1,421 - 1.07
Q3 2012 100 896 1,297 - 0.65
Q2 2012 100 585 1,256 - 0.72
Q1 2012 100 210 1,467 - 0.56
----------------------------------------------------------
Maricunga Q1 2013 100 4,452 - 3,861 -
----------------------------------------------------------
Q4 2012 100 5,704 - 3,937 -
Q3 2012 100 5,326 - 3,755 -
Q2 2012 100 3,808 - 3,487 -
Q1 2012 100 3,574 - 4,014 -
--------------------------------------------------------------------
West Tasiast
Africa Q1 2013 100 6,164 639 4,154 1.87
----------------------------------------------------------
Q4 2012 100 9,522 659 3,681 1.31
Q3 2012 100 6,637 643 1,887 1.55
Q2 2012 100 5,636 656 4,477 1.74
Q1 2012 100 1,783 595 1,002 1.71
--------------------------------------------------------------------
Chirano -
100% Q1 2013 90 1,005 816 - 2.73
----------------------------------------------------------
Q4 2012 90 1,311 879 - 3.27
Q3 2012 90 1,252 846 - 2.67
Q2 2012 90 1,016 802 - 2.70
Q1 2012 90 1,149 854 - 2.97
--------------------------------------------------------------------
Chirano
(6) Q1 2013 90 1,005 816 - 2.73
----------------------------------------------------------
Q4 2012 90 1,311 879 - 3.27
Q3 2012 90 1,252 846 - 2.67
Q2 2012 90 1,016 802 - 2.70
Q1 2012 90 1,149 854 - 2.97
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating Summary
----------------------------------------------------------------------------
Grade Gold Eq
(Heap Recovery Production Gold Eq
Mine Period Ownership Leach) (2) (7) Sales(7)
----------------------------------------------------------------------------
(%) (g/t) (%) (ounces) (ounces)
----------------------------------------------------------------------------
North Fort Knox
America Q1 2013 100 0.25 84% 93,252 118,034
----------------------------------------------------------
Q4 2012 100 0.30 84% 119,582 100,923
Q3 2012 100 0.30 84% 106,698 100,172
Q2 2012 100 0.33 85% 71,952 71,978
Q1 2012 100 0.36 84% 61,716 60,365
--------------------------------------------------------------------
Round
Mountain Q1 2013 50 0.38 75% 39,421 38,796
----------------------------------------------------------
Q4 2012 50 0.40 70% 41,220 41,371
Q3 2012 50 0.44 71% 53,205 53,237
Q2 2012 50 0.43 74% 53,147 52,433
Q1 2012 50 0.46 78% 44,758 43,551
--------------------------------------------------------------------
Kettle
River Q1 2013 100 - 92% 39,870 39,673
----------------------------------------------------------
Q4 2012 100 - 93% 33,548 33,242
Q3 2012 100 - 94% 43,942 44,049
Q2 2012 100 - 92% 35,985 40,354
Q1 2012 100 - 90% 42,618 39,321
----------------------------------------------------------------------------
Russia Kupol
(4)(5) Q1 2013 100 - 93% 124,498 83,799
----------------------------------------------------------
Q4 2012 100 - 93% 146,535 130,759
Q3 2012 100 - 94% 155,533 164,025
Q2 2012 100 - 93% 149,214 156,716
Q1 2012 100 - 93% 126,970 126,735
--------------------------------------------------------------------
South Paracatu
America Q1 2013 100 - 75% 119,891 122,028
----------------------------------------------------------
Q4 2012 100 - 75% 132,114 137,534
Q3 2012 100 - 70% 111,558 104,937
Q2 2012 100 - 74% 118,419 118,389
Q1 2012 100 - 72% 104,618 110,527
--------------------------------------------------------------------
La Coipa
(3) Q1 2013 100 - 84% 53,729 57,242
----------------------------------------------------------
Q4 2012 100 - 86% 63,429 58,935
Q3 2012 100 - 79% 41,585 42,240
Q2 2012 100 - 77% 36,113 30,325
Q1 2012 100 - 78% 37,740 43,712
----------------------------------------------------------
Maricunga Q1 2013 100 0.57 nm 55,062 54,791
----------------------------------------------------------
Q4 2012 100 0.59 nm 64,568 61,046
Q3 2012 100 0.64 nm 46,971 45,818
Q2 2012 100 0.65 nm 60,841 61,367
Q1 2012 100 0.66 nm 63,989 69,063
--------------------------------------------------------------------
West Tasiast
Africa Q1 2013 100 0.35 91% 62,757 68,381
----------------------------------------------------------
Q4 2012 100 0.59 91% 46,051 44,400
Q3 2012 100 0.51 92% 51,842 48,045
Q2 2012 100 0.47 86% 49,807 46,296
Q1 2012 100 0.60 89% 37,634 40,827
--------------------------------------------------------------------
Chirano -
100% Q1 2013 90 - 93% 67,130 69,453
----------------------------------------------------------
Q4 2012 90 - 94% 86,070 87,724
Q3 2012 90 - 93% 67,599 69,698
Q2 2012 90 - 92% 63,660 62,978
Q1 2012 90 - 93% 75,906 78,251
--------------------------------------------------------------------
Chirano
(6) Q1 2013 90 - 93% 60,417 62,508
----------------------------------------------------------
Q4 2012 90 - 94% 77,463 78,952
Q3 2012 90 - 93% 60,839 62,728
Q2 2012 90 - 92% 57,294 56,680
Q1 2012 90 - 93% 68,315 70,426
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating Summary
----------------------------------------------------------------------------
Production
Production cost of
costs of sales(8)
Mine Period Ownership sales(8) /oz Cap Ex DD&A
----------------------------------------------------------------------------
(%) ($ ($/ ($ ($
millions) ounce) millions) millions)
----------------------------------------------------------------------------
North Fort Knox
America Q1 2013 100 $ 65.9 $ 558 $ 49.4 $ 27.2
----------------------------------------------------------
Q4 2012 100 49.8 493 37.8 20.7
Q3 2012 100 64.9 648 13.7 25.7
Q2 2012 100 54.5 757 38.4 11.3
Q1 2012 100 52.0 861 24.8 9.1
--------------------------------------------------------------------
Round
Mountain Q1 2013 50 31.2 804 10.0 4.9
----------------------------------------------------------
Q4 2012 50 32.6 788 18.8 5.4
Q3 2012 50 32.2 605 14.4 6.6
Q2 2012 50 34.7 662 19.3 8.4
Q1 2012 50 37.3 856 13.6 7.8
--------------------------------------------------------------------
Kettle
River Q1 2013 100 20.3 512 1.2 16.4
----------------------------------------------------------
Q4 2012 100 15.4 463 4.7 15.1
Q3 2012 100 20.7 470 1.0 21.7
Q2 2012 100 20.5 508 3.2 18.2
Q1 2012 100 18.9 481 0.5 18.9
----------------------------------------------------------------------------
Russia Kupol
(4)(5) Q1 2013 100 45.9 548 29.0 14.9
----------------------------------------------------------
Q4 2012 100 62.0 474 21.5 24.6
Q3 2012 100 76.5 466 59.0 30.1
Q2 2012 100 73.2 467 43.5 29.4
Q1 2012 100 61.2 483 39.9 23.6
--------------------------------------------------------------------
South Paracatu
America Q1 2013 100 101.4 831 14.4 26.1
----------------------------------------------------------
Q4 2012 100 109.8 798 61.7 31.5
Q3 2012 100 92.0 877 81.0 20.0
Q2 2012 100 108.2 914 67.2 19.2
Q1 2012 100 105.4 954 74.6 14.6
--------------------------------------------------------------------
La Coipa
(3) Q1 2013 100 40.3 704 1.5 36.8
----------------------------------------------------------
Q4 2012 100 43.2 733 8.4 26.8
Q3 2012 100 45.9 1,087 25.9 12.2
Q2 2012 100 34.9 1,151 21.9 6.2
Q1 2012 100 43.6 997 14.4 4.3
----------------------------------------------------------
Maricunga Q1 2013 100 59.8 1,091 16.3 32.3
----------------------------------------------------------
Q4 2012 100 56.6 927 0.5 5.4
Q3 2012 100 40.0 873 33.9 4.9
Q2 2012 100 44.5 725 50.7 5.5
Q1 2012 100 43.7 633 35.6 6.3
--------------------------------------------------------------------
West Tasiast
Africa Q1 2013 100 60.2 880 155.6 33.3
----------------------------------------------------------
Q4 2012 100 47.1 1,061 291.6 23.1
Q3 2012 100 32.2 670 190.4 18.6
Q2 2012 100 44.5 961 124.3 19.9
Q1 2012 100 35.9 879 260.0 13.8
--------------------------------------------------------------------
Chirano -
100% Q1 2013 90 50.7 730 28.1 33.8
----------------------------------------------------------
Q4 2012 90 61.2 698 41.3 45.1
Q3 2012 90 51.3 736 15.9 39.5
Q2 2012 90 49.1 780 20.6 36.9
Q1 2012 90 53.7 686 22.5 41.8
--------------------------------------------------------------------
Chirano
(6) Q1 2013 90 45.6 730 25.3 30.4
----------------------------------------------------------
Q4 2012 90 55.1 698 37.2 40.6
Q3 2012 90 46.2 736 14.3 35.6
Q2 2012 90 44.2 780 18.5 33.2
Q1 2012 90 48.3 686 20.3 37.6
----------------------------------------------------------------------------
(1) Ore processed is to 100%, production and costs are to Kinross' account.
(2) Due to the nature of heap leach operations, recovery rates at Maricunga
cannot be accurately measured on a quarterly basis. Recovery rates at
Fort Knox, Round Mountain and Tasiast represent mill recovery only.
(3) La Coipa silver grade and recovery were as follows: Q1 (2013) 35.61
g/t, 58%; Q4 (2012) 49.45 g/t, 50%; Q3 (2012) 55.58 g/t, 45%; Q2 (2012)
42.04 g/t, 46%
(4) The Kupol segment includes the Kupol and Dvoinoye mines.
(5) Kupol silver grade and recovery were as follows: Q1 (2013) 128.44 g/t,
85%; Q4 (2012) 155.53 g/t, 85%; Q3 (2012) 163.68 g/t, 85%; Q2 (2012)
187.49 g/t, 87%
(6) Includes Kinross' share of Chirano at 90%.
(7) 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: Q1 2013: 54.19:1, Q4 2012: 52.55:1,
Q3 2012: 55.44:1, Q2 2012: 54.77:1.
(8) "Production cost of sales" is equivalent to "Total cost of sales" per
the interim financial statements less depreciation, depletion and
amortization and impairment charges.
For more information, please see Kinross' 2013 first-quarter
Financial Statements and MD&A at www.kinross.com.
(1) Unless otherwise stated, production figures in this news release are
based on Kinross' 90% share of Chirano production. Prior year
production figures have been adjusted to exclude Crixas due to its sale
in Q2 2012.
(2) These figures are non-GAAP financial measures and are defined and
reconciled on pages eight to 10 of this news release.
(3) Attributable margin per ounce sold is a non-GAAP measure defined as
"average realized gold price per ounce" less "attributable production
cost of sales per gold equivalent ounce sold".
(4) "Net earnings (loss) figures in this release represent "net earnings
(loss) from continuing operations attributable to common shareholders".
(5) See Kinross' Annual Information Form for the year ended December 31,
2012, page 62, "Risk Factors".
(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.
Contacts: Media Contact: Kinross Gold Corporation Steve Mitchell
Vice-President, Corporate Communications
416-365-2726steve.mitchell@kinross.com Investor Relations Contact:
Kinross Gold Corporation Tom Elliott Vice-President, Investor
Relations 416-365-3390tom.elliott@kinross.com www.kinross.com
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