Kinross Gold Corporation (TSX: K, NYSE: KGC) today announced its
results for the fourth-quarter and year-end December 31, 2019.(This
news release contains forward-looking information about expected
future events and financial and operating performance of the
Company. We refer to the risks and assumptions set out in our
Cautionary Statement on Forward-Looking Information located on page
21 of this release. All dollar amounts are expressed in U.S.
dollars, unless otherwise noted.)
2019 full-year results and 2020
guidance:
|
2019 guidance (+/- 5%) |
2019 full-year results |
2020 guidance (+/- 5%) |
Gold
equivalent production1(ounces) |
2.5 million |
2.5 million |
2.4 million |
Production cost of sales1, 2 ($ per Au eq.
oz.) |
$730 |
$706 |
$720 |
All-in sustaining cost1, 2($ per Au eq.
oz.) |
$995 |
$983 |
$970 |
Capital expenditures |
$1,050 million |
$1,105 million3 |
$900 million3 |
CEO Commentary:J. Paul
Rollinson, President and CEO, made the following comments in
relation to 2019 fourth-quarter and year-end results:
“In 2019, our portfolio of mines performed
strongly, as we increased production and lowered costs
year-over-year and generated robust free cash flow. Our strong
performance ensured we met our production, cost and capital
guidance for the eighth consecutive year.
“Our three largest producers in 2019 – Paracatu,
Kupol and Tasiast – accounted for 61% of our total production and
delivered the lowest costs in the portfolio. Paracatu and Tasiast
each had an outstanding year, posting record annual production,
with Tasiast also delivering record low costs.
“In terms of 2019 financial performance, Kinross
increased operating cash flow by 55% to $1.2 billion, more than
tripled adjusted net earnings to $423 million, grew our margins by
28%, and improved liquidity to $2 billion while continuing to
invest in our development projects.
“We also took steps to strengthen our future
production profile. We approved and launched the capital efficient
Tasiast 24k expansion project and completed the IFC-led project
financing. We improved our development pipeline by acquiring the
high-quality and highly prospective Chulbatkan project in Russia
and are now proceeding with the La Coipa Restart project in Chile.
In addition, we made excellent progress at our U.S. projects,
commencing production at our Round Mountain Phase W and Bald
Mountain Vantage Complex projects in Nevada, and advancing Fort
Knox Gilmore in Alaska.
“In 2020, we expect to continue our strong
performance, producing approximately 2.4 million gold equivalent
ounces, with all-in sustaining costs and capital expenditures
guidance lower than last year. In 2021, generating strong free cash
flow will continue to be a priority, with production expected to be
at or above 2019 levels and capital expenditures and all-in
sustaining costs expected to decrease compared with 2020. We
currently expect a further reduction in capital expenditures and
all-in sustaining costs for 2022, with production expected to
remain at the 2.5 million ounce level.”
2019 Q4 and full-year
highlights:
- Production1: 645,344 gold
equivalent ounces (Au eq. oz.) in Q4 2019 and 2,507,659 Au eq. oz.
in 2019.
- Revenue: $996.2 million in Q4 2019 and
$3,497.3 million in 2019.
- Production cost of sales2:
$744 per Au eq. oz. in Q4 2019 and $706 per Au eq. oz. in
2019.
- All-in sustaining cost2:
$1,050 per Au eq. oz. sold in Q4 2019 and $983 per Au eq. oz. sold
in 2019. All-in sustaining cost per Au oz. sold on a by-product
basis was $1,041 in Q4 2019 and $974 per Au oz. sold in 2019.
- Operating cash flow: $408.6 million in Q4 2019
and $1,224.9 million in 2019.
- Adjusted operating cash
flow2: $387.6 million in Q4 2019 and
$1,201.5 million for 2019.
- Reported net earnings4:
$521.5 million, or $0.41 per share in Q4 2019, and $718.6 million,
or $0.57 per share, in 2019.
- Adjusted net earnings2,3:
adjusted net earnings of $156.0 million, or $0.13 per share in Q4
2019, and adjusted net earnings of $422.9 million, or $0.34 per
share, in 2019.
- Margins5: attributable
margins of $741 per Au eq. oz. sold in Q4 2019 and $686 per Au eq.
oz. sold for 2019.
Operations highlights:
- Paracatu delivered record annual production of
approximately 620,000 Au eq. oz., mainly due to benefits from an
asset optimization program that improved mill efficiencies and
enhanced the understanding of the orebody.
- Tasiast achieved record production and costs
in 2019, as the mine continued to benefit from the Phase One
expansion and the mill’s strong performance. Year-over-year
production increased by 140,000 Au eq. oz., or 56%, with cost of
sales per ounce decreasing by $374 per ounce sold, or 38%.
- Kupol-Dvoinoye production was 8% higher
year-over-year primarily due to higher-grade ore processed from
Kupol’s Northeast Extension and Moroshka deposits.
- Round Mountain performed well in full-year
2019 with the completion of the Phase W project and increases in
ounces recovered from the heap leach pads and lower full-year cost
of sales.
Balance sheet and
liquidity:
- Cash and cash equivalents of $575.1 million,
and total liquidity of $2,028.2 million at
December 31, 2019. No debt maturities until September
2021.
- Completed the $300 million project financing for Tasiast with
the IFC (a member of the World Bank Group), Export Development
Canada and two commercial banks.
- Sold remaining shares in Lundin Gold Inc. for gross proceeds of
approximately $113 million.
- Sold royalty portfolio to Maverix Metals Inc. (“Maverix”) for
total consideration of approximately $74 million, which includes
$25 million in cash and approximately 11.2 million Maverix common
shares.
Environment, Social, Governance
(ESG):
- Maintained industry-leading health and safety performance.
- Delivered strong environmental management and sustainability
performance; achieved lowest energy-use and greenhouse gas emission
intensities among gold industry peers.
- Published best practice approach to safe and responsible
tailings management, based on an overriding commitment to safety
and environmental stewardship.
- Governance standards continued to be robust: achieved 33% Board
gender diversity target and welcomed two new independent Board
members.
Financial results
Summary of financial and operating results
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Three months ended |
Years ended |
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December 31, |
December 31, |
|
|
(in millions, except ounces, per share amounts, and per ounce
amounts) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
Operating Highlights |
|
|
|
|
|
|
Total gold equivalent ounces(1) |
|
|
|
|
|
|
Produced(3) |
|
650,242 |
|
|
615,279 |
|
|
2,527,788 |
|
|
2,475,068 |
|
|
|
Sold(3) |
|
670,917 |
|
|
641,101 |
|
|
2,512,758 |
|
|
2,532,912 |
|
|
|
|
|
|
|
|
|
|
|
Attributable gold equivalent ounces(1) |
|
|
|
|
|
|
Produced(3) |
|
645,344 |
|
|
610,152 |
|
|
2,507,659 |
|
|
2,452,398 |
|
|
|
Sold(3) |
|
666,199 |
|
|
636,183 |
|
|
2,492,572 |
|
|
2,510,419 |
|
|
|
|
|
|
|
|
|
|
|
Financial Highlights |
|
|
|
|
|
|
Metal sales |
$ |
996.2 |
|
$ |
786.5 |
|
$ |
3,497.3 |
|
$ |
3,212.6 |
|
|
|
Production cost of sales |
$ |
500.5 |
|
$ |
476.4 |
|
$ |
1,778.9 |
|
$ |
1,860.5 |
|
|
|
Depreciation, depletion and amortization |
$ |
210.4 |
|
$ |
184.3 |
|
$ |
731.3 |
|
$ |
772.4 |
|
|
|
Reversals of impairment charges |
$ |
(361.8 |
) |
$ |
- |
|
$ |
(361.8 |
) |
$ |
- |
|
|
|
Operating earnings |
$ |
568.8 |
|
$ |
25.1 |
|
$ |
991.1 |
|
$ |
200.5 |
|
|
|
Net earnings (loss) attributable to common shareholders |
$ |
521.5 |
|
$ |
(27.7 |
) |
$ |
718.6 |
|
$ |
(23.6 |
) |
|
|
Basic earnings (loss) per share attributable to common
shareholders |
$ |
0.41 |
|
$ |
(0.02 |
) |
$ |
0.57 |
|
$ |
(0.02 |
) |
|
|
Diluted earnings (loss) per share attributable to common
shareholders |
$ |
0.41 |
|
$ |
(0.02 |
) |
$ |
0.57 |
|
$ |
(0.02 |
) |
|
|
Adjusted net earnings attributable to common shareholders(2) |
$ |
156.0 |
|
$ |
13.5 |
|
$ |
422.9 |
|
$ |
128.1 |
|
|
|
Adjusted net earnings per share(2) |
$ |
0.13 |
|
$ |
0.01 |
|
$ |
0.34 |
|
$ |
0.10 |
|
|
|
Net cash flow provided from operating activities |
$ |
408.6 |
|
$ |
183.5 |
|
$ |
1,224.9 |
|
$ |
788.7 |
|
|
|
Adjusted operating cash flow(2) |
$ |
387.6 |
|
$ |
135.8 |
|
$ |
1,201.5 |
|
$ |
874.2 |
|
|
|
Capital expenditures |
$ |
298.2 |
|
$ |
273.0 |
|
$ |
1,105.2 |
|
$ |
1,043.4 |
|
|
|
Average realized gold price per ounce(2) |
$ |
1,485 |
|
$ |
1,226 |
|
$ |
1,392 |
|
$ |
1,268 |
|
|
|
Consolidated production cost of sales per equivalent ounce(3)
sold(2) |
$ |
746 |
|
$ |
743 |
|
$ |
708 |
|
$ |
735 |
|
|
|
Attributable(1) production cost of sales per equivalent ounce(3)
sold(2) |
$ |
744 |
|
$ |
743 |
|
$ |
706 |
|
$ |
734 |
|
|
|
Attributable(1) production cost of sales per ounce sold on a
by-product basis(2) |
$ |
728 |
|
$ |
733 |
|
$ |
691 |
|
$ |
723 |
|
|
|
Attributable(1) all-in sustaining cost per ounce sold on a
by-product basis(2) |
$ |
1,041 |
|
$ |
955 |
|
$ |
974 |
|
$ |
959 |
|
|
|
Attributable(1) all-in sustaining cost per equivalent ounce(3)
sold(2) |
$ |
1,050 |
|
$ |
961 |
|
$ |
983 |
|
$ |
965 |
|
|
|
Attributable(1) all-in cost per ounce sold on a by-product
basis(2) |
$ |
1,337 |
|
$ |
1,287 |
|
$ |
1,282 |
|
$ |
1,275 |
|
|
|
Attributable(1) all-in cost per equivalent ounce(3) sold(2) |
$ |
1,340 |
|
$ |
1,286 |
|
$ |
1,284 |
|
$ |
1,274 |
|
|
|
|
|
|
|
|
|
|
(1) "Total" includes 100% of Chirano production. "Attributable"
includes Kinross' share of Chirano (90%) production.(2) The
definition and reconciliation of these non-GAAP financial measures
is included on pages 16 to 20 of this news release.(3) “Gold
equivalent ounces” include silver ounces produced and sold
converted to a gold equivalent based on a ratio of the average spot
market prices for the commodities for each period. The ratio for
2019 was 85.99:1 (2018 - 80.74:1). The ratio for Q4 2019 was
85.59:1 (Q4 2018 - 84.42:1).
The following operating and financial results
are based on fourth-quarter and year-end 2019 gold equivalent
production. Production and cost measures are on an attributable
basis:
Production: Kinross produced
645,344 attributable Au eq. oz. in the fourth quarter of 2019,
compared with 610,152 in the fourth quarter of 2018, mainly due to
record quarterly production at Tasiast and higher production at
Round Mountain and Bald Mountain.
Kinross produced 2,507,659 attributable Au eq.
oz. for full-year 2019, which was in line with the Company’s 2019
annual guidance, and an increase compared with full-year 2018
production of 2,452,398 Au eq. oz.
Production cost of sales:
Production cost of sales per Au eq. oz.2 was $744 for Q4 2019,
compared with $743 for the fourth quarter of 2018. Production cost
of sales per Au oz. on a by-product basis2 was $728 in Q4 2019,
compared with $733 in Q4 2018, based on Q4 2019 attributable gold
sales of 652,462 ounces and attributable silver sales of 1,175,772
ounces.
Production cost of sales per Au eq. oz. was $706
for full-year 2019, which was at the low end of the Company’s 2019
guidance. This compares with production cost of sales of $734 per
Au eq. oz. for full-year 2018. The full-year decrease was mainly
due lower costs at Paracatu, Tasiast and Round Mountain. Production
cost of sales per Au oz. on a by-product basis2 was $691 for
full-year 2019, compared with $723 for full-year 2018, based on
2019 attributable gold sales of 2,438,678 ounces and attributable
silver sales of 4,633,932 ounces.
All-in sustaining cost2: All-in
sustaining cost per Au eq. oz. sold was $1,050 in Q4 2019, compared
with $961 in Q4 2018. All-in sustaining cost per Au oz. sold on a
by-product basis increased to $1,041 in Q4 2019, compared with $955
in Q4 2018.
All-in sustaining cost per Au eq. oz. sold was
$983 for full-year 2019, which was within the Company’s 2019
guidance range, compared with $965 for full-year 2018. All-in
sustaining cost per Au oz. sold on a by-product basis was $974 for
full-year 2019, compared with $959 for full-year 2018.
Revenue: Revenue from metal
sales was $996.2 million in the fourth quarter of 2019, compared
with $786.5 million during the same period in 2018.
Revenue for full-year 2019 increased to $3,497.3
million, compared with $3,212.6 million for full-year 2018.
Average realized gold price6:
The average realized gold price in Q4 2019 increased 21% to $1,485
per ounce, compared with $1,226 per ounce in Q4 2018.
The average realized gold price per ounce
increased 10% to $1,392 for full-year 2019, compared with $1,268
per ounce for full-year 2018.
Margins5: Kinross’ attributable
margin per Au eq. oz. sold increased 53% to $741 per Au eq. oz. for
the fourth quarter of 2019, compared with the Q4 2018 margin of
$483 per Au eq. oz. sold.
Full-year 2019 margin per Au eq. oz. sold
increased 28% to $686, compared with $534 for full-year 2018.
Operating cash flow: Adjusted
operating cash flow2 increased significantly to $387.6 million for
the fourth quarter of 2019, compared with $135.8 million for Q4
2018. Adjusted operating cash flow for full-year 2019 increased 37%
to $1,201.5 million, compared with $874.2 million for full-year
2018.
Net operating cash flow was $408.6 million for
the fourth quarter of 2019, compared with $183.5 million for Q4
2018. Net operating cash flow for full-year 2019 increased 55% to
$1,224.9 million, compared with $788.7 million for full-year
2018.
Impairment reversal: At
December 31, 2019, Kinross recorded non-cash after-tax impairment
reversals totalling $293.6 million, including $161.1 million at
Tasiast and $132.5 million at Paracatu. The reversals were entirely
related to property, plant and equipment, and were mainly due to an
increase in the Company’s long-term gold price estimates.
Earnings/loss: Adjusted net
earnings2,3 increased to $156.0 million, or $0.13 per share,
for Q4 2019, compared with adjusted net earnings of $13.5 million,
or $0.01 per share, for Q4 2018. Full-year 2019 adjusted net
earnings more than tripled to $422.9 million, or $0.34 per share,
compared with adjusted net earnings of $128.1 million, or $0.10 per
share, for full-year 2018, mainly due to higher margins.
Reported net earnings increased to $521.5
million, or $0.41 per share, for Q4 2019, compared with net loss of
$27.7 million, or $0.02 per share, in Q4 2018. Full-year 2019
reported net earnings increased to $718.6 million, or $0.57 per
share, compared with net loss of $23.6 million, or $0.02 per share,
for full-year 2018. The increase was mainly due to higher margins,
non-cash impairment reversals, a gain of $72.7 million on the sale
of the royalty portfolio, and a decrease in depreciation, depletion
and amortization.
Capital expenditures3: Capital
expenditures were $298.2 million for Q4 2019, compared with $273.0
million for the same period last year.
Capital expenditures for full-year 2019 were
$1,105.2 million, compared with $1,043.4 million for 2018,
primarily due to increased spending on projects at Bald Mountain,
Fort Knox and Round Mountain, partially offset by lower spending at
Tasiast. Capital expenditures were within the Company’s
guidance.
Balance sheet
As of December 31, 2019, Kinross had cash and
cash equivalents of $575.1 million, compared with $349.0 million at
December 31, 2018. The increase was primarily due to net operating
cash flow inflows, partially offset by capital expenditures at the
Company’s development projects.
The Company has available credit of $1,453.1
million as of year-end 2019, for total liquidity of $2,028.2
million.
Operating results
Mine-by-mine summaries for 2019 fourth-quarter
and full-year operating results may be found on pages 11 and 15 of
this news release. Highlights include the following:
Americas
Paracatu had an outstanding
year in 2019, achieving record annual production of 619,563 Au eq.
oz. while lowering costs. The strong performance was mainly due to
an asset optimization program started in 2018, which resulted in
improved mill efficiencies and an enhanced understanding of the
orebody. Full-year production increased approximately 98,000 Au eq.
oz., or 19%, compared with 2018, as both throughput and recoveries
improved. Full-year cost of sales per ounce sold decreased by
approximately 19% compared with 2018 mainly due to operational
efficiencies, lower power costs, and favourable foreign exchange
movements. During Q4 2019 cost of sales per ounce sold increased
versus Q3 2019 mainly due to higher maintenance costs, as the
crusher was repaired during the quarter. Quarterly production was
slightly lower compared with Q3 2019 mainly due to lower
throughput.
Round Mountain performed well
for full-year 2019. While there was a slight year-over-year
reduction in annual production, Q4 2019 production increased 26%
compared with Q3 2019 mainly due to strong performance from the
heap leach pads as a result of the Phase W project. Full-year cost
of sales per ounce sold was lower versus 2018 primarily due to
lower operating waste. Cost of sales per ounce sold in Q4 2019 was
largely in line quarter-over-quarter.
At Bald Mountain, full-year
production was lower compared with 2018 mainly due to a
slower-than-anticipated ramp up at the Vantage Complex project and
unfavourable weather conditions at the site early in the year. As
expected, production was significantly higher in Q4 2019,
increasing by 95% compared with Q3 2019, as more ounces were
recovered from the Vantage Complex. Cost of sales per ounce sold
for 2019 was higher compared with 2018 mostly due to lower
production. Cost of sales per ounce sold decreased during Q4 2019
compared with Q3 2019 primarily due an increase in production.
At Fort Knox, production for
2019 was lower compared with 2018 mainly due to a decrease in mill
throughput, while 2019 cost of sales per ounce sold increased
compared with the previous year mainly due to lower production and
higher maintenance costs. Production and cost of sales per ounce
sold for Q4 2019 were largely in line with the previous
quarter.
Maricunga delivered
higher-than-expected annual production from the rinsing of
materials placed on the heap leach pads prior to the suspension of
mining activities. Full-year cost of sales per ounce sold were
largely in line with 2018. The mine has now transitioned into care
and maintenance, with final production occurring in Q4 2019. For
tax planning purposes, the sale of residual gold ounces are
expected to continue during 2020.
Russia
The Russia region continued its strong and
consistent performance in 2019. Combined full-year production at
Kupol and Dvoinoye was 8% higher
compared with 2018 primarily due to higher grade ore processed from
Kupol’s Northeast Extension and Moroshka deposits. Production
quarter-over-quarter was lower primarily due to planned lower mill
grades at Kupol. Full-year cost of sales per ounce sold was higher
compared with 2018 primarily due to an increase in operating waste
mined, and was largely in line quarter-over-quarter.
West Africa
Tasiast outperformed in 2019,
achieving record production and a record low cost of sales per
ounce sold, as the mine continued to benefit from the Phase One
expansion and the mill’s strong performance. During 2019,
production increased by approximately 140,000 Au eq. oz., or 56%,
while cost of sales decreased by $374 per ounce sold, or 38%,
compared with 2018. Tasiast finished the year strongly, achieving a
record quarterly production of 102,973 Au eq. oz. at a cost of
sales of $494 per ounce sold, the lowest in its history. The mine
also achieved a record average throughput of 15,000 tonnes per day
during the quarter. Higher grades, operational efficiencies and
lower operating waste during Q4 2019 also contributed to a decrease
in costs compared with the same period in 2018.
At Chirano, full-year
production decreased slightly compared with 2018 mainly due to
lower grades. Production for Q4 2019 was higher compared with the
previous quarter primarily as a result of improved mill throughput.
Cost of sales per ounce sold was higher for full-year 2019 mainly
due to an increase in operating waste mined associated with the
return to open pit mining, and was largely in line
quarter-over-quarter.
2020 OutlookThe following
section of the news release represents forward-looking information
and users are cautioned that actual results may vary. We refer to
the risks and assumptions contained in the Cautionary Statement on
Forward-Looking Information on page 21 of this news release.
In 2020, Kinross expects to produce 2.4 million
Au eq. oz. (+/- 5%) from its operations. In 2021, annual production
is expected to be at or above 2019 levels, and is expected to
remain at the 2.5 million Au eq. oz. level for 2022.
The slight forecast decrease compared to
full-year 2019 production is primarily due to Maricunga
transitioning to care and maintenance, and expected lower
production at Paracatu following its record year, partially offset
by an expected production increase at Tasiast and Fort Knox.
Production is expected to be relatively flat
quarter-over-quarter throughout 2020, with a slight increase in the
fourth quarter. Tasiast is expected to have higher production in
the first half of the year mainly as a result of higher grade ore.
Paracatu and Round Mountain are expected to have higher production
in the second half of the year mainly due to anticipated higher
grades at Paracatu and more ounces recovered at Round Mountain as
the benefits of Phase W continue to be realized.
Production cost of sales is expected to be $720
per Au eq. oz. (+/- 5%) for 2020. The Company expects all-in
sustaining cost to be $970 (+/- 5%) per ounce sold on both a gold
equivalent and by-product basis for 2020, which is lower than
full-year 2019 all-in sustaining cost per ounce, mainly due to the
expected lower cost of sales per ounce sold and capital
expenditures for 2020. All-in sustaining cost per ounce is expected
to decrease in 2021 and 2022, compared with 2020 levels.
The table below summarizes the 2020 forecast for
production and production cost of sales on a gold equivalent and
by-product accounting basis:
Accounting basis |
2020 Guidance(+/- 5%) |
Gold equivalent basis |
|
Production (Au eq. oz.)1,2 |
2.4 million |
Average production cost of sales per Au eq. oz. 1,2 |
$720 |
All-in sustaining cost per Au eq. oz. 1,2 |
$970 |
By-product basis |
|
Gold ounces1 |
2.3 million |
Silver ounces |
4.0 million |
Average production cost of sales per Au oz. 1,2 |
$710 |
The following table provides a summary of the 2020 production
and production cost of sales forecast by region:
Region |
Forecast 2020 production (Au eq. oz.) |
Percentage of total forecast
production7 |
Forecast 2020 production cost of sales (per Au eq.
oz.)2 |
Americas |
1.3
million (+/- 5%) |
54% |
$770 (+/- 5%) |
West Africa (attributable)* |
600,000 (+/- 10%) |
25% |
$670 (+/- 10%) |
Russia |
500,000 (+/- 3%) |
21% |
$650 (+/- 3%) |
Total |
2.4 million (+/- 5%) |
100% |
$720 (+/- 5%) |
*Based on Kinross’ 90% share of Chirano |
Material assumptions used to forecast 2020
production cost of sales are as follows:
- a gold price of $1,200 per ounce,
- a silver price of $16 per ounce,
- an oil price of $65 per barrel,
- foreign exchange rates of:
- 3.50 Brazilian reais is to the U.S. dollar,
- 1.30 Canadian dollars to the U.S. dollar,
- 60 Russian roubles to the U.S. dollar,
- 650 Chilean pesos to the U.S. dollar,
- 5.0 Ghanaian cedis to the U.S. dollar,
- 35 Mauritanian ouguiyas to the U.S. dollar, and
- 1.11 U.S. dollars to the Euro.
Taking into account existing currency and oil
hedges:
- a 10% change in foreign currency exchange rates would be
expected to result in an approximate $14 impact on production cost
of sales per ounce8;
- specific to the Russian rouble, a 10% change in this exchange
rate would be expected to result in an approximate $15 impact on
Russian production cost of sales per ounce;
- specific to the Brazilian real, a 10% change in this exchange
rate would be expected to result in an approximate $25 impact on
Brazilian production cost of sales per ounce;
- a $10 per barrel change in the price of oil would be expected
to result in an approximate $4 impact on production cost of
sales per ounce;
- a $100 change in the price of gold would be expected to result
in an approximate $4 impact on production cost of sales per ounce
as a result of a change in royalties.
Total capital expenditures for 2020 are forecast
to be approximately $900 million3 (+/- 5%) and are summarized in
the table below.
Capital expenditures for 2021 are expected to be
lower by approximately $100 million compared with 2020 capital
guidance. Capital expenditures are expected to be further reduced
in 2022 compared with 2021 levels.
Region |
Forecast 2020sustaining
capital (million) |
Forecast 2020non-sustaining
capital(million) |
Total forecast capital (+/- 5%)
(million) |
Americas |
$265 |
$270 |
$535 |
West Africa |
$35 |
$280 |
$315 |
Russia |
$25 |
$20 |
$45 |
Corporate |
$5 |
$0 |
$5 |
TOTAL |
$330 |
$570 |
$900* |
*Starting in 2020, the Company will exclude
capitalized interest from its capital expenditures guidance and
intends to report interest as a separate item going forward in
order to provide greater transparency.
Sustaining capital includes the following
forecast spending estimates:
|
$110 million (Americas); $15 million (Russia); $10 million (West
Africa) |
|
$70 million
(Americas); $10 million (Russia); $5 million (West Africa) |
|
$50 million
(Americas); $5 million (West Africa) |
|
$20 million
(Americas); $5 million (West Africa) |
|
$15 million
(Americas) |
Non-sustaining capital includes the following
forecast spending estimates:
- Tasiast West Branch stripping:
|
$225
million |
- Round Mountain Phase W (primarily stripping):
|
$125 million |
|
$95 million |
|
$55 million |
|
$45 million |
- Development projects and other:
|
$25 million |
The 2020 forecast for exploration is
approximately $90 million, all of which is expected to be expensed.
The increase compared to full-year 2019 is primarily due to the
addition of Chulbatkan to the Company’s project pipeline.
The 2020 forecast for overhead (general and
administrative and business development expenses) is approximately
$150 million, approximately $20 million less than 2019 results
primarily as a result of Kinross’ comprehensive cost and efficiency
review across the organization. 2020 annual overhead guidance is
down $55 million compared with 2015 overhead guidance.
Other operating costs expected to be incurred in
2020 are approximately $100 million, which includes approximately
$50 million of care and maintenance costs in Chile and at Kettle
River-Buckhorn.
Based on assumed gold price of $1,200 and other
budget assumptions, tax expense is expected to be a recovery of $25
million and taxes paid is expected to be $110 million. Adjusting
the Brazilian real to the exchange rate of 4.03 at the end of 2019,
tax expense is expected to be $30 million. Tax expense is expected
to increase at 23% of any profit resulting from higher gold prices.
For every $100 increase in the realized gold price, taxes paid is
expected to increase by $20 million.
Depreciation, depletion and amortization is
forecast to be approximately $340 (+/-5%) per Au eq. oz.
Interest paid is forecast to be approximately
$110 million, which includes $55 million of capitalized
interest.
Tasiast project financing
On December 16, 2019, Kinross signed a $300
million project financing for Tasiast with the IFC (a member of the
World Bank Group), Export Development Canada, and with the
participation of ING Bank and Société Générale. The loan is
non-recourse to Kinross, underscores the attractive foreign
investment climate in Mauritania, and was signed following a
comprehensive due diligence process with the lenders, including
site visits, meetings with the Government of Mauritania, and
significant technical and environmental reviews and evaluations.
The first funding draw from the loan is expected later in Q1
2020.
Sale of Lundin Gold shares
As part of its portfolio management strategy and
to further strengthen its balance sheet, on December 9, 2019
Kinross sold its remaining share position in Lundin Gold Inc. to a
syndicate of buyers for gross proceeds of approximately $113
million.
Sale of royalty portfolio to Maverix
Metals
On December 19, 2019, Kinross completed the sale
of its royalty portfolio to Maverix for total consideration of
$73.9 million, which includes $25 million in cash and approximately
11.2 million Maverix common shares, representing a 9.4% ownership
interest in Maverix. The transaction enables Kinross to realize the
value of its royalty portfolio and retain upside exposure through
its meaningful equity position in Maverix.
Environment, Social, Governance
highlights (ESG)
Kinross’ performance in its First Priorities –
safety, environment and social responsibility – remains among the
best in the industry, with a 2019 safety record on par with rates
in low-risk non-industrial sectors. In 2019, we made major
advancements in the implementation of critical risk management
systems that are designed to prevent serious injuries and
fatalities. Kinross’ robust approach to environmental management
includes addressing climate change impacts and risks. Overall, the
Company’s energy-use and greenhouse gas emission intensities are
the lowest amongst gold industry peers. In 2019, Kinross published
its best practice approach to safe and responsible tailings
management, which is based on an overriding commitment to safety
and the environment. For its strong sustainability
performance, Kinross was recently ranked in the top 10 among metals
and mining companies in The Sustainability Yearbook 2020, published
by S&P Global in collaboration with RobecoSAM.
Kinross engages directly with local communities
around its operations to understand their economic,
social and development goals, working together to
ensure that meaningful, long-term benefits are realized through job
creation, training programs, procurement, tax payments, and
targeted community programs. In 2019, Kinross interacted with more
than 90,000 stakeholders and registered more than 650,000
beneficiaries from its community projects. Employing a diverse
workforce comprised of 98% of people from host countries also
enabled Kinross to contribute greater economic value in the areas
where it operates.
Studies measuring quality of life metrics have
found significant improvements in communities around the Company’s
mines at Paracatu and Tasiast. In Chile, 60% of local Colla
indigenous people around the La Coipa project now have access to
electricity after solar panels were installed in their communities.
In Chirano, more than 90% of people in communities around the mine
now have access to safer piped water, compared to less than 40% in
2000, as a result of significant improvements in essential
infrastructure over the past 15 years.
Kinross’ robust corporate
governance standards for its Board of Directors
continue to be driven by a focus on delivering value through a mix
of skills and experience, diversity, director independence and
succession planning. In 2019, Kinross appointed a new Chair of the
Board and welcomed two new Board members. Kinross maintained its
top tier governance performance by, among other things, achieving
its 33% Board gender diversity target and reducing average Board
tenure. Kinross was the top ranked gold mining company in The Globe
and Mail’s 2019 annual corporate governance survey for the second
consecutive year.
In September 2019, the World Gold Council (WGC)
launched its Responsible Gold Mining Principles (RGMPs), which are
an overarching framework that defines responsible gold mining.
Kinross was a participant in the WGC committee that developed the
RGMPs, which are largely consistent with the Company’s current
approach. Kinross is well-positioned to be in substantial
conformance, including obtaining external assurance within the next
three years.
Conference call details
In connection with the release, Kinross will
hold a conference call and audio webcast on Thursday, February 13,
2020 at 8 a.m. ET to discuss the results, followed by a
question-and-answer session. To access the call, please dial:
Canada & US toll-free – (877)
201-0168; Conference ID: 1756358 Outside of Canada &
US – +1 (647) 788-4901; Conference ID: 1756358
Replay (available up to 14 days after the call):
Canada & US toll-free – (800)
585-8367; Conference ID: 1756358 Outside of Canada &
US – +1 (416) 621-4642; Conference ID: 1756358
You may also access the conference call on a listen-only basis
via webcast at our website www.kinross.com. The audio webcast will
be archived on our website at www.kinross.com.
This release should be read in conjunction with
Kinross’ 2019 year-end Financial Statements and Management’s
Discussion and Analysis report at www.kinross.com. Kinross’ 2019
year-end Financial Statements and Management’s Discussion and
Analysis have been filed with Canadian securities regulators
(available at www.sedar.com) and furnished with the U.S. Securities
and Exchange Commission (available at www.sec.gov). Kinross
shareholders may obtain a copy of the financial statements free of
charge upon request to the Company.
About Kinross Gold
Corporation
Kinross is a Canadian-based senior gold mining
company with mines and projects in the United States, Brazil,
Russia, Mauritania, Chile and Ghana. Kinross maintains listings on
the Toronto Stock Exchange (symbol:K) and the New York Stock
Exchange (symbol:KGC).
Media Contact Louie DiazSenior
Director, Corporate Communicationsphone:
416-369-6469louie.diaz@kinross.com
Investor Relations ContactTom
Elliott
Senior Vice-President, Investor Relations and Corporate
Developmentphone:
416-365-3390
tom.elliott@kinross.com
1 Unless otherwise stated, production figures in this news
release are based on Kinross’ 90% share of Chirano
production.2 These figures are non-GAAP financial measures and
are defined and reconciled on pages 16 to 20 of this news
release.3 2020 capital expenditures guidance excludes
capitalized interest of $55 million. The 2019 capital expenditures
guidance and capital expenditures results includes capitalized
interest of $65 million and $45 million, respectively.4 Net
earnings/loss figures in this release represent “net (loss)
earnings from continuing operations attributable to common
shareholders.”5 Attributable margin per equivalent ounce sold
is a non-GAAP financial measure defined as “average realized gold
price per ounce” less “attributable production cost of sales per
gold equivalent ounce sold.”6 Average realized gold price is a
non-GAAP financial measure and is defined as gold metal sales
divided by the total number of gold ounces sold.7 The
percentages are calculated based on the mid-point of regional 2020
forecast production.8 Refers to all of the currencies in the
countries where the Company has mining operations, fluctuating
simultaneously by 10% in the same direction, either appreciating or
depreciating, taking into consideration the impact of hedging and
the weighting of each currency within our consolidated cost
structure.
Review of operations
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31, |
|
Gold equivalent ounces |
|
|
|
|
|
|
|
|
Produced |
|
Sold |
|
Production cost of sales ($millions) |
|
Production cost of sales/equivalent ounce
sold |
|
2019 |
|
2018 |
|
|
2019 |
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
Fort Knox |
53,183 |
|
52,194 |
|
|
55,040 |
|
51,889 |
|
|
$ |
65.9 |
|
$ |
49.1 |
|
|
$ |
1,197 |
$ |
946 |
Round Mountain |
103,501 |
|
96,715 |
|
|
108,402 |
|
91,769 |
|
|
|
79.3 |
|
|
70.0 |
|
|
|
732 |
|
763 |
Bald Mountain |
66,147 |
|
47,211 |
|
|
65,381 |
|
68,288 |
|
|
|
49.8 |
|
|
46.9 |
|
|
|
762 |
|
687 |
Kettle River - Buckhorn |
- |
|
- |
|
|
- |
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
- |
Paracatu |
140,224 |
|
145,634 |
|
|
140,430 |
|
152,395 |
|
|
|
111.1 |
|
|
116.6 |
|
|
|
791 |
|
765 |
Maricunga |
3,221 |
|
7,226 |
|
|
17,455 |
|
19,399 |
|
|
|
11.7 |
|
|
16.1 |
|
|
|
670 |
|
830 |
Americas Total |
366,276 |
|
348,980 |
|
|
386,708 |
|
383,740 |
|
|
|
317.8 |
|
|
298.7 |
|
|
|
822 |
|
778 |
|
|
|
|
|
|
|
|
|
|
|
|
Kupol |
132,009 |
|
123,478 |
|
|
135,083 |
|
124,408 |
|
|
|
83.3 |
|
|
68.7 |
|
|
|
617 |
|
552 |
Russia Total |
132,009 |
|
123,478 |
|
|
135,083 |
|
124,408 |
|
|
|
83.3 |
|
|
68.7 |
|
|
|
617 |
|
552 |
|
|
|
|
|
|
|
|
|
|
|
|
Tasiast |
102,973 |
|
91,548 |
|
|
101,940 |
|
83,780 |
|
|
|
50.4 |
|
|
69.5 |
|
|
|
494 |
|
830 |
Chirano (100%) |
48,984 |
|
51,273 |
|
|
47,186 |
|
49,173 |
|
|
|
49.0 |
|
|
39.5 |
|
|
|
1,038 |
|
803 |
West Africa Total |
151,957 |
|
142,821 |
|
|
149,126 |
|
132,953 |
|
|
|
99.4 |
|
|
109.0 |
|
|
|
667 |
|
820 |
|
|
|
|
|
|
|
|
|
|
|
|
Operations Total |
650,242 |
|
615,279 |
|
|
670,917 |
|
641,101 |
|
|
|
500.5 |
|
|
476.4 |
|
|
|
746 |
|
743 |
Less Chirano non-controlling interest (10%) |
(4,898 |
) |
(5,127 |
) |
|
(4,718 |
) |
(4,918 |
) |
|
|
(4.9 |
) |
|
(4.0 |
) |
|
|
|
Attributable Total |
645,344 |
|
610,152 |
|
|
666,199 |
|
636,183 |
|
|
$ |
495.6 |
|
$ |
472.4 |
|
|
$ |
744 |
$ |
743 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31, |
|
Gold equivalent ounces |
|
|
|
|
|
|
|
|
Produced |
|
Sold |
|
Production cost of sales ($millions) |
|
Production cost of sales/equivalent ounce
sold |
|
2019 |
|
2018 |
|
|
2019 |
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
Fort Knox |
200,263 |
|
255,569 |
|
|
200,323 |
|
256,037 |
|
|
$ |
213.7 |
|
$ |
214.4 |
|
|
$ |
1,067 |
$ |
837 |
Round Mountain |
361,664 |
|
385,601 |
|
|
360,739 |
|
381,478 |
|
|
|
250.6 |
|
|
277.6 |
|
|
|
695 |
|
728 |
Bald Mountain |
187,961 |
|
284,646 |
|
|
177,802 |
|
318,091 |
|
|
|
136.6 |
|
|
174.1 |
|
|
|
768 |
|
547 |
Kettle River - Buckhorn |
- |
|
- |
|
|
- |
|
927 |
|
|
|
- |
|
|
- |
|
|
|
- |
|
- |
Paracatu |
619,563 |
|
521,575 |
|
|
619,009 |
|
523,417 |
|
|
|
412.3 |
|
|
430.5 |
|
|
|
666 |
|
822 |
Maricunga |
38,601 |
|
60,066 |
|
|
43,756 |
|
89,959 |
|
|
|
31.5 |
|
|
65.7 |
|
|
|
720 |
|
730 |
Americas Total |
1,408,052 |
|
1,507,457 |
|
|
1,401,629 |
|
1,569,909 |
|
|
|
1,044.7 |
|
|
1,162.3 |
|
|
|
745 |
|
740 |
|
|
|
|
|
|
|
|
|
|
|
|
Kupol |
527,343 |
|
489,947 |
|
|
526,458 |
|
494,835 |
|
|
|
314.1 |
|
|
288.2 |
|
|
|
597 |
|
582 |
Russia Total |
527,343 |
|
489,947 |
|
|
526,458 |
|
494,835 |
|
|
|
314.1 |
|
|
288.2 |
|
|
|
597 |
|
582 |
|
|
|
|
|
|
|
|
|
|
|
|
Tasiast |
391,097 |
|
250,965 |
|
|
382,803 |
|
243,241 |
|
|
|
230.4 |
|
|
237.3 |
|
|
|
602 |
|
976 |
Chirano (100%) |
201,296 |
|
226,699 |
|
|
201,868 |
|
224,927 |
|
|
|
189.7 |
|
|
172.7 |
|
|
|
940 |
|
768 |
West Africa Total |
592,393 |
|
477,664 |
|
|
584,671 |
|
468,168 |
|
|
|
420.1 |
|
|
410.0 |
|
|
|
719 |
|
876 |
|
|
|
|
|
|
|
|
|
|
|
|
Operations Total |
2,527,788 |
|
2,475,068 |
|
|
2,512,758 |
|
2,532,912 |
|
|
|
1,778.9 |
|
|
1,860.5 |
|
|
|
708 |
|
735 |
Less Chirano non-controlling interest (10%) |
(20,129 |
) |
(22,670 |
) |
|
(20,186 |
) |
(22,493 |
) |
|
|
(19.0 |
) |
|
(17.3 |
) |
|
|
|
Attributable Total |
2,507,659 |
|
2,452,398 |
|
|
2,492,572 |
|
2,510,419 |
|
|
$ |
1,759.9 |
|
$ |
1,843.2 |
|
|
$ |
706 |
$ |
734 |
Consolidated balance sheets
|
|
|
|
|
|
|
|
(expressed
in millions of United States dollars, except share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at |
|
|
|
|
December
31, |
|
December 31, |
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
575.1 |
|
|
$ |
349.0 |
|
|
|
Restricted cash |
|
|
15.2 |
|
|
|
12.7 |
|
|
|
Accounts receivable and other assets |
|
|
130.2 |
|
|
|
101.4 |
|
|
|
Current income tax recoverable |
|
|
43.2 |
|
|
|
79.0 |
|
|
|
Inventories |
|
|
1,053.8 |
|
|
|
1,052.0 |
|
|
|
Unrealized fair value of derivative assets |
|
|
7.2 |
|
|
|
3.8 |
|
|
|
|
|
|
1,824.7 |
|
|
|
1,597.9 |
|
|
|
Non-current assets |
|
|
|
|
|
|
Property, plant and equipment |
|
|
6,340.0 |
|
|
|
5,519.1 |
|
|
|
Goodwill |
|
|
158.8 |
|
|
|
162.7 |
|
|
|
Long-term investments |
|
|
126.2 |
|
|
|
155.9 |
|
|
|
Investment in joint venture |
|
|
18.4 |
|
|
|
18.3 |
|
|
|
Unrealized fair value of derivative assets |
|
|
4.5 |
|
|
|
0.8 |
|
|
|
Other long-term assets |
|
|
568.2 |
|
|
|
564.1 |
|
|
|
Deferred tax assets |
|
|
35.2 |
|
|
|
45.0 |
|
|
|
Total assets |
|
$ |
9,076.0 |
|
|
$ |
8,063.8 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
469.3 |
|
|
$ |
465.9 |
|
|
|
Current income tax payable |
|
|
68.0 |
|
|
|
21.7 |
|
|
|
Current portion of provisions |
|
|
57.9 |
|
|
|
72.6 |
|
|
|
Other current liabilities |
|
|
20.3 |
|
|
|
52.2 |
|
|
|
|
|
|
615.5 |
|
|
|
612.4 |
|
|
|
Non-current liabilities |
|
|
|
|
|
|
Long-term debt and credit facilities |
|
|
1,837.4 |
|
|
|
1,735.0 |
|
|
|
Provisions |
|
|
838.6 |
|
|
|
816.4 |
|
|
|
Long-term lease liabilities |
|
|
38.9 |
|
|
|
- |
|
|
|
Unrealized fair value of derivative liabilities |
|
|
0.8 |
|
|
|
9.6 |
|
|
|
Other long-term liabilities |
|
|
107.7 |
|
|
|
97.9 |
|
|
|
Deferred tax liabilities |
|
|
304.5 |
|
|
|
265.2 |
|
|
|
Total liabilities |
|
|
3,743.4 |
|
|
|
3,536.5 |
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Common shareholders' equity |
|
|
|
|
|
|
Common share capital |
|
$ |
14,926.2 |
|
|
$ |
14,913.4 |
|
|
|
Contributed surplus |
|
|
242.1 |
|
|
|
239.8 |
|
|
|
Accumulated deficit |
|
|
(9,829.4 |
) |
|
|
(10,548.0 |
) |
|
|
Accumulated other comprehensive income (loss) |
|
|
(20.4 |
) |
|
|
(98.5 |
) |
|
|
Total common shareholders' equity |
|
|
5,318.5 |
|
|
|
4,506.7 |
|
|
|
Non-controlling interest |
|
|
14.1 |
|
|
|
20.6 |
|
|
|
Total equity |
|
|
5,332.6 |
|
|
|
4,527.3 |
|
|
|
Total liabilities and equity |
|
$ |
9,076.0 |
|
|
$ |
8,063.8 |
|
|
|
|
|
|
|
|
|
|
Common shares |
|
|
|
|
|
|
Authorized |
|
|
Unlimited |
|
|
|
Unlimited |
|
|
|
Issued and outstanding |
|
|
1,253,765,724 |
|
|
|
1,250,228,821 |
|
|
|
|
|
|
|
|
|
Consolidated statements of
operations
|
|
|
|
|
|
|
|
|
(expressed
in millions of United States dollars, except share and per share
amounts) |
|
|
|
|
|
|
|
|
|
Years ended |
|
|
|
|
|
December
31, |
|
December 31, |
|
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
Revenue |
|
|
|
|
|
|
|
Metal sales |
|
$ |
3,497.3 |
|
|
$ |
3,212.6 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
|
|
|
|
|
Production cost of sales |
|
|
1,778.9 |
|
|
|
1,860.5 |
|
|
|
|
Depreciation, depletion and amortization |
|
|
731.3 |
|
|
|
772.4 |
|
|
|
|
Reversals of impairment charges |
|
|
(361.8 |
) |
|
|
- |
|
|
|
|
Total cost of sales |
|
|
2,148.4 |
|
|
|
2,632.9 |
|
|
|
|
Gross profit |
|
|
1,348.9 |
|
|
|
579.7 |
|
|
|
|
Other operating expense |
|
|
108.5 |
|
|
|
137.0 |
|
|
|
|
Exploration and business development |
|
|
113.5 |
|
|
|
109.2 |
|
|
|
|
General and administrative |
|
|
135.8 |
|
|
|
133.0 |
|
|
|
|
Operating earnings |
|
|
991.1 |
|
|
|
200.5 |
|
|
|
|
Other income - net |
|
|
72.6 |
|
|
|
3.2 |
|
|
|
|
Equity in earnings (losses) of joint ventures - net |
|
|
0.1 |
|
|
|
(0.3 |
) |
|
|
|
Finance income |
|
|
7.9 |
|
|
|
11.0 |
|
|
|
|
Finance expense |
|
|
(107.9 |
) |
|
|
(101.2 |
) |
|
|
|
Earnings before tax |
|
|
963.8 |
|
|
|
113.2 |
|
|
|
|
Income tax expense - net |
|
|
(246.7 |
) |
|
|
(138.8 |
) |
|
|
|
Net earnings (loss) |
|
$ |
717.1 |
|
|
$ |
(25.6 |
) |
|
|
|
Net earnings (loss) attributable to: |
|
|
|
|
|
|
|
Non-controlling interest |
|
$ |
(1.5 |
) |
|
$ |
(2.0 |
) |
|
|
|
Common shareholders |
|
$ |
718.6 |
|
|
$ |
(23.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to common
shareholders |
|
|
|
|
|
|
|
Basic |
|
$ |
0.57 |
|
|
$ |
(0.02 |
) |
|
|
|
Diluted |
|
$ |
0.57 |
|
|
$ |
(0.02 |
) |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding
(millions) |
|
|
|
|
|
|
|
Basic |
|
|
1,252.3 |
|
|
|
1,249.5 |
|
|
|
|
Diluted |
|
|
1,262.3 |
|
|
|
1,249.5 |
|
|
|
Consolidated statements of cash flows
|
(expressed
in millions of United States dollars) |
|
|
|
|
|
|
|
|
|
Years ended |
|
|
|
|
|
December
31, |
|
December 31, |
|
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
Net inflow (outflow) of cash related to the following
activities: |
|
|
|
|
|
|
|
Operating: |
|
|
|
|
|
|
|
Net earnings (loss) |
|
$ |
717.1 |
|
|
$ |
(25.6 |
) |
|
|
|
Adjustments to reconcile net earnings (loss) to net cash provided
from operating activities: |
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
731.3 |
|
|
|
772.4 |
|
|
|
|
Gain on disposition of associate and other interests - net |
|
|
- |
|
|
|
(2.1 |
) |
|
|
|
Reversals of impairment charges |
|
|
(361.8 |
) |
|
|
- |
|
|
|
|
Equity in (earnings) losses of joint ventures - net |
|
|
(0.1 |
) |
|
|
0.3 |
|
|
|
|
Share-based compensation expense |
|
|
14.3 |
|
|
|
14.6 |
|
|
|
|
Finance expense |
|
|
107.9 |
|
|
|
101.2 |
|
|
|
|
Deferred tax expense |
|
|
41.1 |
|
|
|
8.9 |
|
|
|
|
Foreign exchange (gains) losses and other |
|
|
(53.1 |
) |
|
|
12.5 |
|
|
|
|
Reclamation recovery |
|
|
(11.9 |
) |
|
|
(8.0 |
) |
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable and other assets |
|
|
(64.5 |
) |
|
|
(22.7 |
) |
|
|
|
Inventories |
|
|
53.8 |
|
|
|
(5.7 |
) |
|
|
|
Accounts payable and accrued liabilities |
|
|
165.9 |
|
|
|
69.8 |
|
|
|
|
Cash flow provided from operating activities |
|
|
1,340.0 |
|
|
|
915.6 |
|
|
|
|
Income taxes paid |
|
|
(115.1 |
) |
|
|
(126.9 |
) |
|
|
|
Net cash flow provided from operating
activities |
|
|
1,224.9 |
|
|
|
788.7 |
|
|
|
|
Investing: |
|
|
|
|
|
|
|
Additions to property, plant and equipment |
|
|
(1,105.2 |
) |
|
|
(1,043.4 |
) |
|
|
|
Acquisitions |
|
|
(30.0 |
) |
|
|
(304.2 |
) |
|
|
|
Net proceeds from the sale of (additions to) long-term investments
and other assets |
|
|
71.6 |
|
|
|
(52.9 |
) |
|
|
|
Net proceeds from the sale of property, plant and equipment |
|
|
31.9 |
|
|
|
6.4 |
|
|
|
|
Increase in restricted cash |
|
|
(2.5 |
) |
|
|
(0.6 |
) |
|
|
|
Interest received and other - net |
|
|
7.6 |
|
|
|
7.7 |
|
|
|
|
Net cash flow used in investing activities |
|
|
(1,026.6 |
) |
|
|
(1,387.0 |
) |
|
|
|
Financing: |
|
|
|
|
|
|
|
Proceeds from drawdown of debt |
|
|
300.0 |
|
|
|
80.0 |
|
|
|
|
Repayment of debt |
|
|
(200.0 |
) |
|
|
(80.0 |
) |
|
|
|
Payment of lease liabilities |
|
|
(14.3 |
) |
|
|
- |
|
|
|
|
Interest paid |
|
|
(55.6 |
) |
|
|
(57.9 |
) |
|
|
|
Dividends paid to non-controlling interest |
|
|
(5.0 |
) |
|
|
(13.0 |
) |
|
|
|
Other - net |
|
|
- |
|
|
|
(1.7 |
) |
|
|
|
Net cash flow provided from (used in) financing
activities |
|
|
25.1 |
|
|
|
(72.6 |
) |
|
|
|
Effect of exchange rate changes on cash and cash
equivalents |
|
|
2.7 |
|
|
|
(5.9 |
) |
|
|
|
Increase (decrease) in cash and cash
equivalents |
|
|
226.1 |
|
|
|
(676.8 |
) |
|
|
|
Cash and cash equivalents, beginning of
period |
|
|
349.0 |
|
|
|
1,025.8 |
|
|
|
|
Cash and cash equivalents, end of period |
|
$ |
575.1 |
|
|
$ |
349.0 |
|
|
|
|
|
|
|
|
|
|
|
Operating Summary |
|
|
|
Mine |
Period |
Ownership |
Tonnes Ore Mined (1) |
Ore Processed (Milled) (1) |
Ore Processed (Heap Leach)
(1) |
Grade (Mill) |
Grade (Heap Leach) |
Recovery (2) |
Gold Eq Production (5) |
Gold Eq Sales (5) |
Production cost of sales |
Production cost of sales/oz |
Cap Ex (7) |
DD&A |
|
|
|
|
(%) |
('000 tonnes) |
('000 tonnes) |
('000 tonnes) |
(g/t) |
(g/t) |
(%) |
(ounces) |
(ounces) |
($ millions) |
($/ounce) |
($ millions) |
($ millions) |
|
Americas |
Fort Knox |
Q4 2019 |
100 |
7,648 |
2,615 |
5,498 |
0.43 |
0.20 |
81 |
% |
53,183 |
55,040 |
$ |
65.9 |
$ |
1,197 |
$ |
37.1 |
$ |
25.0 |
|
Q3 2019 |
100 |
7,094 |
2,097 |
5,250 |
0.52 |
0.21 |
83 |
% |
54,027 |
51,606 |
|
58.3 |
$ |
1,130 |
|
40.9 |
|
24.7 |
|
Q2 2019 |
100 |
4,829 |
1,811 |
3,440 |
0.59 |
0.20 |
81 |
% |
55,440 |
55,740 |
|
50.7 |
$ |
910 |
|
35.0 |
|
22.6 |
|
Q1 2019 |
100 |
5,796 |
1,556 |
4,295 |
0.72 |
0.22 |
84 |
% |
37,613 |
37,937 |
|
38.8 |
$ |
1,023 |
|
28.9 |
|
18.0 |
|
Q4 2018 |
100 |
5,645 |
2,856 |
2,927 |
0.44 |
0.19 |
83 |
% |
52,194 |
51,889 |
|
49.1 |
$ |
946 |
|
30.5 |
|
21.9 |
|
Round Mountain |
Q4 2019 |
100 |
7,408 |
882 |
7,140 |
1.00 |
0.36 |
82 |
% |
103,501 |
108,402 |
$ |
79.3 |
$ |
732 |
$ |
62.7 |
$ |
12.6 |
|
Q3 2019 |
100 |
7,128 |
1,004 |
7,557 |
1.05 |
0.32 |
85 |
% |
82,195 |
81,617 |
|
57.5 |
$ |
705 |
|
48.3 |
|
9.1 |
|
Q2 2019 |
100 |
4,074 |
909 |
3,910 |
1.17 |
0.33 |
86 |
% |
90,833 |
87,106 |
|
57.8 |
$ |
664 |
|
58.9 |
|
10.2 |
|
Q1 2019 |
100 |
3,904 |
845 |
3,557 |
1.31 |
0.38 |
86 |
% |
85,135 |
83,614 |
|
56.0 |
$ |
670 |
|
64.2 |
|
7.9 |
|
Q4 2018 |
100 |
4,386 |
987 |
4,172 |
1.38 |
0.43 |
83 |
% |
96,715 |
91,769 |
|
70.0 |
$ |
763 |
|
68.0 |
|
9.6 |
|
Bald Mountain (8) |
Q4 2019 |
100 |
2,928 |
- |
3,007 |
- |
0.48 |
nm |
|
66,147 |
65,381 |
$ |
49.8 |
$ |
762 |
$ |
54.6 |
$ |
36.3 |
|
Q3 2019 |
100 |
6,494 |
- |
6,494 |
- |
0.41 |
nm |
|
33,995 |
37,644 |
|
30.6 |
$ |
813 |
|
44.0 |
|
14.8 |
|
Q2 2019 |
100 |
3,725 |
- |
4,138 |
- |
0.36 |
nm |
|
40,564 |
31,547 |
|
27.0 |
$ |
856 |
|
57.5 |
|
12.2 |
|
Q1 2019 |
100 |
2,659 |
- |
2,836 |
- |
0.48 |
nm |
|
47,255 |
43,230 |
|
29.2 |
$ |
675 |
|
64.6 |
|
16.2 |
|
Q4 2018 |
100 |
4,929 |
- |
5,406 |
- |
0.47 |
nm |
|
47,211 |
68,288 |
|
46.9 |
$ |
687 |
|
40.4 |
|
22.4 |
|
Paracatu |
Q4 2019 |
100 |
12,393 |
14,168 |
- |
0.38 |
- |
76 |
% |
140,224 |
140,430 |
$ |
111.1 |
$ |
791 |
$ |
21.4 |
$ |
42.8 |
|
Q3 2019 |
100 |
12,442 |
14,731 |
- |
0.38 |
- |
78 |
% |
146,396 |
145,662 |
|
99.5 |
$ |
683 |
|
39.0 |
|
39.5 |
|
Q2 2019 |
100 |
12,307 |
14,439 |
- |
0.48 |
- |
80 |
% |
186,167 |
186,520 |
|
106.8 |
$ |
573 |
|
34.6 |
|
45.2 |
|
Q1 2019 |
100 |
12,393 |
14,283 |
- |
0.38 |
- |
80 |
% |
146,776 |
146,397 |
|
94.9 |
$ |
648 |
|
16.5 |
|
35.9 |
|
Q4 2018 |
100 |
11,680 |
13,479 |
- |
0.44 |
- |
81 |
% |
145,634 |
152,395 |
|
116.6 |
$ |
765 |
|
33.3 |
|
41.7 |
|
Maricunga (8) |
Q4 2019 |
100 |
- |
- |
- |
- |
- |
nm |
|
3,221 |
17,455 |
$ |
11.7 |
$ |
670 |
$ |
- |
$ |
0.4 |
|
Q3 2019 |
100 |
- |
- |
- |
- |
- |
nm |
|
18,016 |
9,203 |
|
7.0 |
$ |
761 |
|
- |
|
0.4 |
|
Q2 2019 |
100 |
- |
- |
- |
- |
- |
nm |
|
6,648 |
9,474 |
|
8.0 |
$ |
844 |
|
- |
|
0.5 |
|
Q1 2019 |
100 |
- |
- |
- |
- |
- |
nm |
|
10,716 |
7,624 |
|
4.8 |
$ |
630 |
|
- |
|
0.4 |
|
Q4 2018 |
100 |
- |
- |
- |
- |
- |
nm |
|
7,226 |
19,399 |
|
16.1 |
$ |
830 |
|
- |
|
0.6 |
|
Russia |
Kupol (3)(4)(6) |
Q4 2019 |
100 |
468 |
435 |
- |
9.14 |
- |
95 |
% |
132,009 |
135,083 |
$ |
83.3 |
$ |
617 |
$ |
15.8 |
$ |
34.8 |
|
Q3 2019 |
100 |
338 |
431 |
- |
9.65 |
- |
95 |
% |
137,562 |
136,088 |
|
82.6 |
$ |
607 |
|
7.8 |
|
32.2 |
|
Q2 2019 |
100 |
431 |
432 |
- |
9.23 |
- |
94 |
% |
127,684 |
124,873 |
|
70.2 |
$ |
562 |
|
8.2 |
|
30.7 |
|
Q1 2019 |
100 |
362 |
425 |
- |
9.62 |
- |
93 |
% |
130,088 |
130,414 |
|
78.0 |
$ |
598 |
|
8.2 |
|
27.4 |
|
Q4 2018 |
100 |
400 |
425 |
- |
8.77 |
- |
95 |
% |
123,478 |
124,408 |
|
68.7 |
$ |
552 |
|
19.4 |
|
30.1 |
|
West Africa |
Tasiast |
Q4 2019 |
100 |
1,129 |
1,379 |
- |
2.39 |
- |
96 |
% |
102,973 |
101,940 |
$ |
50.4 |
$ |
494 |
$ |
86.3 |
$ |
35.0 |
|
Q3 2019 |
100 |
1,010 |
1,297 |
- |
2.37 |
- |
97 |
% |
93,865 |
86,357 |
|
55.1 |
$ |
638 |
|
74.3 |
|
32.0 |
|
Q2 2019 |
100 |
819 |
1,281 |
- |
2.19 |
- |
97 |
% |
92,901 |
94,748 |
|
58.9 |
$ |
622 |
|
75.2 |
|
32.2 |
|
Q1 2019 |
100 |
1,962 |
1,269 |
- |
2.37 |
- |
97 |
% |
101,358 |
99,758 |
|
66.0 |
$ |
662 |
|
75.7 |
|
31.0 |
|
Q4 2018 |
100 |
3,267 |
1,301 |
- |
2.19 |
- |
94 |
% |
91,548 |
83,780 |
|
69.5 |
$ |
830 |
|
71.1 |
|
28.5 |
|
Chirano - 100% |
Q4 2019 |
90 |
737 |
844 |
- |
2.00 |
- |
91 |
% |
48,984 |
47,186 |
$ |
49.0 |
$ |
1,038 |
$ |
8.0 |
$ |
21.4 |
|
Q3 2019 |
90 |
714 |
801 |
- |
2.02 |
- |
92 |
% |
46,641 |
49,458 |
|
50.0 |
$ |
1,011 |
|
4.8 |
|
22.0 |
|
Q2 2019 |
90 |
619 |
904 |
- |
1.95 |
- |
92 |
% |
53,349 |
51,141 |
|
46.7 |
$ |
913 |
|
2.7 |
|
23.8 |
|
Q1 2019 |
90 |
499 |
908 |
- |
1.97 |
- |
92 |
% |
52,322 |
54,083 |
|
44.0 |
$ |
814 |
|
3.3 |
|
25.4 |
|
Q4 2018 |
90 |
527 |
840 |
- |
2.08 |
- |
92 |
% |
51,273 |
49,173 |
|
39.5 |
$ |
803 |
|
5.7 |
|
28.3 |
|
Chirano - 90% |
Q4 2019 |
90 |
737 |
844 |
- |
2.00 |
- |
91 |
% |
44,086 |
42,468 |
$ |
44.1 |
$ |
1,038 |
$ |
7.2 |
$ |
19.3 |
|
Q3 2019 |
90 |
714 |
801 |
- |
2.02 |
- |
92 |
% |
41,977 |
44,512 |
|
45.0 |
$ |
1,011 |
|
4.3 |
|
19.8 |
|
Q2 2019 |
90 |
619 |
904 |
- |
1.95 |
- |
92 |
% |
48,014 |
46,027 |
|
42.0 |
$ |
913 |
|
2.4 |
|
21.4 |
|
Q1 2019 |
90 |
499 |
908 |
- |
1.97 |
- |
92 |
% |
47,090 |
48,675 |
|
39.6 |
$ |
814 |
|
3.0 |
|
22.9 |
|
Q4 2018 |
90 |
527 |
840 |
- |
2.08 |
- |
92 |
% |
46,146 |
44,255 |
|
35.5 |
$ |
802 |
|
5.1 |
|
25.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Tonnes of ore mined and processed represent 100%
Kinross for all periods presented.(2) Due to the nature of
heap leach operations, recovery rates at Maricunga and Bald
Mountain cannot be accurately measured on a quarterly basis.
Recovery rates at Fort Knox, Round Mountain and Tasiast represent
mill recovery only.(3) Kupol includes the Kupol and Dvoinoye
mines.(4) Kupol silver grade and recovery were as follows: Q4
2019: 65.63 g/t, 84.8%; Q3 2019: 67.44 g/t, 87.8%; Q2 2019: 75.29
g/t, 84.9%; Q1 2019: 69.61 g/t, 82.1%; Q4 2018: 73.35 g/t,
83.5%.(5) Gold equivalent ounces include silver ounces
produced and sold converted to a gold equivalent based on the ratio
of the average spot market prices for the commodities for each
period. The ratios for the quarters presented are as follows: Q4
2019: 85.59:1; Q3 2019: 86.73:1; Q2 2019: 87.98:1; Q1 2019:
83.74:1; Q4 2018: 84.42:1.(6) Dvoinoye ore processed and grade
were as follows: Q4 2019: 100,685, 9.89 g/t; Q3 2019: 113,497, 9.82
g/t; Q2 2019: 113,872, 9.24 g/t; Q1 2019: 135,529, 7.46 g/t; Q4
2018: 104,495, 9.82 g/t.(7) Capital expenditures are presented
on a cash basis, consistent with the statement of cash
flows.(8) "nm" means not meaningful.
Reconciliation of non-GAAP financial
measures
The Company has included certain non-GAAP
financial measures in this document. These measures are not defined
under IFRS and should not be considered in isolation. The Company
believes that these measures, together with measures determined in
accordance with IFRS, provide investors with an improved ability to
evaluate the underlying performance of the Company. The inclusion
of these measures is meant to provide additional information and
should not be used as a substitute for performance measures
prepared in accordance with IFRS. These measures are not
necessarily standard and therefore may not be comparable to other
issuers.
Adjusted net earnings attributable to common
shareholders and adjusted net earnings per share are non-GAAP
measures which determine the performance of the Company, excluding
certain impacts which the Company believes are not reflective of
the Company’s underlying performance for the reporting period, such
as the impact of foreign exchange gains and losses, reassessment of
prior year taxes and/or taxes otherwise not related to the current
period, impairment charges (reversals), gains and losses and other
one-time costs related to acquisitions, dispositions and other
transactions, and non-hedge derivative gains and losses. Although
some of the items are recurring, the Company believes that they are
not reflective of the underlying operating performance of its
current business and are not necessarily indicative of future
operating results. Management believes that these measures, which
are used internally to assess performance and in planning and
forecasting future operating results, provide investors with the
ability to better evaluate underlying performance, particularly
since the excluded items are typically not included in public
guidance. However, adjusted net earnings and adjusted net earnings
per share measures are not necessarily indicative of net earnings
and earnings per share measures as determined under IFRS.
The following table provides a reconciliation of
net earnings (loss) to adjusted net earnings for the periods
presented:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Earnings (Loss) |
|
(in millions, except per share amounts) |
Three months ended |
|
Years ended |
|
|
December 31, |
|
December 31, |
|
|
2019 |
2018 |
|
2019 |
2018 |
|
|
|
|
|
|
|
|
Net earnings (loss) attributable to common shareholders - as
reported |
$ |
521.5 |
|
$ |
(27.7 |
) |
|
$ |
718.6 |
|
$ |
(23.6 |
) |
|
Adjusting items: |
|
|
|
|
|
|
Foreign exchange (gains) losses |
|
6.0 |
|
|
5.5 |
|
|
|
(0.6 |
) |
|
4.3 |
|
|
Foreign exchange (gains) losses on translation of tax basis and
foreign exchange on deferred income taxes within income tax
expense |
|
(12.3 |
) |
|
8.3 |
|
|
|
1.6 |
|
|
62.0 |
|
|
Gain on disposition of royalty portfolio |
|
(72.7 |
) |
|
- |
|
|
|
(72.7 |
) |
|
- |
|
|
Reversals of impairment charges(a) |
|
(361.8 |
) |
|
- |
|
|
|
(361.8 |
) |
|
- |
|
|
Taxes in respect of prior periods |
|
(0.1 |
) |
|
36.3 |
|
|
|
33.3 |
|
|
59.9 |
|
|
Reclamation and remediation recoveries |
|
(11.9 |
) |
|
(8.0 |
) |
|
|
(11.9 |
) |
|
(3.5 |
) |
|
Tasiast Phase One commissioning costs |
|
- |
|
|
- |
|
|
|
- |
|
|
6.4 |
|
|
Fort Knox pit wall slide related costs |
|
8.0 |
|
|
16.5 |
|
|
|
25.1 |
|
|
37.9 |
|
|
Restructuring costs |
|
- |
|
|
- |
|
|
|
12.2 |
|
|
- |
|
|
U.S. Tax Reform impact |
|
- |
|
|
(8.7 |
) |
|
|
- |
|
|
(8.7 |
) |
|
Other |
|
2.7 |
|
|
(0.1 |
) |
|
|
7.6 |
|
|
5.1 |
|
|
Tax effect of the above adjustments(a) |
|
76.6 |
|
|
(8.6 |
) |
|
|
71.5 |
|
|
(11.7 |
) |
|
|
|
(365.5 |
) |
|
41.2 |
|
|
|
(295.7 |
) |
|
151.7 |
|
|
Adjusted net earnings attributable to common shareholders |
$ |
156.0 |
|
$ |
13.5 |
|
|
$ |
422.9 |
|
$ |
128.1 |
|
|
Weighted average number of common shares outstanding - Basic |
|
1,253.5 |
|
|
1,250.2 |
|
|
|
1,252.3 |
|
|
1,249.5 |
|
|
Adjusted net earnings per share |
$ |
0.13 |
|
$ |
0.01 |
|
|
$ |
0.34 |
|
$ |
0.10 |
|
|
|
|
|
|
|
|
|
a) During the year ended December 31, 2019, the Company
recognized non-cash reversals of impairment charges of $361.8
million related to property, plant and equipment at Paracatu and
Tasiast. The tax impact on the impairment reversal at Paracatu was
an expense of $68.2 million. There was no tax impact on the
impairment reversal at Tasiast.
The Company makes reference to a non-GAAP measure for adjusted
operating cash flow. Adjusted operating cash flow is defined as
cash flow from operations excluding certain impacts which the
Company believes are not reflective of the Company’s regular
operating cash flow, and excluding changes in working capital.
Working capital can be volatile due to numerous factors, including
the timing of tax payments, and in the case of Kupol, a build-up of
inventory due to transportation logistics. The Company uses
adjusted operating cash flow internally as a measure of the
underlying operating cash flow performance and future operating
cash flow-generating capability of the Company. However, the
adjusted operating cash flow measure is not necessarily indicative
of net cash flow from operations as determined under IFRS.
|
|
The following table
provides a reconciliation of adjusted operating cash flow for the
periods presented: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Cash Flow |
|
(in millions) |
Three months
ended |
|
Years ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Net cash flow provided from operating activities - as reported |
$ |
408.6 |
|
$ |
183.5 |
|
|
$ |
1,224.9 |
|
$ |
788.7 |
|
|
|
|
|
|
|
|
|
|
Adjusting items: |
|
|
|
|
|
|
|
Tax payments
in respect of prior years |
|
- |
|
|
- |
|
|
|
16.7 |
|
|
- |
|
|
|
Working
capital changes: |
|
|
|
|
|
|
|
Accounts receivable and other assets |
|
(37.4 |
) |
|
(95.4 |
) |
|
|
64.5 |
|
|
22.7 |
|
|
|
Inventories |
|
(44.3 |
) |
|
19.8 |
|
|
|
(53.8 |
) |
|
5.7 |
|
|
|
Accounts payable and other liabilities, including income taxes
paid |
|
60.7 |
|
|
27.9 |
|
|
|
(50.8 |
) |
|
57.1 |
|
|
|
|
|
(21.0 |
) |
|
(47.7 |
) |
|
|
(23.4 |
) |
|
85.5 |
|
|
Adjusted operating cash flow |
$ |
387.6 |
|
$ |
135.8 |
|
|
$ |
1,201.5 |
|
$ |
874.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
production cost of sales per gold equivalent ounce sold is a
non-GAAP measure and is defined as production cost of sales as per
the consolidated financial statements divided by the total number
of gold equivalent ounces sold. This measure converts the Company’s
non-gold production into gold equivalent ounces and credits it to
total production. |
|
|
|
Attributable
production cost of sales per gold equivalent ounce sold is a
non-GAAP measure and is defined as attributable production cost of
sales divided by the attributable number of gold equivalent ounces
sold. This measure converts the Company’s non-gold production into
gold equivalent ounces and credits it to total production. |
|
|
|
Management uses
these measures to monitor and evaluate the performance of its
operating properties. The following table presents a reconciliation
of consolidated and attributable production cost of sales per
equivalent ounce sold for the periods presented: |
|
|
|
|
|
|
|
|
|
|
|
Consolidated and Attributable Production Cost of Sales Per
Equivalent Ounce Sold |
|
(in millions, except ounces and production cost of sales per
equivalent ounce) |
Three months ended |
|
Years ended |
|
December 31, |
|
December 31, |
|
|
|
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Production cost of sales - as reported |
$ |
500.5 |
|
$ |
476.4 |
|
|
$ |
1,778.9 |
|
$ |
1,860.5 |
|
|
Less: portion attributable to Chirano non-controlling
interest(1) |
|
(4.9 |
) |
|
(4.0 |
) |
|
|
(19.0 |
) |
|
(17.3 |
) |
|
Attributable(2) production cost of sales |
$ |
495.6 |
|
$ |
472.4 |
|
|
$ |
1,759.9 |
|
$ |
1,843.2 |
|
|
|
|
|
|
|
|
|
|
Gold equivalent ounces sold |
|
670,917 |
|
|
641,101 |
|
|
|
2,512,758 |
|
|
2,532,912 |
|
|
Less: portion attributable to Chirano non-controlling
interest(10) |
|
(4,718 |
) |
|
(4,918 |
) |
|
|
(20,186 |
) |
|
(22,493 |
) |
|
Attributable(2) gold equivalent ounces sold |
|
666,199 |
|
|
636,183 |
|
|
|
2,492,572 |
|
|
2,510,419 |
|
|
Consolidated production cost of sales per equivalent ounce
sold |
$ |
746 |
|
$ |
743 |
|
|
$ |
708 |
|
$ |
735 |
|
|
Attributable(2) production cost of sales per equivalent ounce
sold |
$ |
744 |
|
$ |
743 |
|
|
$ |
706 |
|
$ |
734 |
|
|
|
|
|
|
|
|
|
|
|
|
Attributable
production cost of sales per ounce sold on a by-product basis is a
non-GAAP measure which calculates the Company’s non-gold production
as a credit against its per ounce production costs, rather than
converting its non-gold production into gold equivalent ounces and
crediting it to total production, as is the case in co-product
accounting. Management believes that this measure provides
investors with the ability to better evaluate Kinross’ production
cost of sales per ounce on a comparable basis with other major gold
producers who routinely calculate their cost of sales per ounce
using by-product accounting rather than co-product accounting. |
|
|
|
The following table
provides a reconciliation of attributable production cost of sales
per ounce sold on a by-product basis for the periods
presented: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable Production Cost of Sales Per Ounce Sold on a
By-Product Basis |
|
(in millions, except ounces and production cost of sales per
ounce) |
Three months ended |
|
Years ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Production cost of sales - as reported |
$ |
500.5 |
|
$ |
476.4 |
|
|
$ |
1,778.9 |
|
$ |
1,860.5 |
|
|
Less: portion attributable to Chirano non-controlling
interest(1) |
|
(4.9 |
) |
|
(4.0 |
) |
|
|
(19.0 |
) |
|
(17.3 |
) |
|
Less: attributable(2) silver revenue(3) |
|
(20.4 |
) |
|
(15.2 |
) |
|
|
(75.1 |
) |
|
(66.4 |
) |
|
Attributable(2) production cost of sales net of silver by-product
revenue |
$ |
475.2 |
|
$ |
457.2 |
|
|
$ |
1,684.8 |
|
$ |
1,776.8 |
|
|
|
|
|
|
|
|
|
|
Gold ounces sold |
|
657,179 |
|
|
628,842 |
|
|
|
2,458,839 |
|
|
2,480,529 |
|
|
Less: portion attributable to Chirano non-controlling
interest(10) |
|
(4,717 |
) |
|
(4,912 |
) |
|
|
(20,161 |
) |
|
(22,460 |
) |
|
Attributable(2) gold ounces sold |
|
652,462 |
|
|
623,930 |
|
|
|
2,438,678 |
|
|
2,458,069 |
|
|
Attributable(2) production cost of sales per ounce sold on a
by-product basis |
$ |
728 |
|
$ |
733 |
|
|
$ |
691 |
|
$ |
723 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In November 2018,
the World Gold Council (“WGC”) published updates to its guidelines
for reporting all-in sustaining costs and all-in costs to address
how the costs associated with leases, after a company’s adoption of
IFRS 16, should be treated. 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 non-GAAP measures. Adoption of the all-in sustaining
cost and all-in cost metrics is voluntary and not necessarily
standard, and therefore, these measures presented by the Company
may not be comparable to similar measures presented by other
issuers. The Company believes that the all-in sustaining cost and
all-in cost measures complement existing measures reported by
Kinross. |
|
|
|
|
|
All-in sustaining
cost includes both operating and capital costs required to sustain
gold production on an ongoing basis. The value of silver sold
is deducted from the total production cost of sales as it is
considered residual production. Sustaining operating costs
represent expenditures incurred at current operations that are
considered necessary to maintain current production.
Sustaining capital represents capital expenditures at existing
operations comprising mine development costs and ongoing
replacement of mine equipment and other capital facilities, and
does not include capital expenditures for major growth projects or
enhancement capital for significant infrastructure improvements at
existing operations. |
|
|
|
|
|
All-in cost is
comprised of all-in sustaining cost as well as operating
expenditures incurred at locations with no current operation, or
costs related to other non-sustaining activities, and capital
expenditures for major growth projects or enhancement capital for
significant infrastructure improvements at existing
operations. |
|
|
|
|
|
Attributable all-in
sustaining cost and all-in cost per ounce sold on a by-product
basis are calculated by adjusting total production cost of sales,
as reported on the consolidated statement of operations, as
follows: |
|
|
|
|
|
|
|
|
|
|
|
Attributable All-In Sustaining Cost and All-In Cost Per
Ounce Sold on a By-Product Basis |
|
|
|
|
(in millions, except ounces and costs per ounce) |
Three months
ended |
|
Years ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Production cost of sales - as reported |
$ |
500.5 |
|
$ |
476.4 |
|
|
$ |
1,778.9 |
|
$ |
1,860.5 |
|
|
Less: portion attributable to Chirano non-controlling
interest(1) |
|
(4.9 |
) |
|
(4.0 |
) |
|
|
(19.0 |
) |
|
(17.3 |
) |
|
Less: attributable(2) silver revenue(3) |
|
(20.4 |
) |
|
(15.2 |
) |
|
|
(75.1 |
) |
|
(66.4 |
) |
|
Attributable(2) production cost of sales net of silver by-product
revenue |
$ |
475.2 |
|
$ |
457.2 |
|
|
$ |
1,684.8 |
|
$ |
1,776.8 |
|
|
Adjusting items on an attributable(2) basis: |
|
|
|
|
|
|
|
General and
administrative(4) |
|
31.3 |
|
|
32.8 |
|
|
|
123.6 |
|
|
133.0 |
|
|
|
Other
operating expense - sustaining(5) |
|
8.3 |
|
|
(20.2 |
) |
|
|
24.7 |
|
|
6.2 |
|
|
|
Reclamation
and remediation - sustaining(6) |
|
13.0 |
|
|
11.6 |
|
|
|
48.2 |
|
|
52.2 |
|
|
|
Exploration
and business development - sustaining(7) |
|
15.4 |
|
|
12.3 |
|
|
|
66.0 |
|
|
53.2 |
|
|
|
Additions to
property, plant and equipment - sustaining(8) |
|
132.7 |
|
|
102.2 |
|
|
|
415.1 |
|
|
335.0 |
|
|
|
Lease
payments - sustaining(9) |
|
3.5 |
|
|
- |
|
|
|
12.7 |
|
|
- |
|
|
All-in Sustaining Cost on a by-product basis - attributable(2) |
$ |
679.4 |
|
$ |
595.9 |
|
|
$ |
2,375.1 |
|
$ |
2,356.4 |
|
|
|
Other
operating expense - non-sustaining(5) |
|
16.3 |
|
|
15.3 |
|
|
|
57.0 |
|
|
48.7 |
|
|
|
Reclamation
and remediation - non-sustaining(6) |
|
1.7 |
|
|
1.9 |
|
|
|
6.9 |
|
|
7.5 |
|
|
|
Exploration
- non-sustaining(7) |
|
14.5 |
|
|
19.9 |
|
|
|
46.7 |
|
|
55.4 |
|
|
|
Additions to
property, plant and equipment - non-sustaining(8) |
|
159.8 |
|
|
170.0 |
|
|
|
637.9 |
|
|
665.0 |
|
|
|
Lease
payments - non-sustaining(9) |
|
0.4 |
|
|
- |
|
|
|
1.6 |
|
|
- |
|
|
All-in Cost on a by-product basis - attributable(2) |
$ |
872.1 |
|
$ |
803.0 |
|
|
$ |
3,125.2 |
|
$ |
3,133.0 |
|
|
Gold ounces sold |
|
657,179 |
|
|
628,842 |
|
|
|
2,458,839 |
|
|
2,480,529 |
|
|
Less: portion attributable to Chirano non-controlling
interest(10) |
|
(4,717 |
) |
|
(4,912 |
) |
|
|
(20,161 |
) |
|
(22,460 |
) |
|
Attributable(2) gold ounces sold |
|
652,462 |
|
|
623,930 |
|
|
|
2,438,678 |
|
|
2,458,069 |
|
|
Attributable(2) all-in sustaining cost per ounce sold on a
by-product basis |
$ |
1,041 |
|
$ |
955 |
|
|
$ |
974 |
|
$ |
959 |
|
|
Attributable(2) all-in cost per ounce sold on a by-product
basis |
$ |
1,337 |
|
$ |
1,287 |
|
|
$ |
1,282 |
|
$ |
1,275 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company also
assesses its all-in sustaining cost and all-in cost on a gold
equivalent ounce basis. Under these non-GAAP measures, the
Company’s production of silver is converted into gold equivalent
ounces and credited to total production. |
|
|
|
Attributable all-in
sustaining cost and all-in cost per equivalent ounce sold are
calculated by adjusting total production cost of sales, as reported
on the consolidated statement of operations, as follows: |
|
|
|
|
|
|
|
|
|
|
|
Attributable All-In Sustaining Cost and All-In Cost Per
Equivalent Ounce Sold |
|
(in millions, except ounces and costs per equivalent ounce) |
Three months
ended |
|
Years ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2019 |
|
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Production cost of sales - as reported |
$ |
500.5 |
|
$ |
476.4 |
|
|
$ |
1,778.9 |
|
$ |
1,860.5 |
|
|
Less: portion attributable to Chirano non-controlling
interest(1) |
|
(4.9 |
) |
|
(4.0 |
) |
|
|
(19.0 |
) |
|
(17.3 |
) |
|
Attributable(2) production cost of sales |
$ |
495.6 |
|
$ |
472.4 |
|
|
$ |
1,759.9 |
|
$ |
1,843.2 |
|
|
Adjusting items on an attributable(2) basis: |
|
|
|
|
|
|
|
General and
administrative(4) |
|
31.3 |
|
|
32.8 |
|
|
|
123.6 |
|
|
133.0 |
|
|
|
Other
operating expense - sustaining(5) |
|
8.3 |
|
|
(20.2 |
) |
|
|
24.7 |
|
|
6.2 |
|
|
|
Reclamation
and remediation - sustaining(6) |
|
13.0 |
|
|
11.6 |
|
|
|
48.2 |
|
|
52.2 |
|
|
|
Exploration
and business development - sustaining(7) |
|
15.4 |
|
|
12.3 |
|
|
|
66.0 |
|
|
53.2 |
|
|
|
Additions to
property, plant and equipment - sustaining(8) |
|
132.7 |
|
|
102.2 |
|
|
|
415.1 |
|
|
335.0 |
|
|
|
Lease
payments - sustaining(9) |
|
3.5 |
|
|
- |
|
|
|
12.7 |
|
|
- |
|
|
All-in Sustaining Cost - attributable(2) |
$ |
699.8 |
|
$ |
611.1 |
|
|
$ |
2,450.2 |
|
$ |
2,422.8 |
|
|
|
Other
operating expense - non-sustaining(5) |
|
16.3 |
|
|
15.3 |
|
|
|
57.0 |
|
|
48.7 |
|
|
|
Reclamation
and remediation - non-sustaining(6) |
|
1.7 |
|
|
1.9 |
|
|
|
6.9 |
|
|
7.5 |
|
|
|
Exploration
- non-sustaining(7) |
|
14.5 |
|
|
19.9 |
|
|
|
46.7 |
|
|
55.4 |
|
|
|
Additions to
property, plant and equipment - non-sustaining(8) |
|
159.8 |
|
|
170.0 |
|
|
|
637.9 |
|
|
665.0 |
|
|
|
Lease
payments - non-sustaining(9) |
|
0.4 |
|
|
- |
|
|
|
1.6 |
|
|
- |
|
|
All-in Cost - attributable(2) |
$ |
892.5 |
|
$ |
818.2 |
|
|
$ |
3,200.3 |
|
$ |
3,199.4 |
|
|
Gold equivalent ounces sold |
|
670,917 |
|
|
641,101 |
|
|
|
2,512,758 |
|
|
2,532,912 |
|
|
Less: portion attributable to Chirano non-controlling
interest(10) |
|
(4,718 |
) |
|
(4,918 |
) |
|
|
(20,186 |
) |
|
(22,493 |
) |
|
Attributable(2) gold equivalent ounces sold |
|
666,199 |
|
|
636,183 |
|
|
|
2,492,572 |
|
|
2,510,419 |
|
|
Attributable(2) all-in sustaining cost per equivalent ounce
sold |
$ |
1,050 |
|
$ |
961 |
|
|
$ |
983 |
|
$ |
965 |
|
|
Attributable(2) all-in cost per equivalent ounce sold |
$ |
1,340 |
|
$ |
1,286 |
|
|
$ |
1,284 |
|
$ |
1,274 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The portion attributable to Chirano
non-controlling interest represents the non-controlling interest
(10%) in the production cost of sales for the Chirano mine.(2)
“Attributable” includes Kinross' share of Chirano (90%)
production.(3) “Attributable silver revenue” represents the
attributable portion of metal sales realized from the production of
the secondary or by-product metal (i.e. silver). Revenue from the
sale of silver, which is produced as a by-product of the process
used to produce gold, effectively reduces the cost of gold
production.(4) “General and administrative” expenses is as reported
on the consolidated statement of operations, net of certain
restructuring expenses. General and administrative expenses are
considered sustaining costs as they are required to be absorbed on
a continuing basis for the effective operation and governance of
the Company.(5) “Other operating expense – sustaining” is
calculated as “Other operating expense” as reported on the
consolidated statement of operations, less other operating and
reclamation and remediation expenses related to non-sustaining
activities as well as other items not reflective of the underlying
operating performance of our business. Other operating expenses are
classified as either sustaining or non-sustaining based on the type
and location of the expenditure incurred. The majority of other
operating expenses that are incurred at existing operations are
considered costs necessary to sustain operations, and are therefore
classified as sustaining. Other operating expenses incurred at
locations where there is no current operation or related to other
non-sustaining activities are classified as non-sustaining.(6)
“Reclamation and remediation - sustaining” is calculated as current
period accretion related to reclamation and remediation obligations
plus current period amortization of the corresponding reclamation
and remediation assets, and is intended to reflect the periodic
cost of reclamation and remediation for currently operating mines.
Reclamation and remediation costs for development projects or
closed mines are excluded from this amount and classified as
non-sustaining.(7) “Exploration and business development –
sustaining” is calculated as “Exploration and business development”
expenses as reported on the consolidated statement of operations,
less non-sustaining exploration expenses. Exploration expenses are
classified as either sustaining or non-sustaining based on a
determination of the type and location of the exploration
expenditure. Exploration expenditures within the footprint of
operating mines are considered costs required to sustain current
operations and so are included in sustaining costs. Exploration
expenditures focused on new ore bodies near existing mines (i.e.
brownfield), new exploration projects (i.e. greenfield) or for
other generative exploration activity not linked to existing mining
operations are classified as non-sustaining. Business development
expenses are considered sustaining costs as they are required for
general operations.(8) “Additions to property, plant and equipment
– sustaining” represents the majority of capital expenditures at
existing operations including capitalized exploration costs,
periodic capitalized stripping and underground mine development
costs, ongoing replacement of mine equipment and other capital
facilities and other capital expenditures and is calculated as
total additions to property, plant and equipment (as reported on
the consolidated statements of cash flows), less capitalized
interest and non-sustaining capital. Non-sustaining capital
represents capital expenditures for major projects, including major
capital stripping projects at existing operations that are expected
to materially benefit the operation, as well as enhancement capital
for significant infrastructure improvements at existing operations.
Non-sustaining capital expenditures during the year ended December
31, 2019, primarily relate to major projects at Tasiast, Round
Mountain, Bald Mountain, and Fort Knox. Non-sustaining capital
expenditures during the year ended December 31, 2018, primarily
related to major projects at Tasiast, Round Mountain, and Bald
Mountain.(9) “Lease payments – sustaining” represents the majority
of lease payments as reported on the consolidated statements of
cash flows and is made up of the principal and financing components
of such cash payments, less non-sustaining lease payments. Lease
payments for development projects or closed mines are classified as
non-sustaining.(10) “Portion attributable to Chirano
non-controlling interest” represents the non-controlling interest
(10%) in the ounces sold from the Chirano mine.(11) “Average
realized gold price per ounce” is a non-GAAP financial measure and
is defined as gold metal sales divided by the total number of gold
ounces sold. This measure is intended to enable Management to
better understand the price realized in each reporting period. The
realized price measure does not have any standardized definition
under IFRS and should not be considered a substitute for measure of
performance prepared in accordance with IFRS.
Cautionary statement on forward-looking
information
All statements, other than statements of
historical fact, contained or incorporated by reference in this
news release including, but not limited to, any information as to
the future financial or operating performance of Kinross,
constitute “forward-looking information” or “forward-looking
statements” within the meaning of certain securities laws,
including the provisions of the Securities Act (Ontario) and the
provisions for “safe harbor” under the United States Private
Securities Litigation Reform Act of 1995 and are based on
expectations, estimates and projections as of the date of this news
release. Forward-looking statements contained in this news release,
include, but are not limited to, those under the headings (or
headings that include) “2019 full year results and 2020 guidance”,
“CEO Commentary”, “Tasiast Project Financing” and “2020
Outlook” as well as statements with respect to our guidance for
production, production costs of sales, all-in sustaining cost and
capital expenditures; the schedules and budgets for the Company’s
development projects; mine life; and continuous improvement
initiatives, as well as references to other possible events, the
future price of gold and silver, the timing and amount of estimated
future production, costs of production, capital expenditures, costs
and timing of the development of projects and new deposits,
estimates and the realization of such estimates (such as mineral or
gold reserves and resources or mine life), success of exploration,
development and mining, currency fluctuations, capital
requirements, project studies, mine life extensions, government
regulation permit applications and conversions, restarting
suspended or disrupted operations; environmental risks and
proceedings; and pending litigation. The words “anticipate”,
“continue”, “estimates”, “expects”, “forecast”, “guidance”, “on
budget”, “on schedule”, “outlook”, “progress”, 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, 2019, and the
Annual Information Form dated March 29, 2019 as well as: (1) there
being no significant disruptions affecting the operations of the
Company, whether due to extreme weather events (including, without
limitation, excessive or lack of rainfall, in particular, the
potential for further production curtailments at Paracatu resulting
from insufficient rainfall and the operational challenges at Fort
Knox and Bald Mountain resulting from excessive rainfall, which can
impact costs and/or production) and other or related natural
disasters, labour disruptions (including but not limited to
workforce reductions), supply disruptions, power disruptions,
damage to equipment, pit wall slides (in particular that the
effects of the pit wall slides at Fort Knox and Round Mountain are
consistent with the Company’s expectations) or otherwise; (2)
permitting, development, operations and production from the
Company’s operations and development projects being consistent with
Kinross’ current expectations including, without limitation: the
maintenance of existing permits and approvals and the timely
receipt of all permits and authorizations necessary for the
operation of the Tasiast Phase One expansion, and the development
and operation of the 24k Project; operation of the SAG mill at
Tasiast; land acquisitions and permitting for the construction and
operation of the new tailings facility, water and power supply and
continued operation of the tailings reprocessing facility at
Paracatu; and the parliamentary ratification of the Chirano
mining permit in a manner consistent with the Company’s
expectations; (3) political and legal developments in any
jurisdiction in which the Company operates being consistent with
its current expectations including, without limitation, the impact
of any political tensions and uncertainty in the Russian Federation
and Ukraine or any related sanctions and any other similar
restrictions or penalties imposed, or actions taken, by any
government, including but not limited to amendments to the mining
laws, and potential power rationing and tailings facility
regulations in Brazil, potential amendments to water laws and/or
other water use restrictions and regulatory actions in Chile, new
dam safety regulations, and potential amendments to minerals and
mining laws and energy levies laws, and the enforcement of labour
laws in Ghana, new regulations relating to work permits, potential
amendments to customs and mining laws (including but not limited to
amendments to the VAT) and the pending implementation of revisions
to the tax code in Mauritania, and satisfactory resolution of the
discussions with the Mauritanian government regarding the Company’s
activities in Mauritania including those related to Tasiast Sud,
VAT and fuel duty exonerations and the sharing of economic benefits
from the operation, the European Union’s General Data Protection
Regulation or similar legislation in other jurisdictions and
potential amendments to and enforcement of tax laws in Russia
(including, but not limited to, the interpretation, implementation,
application and enforcement of any such laws and amendments
thereto), and the impact of any trade tariffs being consistent with
Kinross’ current expectations; (4) the completion of studies,
including optimization studies, scoping studies and prefeasibility
and feasibility studies, on the timelines currently expected and
the results of those studies being consistent with Kinross’ current
expectations, including the completion of the La Coipa feasibility
study and the Lobo-Marte pre-feasibility study; (5) the exchange
rate between the Canadian dollar, Brazilian real, Chilean peso,
Russian rouble, Mauritanian ouguiya, Ghanaian cedi and the U.S.
dollar being approximately consistent with current levels; (6)
certain price assumptions for gold and silver; (7) prices for
diesel, natural gas, fuel oil, electricity and other key supplies
being approximately consistent with current levels; (8) production
and cost of sales forecasts for the Company meeting expectations;
(9) the accuracy of the current mineral reserve and mineral
resource estimates of the Company (including but not limited to ore
tonnage and ore grade estimates), mine plans for the Company’s
mining operations, and the Company’s internal models; (10) labour
and materials costs increasing on a basis consistent with Kinross’
current expectations; (11) the terms and conditions of the legal
and fiscal stability agreements for the Tasiast and Chirano
operations being interpreted and applied in a manner consistent
with their intent and Kinross’ expectations and without material
amendment or formal dispute (including without limitation the
application of tax, customs and duties exemptions and royalties);
(12) goodwill and/or asset impairment potential; (13) the
regulatory and legislative regime regarding mining, electricity
production and transmission (including rules related to power
tariffs) in Brazil being consistent with Kinross’ current
expectations; (14) access to capital markets, including but not
limited to maintaining our current credit ratings consistent with
the Company’s current expectations; (15) that the Brazilian power
plants will operate in a manner consistent with our current
expectations; (16) that drawdown of funds under the Tasiast project
financing will proceed in a manner consistent with our current
expectations; (17) potential direct or indirect operational impacts
resulting from infectious diseases or pandemics; and (18)
litigation and regulatory proceedings and the potential
ramifications thereof being concluded in a manner consistent with
the Company’s expectations (including without limitation the
ongoing litigation in Chile relating to the alleged damage of
wetlands and the scope of any remediation plan or other
environmental obligations arising therefrom, the ongoing litigation
with the Russian tax authorities regarding dividend withholding tax
and the ongoing Sunnyside litigation regarding potential CERCLA
liability). Known and unknown factors could cause actual results to
differ materially from those projected in the forward-looking
statements. Such factors include, but are not limited to: sanctions
(any other similar restrictions or penalties) now or subsequently
imposed, other actions taken, by, against, in respect of or
otherwise impacting any jurisdiction in which the Company is
domiciled or operates (including but not limited to the Russian
Federation, Canada, the European Union and the United States), or
any government or citizens of, persons or companies domiciled in,
or the Company’s business, operations or other activities in, any
such jurisdiction; fluctuations in the currency markets;
fluctuations in the spot and forward price of gold or certain other
commodities (such as fuel and electricity); changes in the discount
rates applied to calculate the present value of net future cash
flows based on country-specific real weighted average cost of
capital; changes in the market valuations of peer group gold
producers and the Company, and the resulting impact on market price
to net asset value multiples; changes in various market variables,
such as interest rates, foreign exchange rates, gold or silver
prices and lease rates, or global fuel prices, that could impact
the mark-to-market value of outstanding derivative instruments and
ongoing payments/receipts under any financial obligations; risks
arising from holding derivative instruments (such as credit risk,
market liquidity risk and mark-to-market risk); changes in national
and local government legislation, taxation (including but not
limited to income tax, advance income tax, stamp tax, withholding
tax, capital tax, tariffs, value-added or sales tax, capital
outflow tax, capital gains tax, windfall or windfall profits tax,
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, Russia, Mauritania, Ghana, or other
countries in which Kinross does business or may carry on business;
business opportunities that may be presented to, or pursued by, us;
our ability to successfully integrate acquisitions and complete
divestitures; operating or technical difficulties in connection
with mining or development activities; employee relations;
litigation or other claims against, or regulatory investigations
and/or any enforcement actions, administrative orders or sanctions
in respect of the Company (and/or its directors, officers, or
employees) including, but not limited to, securities class action
litigation in Canada and/or the United States, environmental
litigation or regulatory proceedings or any investigations,
enforcement actions and/or sanctions under any applicable
anti-corruption, international sanctions and/or anti-money
laundering laws and regulations in Canada, the United States or any
other applicable jurisdiction; the speculative nature of gold
exploration and development including, but not limited to, the
risks of obtaining necessary licenses and permits; diminishing
quantities or grades of reserves; adverse changes in our credit
ratings; and contests over title to properties, particularly title
to undeveloped properties. In addition, there are risks and hazards
associated with the business of gold exploration, development and
mining, including environmental hazards, industrial accidents,
unusual or unexpected formations, pressures, cave-ins, flooding and
gold bullion losses (and the risk of inadequate insurance, or the
inability to obtain insurance, to cover these risks). Many of these
uncertainties and contingencies can directly or indirectly affect,
and could cause, Kinross’ actual results to differ materially from
those expressed or implied in any forward-looking statements made
by, or on behalf of, Kinross, including but not limited to
resulting in an impairment charge on goodwill and/or assets. There
can be no assurance that forward-looking statements will prove to
be accurate, as actual results and future events could differ
materially from those anticipated in such statements.
Forward-looking statements are provided for the purpose of
providing information about management’s expectations and plans
relating to the future. All of the forward-looking statements made
in this news release are qualified by this cautionary statement and
those made in our other filings with the securities regulators of
Canada and the United States including, but not limited to, the
cautionary statements made in the “Risk Analysis” section of our
MD&A for the year ended December 31, 2019 and the Annual
Information Form dated March 29, 2019. These factors are not
intended to represent a complete list of the factors that could
affect Kinross. Kinross disclaims any intention or obligation to
update or revise any forward-looking statements or to explain any
material difference between subsequent actual events and such
forward-looking statements, except to the extent required by
applicable law.
Other information Where we say
"we", "us", "our", the "Company", or "Kinross" in this
presentation, we mean Kinross Gold Corporation and/or one or more
or all of its subsidiaries, as may be applicable.
The technical information about the Company’s
mineral properties contained in this presentation has been prepared
under the supervision of Mr. John Sims, an officer of the Company
who is a “qualified person” within the meaning of National
Instrument 43-101.
Source: Kinross Gold Corporation
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