Kinross Gold Corporation (TSX: K, NYSE: KGC) (“Kinross” or the
“Company”) today announced its results for the first-quarter ended
March 31, 2023.
This news release contains forward-looking
information about expected future events and financial and
operating performance of the Company. Please refer to the risks and
assumptions set out in our Cautionary Statement on Forward-Looking
Information located on page 28 of this release. All dollar amounts
are expressed in U.S. dollars, unless otherwise noted.
Q1 2023 highlights from continuing
operations:
- The Company is on track to meet its 2023 annual
guidance.
- Production of 466,022 gold equivalent ounces
(Au eq. oz.), a 23% year-over-year increase, and
sales of 490,330 Au eq. oz.
- Production cost of sales1 of $987 per Au eq.
oz. sold and all-in sustaining cost2 of $1,321 per
Au eq. oz. sold.
- Margins3 of $907 per Au eq. oz.
sold.
- Operating cash flow4 of $259.0 million and
adjusted operating cash flow2 of $358.2
million.
- Reported net earnings5 of $90.2 million, or
$0.07 per share, with adjusted net earnings2, 6 of
$87.6 million, or $0.07 per share2.
- Cash and cash equivalents of $471.0 million,
and total liquidity7 of
approximately $1.7 billion at March 31, 2023.
- Kinross’ Board of Directors declared a
quarterly dividend of $0.03 per common
share payable on June 15, 2023 to shareholders of record at
the close of business on June 1, 2023.
Operational and development project
highlights:
- In the first quarter,
Tasiast achieved two record-production months in
January and March driven by record grades, and successfully
completed a planned shutdown in February related to the
Tasiast 24k expansion project. The Tasiast 24k
project remains on budget and on schedule to reach 24,000 tonnes
per day throughput in mid-2023.
- Paracatu was a
solid contributor with higher year-over-year production at lower
costs.
- La Coipa achieved
record grades and recoveries since restarting operations last year
and generated strong cash flow.
- The exploration program at
Great Bear in Red Lake, Ontario, continues to make
excellent progress. In 2023, Kinross expects to further delineate
the deposit at depth and add inferred resource ounces. Drilling
results continue to confirm gold mineralization at good widths and
high grades, including at depths of 1.3 kilometres.
Environment, Social and Governance
(ESG):
- Kinross published its 2022
Sustainability and ESG Report on May 9, 2023, detailing its
refreshed ESG strategy as well as a comprehensive summary of its
performance over the past year.
- In the most important area of
safety, Kinross advanced its people-centric safety philosophy
through new site level engagement programs and enhanced information
sharing across operations.
- Bald Mountain was awarded the 2022
Reclamation Award for ‘Leadership in Concurrent Mine
Reclamation.’
- Kinross advanced its Diversity,
Equity and Inclusion (DEI) strategy in 2022, achieving the highest
percentage of women employees at Kinross in the last five years,
including the highest percentage of women in Science, Technology,
Engineering and Mathematics (STEM) roles and 33% women on its
Senior Leadership Team.
CEO commentary:J. Paul
Rollinson, President and CEO, made the following comments in
relation to 2023 first-quarter results:
“Kinross delivered a strong first quarter with
contributions from all of our sites resulting in a 23% increase in
year-over-year production. Tasiast, La Coipa and Paracatu delivered
strong production, margins and cash flow, including two record
production months and record grades at Tasiast. Our U.S. operations
delivered on plan as we continue to reinvest in our future with a
focus on higher-margin opportunities.
“We continue to make excellent progress
advancing our pipeline of development and exploration projects. The
Tasiast 24k project is on schedule to reach nameplate capacity
mid-year and the Tasiast solar power plant is expected to come
online by the end of the year. At Great Bear, drilling results
continue to confirm mineralization with good widths and high grades
including at depths of more than one kilometre.
“Our portfolio of operations is well positioned
and on track to deliver our annual production and cost guidance. We
continue to maintain our financial strength and excellent
liquidity, while bolstering our investment-grade balance sheet and
continuing with our return of capital program.
“Mining responsibly and our strong commitment to
ESG are integral to our business and are embedded in our culture
and core values. We are pleased to publish our 2022 Sustainability
and ESG Report which details our ESG strategy as well as another
strong year of performance in this important area. Our goal is to
be a partner of choice in the communities in which we operate while
continuing to deliver meaningful and lasting benefits to all of our
stakeholders. We remain focused on our commitment to reduce
greenhouse gas emission intensity (on a per gold equivalent ounce
basis) by 30% by 2030, driven by interim targets and a focus on
continuous improvement and innovation.”
Summary of financial and operating
results
|
Three months ended |
|
March 31, |
(unaudited, in millions of U.S. dollars, except ounces, per share
amounts, and per ounce amounts) |
2023 |
2022 |
Operating
Highlights |
|
|
Total
gold equivalent ounces from continuing operations(a),(b) |
|
|
Produced |
|
466,022 |
|
378,421 |
Sold |
|
490,330 |
|
373,728 |
|
|
|
Financial Highlights from Continuing
Operations(a) |
|
|
Metal
sales |
$ |
929.3 |
$ |
700.9 |
Production cost of sales |
$ |
483.9 |
$ |
363.1 |
Depreciation, depletion and amortization |
$ |
211.9 |
$ |
166.5 |
Operating
earnings |
$ |
143.9 |
$ |
102.5 |
Net
earnings from continuing operations attributable to common
shareholders |
$ |
90.2 |
$ |
81.3 |
Basic
earnings per share from continuing operations attributable to
common shareholders |
$ |
0.07 |
$ |
0.06 |
Diluted
earnings per share from continuing operations attributable to
common shareholders |
$ |
0.07 |
$ |
0.06 |
Adjusted
net earnings from continuing operations attributable to common
shareholders(c) |
$ |
87.6 |
$ |
68.8 |
Adjusted
net earnings from continuing operations per share(c) |
$ |
0.07 |
$ |
0.05 |
Net cash
flow of continuing operations provided from operating
activities |
$ |
259.0 |
$ |
97.9 |
Adjusted
operating cash flow from continuing operations(c) |
$ |
358.2 |
$ |
249.1 |
Capital
expenditures from continuing operations(d) |
$ |
221.2 |
$ |
100.7 |
Free cash
flow from continuing operations(c) |
$ |
37.8 |
$ |
(2.8 |
Average
realized gold price per ounce from continuing operations(e) |
$ |
1,894 |
$ |
1,876 |
Production cost of sales from continuing operations per equivalent
ounce(b) sold(f) |
$ |
987 |
$ |
972 |
Production cost of sales from continuing operations per ounce sold
on a by-product basis(c) |
$ |
929 |
$ |
966 |
All-in
sustaining cost from continuing operations per ounce sold on a
by-product basis(c) |
$ |
1,284 |
$ |
1,227 |
All-in
sustaining cost from continuing operations per equivalent ounce(b)
sold(c) |
$ |
1,321 |
$ |
1,231 |
Attributable all-in cost(g) from continuing operations per ounce
sold on a by-product basis(c) |
$ |
1,616 |
$ |
1,466 |
Attributable all-in cost(g) from continuing operations per
equivalent ounce(b) sold(c) |
$ |
1,634 |
$ |
1,468 |
(a) |
Results for the three months ended March 31, 2023 and 2022 are from
continuing operations and exclude results from the Company’s
Chirano and Russian operations due to the classification of these
operations as discontinued and their later sale in 2022. The
comparative information for the three months ended March 31, 2022,
as previously presented in the MD&A and financial statements
for the three months ended March 31, 2022, has been updated
retrospectively to exclude results from the Company’s Chirano
operations. |
(b) |
“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
2023 was 83.82:1 (first quarter of 2022 - 78.19:1). |
(c) |
The definition and reconciliation
of these non-GAAP financial measures and ratios is included on
pages 17 to 22 of this news release. Non-GAAP financial
measures and ratios have no standardized meaning under IFRS and
therefore, may not be comparable to similar measures presented by
other issuers. |
(d) |
“Capital expenditures from
continuing operations” is as reported as “Additions to property,
plant and equipment” on the interim condensed consolidated
statements of cash flows. |
(e) |
“Average realized gold price per
ounce from continuing operations” is defined as gold metal sales
from continuing operations divided by total gold ounces sold from
continuing operations. |
(f) |
“Production cost of sales from
continuing operations per equivalent ounce sold” is defined as
production cost of sales divided by total gold equivalent ounces
sold from continuing operations. |
(g) |
“Attributable all-in cost”
includes Kinross’ share of Manh Choh (70%) costs. |
|
|
The following operating and financial results
are based on first-quarter gold equivalent production:
Production: Kinross produced
466,022 Au eq. oz. in Q1 2023 from continuing operations, compared
with 378,421 Au eq. oz. in Q1 2022. The 23% year-over-year increase
was primarily attributable to the ramp up of production at La Coipa
in 2022 and higher production at Paracatu, Round Mountain and Fort
Knox.
Sales: Kinross sold 490,330 Au
eq. oz. in Q1 2023 from continuing operations, compared with
373,728 Au eq. oz. in Q1 2022. The year-over-year increase is
primarily due to higher production and timing of gold equivalent
ounces sold.
Average realized gold price:
The average realized gold price from continuing operations in Q1
2023 was $1,894 per ounce, compared with $1,876 per ounce in Q1
2022.
Revenue: During the first
quarter, revenue from continuing operations increased to $929.3
million, compared with $700.9 million during Q1 2022. The 33%
increase is due to an increase in gold equivalent ounces sold and
an increase in average realized gold price.
Production cost of sales:
Production cost of sales1 from continuing operations per Au eq. oz.
sold was $987 for the quarter, compared with $972 in Q1 2022,
primarily due to higher costs at the Company’s Nevada operations,
largely offset by increased production.
Production cost of sales from continuing
operations per Au oz. sold2 on a by-product basis was $929 in Q1
2023, compared with $966 in Q1 2022, based on gold sales of
461,696 ounces and silver sales of 2,400,198 ounces.
Margins3: Kinross’ margin from
continuing operations per Au eq. oz. sold was $907 for Q1 2023, in
line with the Q1 2022 margin of $904.
All-in sustaining cost2: All-in
sustaining cost from continuing operations per Au eq. oz. sold was
$1,321 in Q1 2023, compared with $1,231 in Q1 2022.
In Q1 2023, all-in sustaining cost from
continuing operations per Au oz. sold on a by-product basis was
$1,284, compared with $1,227 in Q1 2022.
Operating cash flow: Operating
cash flow from continuing operations4 was $259.0 million for Q1
2023, compared with $97.9 million for Q1 2022.
Adjusted operating cash flow from continuing
operations2 increased to $358.2 million in Q1 2023, compared with
$249.1 million for Q1 2022.
Free cash
flow2: Free cash flow from continuing
operations in Q1 2023 was $37.8 million, which includes total
working capital changes8 representing an outflow of $99.2 million,
compared with a net outflow of $2.8 million in Q1 2022, which
included total working capital changes8 representing an outflow of
$151.2 million.
Earnings: Reported net
earnings5 from continuing operations was $90.2 million, or $0.07
per share for Q1 2023, compared with reported net earnings of $81.3
million, or $0.06 per share, for Q1 2022. The increase in reported
net earnings was mainly due to the increase in margins.
Adjusted net earnings from continuing
operations2,6 was $87.6 million, or $0.07 per share, for Q1 2023,
compared with $68.8 million, or $0.05 per share, for Q1
2022.
Capital expenditures: Capital
expenditures from continuing operations increased to $221.2 million
for Q1 2023, compared with $100.7 million for Q1 2022, primarily
due to an increase in capital stripping at Tasiast, Fort Knox and
Bald Mountain and development activities at Manh Choh.
Balance sheet
As of March 31, 2023, Kinross had cash and cash
equivalents of $471.0 million, compared with $418.1 million at
December 31, 2022.
The Company had additional available credit9 of
approximately $1.3 billion and total liquidity7 of approximately
$1.7 billion.
Return of capital
As part of its continuing quarterly dividend
program, the Company declared a dividend of $0.03 per common share
payable on June 15, 2023, to shareholders of record as of June 1,
2023.
Under the Company’s current share buyback
program, the amount of capital returned through buybacks is based
on excess cash (defined as free cash flow after paying interest and
dividends) generated in each quarter, with actual share repurchases
occurring on a one quarter lag basis. As such, there were no
repurchases in the first quarter and the Company expects to
repurchase shares in the second half of the year.
Operating results
Mine-by-mine summaries for 2023 first-quarter
operating results may be found on pages 12 and 16 of this news
release. Across the portfolio, all projects are on plan and met
quarterly production targets. Highlights include the following:
At Tasiast, production was
lower quarter-over-quarter and year-over-year primarily due to
lower throughput as a result of the planned shutdown in February
mainly for tie-ins at the Tasiast 24k project. Notwithstanding the
planned shutdown, monthly production records were achieved in both
January and March as the lower quarter-over-quarter throughput was
partially offset by improving recoveries and record-high grades as
a result of mine sequencing. Cost of sales per ounce sold was
higher compared with the previous quarter due to lower production,
and lower year-over-year mainly due to lower operating waste mined
in the first quarter of 2023.
At Paracatu, production was on
plan and increased year-over-year primarily due to higher
throughput, grades and recoveries, and decreased
quarter-over-quarter mainly due to expected lower grades and
recoveries as a result of planned mine sequencing, partially offset
by higher throughput. Cost of sales per ounce sold was lower
year-over-year mainly due to increased production and higher
quarter-over-quarter mainly due to lower production.
At Fort Knox, production was
lower compared with the previous quarter mainly due to the seasonal
effect of fewer ounces recovered from the heap leach pads.
Year-over-year production increased largely due to higher mill
production as a result of higher grades processed. Production cost
of sales per ounce sold was in line quarter-over-quarter, and lower
year-over-year due to higher production.
At Round Mountain, production
was slightly lower than the previous quarter mainly due to fewer
ounces recovered from the heap leach pads. Production increased
year-over-year due to an increase in ounces recovered from the heap
leach pads. Cost of sales per ounce sold increased
quarter-over-quarter due to lower production and lower capital
development, and increased year-over-year due to inflationary cost
pressures on power and reagent costs, maintenance supplies and
lower capital development.
At Bald Mountain, production
decreased quarter-over-quarter mainly due to fewer ounces recovered
from the heap leach pads related to a decrease in tonnes placed on
the heap leach pads, partially offset by higher grades.
Year-over-year production decreased mainly due to fewer tonnes
placed on the heap leach pads and lower grades. Cost of sales per
ounce sold increased quarter-over-quarter due to lower production
and year-over-year largely due to higher reagent costs and
royalties. The unprecedented winter snowfall had an impact on
mining and stacking activities at Bald Mountain, however the site
achieved quarterly production targets and has made strong progress
catching up on mining activities in April.
At La Coipa, production was
lower compared with the previous quarter mainly due to the planned
mill shutdown to increase mill reliability, resulting in lower
throughput, partially offset by higher grades and strong
recoveries. Cost of sales per ounce sold increased
quarter-over-quarter mainly due to lower production. The Company
continues to focus on optimizing the plant and maintaining the
outperformance on recovery, and production at La Coipa remains on
plan for the year. La Coipa poured first gold in February 2022 and
ramped up in the second half of the year.
Development projects and exploration
update
Tasiast
The Tasiast
24k project continues to progress on budget and on
schedule to reach designed throughput of 24,000 t/d by mid-year and
ramp-up to operate consistently at this design throughput by the
end of the year. The successful execution of the mill shutdown in
February put into operation a new vibrating screen at the SAG
discharge, as well as an upgrade to a higher capacity SAG primary
cyclone cluster. Mechanical and electrical installation works are
substantially advanced on the pre-classification circuit (the
remaining 24k debottlenecking scope), with pre-commissioning of
subsystems having commenced in April and phased commissioning
expected to continue through to the end of June. A shutdown is
planned in June in connection with the 24k expansion project.
The 34MW Tasiast solar power plant continues to
advance and is on schedule for completion by the end of the year.
All photovoltaic modules have arrived and procurement is
substantially complete with all critical equipment on site or in
transit. Civil works are well advanced and mechanical assembly
installation is progressing well as the installation of the first
photovoltaic modules started in April.
Great Bear
The Company continues to make excellent progress
at the Great Bear project in Red Lake, Ontario. In the first
quarter, Kinross drilled approximately 38,000 metres as part of its
robust exploration and infill drilling program. Kinross’ focus this
year is on inferred drilling in the area half a kilometre to one
kilometre below surface. This work will be complemented by
exploration drilling along strike of the LP Fault zone and around
the Hinge and Limb zones that have seen little exploration drilling
for new mineralization beyond the known zones, with the goal of
further delineating the deposit at depth as well as adding inferred
resource ounces.
Since its last update on February 13, 2023, the
Company has received additional assay results, with a selection of
the new results from targets at the LP Fault and Limb zones
highlighted in the table below. Notable exploration results at
Great Bear in the first quarter include:
- BR-695 (Yuma) – 9.6m @ 10.5 g/t at a depth of 1,300m
- BR-697A (Yuma) – 38m @ 5.2 g/t, including 4.2m @ 32.4 g/t, at a
depth of 800m
- BR-735 (Viggo) – 2.6m @ 73 g/t, at a depth of 100m
- DL-132 (Limb) – 5.9m @ 7.8 g/t at a depth of 900m
Results-to-date continue to support the view of
a high-grade deposit that underpins the prospect of a large,
long-life mining complex with the recent results continuing to
demonstrate the high-grade nature of the mineralization. Hole
BR-695, the deepest hole to date on the property, intersected a
9.6m interval at 10.5 g/t gold at a vertical depth of 1.3
kilometres. The latest results also confirm the system has broad
zones of mineralization as seen in hole BR-697A that intersected a
38m interval at 5.2 g/t gold including a 4.2m interval of 32.4 g/t
gold, at a vertical depth of 800m. Hole BR-735 intersected 2.6m at
73 g/t gold at a vertical depth of 100m and extends the strike
length of the Viggo mineralization. In the Limb zone (Red Lake
style of mineralization) hole DL-132 intersected 5.9m of 7.8 g/t
gold at a vertical depth of 900m, once again demonstrating that
this system also continues at depth.
The Company is also progressing studies and
permitting for an advanced exploration program that would establish
an underground decline to obtain a bulk sample and allow for more
efficient exploration of deeper areas of the LP Fault zone, along
with the nearby Hinge and Limb gold zones. Kinross is targeting a
potential start of the surface construction for the advanced
exploration program as early as 2024.
Baseline environmental surveys, local community
socio-economic studies and engineering activities required for the
permitting process for the main project are progressing
well. The Company continues to work together to build a
mutually beneficial relationship with the Wabauskang and Lac Seul
First Nations, on whose traditional territories the project is
located, and is providing support for their technical resources in
the area of environmental monitoring. Kinross continues to
advance technical studies and permitting activities, with plans to
release the results of this work in the form of a preliminary
economic assessment in 2024.
Selected Great Bear Drill
Results
See Appendix A for full results.
Hole ID |
|
From (m) |
To (m) |
Width (m) |
True Width (m) |
Au (g/t) |
Target |
BR-655 |
|
542.9 |
592.2 |
49.3 |
36.0 |
2.88 |
Discovery |
BR-655 |
including |
549.0 |
552.9 |
3.9 |
2.8 |
3.52 |
|
BR-655 |
and including |
577.8 |
585.9 |
8.1 |
5.9 |
12.09 |
|
BR-655 |
and |
598.3 |
610.0 |
11.7 |
8.7 |
1.11 |
|
BR-655 |
and |
628.8 |
632.0 |
3.3 |
2.5 |
0.53 |
|
BR-655 |
and |
648.0 |
652.2 |
4.1 |
3.5 |
0.83 |
|
BR-655 |
and |
688.5 |
695.5 |
7.0 |
5.2 |
3.44 |
|
BR-655 |
including |
688.5 |
693.8 |
5.3 |
3.9 |
3.96 |
|
BR-655 |
and |
708.0 |
712.5 |
4.5 |
3.8 |
0.51 |
|
BR-695 |
|
1,363.8 |
1,373.3 |
9.5 |
8.6 |
2.07 |
Yuma |
BR-695 |
including |
1,363.8 |
1,367.4 |
3.6 |
3.3 |
5.02 |
|
BR-695 |
|
1,530.0 |
1,551.0 |
21.0 |
19.1 |
1.14 |
|
BR-695 |
|
1,556.5 |
1,602.2 |
45.7 |
41.6 |
2.71 |
|
BR-695 |
including |
1,556.5 |
1,567.0 |
10.6 |
9.6 |
10.46 |
|
BR-695 |
including |
1,561.4 |
1,565.0 |
3.7 |
3.3 |
24.38 |
|
BR-695 |
|
1,617.2 |
1,620.0 |
2.8 |
2.5 |
5.31 |
|
BR-697A |
|
968.8 |
971.8 |
3.0 |
2.8 |
0.46 |
Yuma |
BR-697A |
and |
1,004.2 |
1,046.2 |
42.1 |
38.0 |
5.24 |
|
BR-697A |
including |
1,027.4 |
1,032.0 |
4.7 |
4.2 |
32.35 |
|
BR-697A |
and |
1,044.2 |
1,044.9 |
0.8 |
0.7 |
64.50 |
|
BR-719 |
|
620.7 |
627.6 |
6.8 |
5.3 |
0.82 |
Bruma |
BR-719 |
and |
680.4 |
706.3 |
25.9 |
19.4 |
2.05 |
|
BR-719 |
including |
682.0 |
694.0 |
12.0 |
9.0 |
3.66 |
|
BR-735 |
|
120.0 |
123.0 |
3.0 |
2.6 |
73.18 |
Viggo |
BR-735 |
including |
121.5 |
123.0 |
1.5 |
1.3 |
146.00 |
|
BR-794 |
|
942.0 |
953.5 |
11.5 |
9.0 |
3.77 |
Yauro |
BR-794 |
including |
942.0 |
944.0 |
2.0 |
1.6 |
6.54 |
|
BR-794 |
and including |
952.0 |
952.8 |
0.8 |
0.6 |
35.60 |
|
BR-794 |
and |
964.0 |
972.0 |
8.0 |
7.0 |
24.38 |
|
BR-794 |
and |
997.4 |
1,013.0 |
15.7 |
11.4 |
1.76 |
|
BR-794 |
and |
1,083.6 |
1,088.7 |
5.1 |
3.9 |
1.23 |
|
DL-132 |
|
898.1 |
904.8 |
6.7 |
5.4 |
3.62 |
Limb |
DL-132 |
including |
899.1 |
904.8 |
5.7 |
4.6 |
4.14 |
|
DL-132 |
and |
1,059.9 |
1,066.7 |
6.8 |
5.9 |
7.75 |
|
DL-132 |
including |
1,060.9 |
1,061.5 |
0.6 |
0.5 |
76.40 |
|
Results are preliminary in nature and are
subject to on-going QA/QC. Lengths are subject to rounding.
See Appendix B for a LP Fault zone long
section.
Manh Choh
At the 70% owned Manh
Choh project, activities remain on schedule and on
budget, with the early works program completed successfully. The
camp is now operational, supporting the construction activities
underway, and is being managed by an Alaska-based firm. Long lead
procurement orders have been expedited and onboarding of key
construction and operational contractors continues to advance as
planned for both the Manh Choh site and Fort Knox mill
modifications. The public comment period for the operating permits
was successfully completed and the overall permitting process
remains on track. The Company continues to plan for the
construction ramp-up with a steadfast focus on developing the mine
while keeping the safety of our people and the environment at the
forefront and continuing to build strong relationships with
communities and the Native Village of Tetlin.
The Company announced on July 27, 2022, that it
was proceeding with the Manh Choh project as the operator of the
joint venture. Initial production from Manh Choh is expected in the
second half of 2024 and is expected to add approximately 640,000
attributable Au eq. oz. to the Company’s production profile over
its approximately 4.5 year life-of-mine.
Chile
Kinross’ activities in Chile are currently
focused on La Coipa and potential opportunities to extend its mine
life. The Lobo-Marte project continues to provide
optionality as a potential large, low-cost mine upon the conclusion
of mining at La Coipa. While the Company focuses its technical
resources on La Coipa, it will continue to engage and build
relationships with communities related to Lobo-Marte and government
stakeholders.
Curlew Basin
exploration
At
the Curlew Basin
exploration project in Washington State, located approximately 35
kilometres north of the Company’s Kettle River mill by paved road,
underground exploration drill results continue to confirm vein
extensions and continuity within high priority target areas.
Exploration drilling is underway and will continue throughout the
remainder of the year with the goal of building on the
resource.
Exploration drill results received during the
quarter include:
-
LP – 3.0m @ 37.3 g/t Au and 6.9m @ 11.7 g/t Au (1136 &
1135)
-
K5N – 2.3m @ 24.2 g/t Au and 2.7m @ 20.7 g/t Au (1402)
-
K5S – 2.8m @ 10.6 g/t Au and 4.8m @ 8.75 g/t Au (1147)
Round Mountain Phase X and Gold Hill
exploration
Kinross continues to focus on progressing the
higher-margin, higher-return underground opportunities at Phase X
and Gold Hill.
Construction of the exploration decline at
Phase X started in the first quarter and
underground development is progressing to start definition drilling
in early 2024. The Company is also advancing studies and permitting
for a potential underground mine at Phase X in parallel with the
underground development to advance our path to production.
Phase X is a continuation of the world-class
Round Mountain low sulfidation epithermal system (over 16Moz.
produced which consists of disseminated gold hosted in a rhyolite
tuff). This mineralized zone progressively deepens westward due to
a combination of a gentle west-dip and down-dropping along a series
of ‘Basin and Range’ faults.
At the Gold
Hill exploration project, located approximately seven
kilometres northeast of Round Mountain, drilling commenced early
this year with four drill rigs and permitting for an underground
decline is progressing. Exploration drilling is focused on
extending the Jersey vein and testing continuity of the
mid-Atlantic vein zone. Drilling thus far has successfully
intersected the targeted veins and assays will be included in the
Company’s second quarter results.
Gold Hill is a low sulfidation epithermal vein
system consisting of high-grade narrow quartz veins with
significant strike continuity. Historic underground mining (current
pit area) produced approximately 40koz with a grade of 10g/t
Au.
Company Guidance The 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 28.
The Company is on track to meet its 2023
production guidance of 2.1 million Au eq. oz. (+/- 5%). Production
is expected to increase following the first quarter, largely driven
by expected higher production at Tasiast and La Coipa, as well as
the seasonal impacts on mining at Paracatu and the Company’s US
heap leach operations. Kinross’ annual production is expected to
remain stable in 2024 and 2025 at 2.1 million and 2.0 million
attributable10 Au eq. oz. (+/- 5%), respectively.
The Company is also on track to meet its 2023
guidance for production cost of sales, all-in sustaining cost and
attributable11 capital expenditures.
Environment, Social and Governance (ESG)
update
Kinross published its 2022 Sustainability and
ESG Report on May 9, 2023, detailing its approach to
sustainability, its ESG strategy and strong performance in this
area over the past year. At the core of Kinross’ business is its
commitment to safety and the health of its people, environmental
stewardship, and the well-being of its host communities.
Access the full Sustainability and ESG Report
here: www.kinross.com/2022-Sustainability-and-ESG-ReportFor
highlights of the Report, read here:
www.kinross.com/Kinross-release-2022-Sustainability-and-ESG-Report
Kinross’ updated ESG strategy outlines three key
pillars – Workforce and Community, Natural Capital, and Climate and
Energy – through to 2030 and beyond as priority focus areas to make
strong contributions and build shared value.
Kinross’ leading performance was reinforced by
continued high ratings and rankings within our peer group. The
Company achieved its highest S&P ESG Global rating in 2022,
ranking in the 97th percentile, the highest ever placement for
Kinross, improved its Sustainalytics risk rating score with a
significant 10-point increase, and maintained its ‘A’ position with
MSCI for the third-consecutive year.
Kinross obtained external assurance of both
selected ESG performance metrics and conformance with the
Responsible Gold Mining Principles established by the World Gold
Council and, following the Company’s normal practice, has provided
Global Reporting Initiative (GRI) and Sustainability Accounting
Standards Board (SASB) indices.
Other highlights from the 2022 Sustainability
and ESG Report include:
- In the most important area of safety, improvements were made
across all leading areas including a “Critical Risk Management
Blitz” to identify opportunities and weaknesses and launching a new
Global Safety Learning Forum to advance Kinross’ people-centric
safety philosophy through site level engagement and information
sharing across operations.
- In 2022, Kinross generated $2.9 billion in economic benefits in
its host countries through taxes, wages, procurement and community
support, including donations. Since 2010, $44 billion has been
contributed to the economies of Kinross’ host countries.
- Kinross made strides in its DEI strategy achieving the highest
percentage of women employees at Kinross in the last five years,
including the highest percentage of women in STEM roles at 15% and
the highest percentage of women in management positions, including
33% women on its Senior Leadership Team. At sites, high-levels of
in-country employment were maintained with 99% of non-management
employees and 87% of management from within host countries.
- For reclamation efforts that go beyond standard reclamation
requirements, Bald Mountain was awarded the 2022 Reclamation Award
for ‘Leadership in Concurrent Mine Reclamation’ from the Nevada
Division of Environmental Protection, Nevada Department of Wildlife
(NDOW), US Forest Service, US Bureau of Land Management (BLM) and
the Nevada Division of Minerals.
In the first quarter of 2023, Kinross maintained
its strong ESG performance, including setting up a cross-functional
Corporate Human Rights Task Force that is focused on delivering a
four-part action plan. In host communities, more than $1.3 million
of monetary and in-kind contributions were made through site
community investment strategies and a high level of stakeholder
interaction was maintained.
Kinross maintained close engagement with
Indigenous communities related to its projects and operations,
including advancing discussions with the Wabauskang and Lac Seul
First Nations on how the Great Bear project can provide
long-lasting benefits to their communities. At Manh Choh, the
Alaska Department of Labor and Workforce Development provided the
University of Alaska Fairbank’s Mining and Training Petroleum
Service program with a $300,000 grant, in partnership with Kinross
Alaska, to support local communities with the training and skills
needed to secure jobs at Manh Choh. In Chile, eight members of the
Colla indigenous communities related to La Coipa and Lobo Marte
graduated from an adult education program. Learn more about
Kinross’ work with the Colla community here:
https://youtu.be/4we2gHyBEWg.
Conference call details
In connection with this news release, Kinross
will hold a conference call and audio webcast on Wednesday, May 10,
2023, at 7:45 a.m. EDT to discuss the results, followed by a
question-and-answer session. To access the call, please dial:
Canada & US toll-free – 1
(888) 330-2446; Passcode: 4915537Outside of Canada &
US – 1 (240) 789-2732; Passcode: 4915537
Replay (available up to 14 days after the
call):
Canada & US toll-free –
1-800-770-2030; Passcode: 4915537Outside of Canada &
US – 1-647-362-9199; Passcode: 4915537
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 release should be read in conjunction with
Kinross’ 2023 first-quarter unaudited Financial Statements and
Management’s Discussion and Analysis report at www.kinross.com.
Kinross’ 2023 first-quarter unaudited 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.
Virtual Annual Meeting of
Shareholders
Kinross’ Annual Meeting of Shareholders will be
held on Wednesday, May 10, 2023, at 10:00 a.m. EDT.
The Company has elected to hold a virtual
meeting via a live audio webcast to provide enhanced flexibility
and opportunity for shareholder participation irrespective of their
geographic location and share ownership. Further, with advancements
in conferencing technology and the residual impacts of the COVID-19
pandemic, Kinross believes this expedient approach will still
provide the same level of disclosure, transparency and
participation as previous meetings.
The virtual meeting will be accessible online
at:
web.lumiagm.com/417158950.
Voting and participation instructions for
eligible shareholders are provided in the Company’s Notice of
Annual Meeting of Shareholders and Management Information
Circular.
The link to the virtual meeting will also be
accessible at www.kinross.com and will be archived for later
use.
About Kinross Gold
Corporation
Kinross is a Canadian-based global senior gold
mining company with operations and projects in the United States,
Brazil, Mauritania, Chile and Canada. Our focus is on delivering
value based on the core principles of responsible mining,
operational excellence, disciplined growth, and balance sheet
strength. Kinross maintains listings on the Toronto Stock Exchange
(symbol:K) and the New York Stock Exchange (symbol:KGC).
Media
Contact
Victoria BarringtonSenior Director, Corporate
Communicationsphone:
647-788-4153victoria.barrington@kinross.com
Investor Relations
Contact
Chris LichtenheldtVice-President, Investor
Relationsphone: 416-365-2761chris.lichtenheldt@kinross.com
Review of operations
|
|
|
|
|
|
|
|
Three months ended March 31,(unaudited) |
Gold equivalent ounces |
|
|
|
|
|
|
|
Produced |
|
Sold |
|
Production cost ofsales ($millions) |
|
Production cost ofsales/equivalent ounce sold |
|
2023 |
2022 |
|
2023 |
2022 |
|
2023 |
2022 |
|
2023 |
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Fort Knox |
65,387 |
54,803 |
|
65,404 |
52,813 |
|
$ |
77.6 |
$ |
67.4 |
|
$ |
1,186 |
$ |
1,276 |
Round Mountain |
58,832 |
45,319 |
|
58,226 |
46,959 |
|
|
96.5 |
|
52.3 |
|
|
1,657 |
|
1,114 |
Bald Mountain |
33,828 |
36,071 |
|
47,283 |
41,017 |
|
|
58.0 |
|
40.3 |
|
|
1,227 |
|
983 |
United States Total |
158,047 |
136,193 |
|
170,913 |
140,789 |
|
|
232.1 |
|
160.0 |
|
|
1,358 |
|
1,136 |
|
|
|
|
|
|
|
|
|
|
|
|
Paracatu |
123,334 |
108,009 |
|
128,344 |
101,886 |
|
|
118.0 |
|
106.6 |
|
|
919 |
|
1,046 |
La Coipa |
53,596 |
524 |
|
61,780 |
- |
|
|
44.9 |
|
- |
|
|
727 |
|
- |
Maricunga |
- |
- |
|
814 |
858 |
|
|
0.5 |
|
0.7 |
|
|
614 |
|
816 |
Tasiast |
131,045 |
133,695 |
|
128,479 |
130,195 |
|
|
88.4 |
|
95.8 |
|
|
688 |
|
736 |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations Total |
466,022 |
378,421 |
|
490,330 |
373,728 |
|
|
483.9 |
|
363.1 |
|
|
987 |
|
972 |
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued
Operations |
|
|
|
|
|
|
|
|
|
|
|
Kupol |
- |
95,891 |
|
- |
85,937 |
|
|
- |
|
65.4 |
|
$ |
- |
$ |
761 |
Chirano
(100%) |
- |
34,929 |
|
- |
35,810 |
|
|
- |
|
47.6 |
|
|
- |
|
1,329 |
|
- |
130,820 |
|
- |
121,747 |
|
|
- |
|
113.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim condensed consolidated balance
sheets
(unaudited, expressed in millions
of U.S. dollars, except share amounts) |
|
|
|
|
|
|
|
|
|
|
|
As at |
|
|
March 31, |
|
December 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
471.0 |
|
|
$ |
418.1 |
|
Restricted cash |
|
|
10.9 |
|
|
|
10.1 |
|
Accounts receivable and other assets |
|
|
290.5 |
|
|
|
318.2 |
|
Current income tax recoverable |
|
|
6.5 |
|
|
|
8.5 |
|
Inventories |
|
|
1,138.9 |
|
|
|
1,072.2 |
|
Unrealized fair value of derivative assets |
|
|
23.0 |
|
|
|
25.5 |
|
|
|
|
1,940.8 |
|
|
|
1,852.6 |
|
Non-current assets |
|
|
|
|
Property, plant and equipment |
|
|
7,793.1 |
|
|
|
7,741.4 |
|
Long-term investments |
|
|
100.2 |
|
|
|
116.9 |
|
Other long-term assets |
|
|
660.8 |
|
|
|
680.9 |
|
Deferred tax assets |
|
|
5.5 |
|
|
|
4.6 |
|
Total assets |
|
$ |
10,500.4 |
|
|
$ |
10,396.4 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
479.3 |
|
|
$ |
550.0 |
|
Current income tax payable |
|
|
44.6 |
|
|
|
89.4 |
|
Current portion of long-term debt and credit facilities |
|
|
535.3 |
|
|
|
36.0 |
|
Current portion of provisions |
|
|
50.8 |
|
|
|
50.8 |
|
Other current liabilities |
|
|
16.4 |
|
|
|
25.3 |
|
|
|
|
1,126.4 |
|
|
|
751.5 |
|
Non-current liabilities |
|
|
|
|
Long-term debt and credit facilities |
|
|
2,158.9 |
|
|
|
2,556.9 |
|
Provisions |
|
|
799.1 |
|
|
|
755.9 |
|
Long-term lease liabilities |
|
|
24.0 |
|
|
|
23.1 |
|
Other long-term liabilities |
|
|
125.0 |
|
|
|
125.3 |
|
Deferred tax liabilities |
|
|
311.2 |
|
|
|
301.5 |
|
Total liabilities |
|
$ |
4,544.6 |
|
|
$ |
4,514.2 |
|
|
|
|
|
|
Equity |
|
|
|
|
Common shareholders’ equity |
|
|
|
|
Common share capital |
|
$ |
4,480.2 |
|
|
$ |
4,449.5 |
|
Contributed surplus |
|
|
10,641.1 |
|
|
|
10,667.5 |
|
Accumulated deficit |
|
|
(9,198.2 |
) |
|
|
(9,251.6 |
) |
Accumulated other comprehensive income (loss) |
|
|
(36.1 |
) |
|
|
(41.7 |
) |
Total common shareholders’ equity |
|
|
5,887.0 |
|
|
|
5,823.7 |
|
Non-controlling interests |
|
|
68.8 |
|
|
|
58.5 |
|
Total equity |
|
|
5,955.8 |
|
|
|
5,882.2 |
|
Total liabilities and equity |
|
$ |
10,500.4 |
|
|
$ |
10,396.4 |
|
|
|
|
|
|
Common shares |
|
|
|
|
Authorized |
|
Unlimited |
|
|
Unlimited |
|
Issued and outstanding |
|
|
1,227,563,020 |
|
|
|
1,221,891,341 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim condensed consolidated
statements of operations
(unaudited,
expressed in millions of U.S. dollars, except share and per share
amounts) |
|
|
Three months ended |
|
|
March 31, |
|
March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue |
|
|
|
|
Metal sales |
|
$ |
929.3 |
|
|
$ |
700.9 |
|
|
|
|
|
|
Cost of sales |
|
|
|
|
Production cost of sales |
|
|
483.9 |
|
|
|
363.1 |
|
Depreciation, depletion and amortization |
|
|
211.9 |
|
|
|
166.5 |
|
Total cost of sales |
|
|
695.8 |
|
|
|
529.6 |
|
Gross profit |
|
|
233.5 |
|
|
|
171.3 |
|
Other operating expense |
|
|
31.2 |
|
|
|
15.2 |
|
Exploration and business development |
|
|
34.0 |
|
|
|
23.4 |
|
General and administrative |
|
|
24.4 |
|
|
|
30.2 |
|
Operating earnings |
|
|
143.9 |
|
|
|
102.5 |
|
Other income (expense) - net |
|
|
4.4 |
|
|
|
(6.7 |
) |
Finance income |
|
|
9.4 |
|
|
|
2.2 |
|
Finance expense |
|
|
(27.5 |
) |
|
|
(21.2 |
) |
Earnings from continuing operations before
tax |
|
|
130.2 |
|
|
|
76.8 |
|
Income tax (expense) recovery - net |
|
|
(39.8 |
) |
|
|
4.5 |
|
Earnings
from continuing operations after tax |
|
|
90.4 |
|
|
|
81.3 |
|
Earnings
(loss) from discontinued operations after tax |
|
|
- |
|
|
|
(605.2 |
) |
Net earnings (loss) |
|
$ |
90.4 |
|
|
$ |
(523.9 |
) |
Net earnings from continuing operations attributable
to: |
|
|
|
|
Non-controlling interests |
|
$ |
0.2 |
|
|
$ |
- |
|
Common shareholders |
|
$ |
90.2 |
|
|
$ |
81.3 |
|
Net earnings (loss) from discontinued operations
attributable to: |
|
|
|
|
Non-controlling interests |
|
$ |
- |
|
|
$ |
(0.1 |
) |
Common shareholders |
|
$ |
- |
|
|
$ |
(605.1 |
) |
Net earnings (loss) attributable to: |
|
|
|
|
Non-controlling interests |
|
$ |
0.2 |
|
|
$ |
(0.1 |
) |
Common shareholders |
|
$ |
90.2 |
|
|
$ |
(523.8 |
) |
Earnings per share from continuing operations attributable
to common shareholders |
|
|
|
|
Basic |
|
$ |
0.07 |
|
|
$ |
0.06 |
|
Diluted |
|
$ |
0.07 |
|
|
$ |
0.06 |
|
Earnings (loss) per share from discontinued operations
attributable to common shareholders |
|
$ |
- |
|
|
$ |
(0.48 |
) |
Basic |
|
$ |
- |
|
|
$ |
(0.48 |
) |
Diluted |
|
|
|
|
Earnings (loss) per share attributable to common
shareholders |
|
|
|
|
Basic |
|
$ |
0.07 |
|
|
$ |
(0.41 |
) |
Diluted |
|
$ |
0.07 |
|
|
$ |
(0.41 |
) |
|
|
|
|
|
Interim condensed consolidated
statements of cash flows
(unaudited, expressed in
millions of U.S. dollars) |
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
March 31, |
|
March 31, |
|
|
|
|
2023 |
|
|
|
2022 |
|
Net inflow (outflow) of cash related to the following
activities: |
|
|
|
|
|
Operating: |
|
|
|
|
|
Earnings
from continuing operations after tax |
|
|
$ |
90.4 |
|
|
$ |
81.3 |
|
Adjustments to reconcile net earnings from continuing operations to
net cash provided from operating activities: |
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
|
211.9 |
|
|
|
166.5 |
|
Finance expense |
|
|
|
27.5 |
|
|
|
21.2 |
|
Deferred tax expense (recovery) |
|
|
|
9.0 |
|
|
|
(16.9 |
) |
Foreign exchange losses and other |
|
|
|
15.4 |
|
|
|
6.8 |
|
Reclamation expense (recovery) |
|
|
|
4.0 |
|
|
|
(9.8 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable and other assets |
|
|
|
20.0 |
|
|
|
48.3 |
|
Inventories |
|
|
|
(43.2 |
) |
|
|
(89.3 |
) |
Accounts payable and accrued liabilities |
|
|
|
(5.8 |
) |
|
|
(27.8 |
) |
Cash flow provided from operating activities |
|
|
|
329.2 |
|
|
|
180.3 |
|
Income taxes paid |
|
|
|
(70.2 |
) |
|
|
(82.4 |
) |
Net cash flow of continuing operations provided from
operating activities |
|
|
|
259.0 |
|
|
|
97.9 |
|
Net cash flow of discontinued operations provided from
operating activities |
|
|
|
- |
|
|
|
98.4 |
|
Investing: |
|
|
|
|
|
Additions to property, plant and equipment |
|
|
|
(221.2 |
) |
|
|
(100.7 |
) |
Interest paid capitalized to property, plant and equipment |
|
|
|
(38.3 |
) |
|
|
(10.6 |
) |
Acquisitions net of cash acquired |
|
|
|
- |
|
|
|
(1,027.5 |
) |
Net disposals (additions) to long-term investments and other
assets |
|
|
|
15.3 |
|
|
|
(13.9 |
) |
Increase in restricted cash - net |
|
|
|
(0.8 |
) |
|
|
(1.7 |
) |
Interest received and other - net |
|
|
|
2.7 |
|
|
|
1.1 |
|
Net cash flow of continuing operations used in investing
activities |
|
|
|
(242.3 |
) |
|
|
(1,153.3 |
) |
Net cash flow of discontinued operations provided from
(used in) investing activities |
|
|
|
5.0 |
|
|
|
(17.0 |
) |
Financing: |
|
|
|
|
|
Proceeds from drawdown of debt |
|
|
|
100.0 |
|
|
|
1,097.6 |
|
Interest paid |
|
|
|
(24.2 |
) |
|
|
(24.7 |
) |
Payment of lease liabilities |
|
|
|
(15.5 |
) |
|
|
(5.4 |
) |
Dividends paid to common shareholders |
|
|
|
(36.8 |
) |
|
|
(38.9 |
) |
Other - net |
|
|
|
7.2 |
|
|
|
5.9 |
|
Net cash flow of continuing operations provided from
financing activities |
|
|
|
30.7 |
|
|
|
1,034.5 |
|
Net cash flow of discontinued operations provided from
financing activities |
|
|
|
- |
|
|
|
- |
|
Effect of exchange rate changes on cash and cash
equivalents of continuing operations |
|
|
|
0.5 |
|
|
|
- |
|
Effect of exchange rate changes on cash and cash
equivalents of discontinued operations |
|
|
|
- |
|
|
|
(3.8 |
) |
Increase in cash and cash equivalents |
|
|
|
52.9 |
|
|
|
56.7 |
|
Cash and cash equivalents, beginning of
period |
|
|
|
418.1 |
|
|
|
531.5 |
|
Reclassified to assets held for sale |
|
|
|
- |
|
|
|
(134.0 |
) |
Cash and cash equivalents, end of period |
|
|
$ |
471.0 |
|
|
$ |
454.2 |
|
|
|
|
|
|
|
Operating Summary |
|
Mine |
Period |
Tonnes Ore Mined |
Ore Processed (Milled) |
Ore Processed (Heap Leach) |
Grade (Mill) |
Grade (Heap Leach) |
Recovery (a)(d) |
Gold Eq Production(b) |
Gold Eq Sales(b) |
Production cost of sales |
Production cost of sales/oz(c) |
Cap Ex - sustaining(e) |
Total Cap Ex (e) |
DD&A |
|
|
|
(’000
tonnes) |
(’000 tonnes) |
(’000 tonnes) |
(g/t) |
(g/t) |
(%) |
(ounces) |
(ounces) |
($ millions) |
($/ounce) |
($ millions) |
($ millions) |
($ millions) |
Americas |
Fort Knox |
Q1 2023 |
7,412 |
1,966 |
5,972 |
0.78 |
0.22 |
82 |
% |
65,387 |
65,404 |
$ |
77.6 |
$ |
1,186 |
$ |
38.6 |
$ |
39.1 |
$ |
18.6 |
Q4 2022 |
12,205 |
2,395 |
11,454 |
0.69 |
0.20 |
79 |
% |
83,739 |
87,061 |
$ |
102.1 |
$ |
1,173 |
$ |
34.4 |
$ |
39.1 |
$ |
40.9 |
Q3 2022 |
15,547 |
2,477 |
13,120 |
0.71 |
0.21 |
80 |
% |
75,522 |
74,221 |
$ |
88.6 |
$ |
1,194 |
$ |
30.5 |
$ |
31.0 |
$ |
21.8 |
Q2 2022 |
14,591 |
2,260 |
12,785 |
0.72 |
0.19 |
81 |
% |
77,184 |
77,698 |
$ |
92.6 |
$ |
1,192 |
$ |
12.1 |
$ |
13.1 |
$ |
26.1 |
Q1 2022 |
13,743 |
1,852 |
13,010 |
0.66 |
0.17 |
80 |
% |
54,803 |
52,813 |
$ |
67.4 |
$ |
1,276 |
$ |
1.7 |
$ |
2.9 |
$ |
20.9 |
Round Mountain |
Q1 2023 |
5,019 |
878 |
4,367 |
0.81 |
0.44 |
79 |
% |
58,832 |
58,226 |
$ |
96.5 |
$ |
1,657 |
$ |
7.4 |
$ |
7.4 |
$ |
34.6 |
Q4 2022 |
5,177 |
962 |
4,772 |
0.74 |
0.36 |
74 |
% |
61,929 |
67,484 |
$ |
95.1 |
$ |
1,409 |
$ |
41.1 |
$ |
41.1 |
$ |
19.1 |
Q3 2022 |
8,856 |
1,021 |
8,336 |
0.64 |
0.27 |
79 |
% |
62,417 |
61,757 |
$ |
87.0 |
$ |
1,409 |
$ |
24.7 |
$ |
24.7 |
$ |
17.6 |
Q2 2022 |
6,702 |
945 |
6,515 |
0.67 |
0.32 |
78 |
% |
56,709 |
51,455 |
$ |
74.8 |
$ |
1,454 |
$ |
20.5 |
$ |
20.6 |
$ |
11.7 |
Q1 2022 |
3,767 |
929 |
3,208 |
0.80 |
0.36 |
79 |
% |
45,319 |
46,959 |
$ |
52.3 |
$ |
1,114 |
$ |
15.9 |
$ |
16.0 |
$ |
12.1 |
Bald Mountain |
Q1 2023 |
1,864 |
- |
1,857 |
- |
0.47 |
nm |
33,828 |
47,283 |
$ |
58.0 |
$ |
1,227 |
$ |
6.1 |
$ |
25.2 |
$ |
33.9 |
Q4 2022 |
3,002 |
- |
2,957 |
- |
0.37 |
nm |
58,521 |
66,847 |
$ |
62.8 |
$ |
939 |
$ |
17.2 |
$ |
37.4 |
$ |
63.4 |
Q3 2022 |
4,152 |
- |
4,152 |
- |
0.37 |
nm |
65,394 |
52,472 |
$ |
51.2 |
$ |
976 |
$ |
10.4 |
$ |
28.2 |
$ |
39.1 |
Q2 2022 |
4,945 |
- |
4,945 |
- |
0.60 |
nm |
54,108 |
54,472 |
$ |
54.5 |
$ |
1,001 |
$ |
5.0 |
$ |
16.2 |
$ |
38.4 |
Q1 2022 |
3,870 |
- |
3,870 |
- |
0.63 |
nm |
36,071 |
41,017 |
$ |
40.3 |
$ |
983 |
$ |
2.7 |
$ |
5.8 |
$ |
35.1 |
Paracatu |
Q1 2023 |
8,056 |
15,130 |
- |
0.37 |
- |
79 |
% |
123,334 |
128,344 |
$ |
118.0 |
$ |
919 |
$ |
27.8 |
$ |
27.8 |
$ |
40.4 |
Q4 2022 |
13,324 |
13,847 |
- |
0.50 |
- |
81 |
% |
180,809 |
183,190 |
$ |
130.3 |
$ |
711 |
$ |
43.9 |
$ |
43.9 |
$ |
52.7 |
Q3 2022 |
11,752 |
13,797 |
- |
0.45 |
- |
79 |
% |
159,113 |
152,616 |
$ |
131.1 |
$ |
859 |
$ |
33.6 |
$ |
33.6 |
$ |
47.2 |
Q2 2022 |
11,011 |
15,133 |
- |
0.35 |
- |
75 |
% |
129,423 |
133,472 |
$ |
129.6 |
$ |
971 |
$ |
31.2 |
$ |
31.2 |
$ |
46.0 |
Q1 2022 |
6,165 |
13,645 |
- |
0.33 |
- |
75 |
% |
108,009 |
101,886 |
$ |
106.6 |
$ |
1,046 |
$ |
16.0 |
$ |
16.0 |
$ |
39.6 |
La Coipa(f) |
Q1 2023 |
748 |
691 |
- |
1.68 |
- |
88 |
% |
53,596 |
61,780 |
$ |
44.9 |
$ |
727 |
$ |
1.6 |
$ |
25.4 |
$ |
36.4 |
Q4 2022 |
1,047 |
933 |
- |
1.47 |
- |
84 |
% |
67,683 |
68,135 |
$ |
39.4 |
$ |
578 |
$ |
2.6 |
$ |
46.0 |
$ |
25.6 |
Q3 2022 |
1,079 |
637 |
- |
1.19 |
- |
83 |
% |
33,955 |
24,681 |
$ |
12.1 |
$ |
490 |
$ |
2.9 |
$ |
34.7 |
$ |
- |
Q2 2022 |
550 |
321 |
- |
0.74 |
- |
69 |
% |
7,414 |
7,099 |
$ |
5.6 |
$ |
789 |
$ |
1.6 |
$ |
39.0 |
$ |
- |
Q1 2022 |
174 |
58 |
- |
0.41 |
- |
82 |
% |
524 |
- |
$ |
- |
$ |
- |
$ |
0.7 |
$ |
35.8 |
$ |
- |
West Africa |
Tasiast |
Q1 2023 |
1,690 |
1,208 |
- |
3.49 |
- |
91 |
% |
131,045 |
128,479 |
$ |
88.4 |
$ |
688 |
$ |
14.6 |
$ |
64.6 |
$ |
46.2 |
Q4 2022 |
3,737 |
1,627 |
- |
3.21 |
- |
90 |
% |
143,002 |
147,019 |
$ |
96.2 |
$ |
654 |
$ |
38.3 |
$ |
90.3 |
$ |
48.7 |
Q3 2022 |
4,437 |
1,741 |
- |
2.72 |
- |
89 |
% |
132,754 |
128,014 |
$ |
94.8 |
$ |
741 |
$ |
3.6 |
$ |
33.4 |
$ |
58.0 |
Q2 2022 |
3,053 |
1,680 |
- |
2.51 |
- |
89 |
% |
129,140 |
114,064 |
$ |
93.3 |
$ |
818 |
$ |
6.7 |
$ |
24.3 |
$ |
56.4 |
Q1 2022 |
3,462 |
1,524 |
- |
2.54 |
- |
94 |
% |
133,695 |
130,195 |
$ |
95.8 |
$ |
736 |
$ |
4.1 |
$ |
19.4 |
$ |
57.1 |
(a) |
Due to the nature of heap leach operations, recovery rates at Bald
Mountain cannot be accurately measured on a quarterly basis.
Recovery rates at Fort Knox and Round Mountain represent mill
recovery only. |
(b) |
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 2023: 83.82:1; Q4 2022: 81.88:1; Q3 2022:
89.91:1; Q2 2022: 82.77:1; Q1 2022: 78.19:1. |
(c) |
“Production cost of sales per
equivalent ounce sold” is defined as production cost of sales
divided by total gold equivalent ounces sold from continuing
operations. |
(d) |
“nm” means not meaningful. |
(e) |
“Total Cap Ex” is as reported as
“Additions to property, plant and equipment” on the interim
condensed consolidated statements of cash flows. “Capital
expenditures - sustaining” is a non-GAAP financial measure. The
definition and reconciliation of this non-GAAP financial measure is
included on page 22 of this news release. |
(f) |
La Coipa silver grade and
recovery were as follows: Q1 2023: 125.77 g/t, 70%; Q4 2022: 137.53
g/t, 68%; Q3 2022: 121.06 g/t, 61%; Q2 2022: 56.04 g/t, 43%; Q1
2022: nm. |
|
|
Reconciliation of non-GAAP financial
measures and ratios
The Company has included certain non-GAAP
financial measures and ratios in this document. These financial
measures and ratios are not defined under International Financial
Reporting Standards (IFRS) and should not be considered in
isolation. The Company believes that these financial measures and
ratios, together with financial measures and ratios determined in
accordance with IFRS, provide investors with an improved ability to
evaluate the underlying performance of the Company. The inclusion
of these financial measures and ratios is meant to provide
additional information and should not be used as a substitute for
performance measures prepared in accordance with IFRS. These
financial measures and ratios are not necessarily standard and
therefore may not be comparable to other issuers.
All the non-GAAP financial measures and ratios
in this document are from continuing operations and exclude results
from the Company’s Chirano and Russian operations due to the
classification of these operations as discontinued. The comparative
information as previously presented in the MD&A and financial
statements for the three months ended March 31, 2022, has been
recast to exclude Chirano. As a result of the exclusion of Chirano,
the following non-GAAP financial measures and ratios are no longer
on an attributable basis, but on a total basis: production cost of
sales from continuing operations per ounce sold on a by-product
basis and all-in-sustaining cost from continuing operations per
equivalent ounce sold and per ounce sold on a by-product basis.
Adjusted net earnings from continuing
operations attributable to common shareholders and
adjusted net earnings from continuing operations per
share are non-GAAP financial measures and ratios 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 and ratios, 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 from continuing operations
and adjusted net earnings from continuing operations per share
measures and ratios are not necessarily indicative of net earnings
from continuing operations and earnings per share measures and
ratios 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:
|
(unaudited, expressed in millions of U.S dollars, |
Three Months Ended |
except
per share amounts) |
March 31, |
|
|
2023 |
|
|
2022 |
|
|
|
|
Net
earnings from continuing operations attributable to common
shareholders - as reported |
$ |
90.2 |
|
$ |
81.3 |
|
Adjusting
items: |
|
|
Foreign exchange (gains) losses |
|
(3.8 |
) |
|
4.1 |
|
Foreign exchange gains on translation of tax basis and foreign
exchange on deferred income taxes within income tax expense |
|
(13.2 |
) |
|
(15.7 |
) |
Taxes in respect of prior periods |
|
12.0 |
|
|
5.7 |
|
Reclamation expense (recovery) |
|
4.0 |
|
|
(9.8 |
) |
Other(a) |
|
(1.2 |
) |
|
3.5 |
|
Tax effects of the above adjustments |
|
(0.4 |
) |
|
(0.3 |
) |
|
|
(2.6 |
) |
|
(12.5 |
) |
Adjusted
net earnings from continuing operations attributable to common
shareholders |
$ |
87.6 |
|
$ |
68.8 |
|
Weighted
average number of common shares outstanding - Basic |
|
1,225.0 |
|
|
1,264.5 |
|
Adjusted
net earnings from continuing operations per share |
$ |
0.07 |
|
$ |
0.05 |
|
Basic
earnings from continuing operations per share attributable to
common shareholders - as reported |
$ |
0.07 |
|
$ |
0.06 |
|
|
|
|
(a) |
Other includes various impacts, such as one-time costs at sites,
and gains and losses on the sale of assets and hedges, which the
Company believes are not reflective of the Company’s underlying
performance for the reporting period. |
|
|
Free cash flow from continuing
operations is a non-GAAP financial measure and is defined
as net cash flow of continuing operations provided from operating
activities less additions to property, plant and equipment. The
Company believes that this measure, which is used internally to
evaluate the Company’s underlying cash generation performance and
the ability to repay creditors and return cash to shareholders,
provides investors with the ability to better evaluate the
Company’s underlying performance. However, the free cash flow from
continuing operations measure is not necessarily indicative of
operating earnings or net cash flow of continuing operations
provided from operating activities as determined under IFRS.
The following table provides a reconciliation of
free cash flow from continuing operations for the periods
presented:
|
|
|
|
|
|
Three months ended |
(unaudited, expressed in millions of U.S dollars) |
|
March 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
Net cash
flow of continuing operations provided from operating activities -
as reported |
$ |
259.0 |
|
$ |
97.9 |
|
|
|
|
|
Less:
Additions to property, plant and equipment |
|
(221.2 |
) |
|
(100.7 |
) |
|
|
|
|
Free cash
flow from continuing operations |
$ |
37.8 |
|
$ |
(2.8 |
) |
|
|
|
|
|
|
|
|
Adjusted operating cash flow from
continuing operations is a non-GAAP financial measure and
is defined as net cash flow of continuing operations provided from
operating activities 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. The Company uses adjusted operating cash flow from
continuing operations 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 from continuing operations measure is not
necessarily indicative of net cash flow of continuing operations
provided from operating activities as determined under IFRS.
The following table provides a reconciliation of
adjusted operating cash flow from continuing operations for the
periods presented:
|
|
|
|
Three months ended |
(unaudited, expressed in millions of U.S dollars) |
March 31, |
|
|
2023 |
|
|
2022 |
|
|
|
|
Net cash
flow of continuing operations provided from operating activities -
as reported |
$ |
259.0 |
|
$ |
97.9 |
|
|
|
|
Adjusting
items: |
|
|
Working capital changes: |
|
|
Accounts receivable and other assets |
|
(20.0 |
) |
|
(48.3 |
) |
Inventories |
|
43.2 |
|
|
89.3 |
|
Accounts payable and other liabilities, including income taxes
paid |
|
76.0 |
|
|
110.2 |
|
Total working capital changes |
|
99.2 |
|
|
151.2 |
|
Adjusted
operating cash flow from continuing operations |
$ |
358.2 |
|
$ |
249.1 |
|
|
|
|
|
|
|
Production cost of sales from continuing
operations per ounce sold on a by-product basis is a
non-GAAP ratio 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 ratio 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
production cost of sales from continuing operations per ounce sold
on a by-product basis for the periods presented:
|
|
|
(unaudited, expressed in millions of U.S. dollars, |
|
Three months ended |
except ounces and production cost of sales per equivalent
ounce) |
|
March 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
Production cost of sales from continuing operations - as
reported |
$ |
483.9 |
|
$ |
363.1 |
|
Less:
silver revenue(a) |
|
(54.9 |
) |
|
(4.4 |
) |
Production cost of sales from continuing operations net of silver
by-product revenue |
$ |
429.0 |
|
$ |
358.7 |
|
|
|
|
|
Gold
ounces sold from continuing operations |
|
461,696 |
|
|
371,335 |
|
Total
gold equivalent ounces sold from continuing operations |
|
490,330 |
|
|
373,728 |
|
Production cost of sales from continuing operations per equivalent
ounce sold(b) |
$ |
987 |
|
$ |
972 |
|
Production cost of sales from continuing operations per ounce sold
on a by-product basis |
$ |
929 |
|
$ |
966 |
|
|
|
|
|
See Endnotes on page 22 for details of
the footnotes referenced within the table above.
All-in sustaining cost and attributable
all-in cost from continuing operations per ounce sold on a
by-product basis are non-GAAP financial measures and
ratios, as applicable, calculated based on guidance published by
the World Gold Council (“WGC”). The WGC is a market development
organization for the gold industry and is an association whose
membership comprises leading gold mining companies including
Kinross. Although the WGC is not a mining industry regulatory
organization, it worked closely with its member companies to
develop these metrics. Adoption of the all-in sustaining cost and
all-in cost metrics is voluntary and not necessarily standard, and
therefore, these measures and ratios presented by the Company may
not be comparable to similar measures and ratios presented by other
issuers. The Company believes that the all-in sustaining cost and
all-in cost measures complement existing measures and ratios
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,
i.e. a by-product. 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, including capitalized stripping, 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.
All-in sustaining cost and attributable
all-in cost from continuing operations per ounce sold on a
by-product basis are calculated by adjusting production
cost of sales from continuing operations, as reported on the
interim condensed consolidated statements of operations, as
follows:
|
|
(unaudited, expressed in millions of U.S. dollars, |
Three Months Ended |
except ounces and costs per ounce) |
March 31, |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
Production cost of sales from continuing operations - as
reported |
$ |
483.9 |
|
$ |
363.1 |
|
Less:
silver revenue from continuing operations(a) |
|
(54.9 |
) |
|
(4.4 |
) |
Production cost of sales from continuing operations net of silver
by-product revenue |
$ |
429.0 |
|
$ |
358.7 |
|
Adjusting
items: |
|
|
General and administrative(d) |
|
24.4 |
|
|
30.2 |
|
Other operating expense - sustaining(e) |
|
6.5 |
|
|
5.6 |
|
Reclamation and remediation - sustaining(f) |
|
14.3 |
|
|
7.8 |
|
Exploration and business development - sustaining(g) |
|
6.6 |
|
|
6.9 |
|
Additions to property, plant and equipment - sustaining(h) |
|
96.6 |
|
|
41.1 |
|
Lease payments - sustaining(i) |
|
15.2 |
|
|
5.2 |
|
All-in
Sustaining Cost on a by-product basis |
$ |
592.6 |
|
$ |
455.5 |
|
Adjusting
items on an attributable(c) basis: |
|
|
Other operating expense - non-sustaining(e) |
|
8.7 |
|
|
12.2 |
|
Reclamation and remediation - non-sustaining(f) |
|
1.9 |
|
|
1.2 |
|
Exploration and business development - non-sustaining(g) |
|
27.6 |
|
|
16.5 |
|
Additions to property, plant and equipment - non-sustaining(h) |
|
115.2 |
|
|
58.7 |
|
Lease payments - non-sustaining(i) |
|
0.3 |
|
|
0.2 |
|
All-in
Cost on a by-product basis - attributable(c) |
$ |
746.3 |
|
$ |
544.3 |
|
|
|
461,696 |
|
|
371,335 |
|
Production cost of sales from continuing operations per equivalent
ounce sold(b) |
$ |
987 |
|
$ |
972 |
|
All-in
sustaining cost from continuing operations per ounce sold on a
by-product basis |
$ |
1,284 |
|
$ |
1,227 |
|
Attributable(c) all-in cost from continuing operations per ounce
sold on a by-product basis |
$ |
1,616 |
|
$ |
1,466 |
|
|
|
|
See Endnotes on page 22 for details of
the footnotes referenced within the table above.
The Company also assesses its all-in sustaining
cost and attributable all-in cost from continuing operations on a
gold equivalent ounce basis. Under these non-GAAP financial
measures and ratios, the Company’s production of silver is
converted into gold equivalent ounces and credited to total
production.
All-in sustaining cost and attributable
all-in cost from continuing operations per equivalent ounce
sold are calculated by adjusting production cost of sales
from continuing operations, as reported on the interim condensed
consolidated statements of operations, as follows:
|
|
|
(unaudited, expressed in millions of U.S. dollars, |
Three months ended |
except ounces and costs per ounce) |
March 31, |
|
2023 |
2022 |
|
|
|
Production cost of sales from continuing operations - as
reported |
$ |
483.9 |
$ |
363.1 |
Adjusting
items: |
|
|
General and administrative(d) |
|
24.4 |
|
30.2 |
Other operating expense - sustaining(e) |
|
6.5 |
|
5.6 |
Reclamation and remediation - sustaining(f) |
|
14.3 |
|
7.8 |
Exploration and business development - sustaining(g) |
|
6.6 |
|
6.9 |
Additions to property, plant and equipment - sustaining(h) |
|
96.6 |
|
41.1 |
Lease payments - sustaining(i) |
|
15.2 |
|
5.2 |
All-in
Sustaining Cost |
$ |
647.5 |
$ |
459.9 |
Adjusting
items on an attributable(c) basis: |
|
|
Other operating expense - non-sustaining(e) |
|
8.7 |
|
12.2 |
Reclamation and remediation - non-sustaining(f) |
|
1.9 |
|
1.2 |
Exploration and business development - non-sustaining(g) |
|
27.6 |
|
16.5 |
Additions to property, plant and equipment - non-sustaining(h) |
|
115.2 |
|
58.7 |
Lease payments - non-sustaining(i) |
|
0.3 |
|
0.2 |
All-in
Cost - attributable(c) |
$ |
801.2 |
$ |
548.7 |
Gold
equivalent ounces sold from continuing operations |
|
490,330 |
|
373,728 |
Production cost of sales from continuing operations per equivalent
ounce sold(b) |
$ |
987 |
$ |
972 |
All-in
sustaining cost from continuing operations per equivalent ounce
sold |
$ |
1,321 |
$ |
1,231 |
Attributable(c) all-in cost from continuing operations per
equivalent ounce sold |
$ |
1,634 |
$ |
1,468 |
|
|
|
See Endnotes on page 22 for details of
the footnotes referenced within the table above.
Capital expenditures from continuing
operations are classified as either sustaining capital
expenditures or non-sustaining capital expenditures, depending on
the nature of the expenditure. Sustaining capital expenditures
typically represent capital expenditures at existing operations
including capitalized exploration costs and capitalized stripping
unless related to major projects, 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 non-sustaining capital
expenditures. Non-sustaining capital expenditures represent 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.
Management believes this to be a useful indicator of the purpose of
capital expenditures and this distinction is an input into the
calculation of all-in sustaining costs from continuing operations
per ounce and attributable all-in costs from continuing operations
per ounce. The categorization of sustaining capital expenditures
and non-sustaining capital expenditures is consistent with the
definitions under the WGC all-in cost standard. Sustaining capital
expenditures and non-sustaining capital expenditures are not
defined under IFRS, however, the sum of these two measures total to
additions to property, plant and equipment as disclosed under IFRS
on the interim condensed consolidated statements of cash flows.
The following table provides a reconciliation of
the classification of capital expenditures for the periods
presented:
(unaudited, expressed in millions of U.S dollars) |
|
|
|
|
|
|
|
Three months ended March 31, 2023: |
Fort Knox (USA) |
Round Mountain (USA) |
Bald Mountain (USA) |
Manh Choh (USA)(a) |
Total USA |
Paracatu (Brazil) |
La Coipa (Chile) |
Tasiast (Mauritania) |
|
Other(b) |
Total |
Sustaining capital expenditures |
$ |
38.6 |
$ |
7.4 |
$ |
6.1 |
$ |
- |
$ |
52.1 |
$ |
27.8 |
$ |
1.6 |
$ |
14.6 |
|
$ |
0.4 |
$ |
96.5 |
Non-sustaining capital expenditures |
|
0.5 |
|
- |
|
19.1 |
|
28.7 |
|
48.3 |
|
- |
|
23.8 |
|
50.0 |
|
|
2.6 |
|
124.7 |
Additions to property, plant and equipment - per cash flow |
$ |
39.1 |
$ |
7.4 |
$ |
25.2 |
$ |
28.7 |
$ |
100.4 |
$ |
27.8 |
$ |
25.4 |
$ |
64.6 |
|
$ |
3.0 |
$ |
221.2 |
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2022:(c) |
Sustaining capital expenditures |
$ |
1.7 |
$ |
16.0 |
$ |
2.7 |
$ |
- |
$ |
20.4 |
$ |
16.0 |
$ |
0.7 |
$ |
4.1 |
|
$ |
0.2 |
$ |
41.4 |
Non-sustaining capital expenditures |
|
1.2 |
|
- |
|
3.1 |
|
2.9 |
|
7.2 |
|
- |
|
35.1 |
|
15.3 |
|
|
1.7 |
|
59.3 |
Additions to property, plant and equipment - per cash flow |
$ |
2.9 |
$ |
16.0 |
$ |
5.8 |
$ |
2.9 |
$ |
27.6 |
$ |
16.0 |
$ |
35.8 |
$ |
19.4 |
|
$ |
1.9 |
$ |
100.7 |
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Represents 100% of capital expenditures, of which 70% is Kinross’
share. |
(b) |
Other includes non-sustaining
capital expenditures of $1.2 million in 2023 at Lobo-Marte in Chile
and sustaining and non-sustaining capital expenditures of $0.4
million and $1.4 million in 2023, respectively, in Canada. |
(c) |
Results for the three months
ended March 31, 2022 have been updated retrospectively and exclude
results from the Company’s Chirano and Russian operations due to
the classification of these operations in 2022. |
|
|
Endnotes
(a) |
“Silver revenue” represents the 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. |
(b) |
“Production cost of sales from
continuing operations per equivalent ounce sold” is defined as
production cost of sales from continuing operations divided by
total gold equivalent ounces sold from continuing operations. |
(c) |
“Attributable” includes Kinross’
share of Manh Choh (70%) costs. As Manh Choh is a non-operating
site, the attributable costs are non-sustaining costs and as such
only impact the all-in-cost measures. |
(d) |
“General and administrative”
expenses are as reported on the interim condensed consolidated
statements 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. |
(e) |
“Other operating expense –
sustaining” is calculated as “Other operating expense” as reported
on the interim condensed consolidated statements 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. |
(f) |
“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. |
(g) |
“Exploration and business
development – sustaining” is calculated as “Exploration and
business development” expenses as reported on the interim condensed
consolidated statements of operations, less non-sustaining
exploration and business development 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 classified as either sustaining or non-sustaining
based on a determination of the type of expense and requirement for
general or growth related operations. |
(h) |
“Additions to property, plant and
equipment – sustaining and non-sustaining” are as presented on page
22 of this news release. Non-sustaining capital expenditures
included in the calculation of attributable all-in-cost includes
Kinross’ share of Manh Choh (70%) costs. |
(i) |
“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. |
|
|
APPENDIX A
Recent LP Fault zone assay
results
Hole ID |
|
From (m) |
To(m) |
Width (m) |
TrueWidth (m) |
Au(g/t) |
Target |
BR-539 |
|
645.7 |
649.4 |
3.7 |
2.9 |
0.38 |
Bruma |
BR-539 |
and |
719.7 |
724.0 |
4.4 |
3.5 |
0.56 |
|
BR-653 |
|
744.5 |
754.4 |
9.9 |
7.2 |
1.03 |
Discovery |
BR-653 |
and |
968.1 |
973.7 |
5.6 |
4.8 |
0.58 |
|
BR-654 |
|
656.4 |
682.5 |
26.1 |
22.2 |
0.86 |
Discovery |
BR-654 |
and |
690.0 |
693.5 |
3.5 |
2.9 |
0.39 |
|
BR-654 |
and |
712.8 |
721.2 |
8.5 |
7.1 |
0.83 |
|
BR-654 |
and |
736.5 |
742.1 |
5.6 |
4.1 |
0.59 |
|
BR-654 |
and |
765.2 |
769.7 |
4.5 |
3.7 |
0.61 |
|
BR-654 |
and |
778.7 |
790.7 |
12.0 |
10.2 |
0.59 |
|
BR-654 |
and |
798.1 |
816.2 |
18.2 |
15.4 |
1.45 |
|
BR-654 |
including |
809.0 |
811.0 |
2.0 |
1.7 |
6.32 |
|
BR-654 |
and |
835.7 |
846.3 |
10.6 |
8.0 |
0.59 |
|
BR-655 |
|
542.9 |
592.2 |
49.3 |
36.0 |
2.88 |
Discovery |
BR-655 |
including |
549.0 |
552.9 |
3.9 |
2.8 |
3.52 |
|
BR-655 |
and including |
577.8 |
585.9 |
8.1 |
5.9 |
12.09 |
|
BR-655 |
and |
598.3 |
610.0 |
11.7 |
8.7 |
1.11 |
|
BR-655 |
and |
628.8 |
632.0 |
3.3 |
2.5 |
0.53 |
|
BR-655 |
and |
648.0 |
652.2 |
4.1 |
3.5 |
0.83 |
|
BR-655 |
and |
688.5 |
695.5 |
7.0 |
5.2 |
3.44 |
|
BR-655 |
including |
688.5 |
693.8 |
5.3 |
3.9 |
3.96 |
|
BR-655 |
and |
708.0 |
712.5 |
4.5 |
3.8 |
0.51 |
|
BR-656 |
|
270.2 |
274.0 |
3.8 |
3.0 |
0.64 |
Discovery |
BR-656 |
and |
417.5 |
436.8 |
19.3 |
17.3 |
1.08 |
|
BR-656 |
and |
457.2 |
498.5 |
41.4 |
29.8 |
0.95 |
|
BR-656 |
and |
504.6 |
520.0 |
15.4 |
12.6 |
0.71 |
|
BR-656 |
and |
546.2 |
556.1 |
10.0 |
7.6 |
0.78 |
|
BR-656 |
and |
655.4 |
658.4 |
3.0 |
2.5 |
0.37 |
|
BR-659 |
|
519.2 |
527.8 |
8.6 |
6.9 |
0.92 |
Viggo |
BR-667 |
|
525.4 |
532.4 |
7.0 |
6.0 |
1.78 |
Discovery |
BR-667 |
and |
541.5 |
601.7 |
60.2 |
48.8 |
1.00 |
|
BR-697A |
|
968.8 |
971.8 |
3.0 |
2.8 |
0.46 |
Yuma |
BR-697A |
and |
1,004.2 |
1,046.2 |
42.1 |
38.0 |
5.24 |
|
BR-697A |
including |
1,027.4 |
1,032.0 |
4.7 |
4.2 |
32.35 |
|
BR-697A |
and |
1,044.2 |
1,044.9 |
0.8 |
0.7 |
64.50 |
|
BR-669 |
|
412.7 |
416.7 |
4.0 |
3.6 |
0.47 |
Discovery |
BR-669 |
and |
421.5 |
427.8 |
6.3 |
4.8 |
0.74 |
|
BR-669 |
and |
443.8 |
455.8 |
12.0 |
8.8 |
1.74 |
|
BR-669 |
including |
447.3 |
449.4 |
2.1 |
1.6 |
7.55 |
|
BR-669 |
and |
554.6 |
561.8 |
7.2 |
5.6 |
1.16 |
|
BR-679 |
|
310.5 |
313.5 |
3.0 |
2.4 |
0.70 |
Bruma |
BR-679 |
and |
324.3 |
328.2 |
3.8 |
3.2 |
0.56 |
|
BR-679 |
and |
472.5 |
475.5 |
3.0 |
2.5 |
1.28 |
|
BR-694 |
No significant intersections |
Auro |
BR-695 |
|
1,363.8 |
1,373.3 |
9.5 |
8.6 |
2.07 |
Yuma |
BR-695 |
including |
1,363.8 |
1,367.4 |
3.6 |
3.3 |
5.02 |
|
BR-695 |
|
1,530.0 |
1,551.0 |
21.0 |
19.1 |
1.14 |
|
BR-695 |
|
1,556.5 |
1,602.2 |
45.7 |
41.6 |
2.71 |
|
BR-695 |
including |
1,556.5 |
1,567.0 |
10.6 |
9.6 |
10.46 |
|
BR-695 |
including |
1,561.4 |
1,565.0 |
3.7 |
3.3 |
24.38 |
|
BR-695 |
|
1,617.2 |
1,620.0 |
2.8 |
2.5 |
5.31 |
|
BR-708A |
No significant intersections |
Yauro |
BR-716 |
|
504.0 |
507.0 |
3.0 |
2.5 |
0.49 |
Bruma |
BR-716 |
and |
625.0 |
629.4 |
4.4 |
3.4 |
0.55 |
|
BR-716 |
and |
638.8 |
657.5 |
18.7 |
14.5 |
0.87 |
|
BR-716 |
and |
665.2 |
672.3 |
7.1 |
5.7 |
0.67 |
|
BR-716 |
and |
721.6 |
730.6 |
8.9 |
7.7 |
0.54 |
|
BR-717 |
|
572.4 |
581.5 |
9.1 |
6.4 |
1.02 |
Bruma |
BR-717 |
and |
631.5 |
639.4 |
7.9 |
7.2 |
0.50 |
|
BR-718 |
No significant intersections |
Bruma |
BR-719 |
|
620.7 |
627.6 |
6.8 |
5.3 |
0.82 |
Bruma |
BR-719 |
and |
680.4 |
706.3 |
25.9 |
19.4 |
2.05 |
|
BR-719 |
including |
682.0 |
694.0 |
12.0 |
9.0 |
3.66 |
|
BR-720 |
|
220.1 |
225.5 |
5.4 |
4.0 |
0.49 |
Discovery |
BR-720 |
and |
242.2 |
264.0 |
21.8 |
18.5 |
0.79 |
|
BR-720 |
and |
334.0 |
339.0 |
5.0 |
3.9 |
0.49 |
|
BR-720 |
and |
454.5 |
456.5 |
2.0 |
1.4 |
16.69 |
|
BR-728 |
No significant intersections |
Bruma |
BR-729 |
|
639.1 |
645.0 |
5.9 |
4.8 |
0.64 |
Bruma |
BR-732 |
|
48.5 |
57.5 |
9.0 |
7.8 |
0.33 |
Viggo |
BR-733 |
No significant intersections |
Viggo |
BR-734 |
|
38.5 |
56.4 |
18.0 |
13.1 |
1.33 |
Viggo |
BR-735 |
|
120.0 |
123.0 |
3.0 |
2.6 |
73.18 |
Viggo |
BR-735 |
including |
121.5 |
123.0 |
1.5 |
1.3 |
146.00 |
|
BR-736 |
|
211.7 |
217.0 |
5.3 |
4.8 |
3.17 |
Viggo |
BR-736 |
including |
212.7 |
216.0 |
3.3 |
3.0 |
4.57 |
|
BR-739 |
|
41.0 |
45.0 |
4.0 |
3.2 |
0.72 |
Viggo |
BR-740 |
|
443.0 |
446.0 |
3.0 |
2.6 |
1.26 |
Viggo |
BR-741 |
|
505.5 |
510.0 |
4.5 |
4.1 |
0.52 |
Viggo |
BR-742 |
|
432.8 |
438.7 |
5.9 |
5.0 |
0.57 |
Viggo |
BR-742 |
and |
466.4 |
471.0 |
4.6 |
4.1 |
0.67 |
|
BR-743 |
|
466.2 |
482.3 |
16.1 |
13.2 |
0.87 |
Viggo |
BR-755 |
No significant intersections |
Auro |
BR-756 |
|
988.3 |
994.5 |
6.3 |
5.0 |
0.99 |
Auro |
BR-757 |
|
867.0 |
870.0 |
3.0 |
2.2 |
1.17 |
Auro |
BR-757 |
and |
892.5 |
897.0 |
4.5 |
3.9 |
0.51 |
|
BR-758 |
|
578.8 |
582.0 |
3.2 |
2.2 |
4.04 |
Viggo |
BR-759 |
|
664.0 |
667.0 |
3.0 |
2.2 |
0.74 |
Auro |
BR-759 |
and |
912.0 |
922.5 |
10.6 |
8.0 |
0.67 |
|
BR-762 |
|
517.0 |
520.5 |
3.5 |
2.7 |
2.72 |
Viggo |
BR-765 |
|
729.0 |
738.0 |
9.0 |
7.2 |
0.80 |
Auro |
BR-765 |
and |
763.8 |
768.0 |
4.3 |
3.4 |
0.58 |
|
BR-766 |
|
510.0 |
517.7 |
7.7 |
6.6 |
2.80 |
Viggo |
BR-766 |
including |
511.6 |
515.0 |
3.4 |
3.0 |
5.20 |
|
BR-767 |
|
599.5 |
606.7 |
7.1 |
6.4 |
1.41 |
Viggo |
BR-767 |
and |
672.8 |
675.8 |
3.0 |
2.3 |
1.09 |
|
BR-768 |
|
798.5 |
803.0 |
4.5 |
3.7 |
1.29 |
Yauro |
BR-768 |
and |
884.7 |
890.7 |
6.1 |
4.8 |
0.84 |
|
BR-769 |
No significant intersections |
Yauro |
BR-770 |
|
1,288.0 |
1,291.0 |
3.0 |
2.1 |
0.51 |
Auro |
BR-770 |
and |
1,368.8 |
1,396.2 |
27.4 |
20.8 |
0.84 |
|
BR-770 |
and |
1,524.3 |
1,534.5 |
10.2 |
8.3 |
0.68 |
|
BR-770 |
and |
1,631.3 |
1,635.8 |
4.5 |
3.3 |
0.43 |
|
BR-770 |
and |
1,659.3 |
1,662.3 |
3.0 |
2.7 |
2.91 |
|
BR-771 |
|
1,235.6 |
1,254.1 |
18.5 |
16.7 |
0.47 |
Auro |
BR-771 |
and |
1,386.0 |
1,389.2 |
3.2 |
2.8 |
0.65 |
|
BR-772 |
|
1,317.0 |
1,320.0 |
3.0 |
2.6 |
0.64 |
Discovery |
BR-772 |
and |
1,368.0 |
1,399.5 |
31.5 |
24.6 |
0.67 |
|
BR-772 |
and |
1,413.0 |
1,427.4 |
14.3 |
10.2 |
0.57 |
|
BR-773 |
|
842.9 |
849.1 |
6.2 |
4.5 |
0.45 |
Bruma |
BR-780 |
|
842.9 |
846.3 |
3.4 |
2.9 |
1.38 |
Bruma |
BR-780 |
and |
906.0 |
922.7 |
16.7 |
14.0 |
0.92 |
|
BR-780 |
and |
941.6 |
947.2 |
5.6 |
5.0 |
1.12 |
|
BR-781 |
|
689.6 |
699.0 |
9.5 |
8.2 |
0.45 |
Bruma |
BR-781 |
and |
777.0 |
791.2 |
14.2 |
10.1 |
0.48 |
|
BR-781 |
and |
804.0 |
821.3 |
17.3 |
13.3 |
0.46 |
|
BR-782A |
No significant intersections |
Bruma |
BR-783 |
|
648.8 |
651.8 |
3.0 |
2.2 |
2.00 |
Bruma |
BR-783 |
and |
939.8 |
943.2 |
3.4 |
3.1 |
0.44 |
|
BR-793 |
No significant intersections |
Yauro |
BR-794 |
|
942.0 |
953.5 |
11.5 |
9.0 |
3.77 |
Yauro |
BR-794 |
including |
942.0 |
944.0 |
2.0 |
1.6 |
6.54 |
|
BR-794 |
and including |
952.0 |
952.8 |
0.8 |
0.6 |
35.60 |
|
BR-794 |
and |
964.0 |
972.0 |
8.0 |
7.0 |
24.38 |
|
BR-794 |
and |
997.4 |
1,013.0 |
15.7 |
11.4 |
1.76 |
|
BR-794 |
and |
1,083.6 |
1,088.7 |
5.1 |
3.9 |
1.23 |
|
BR-800 |
|
817.0 |
820.0 |
3.0 |
2.1 |
1.40 |
Auro |
BR-800 |
and |
840.0 |
843.0 |
3.0 |
2.6 |
0.39 |
|
DL-083 |
|
663.6 |
673.6 |
10.1 |
7.7 |
5.57 |
Limb |
DL-083 |
including |
664.5 |
673.6 |
9.1 |
7.0 |
6.05 |
|
DL-088 |
No significant intersections |
Limb |
DL-089 |
No significant intersections |
Limb |
DL-114 |
|
237.1 |
240.6 |
3.5 |
2.7 |
0.68 |
Limb |
DL-114 |
and |
829.0 |
834.1 |
5.1 |
4.2 |
2.01 |
|
DL-117 |
|
873.1 |
876.8 |
3.7 |
2.7 |
2.41 |
Limb |
DL-132 |
|
898.1 |
904.8 |
6.7 |
5.4 |
3.62 |
Limb |
DL-132 |
including |
899.1 |
904.8 |
5.7 |
4.6 |
4.14 |
|
DL-132 |
and |
1,059.9 |
1,066.7 |
6.8 |
5.9 |
7.75 |
|
DL-132 |
including |
1,060.9 |
1,061.5 |
0.6 |
0.5 |
76.40 |
|
DL-133 |
|
19.7 |
52.5 |
32.8 |
28.5 |
0.81 |
Limb |
DL-134 |
|
918.1 |
921.5 |
3.4 |
2.8 |
1.60 |
Limb |
Results are preliminary in nature and are
subject to on-going QA/QC. Lengths are subject to rounding.
APPENDIX B
LP Fault zone long section
A photo accompanying this announcement is available
at
https://www.globenewswire.com/NewsRoom/AttachmentNg/6b8a3d42-cd78-4023-901c-4385be0bc7a9
Composites generated from drill intersections
received since the February 13, 2023 news release includes assays
from 52 fully assayed drill holes at the LP Fault zone and 8 at the
Limb zone. Composites are generated using 0.3 g/t minimum grade,
maximum linear internal dilution of 5.0 m, and allows short
high-grade intervals greater than 8 GXM to be retained. Results are
preliminary in nature and are subject to on-going QA/QC. For full
list of significant, composited assay results, see Appendix A.
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) “Q1 2023 highlights from continuing
operations”, “Operational and development project highlights”, “CEO
commentary”, “Return of capital”, “Operating results”, “Development
project and exploration update”, “Company Guidance”, and
“Environment, Social and Governance (ESG) update” as well as
statements with respect to our guidance for production, cost
guidance, including production costs of sales, all-in sustaining
cost of sales, and capital expenditures; statements with respect to
our guidance for cash flow and free cash flow; the declaration,
payment and sustainability of the Company’s dividends or share
repurchases; identification of additional resources and reserves;
the Company’s liquidity; greenhouse gas reduction initiatives and
targets; the implementation and effectiveness of the Company’s ESG
strategy; the schedules and budgets for the Company’s development
projects; budgets for and future prospects for exploration,
development and operation at the Company’s operations and projects,
including the Great Bear project, ramp-up at La Coipa, the Tasiast
24k project, Manh Choh and the Tasiast solar project; and the
Company’s liquidity outlook, 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,
operating costs; price inflation; 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, government regulation, permit
applications, restarting suspended or disrupted operations;
environmental risks and proceedings; and resolution of pending
litigation. The words “advance”, “believe”, “continue”,
“estimates”, “expects”, “focus”, “forecast”, “guidance”, “on
schedule”, “on track”, “opportunity” “outlook”, “plan”, “poised”,
“potential”, “priority”, “prospect”, 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, 2022, and the
Annual Information Form dated March 31, 2022 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 snowfall, 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 or snowfall, which can impact costs and/or production) and
other or related natural disasters, labour disruptions (including
but not limited to strikes or workforce reductions), supply
disruptions, power disruptions, damage to equipment, pit wall
slides 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 Tasiast; water and power supply and
continued operation of the tailings reprocessing facility at
Paracatu; permitting of the Great Bear project (including the
consultation process with Indigenous groups), permitting and
development of the Lobo-Marte project; ramp-up of production at the
La Coipa project; in each case in a manner consistent with the
Company’s expectations; and the successful completion of
exploration consistent with the Company’s expectations at the
Company’s projects; (3) political and legal developments in any
jurisdiction in which the Company operates being consistent with
its current expectations including, without limitation,
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 (including those related to financial
assurance requirements), potential amendments to water laws and/or
other water use restrictions and regulatory actions in Chile, new
dam safety regulations, potential amendments to minerals and mining
laws and energy levies laws, new regulations relating to work
permits, potential amendments to customs and mining laws (including
but not limited to amendments to the VAT) and the potential
application of the tax code in Mauritania, potential amendments to
and enforcement of tax laws in Mauritania (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, improvement studies; scoping studies and preliminary
economic assessments, pre-feasibility and feasibility studies, on
the timelines currently expected and the results of those studies
being consistent with Kinross’ current expectations; (5) the
exchange rate between the Canadian dollar, Brazilian real, Chilean
peso, Mauritanian ouguiya 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 the Company’s expectations; (8) attributable 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 and Kinross’ analysis thereof being
consistent with expectations (including but not limited to ore
tonnage and ore grade estimates), future mineral resource and
mineral reserve estimates being consistent with preliminary work
undertaken by the Company, mine plans for the Company’s current and
future 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 Tasiast 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) 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) potential direct or
indirect operational impacts resulting from infectious diseases or
pandemics such as COVID-19; (16) changes in national and local
government legislation or other government actions; (17)
litigation, regulatory proceedings and audits, and the potential
ramifications thereof, being concluded in a manner consistent with
the Corporation’s expectations (including without limitation
litigation in Chile relating to the alleged damage of wetlands and
the scope of any remediation plan or other environmental
obligations arising therefrom); (18) the Company’s financial
results, cash flows and future prospects being consistent with
Company expectations in amounts sufficient to permit sustained
share repurchases and dividend payments; (19) the impacts of
detected pit wall instability at Round Mountain and Bald Mountain
being consistent with the Company’s expectations; (20) the
Company’s estimates regarding the timing of completion of the
Tasiast 24k project; and (21) that deferred payments in respect of
the Ghana divestiture will be paid and, in the event any deferred
payment is not paid, the applicable security package will be
realized and enforceable in a manner consistent with the Company’s
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: the
inaccuracy of any of the foregoing assumptions; fluctuations in the
currency markets; fluctuations in the spot and forward price of
gold or certain other commodities (such as fuel and electricity);
price inflation of goods and services; 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,
production royalties, 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, Mauritania 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, development or refining 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 and maintaining 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, 2022, and the “Risk
Factors” set forth in the Company’s Annual Information Form dated
March 31, 2023. 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 $20 impact on
production cost of sales per equivalent ounce sold12.
Specific to the Brazilian real, a 10% change in
the exchange rate would be expected to result in an approximate $30
impact on Brazilian production cost of sales per equivalent ounce
sold.
Specific to the Chilean peso, a 10% change in
the exchange rate would be expected to result in an approximate $50
impact on Chilean production cost of sales per equivalent ounce
sold.
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 equivalent ounce sold.
A $100 change in the price of gold would be
expected to result in an approximate $4 impact on production cost
of sales per equivalent ounce sold as a result of a change in
royalties.
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
mineral properties contained in this news release has been prepared
under the supervision of Mr. John Sims who is a “qualified person”
within the meaning of National Instrument 43-101.
All dollar amounts are expressed as U.S.
dollars, unless otherwise noted.
Source: Kinross Gold Corporation
1 “Production cost of sales from continuing
operations per equivalent ounce sold” is defined as production cost
of sales, as reported on the interim condensed consolidated
statements of operations, divided by total gold equivalent ounces
sold from continuing operations.
2 These figures are non-GAAP financial measures
and ratios, as applicable, and are defined and reconciled on pages
17 to 22 of this news release. Non-GAAP financial measures and
ratios have no standardized meaning under IFRS and therefore, may
not be comparable to similar measures presented by other
issuers.
3 “Margins” from continuing operations per
equivalent ounce sold is defined as average realized gold price per
ounce from continuing operations less production cost of sales from
continuing operations per equivalent ounce sold.
4 Operating cash flow figures in this release
represent “Net cash flow of continuing operations provided from
operating activities,” as reported on the interim condensed
consolidated statements of cash flows.
5 Reported net earnings figures in this news
release represent “Net earnings from continuing operations
attributable to common shareholders,” as reported on the interim
condensed consolidated statements of operations.
6 Adjusted net earnings figures in this news
release represent “Adjusted net earnings from continuing operations
attributable to common shareholders.”
7 “Total liquidity” is defined as the sum of
cash and cash equivalents, as reported on the interim condensed
consolidated balance sheets, and available credit under the
Company’s credit facilities (as calculated in Section 6 – Liquidity
and Capital Resources of Kinross’ MD&A for the three months
ended March 31, 2023).
8 Total working capital changes is defined as
the sum of the changes in operating assets and liabilities,
including income taxes paid, as reported on the interim condensed
consolidated statements of cash flows (as shown in the adjusted
operating cash flow from continuing operations reconciliation table
on page 18 of this news release).
9 “Available credit” is defined as available
credit under the Company’s credit facilities and is calculated in
Section 6 – Liquidity and Capital Resources of Kinross’ MD&A
for the three months ended March 31, 2023.
10 Attributable production guidance includes
Kinross’ share of Manh Choh (70%) production.
11 Attributable capital expenditure guidance
includes Kinross’ share of Manh Choh (70%) capital
expenditures.
12 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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