Kinross Gold Corporation (TSX: K, NYSE: KGC) today announced its
results for the third quarter ended September 30, 2020.(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 18 of this
release. All dollar amounts are expressed in U.S. dollars, unless
otherwise noted.)
2020 third-quarter
highlights:
|
Q3 2020 results |
First nine months 2020 results |
2020 guidance(+/- 5%) |
Gold equivalent production1 (ounces) |
|
603,312 |
|
1,742,616 |
2.4 million |
Production cost of sales 1,2($ per Au eq.
oz.) |
$737 |
$738 |
$720 |
All-in sustaining cost1,2 ($ per Au eq. oz.) |
$958 |
$978 |
$970 |
Capital expenditures |
$212.1 million |
$617.8 million |
$900 million |
- Kinross remains on track to meet its original 2020 guidance for
production, cost of sales per
ounce, all-in sustaining cost per ounce
and capital expenditures for the ninth consecutive
year, despite impacts from the COVID-19 pandemic.
- Production1, 2 of
603,312 attributable gold equivalent ounces (Au eq. oz.), and sales
of 588,559 Au eq. oz.
- Production cost of
sales1,2 of $737 per Au eq. oz. and
all-in sustaining cost1,2 of $958
per Au eq. oz. sold, both of which are within the Company’s 2020
guidance range.
- Attributable margin
per Au eq. oz. sold3 increased 60% to $1,171 per Au eq. oz.
compared with Q3 2019, significantly outpacing the year-over-year
30% increase in the average realized gold price4.
- Operating cash flow
more than doubled to $544.1 million, and adjusted operating
cash flow2 increased by 86% to $549.6 million, compared
with Q3 2019.
- Reported net
earnings5 nearly quadrupled to $240.7 million, or $0.19
per share, and adjusted net earnings2 nearly
tripled to $310.2 million, or $0.25 per share, compared with Q3
2019.
- Cash and cash
equivalents of $933.5 million and total
liquidity of $2.5 billion at September 30, 2020. The
Company also further improved its debt metrics, including its net
debt to EBITDA ratio.
- Kinross’ Board of Directors declared a quarterly
dividend of $0.03 per common share payable on
December 10, 2020 to shareholders of record at the close of
business on November 25, 2020. The Company also declared a dividend
on September 17, 2020 and announced plans to pay a regular
quarterly dividend.
- In August 2020, Kinross released its biennial Sustainability
Report, highlighting the Company’s strong environmental, social and
governance (ESG) record.
- On September 17, 2020, the Company announced a growing
three-year production profile, with production expected to increase
20% to 2.9 million Au eq. oz. in 2023.
- On September 30, 2020, Kinross acquired 70% of the Peak project
in Alaska. As the project operator, the Company expects to process
Peak ore at its Fort Knox mill, benefitting both the project and
mine.
- On October 20, 2020, Kinross provided a long-term production
outlook, with expected average annual production of 2.5 million Au
eq. oz. out to 2029.
CEO
commentary: J.
Paul Rollinson, President and CEO, made the following comments in
relation to 2020 third-quarter results:
“Kinross delivered another strong quarter,
generating robust free cash flow and a significant increase in
earnings. Our mines continued to perform well as our global teams
have effectively managed the operational challenges caused by the
COVID-19 pandemic. As a result, we are well on track to meet our
annual guidance for production and costs for the ninth consecutive
year.
“Year-over-year, our margins grew by 60% to
$1,171 per gold ounce sold, which substantially outpaced the 30%
increase in the average realized gold price. We also continued to
strengthen our investment grade balance sheet and ended the quarter
with approximately $935 million in cash and total liquidity of $2.5
billion.
“In September, we were pleased to announce an
expected 20% increase in production over the next three years to
2.9 million gold equivalent ounces, along with plans for a
quarterly dividend to return capital to our shareholders. We also
provided a long-term production outlook which forecasts Kinross
producing an average of 2.5 million gold equivalent ounces annually
through to 2029.
“Our robust financial position, diverse
operating portfolio, attractive project pipeline and successful
track record of exploration and project development provides a
strong foundation from which to continue building value well into
the future.”
Financial results
Summary of financial and operating results
|
|
|
|
|
|
|
|
Three months ended |
Nine months ended |
|
|
September 30, |
September 30, |
(unaudited, expressed in millions of U.S. dollars, except ounces,
per share amounts, and per ounce amounts) |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Operating Highlights |
|
|
|
|
Total gold equivalent ounces(a) |
|
|
|
|
Produced(c) |
|
607,744 |
|
612,697 |
|
1,755,363 |
|
1,877,546 |
Sold(c) |
|
593,218 |
|
597,635 |
|
1,738,379 |
|
1,841,841 |
|
|
|
|
|
|
Attributable gold equivalent ounces(a) |
|
|
|
|
Produced(c) |
|
603,312 |
|
608,033 |
|
1,742,616 |
|
1,862,315 |
Sold(c) |
|
588,559 |
|
592,689 |
|
1,725,778 |
|
1,826,373 |
|
|
|
|
|
|
Financial Highlights |
|
|
|
|
Metal sales |
$ |
1,131.3 |
$ |
877.1 |
$ |
3,018.3 |
$ |
2,501.1 |
Production cost of sales |
$ |
439.4 |
$ |
440.6 |
$ |
1,289.2 |
$ |
1,278.4 |
Depreciation, depletion and amortization |
$ |
204.8 |
$ |
176.9 |
$ |
608.3 |
$ |
520.9 |
Reversal of impairment charge |
$ |
- |
$ |
- |
$ |
48.3 |
$ |
- |
Operating earnings |
$ |
393.4 |
$ |
162.6 |
$ |
907.1 |
$ |
422.3 |
Net earnings attributable to common shareholders |
$ |
240.7 |
$ |
60.9 |
$ |
559.1 |
$ |
197.1 |
Basic earnings per share attributable to common shareholders |
$ |
0.19 |
$ |
0.05 |
$ |
0.44 |
$ |
0.16 |
Diluted earnings per share attributable to common shareholders |
$ |
0.19 |
$ |
0.05 |
$ |
0.44 |
$ |
0.16 |
Adjusted net earnings attributable to common shareholders(b) |
$ |
310.2 |
$ |
104.0 |
$ |
631.7 |
$ |
266.9 |
Adjusted net earnings per share(b) |
$ |
0.25 |
$ |
0.08 |
$ |
0.50 |
$ |
0.21 |
Net cash flow provided from operating activities |
$ |
544.1 |
$ |
231.7 |
$ |
1,276.5 |
$ |
816.3 |
Adjusted operating cash flow(b) |
$ |
549.6 |
$ |
295.4 |
$ |
1,385.1 |
$ |
813.9 |
Capital expenditures(d) |
$ |
212.1 |
$ |
242.6 |
$ |
617.8 |
$ |
762.3 |
Average realized gold price per ounce(b) |
$ |
1,908 |
$ |
1,467 |
$ |
1,736 |
$ |
1,358 |
Consolidated production cost of sales per equivalent ounce(c)
sold(b) |
$ |
741 |
$ |
737 |
$ |
742 |
$ |
694 |
Attributable(a) production cost of sales per equivalent ounce(c)
sold(b) |
$ |
737 |
$ |
735 |
$ |
738 |
$ |
692 |
Attributable(a) production cost of sales per ounce sold on a
by-product basis(b) |
$ |
707 |
$ |
716 |
$ |
717 |
$ |
677 |
Attributable(a) all-in sustaining cost per ounce sold on a
by-product basis(b) |
$ |
934 |
$ |
1,016 |
$ |
962 |
$ |
949 |
Attributable(a) all-in sustaining cost per equivalent ounce(c)
sold(b) |
$ |
958 |
$ |
1,028 |
$ |
978 |
$ |
958 |
Attributable(a) all-in cost per ounce sold on a by-product
basis(b) |
$ |
1,226 |
$ |
1,305 |
$ |
1,226 |
$ |
1,261 |
Attributable(a) all-in cost per equivalent ounce(c) sold(b) |
$ |
1,243 |
$ |
1,309 |
$ |
1,237 |
$ |
1,264 |
|
|
|
|
|
|
(a) “Total” includes 100% of Chirano
production. "Attributable" includes Kinross' share of Chirano (90%)
and Peak (70%) production and costs.(b) The
definition and reconciliation of these non-GAAP financial measures
is included on pages 13 to 17 of this news
release.(c) “Gold equivalent ounces” include
silver ounces produced and sold converted to a gold equivalent
based on a ratio of the average spot market prices for the
commodities for each period. The ratio for the third quarter of
2020 was 78.68:1 (third quarter of 2019 – 86.73:1). The ratio for
the first nine months of 2020 was 90.15:1 (first nine months of
2019 – 86.13:1).(d) “Capital expenditures” is as
reported as “Additions to property, plant and equipment” on the
interim condensed consolidated statement of cash flows and excludes
“Interest paid capitalized to property, plant and equipment”.
The following operating and financial results
are based on 2020 third-quarter gold equivalent production.
Production and cost measures are on an attributable basis:
Production1: Kinross produced
603,312 attributable Au eq. oz. in Q3 2020, compared with 608,033
Au eq. oz. in Q3 2019. The slight decrease was largely due to lower
production at Paracatu, Maricunga and Kupol, largely offset by
increases at Fort Knox and Bald Mountain.
Average realized gold price3:
The average realized gold price in Q3 2020 increased 30% to $1,908
per ounce, compared with $1,467 per ounce in Q3 2019.
Revenue: Revenue from metal
sales increased by 29% to $1,131.3 million in Q3 2020, compared
with $877.1 million during the same period in 2019.
Production cost of
sales1, 2: Production cost of sales per
Au eq. oz. was $737 for Q3 2020 and was in line with $735 for Q3
2019. Production cost of sales per Au oz. on a by-product basis
decreased to $707 in Q3 2020, compared with $716 in Q3 2019, based
on Q3 2020 attributable gold sales of 573,173 ounces and
attributable silver sales of 1,210,707 ounces.
Margins: Kinross’ attributable
margin per Au eq. oz. sold3 increased by 60% to $1,171 for Q3 2020,
compared with the Q3 2019 margin of $732, and significantly
outpacing the year-over-year 30% increase in average realized gold
price.
All-in sustaining cost1, 2:
All-in sustaining cost per Au eq. oz. sold decreased to $958 in Q3
2020, compared with $1,028 in Q3 2019. All-in sustaining cost per
Au oz. sold on a by-product basis decreased to $934 in Q3 2020,
compared with $1,016 in Q3 2019. The decrease in all-in sustaining
cost was primarily a result of lower capital expenditures.
Operating cash flow: Adjusted
operating cash flow2 for Q3 2020 increased by 86% to $549.6
million, compared with $295.4 million for Q3 2019, primarily due to
the increase in margins.
Net operating cash flow increased by 135% to
$544.1 million for Q3 2020, compared with $231.7 million for Q3
2019.
Earnings: Adjusted net
earnings2 nearly tripled to $310.2 million, or $0.25 per share, for
Q3 2020, compared with $104.0 million, or $0.08 per share, for Q3
2019, primarily due to the increase in margins.
Reported net earnings5 nearly quadrupled to
$240.7 million, or $0.19 per share, for Q3 2020, compared with
$60.9 million, or $0.05 per share, for Q3 2019.
Capital expenditures: Capital
expenditures were $212.1 million for Q3 2020, compared with $242.6
million for Q3 2019, primarily due to decreases in spending at Bald
Mountain and Tasiast.
Balance sheet
and financial position
As of September 30, 2020, Kinross had cash and
cash equivalents of $933.5 million, compared with $1,527.1 million
at June 30, 2020. The decrease was primarily related to the full
repayment of the $750 million drawn from the Company’s $1.5 billion
credit facility earlier in the year as a precaution against
uncertainties caused by the COVID-19 pandemic and the acquisition
of the Peak project. Strong free cash flow generated during Q3 2020
partially offset the cash used for the repayment and
acquisition.
The Company had additional available credit of
$1,565.3 million as of September 30, 2020, and total liquidity of
approximately $2.5 billion. Kinross had total debt of approximately
$1.9 billion, of which $500 million in senior notes are due in
September 2021, which the Company intends to repay.
Kinross continues to prioritize maintaining and
strengthening its investment grade balance sheet.
Operating results
The Company’s comprehensive response to the
COVID-19 pandemic continued to maintain the safety of its global
workforce and host communities while mitigating operational
impacts.
Mine-by-mine summaries for 2020 third-quarter
results can be found on pages eight and 12 of this news release.
Operational highlights from Q3 2020 include the following:
Americas
Fort Knox performed well during
the quarter, with higher production and lower cost of sales per
ounce sold compared with Q2 2020 mainly due to strong mill
performance. The operation delivered higher production compared
with Q3 2019 as a result of higher mill grades and mill throughput.
Cost of sales per ounce sold decreased year-over-year due to
increased production and mill throughput, partially offset by
higher operating waste mined.
Round Mountain’s production was
largely in line with Q2 2020, with cost of sales per ounce sold
decreasing mainly as a result of lower contractor costs.
Year-over-year production decreased primarily as a result of lower
mill grades, partially offset by higher ounces recovered from the
heap leach pads. Cost of sales per ounce sold was lower compared
with Q3 2019 mainly due to a decrease in operating waste mined and
lower fuel costs.
At Bald Mountain, both
production and cost of sales per ounce sold were largely consistent
with Q2 2020. Production increased compared with Q3 2019 as more
ounces were recovered from the Vantage Complex heap leach pad due
to higher grades. Cost of sales per ounce sold increased
year-over-year mainly due to higher royalty expenses driven by
higher gold prices.
At Paracatu, production was
lower quarter-over-quarter mainly due to a decrease in mill
throughput as a result of planned maintenance and lower grades. The
lower throughput, and a decrease in recoveries, contributed to the
lower production year-over-year. Production is expected to improve
in the fourth quarter as mining is expected to transition to higher
grade ore. Cost of sales per ounce sold increased compared with Q2
2020 and Q3 2019 mainly as a result of lower ounces produced,
higher contractor costs and maintenance supplies, partially offset
by favourable foreign exchange movements.
Russia
At Kupol and
Dvoinoye, production was largely in line with the
previous quarter and was lower year-over-year mainly due to
anticipated lower grades at Kupol. Cost of sales per ounce sold was
lower compared with Q2 2020 and Q3 2019, primarily due to reduced
mining activity at Dvoinoye. Favourable foreign exchange rates also
contributed to the year-over-year decrease in cost of sales per
ounce sold, which was partially offset by higher royalties
associated with the increase in the average realized gold
price.
West Africa
Tasiast performed well, with
higher production quarter-over-quarter and year-over-year. While
production in the second quarter was negatively impacted by a
strike, Q3 2020 production improved as a result of record mill
grades and higher mill throughput, with Tasiast achieving a record
production month in August. Cost of sales per ounce sold increased
compared with Q2 2020 mainly due to higher royalty expenses and
increased milling supplies. Compared with Q3 2019, production
increased due to higher mill grades, which was partially offset by
lower mill throughput and recoveries, while cost of sales per ounce
sold was largely consistent.
During the quarter, Tasiast’s mining rate
continued to ramp up and is now operating at near full capacity
after rates were affected by the strike in Q2 2020 and COVID-19
impacts earlier in the year. As a result of lower mining rates,
approximately 100k Au eq. oz. of production is expected to be
deferred from 2021 to 2022. Kinross does not expect any impacts to
Tasiast’s life of mine production.
At Chirano, production
increased compared with the previous quarter primarily due to
higher mill throughput, and cost of sales per ounce sold increased
due to higher milling costs. Year-over-year production was lower as
a result of lower grades, and cost of sales per ounce sold
increased due to higher milling costs and maintenance supplies,
partially offset by lower operating waste mined.
Long-term
production outlook
On September 17, 2020, Kinross announced a
growing three-year production profile, with production expected to
increase by approximately half a million ounces, or 20%, to 2.9
million Au eq. oz. in 2023. The Company expects production1 (+/-
5%) of 2.4 million Au eq. oz. in 2021, 2.7 million Au eq. oz.
in 2022, and 2.9 million Au eq. oz. in 2023.
On October 20, 2020, Kinross provided a
long-term production outlook, with expected average annual
production of 2.5 million Au eq. oz.1 to 2029. Kinross’ production
outlook is based on long-life assets that anchor the Company’s
global portfolio, along with numerous growth projects in all
operating regions.
Development projects
Alaska projects
At the Fort Knox Gilmore
project, work on infrastructure and processing facilities is now
substantially complete. First ore was placed on the new Barnes
Creek heap leach pad in early October, as construction of the pad
was completed on time and under budget during the quarter.
Stripping is progressing well, and the Company expects to
accelerate production at the Gilmore project to bring ounces
forward as part of Kinross’ growing three-year production
profile.
On September 30, 2020, the Company acquired a
70% interest in the open pit Peak project in
Alaska for total cash consideration of $93.7 million. As the
project operator, Kinross expects to process Peak ore at its Fort
Knox mill. Processing ore at Fort Knox avoids mill construction at
Peak and is expected to decrease execution risk, lower capital
expenditures, drive attractive returns, and reduce the project’s
environmental footprint and permitting requirements. Blending the
higher grade ore from Peak with Fort Knox ore is expected to extend
mill operation at Fort Knox, reduce overall costs and increase cash
flow. The project is expected to benefit the state and local
communities, in particular, the Upper Tanana Athabascan
Village of Tetlin.
Kinross expects to commence production at Peak
in 2024, with total production of approximately 1 million Au eq.
oz. over 4.5 years at average mining grades of approximately 6 g/t.
Kinross plans to commence a drilling program before year end to
further develop the project’s resource base, and expects to
complete permitting and a feasibility study by the end of 2022.
Tasiast 24k
The Tasiast 24k project is
advancing well and remains on schedule to increase throughput
capacity to 21,000 t/d by the end of 2021, and then to 24,000 t/d
by mid-2023. The project is now approximately 45% complete, with
civil and mechanical works progressing well in the processing
plant, including the gravity circuit, thickener and screens. Work
on power plant construction, which was previously delayed by
COVID-19 impacts, is now ramping up.
Chulbatkan
license – Udinsk
project
At the Udinsk development
project – the first project the Company expects to develop on the
larger Chulbatkan license – study work is advancing well. The 2020
drill program has ramped back up after challenges related to
COVID-19 earlier in the year, and as of the end of Q3 2020,
approximately 50,000 metres of drilling have been completed. All of
the current estimated mineral resources at Chulbatkan are located
at Udinsk, which has a footprint that represents less than 1% of
the approximately 450 sq. kilometre Chulbatkan license area.
On the Chulbatkan license, a
geochemistry and geophysics exploration program completed outside
of Udinsk has returned positive results, with new anomalies
identified. The large, prospective Chulbatkan license area provides
exploration potential that is incremental to the Udinsk
project.
La Coipa Restart and
Lobo-Marte
The La Coipa Restart project is
progressing well and is on schedule to begin pre-stripping in early
2021, with first production expected in mid-2022. An access road to
the Phase 7 pit has been established and refurbishments of the
fleet that was successfully transferred from Maricunga in April
2020 are progressing well. Early work on refurbishing the plant and
existing infrastructure is also advancing well as the team
continues to work to offset challenges to project timing caused by
COVID-19 impacts. The Company continues to study opportunities to
incorporate adjacent deposits with existing mineral reserves and
resources into the La Coipa mine plan and potentially extend mine
life.
At the Lobo-Marte project, work
on permitting and the feasibility study (FS) is advancing, with the
FS on schedule to be completed in Q4 2021. The Company is targeting
production at Lobo-Marte to commence in 2027 after the completion
of mining at La Coipa. Kinross continues to believe that Lobo-Marte
offers the potential of a long-life, cornerstone asset with
attractive costs.
2020 guidance The following
section of the news release represents forward-looking information
and users are cautioned that actual results may vary. We refer to
the risks and assumptions contained in the Cautionary Statement on
Forward-Looking Information on page 18 of this news release.
On September 17, 2020, the Company reinstated
its 2020 guidance originally announced on February 12, 2020.
Kinross is on track to meet its production1
guidance of 2.4 million Au eq. oz. (+/- 5%), its cost of sales per
ounce1 guidance of $720 per Au eq. oz. sold (+/- 5%), and its
all-in sustaining cost1 guidance of $970 per Au eq. oz. sold (+/-
5%) for 2020. The Company also remains on track to meet its capital
expenditures guidance of $900 million (+/- 5%).
2019 Sustainability Report
In August 2020, Kinross released its biennial
Sustainability Report (“Report”) detailing the Company’s progress
over the past two years in delivering on its commitment to
responsible mining. The Report provides a transparent account of
Kinross’ sustainability performance, including ESG activities, and
an in-depth review of the Company’s relationships with host
communities, workforce and host governments.
Health and safety remains Kinross’ top priority
and is exemplified by its strong safety performance. Incident
frequency rates have remained among the lowest in the industry, and
on par with, or better than rates in low-risk, non-industrial
sectors. In line with this commitment, the Report provides
comprehensive information on Kinross’ COVID-19 Response, which
includes rigorous measures to keep its employees safe, mitigate the
spread of the virus, maintain business continuity and production,
and support employees and host communities.
The Company continued to deliver socio-economic
value, and provided benefits to host countries with a total of $3.2
billion spent in-country in 2019 through taxes, wages, procurement
and community support.
Kinross has adopted the World Gold Council’s
Responsible Gold Mining Principles (RGMPs), proceeded with the
implementation of the recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD) and continued to
advance the UN Sustainable Development Goals (SDGs). The Report
follows the Global Reporting Initiative (GRI) framework, fulfills
Kinross’ commitment as a participant in the UN Global Compact, and
includes metrics from the Mining and Metals Standard of the
Sustainability Accounting Standards Board (SASB).
Q3
2020 conference call details
In connection with the release, Kinross will
hold a conference call and audio webcast on Thursday, November 5,
2020 at 8:00 a.m. ET followed by a question-and-answer session.
Please enter the passcode:
8369428 to access the call.
Canada & US
toll-free – +1 (833) 968-2237; Passcode:
8369428Outside of Canada & US – +1 (825)
312-2059; Passcode: 8369428
Replay (available up to 14 days after the
call):
Canada & US toll-free – +1
(800) 585-8367; Passcode: 8369428Outside of Canada &
US – +1 (416) 621-4642; Passcode: 8369428
You may also access the conference call on a
listen-only basis via webcast at our website www.kinross.com. The
audio webcast will be archived on www.kinross.com.
This news release should be read in conjunction
with Kinross’ 2020 third-quarter unaudited Financial Statements and
Management’s Discussion and Analysis report at www.kinross.com.
Kinross’ third-quarter unaudited Financial Statements and
Management’s Discussion and Analysis have been filed with Canadian
securities regulators (available at www.sedar.com) and furnished to
the U.S. Securities and Exchange Commission (available at
www.sec.gov). Kinross shareholders may obtain a copy of the
financial statements free of charge upon request to the
Company.
About Kinross Gold Corporation
Kinross is a Canadian-based senior gold mining
company with mines and projects in the United States, Brazil,
Russia, Mauritania, Chile and Ghana. Kinross maintains listings on
the Toronto Stock Exchange (symbol:K) and the New York Stock
Exchange (symbol:KGC).
Media Contact Louie DiazSenior Director,
Corporate Communicationsphone:
416-369-6469louie.diaz@kinross.com
_________________________________________________
Investor Relations ContactTom
Elliott Senior
Vice-President, Investor Relations phone:
416-365-3390 tom.elliott@kinross.comReview
of operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, (unaudited) |
|
Gold equivalent ounces |
|
|
|
|
|
|
|
|
Produced |
|
Sold |
|
Production cost of sales ($millions) |
|
Production cost of sales/equivalent ounce
sold |
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
Fort Knox |
72,705 |
|
54,027 |
|
|
73,267 |
|
51,606 |
|
|
$ |
69.5 |
|
$ |
58.3 |
|
|
$ |
949 |
$ |
1,130 |
Round Mountain |
76,039 |
|
82,195 |
|
|
72,717 |
|
81,617 |
|
|
|
49.7 |
|
|
57.5 |
|
|
|
683 |
|
705 |
Bald Mountain |
49,339 |
|
33,995 |
|
|
37,492 |
|
37,644 |
|
|
|
32.1 |
|
|
30.6 |
|
|
|
856 |
|
813 |
Paracatu |
131,000 |
|
146,396 |
|
|
128,782 |
|
145,662 |
|
|
|
96.6 |
|
|
99.5 |
|
|
|
750 |
|
683 |
Maricunga |
3,132 |
|
18,016 |
|
|
4,442 |
|
9,203 |
|
|
|
1.0 |
|
|
7.0 |
|
|
|
225 |
|
761 |
Americas Total |
332,215 |
|
334,629 |
|
|
316,700 |
|
325,732 |
|
|
|
248.9 |
|
|
252.9 |
|
|
|
786 |
|
776 |
|
|
|
|
|
|
|
|
|
|
|
|
Kupol |
128,144 |
|
137,562 |
|
|
126,637 |
|
136,088 |
|
|
|
69.2 |
|
|
82.6 |
|
|
|
546 |
|
607 |
Russia Total |
128,144 |
|
137,562 |
|
|
126,637 |
|
136,088 |
|
|
|
69.2 |
|
|
82.6 |
|
|
|
546 |
|
607 |
|
|
|
|
|
|
|
|
|
|
|
|
Tasiast |
103,065 |
|
93,865 |
|
|
103,295 |
|
86,357 |
|
|
|
65.2 |
|
|
55.1 |
|
|
|
631 |
|
638 |
Chirano (100%) |
44,320 |
|
46,641 |
|
|
46,586 |
|
49,458 |
|
|
|
56.1 |
|
|
50.0 |
|
|
|
1,204 |
|
1,011 |
West Africa Total |
147,385 |
|
140,506 |
|
|
149,881 |
|
135,815 |
|
|
|
121.3 |
|
|
105.1 |
|
|
|
809 |
|
774 |
|
|
|
|
|
|
|
|
|
|
|
|
Operations Total |
607,744 |
|
612,697 |
|
|
593,218 |
|
597,635 |
|
|
|
439.4 |
|
|
440.6 |
|
|
|
741 |
|
737 |
Less Chirano non-controlling interest (10%) |
(4,432 |
) |
(4,664 |
) |
|
(4,659 |
) |
(4,946 |
) |
|
|
(5.6 |
) |
|
(5.0 |
) |
|
|
|
Attributable Total |
603,312 |
|
608,033 |
|
|
588,559 |
|
592,689 |
|
|
$ |
433.8 |
|
$ |
435.6 |
|
|
$ |
737 |
$ |
735 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, (unaudited) |
|
Gold equivalent ounces |
|
|
|
|
|
|
|
|
Produced |
|
Sold |
|
Production cost of sales ($millions) |
|
Production cost of sales/equivalent ounce
sold |
|
2020 |
|
2019 |
|
|
2020 |
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
Fort Knox |
180,402 |
|
147,080 |
|
|
180,500 |
|
145,283 |
|
|
$ |
200.2 |
|
$ |
147.8 |
|
|
$ |
1,109 |
$ |
1,017 |
Round Mountain |
234,855 |
|
258,163 |
|
|
229,519 |
|
252,337 |
|
|
|
157.4 |
|
|
171.3 |
|
|
|
686 |
|
679 |
Bald Mountain |
139,795 |
|
121,814 |
|
|
129,462 |
|
112,421 |
|
|
|
110.5 |
|
|
86.8 |
|
|
|
854 |
|
772 |
Paracatu |
394,217 |
|
479,339 |
|
|
390,625 |
|
478,579 |
|
|
|
267.7 |
|
|
301.2 |
|
|
|
685 |
|
629 |
Maricunga |
3,132 |
|
35,380 |
|
|
6,912 |
|
26,301 |
|
|
|
2.6 |
|
|
19.8 |
|
|
|
376 |
|
753 |
Americas Total |
952,401 |
|
1,041,776 |
|
|
937,018 |
|
1,014,921 |
|
|
|
738.4 |
|
|
726.9 |
|
|
|
788 |
|
716 |
|
|
|
|
|
|
|
|
|
|
|
|
Kupol |
380,012 |
|
395,334 |
|
|
379,432 |
|
391,375 |
|
|
|
225.4 |
|
|
230.8 |
|
|
|
594 |
|
590 |
Russia Total |
380,012 |
|
395,334 |
|
|
379,432 |
|
391,375 |
|
|
|
225.4 |
|
|
230.8 |
|
|
|
594 |
|
590 |
|
|
|
|
|
|
|
|
|
|
|
|
Tasiast |
295,481 |
|
288,124 |
|
|
295,924 |
|
280,863 |
|
|
|
174.9 |
|
|
180.0 |
|
|
|
591 |
|
641 |
Chirano (100%) |
127,469 |
|
152,312 |
|
|
126,005 |
|
154,682 |
|
|
|
150.5 |
|
|
140.7 |
|
|
|
1,194 |
|
910 |
West Africa Total |
422,950 |
|
440,436 |
|
|
421,929 |
|
435,545 |
|
|
|
325.4 |
|
|
320.7 |
|
|
|
771 |
|
736 |
|
|
|
|
|
|
|
|
|
|
|
|
Operations Total |
1,755,363 |
|
1,877,546 |
|
|
1,738,379 |
|
1,841,841 |
|
|
|
1,289.2 |
|
|
1,278.4 |
|
|
|
742 |
|
694 |
Less Chirano non-controlling interest (10%) |
(12,747 |
) |
(15,231 |
) |
|
(12,601 |
) |
(15,468 |
) |
|
|
(15.0 |
) |
|
(14.1 |
) |
|
|
|
Attributable Total |
1,742,616 |
|
1,862,315 |
|
|
1,725,778 |
|
1,826,373 |
|
|
$ |
1,274.2 |
|
$ |
1,264.3 |
|
|
$ |
738 |
$ |
692 |
|
|
|
|
|
|
|
|
|
|
|
|
Interim condensed consolidated balance
sheets
|
|
|
|
|
|
(unaudited,
expressed in millions of U.S. dollars, except share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
As at |
|
|
|
September
30, |
|
December 31, |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
933.5 |
|
|
$ |
575.1 |
|
|
Restricted cash |
|
|
13.1 |
|
|
|
15.2 |
|
|
Accounts receivable and other assets |
|
|
182.4 |
|
|
|
137.4 |
|
|
Current income tax recoverable |
|
|
157.0 |
|
|
|
43.2 |
|
|
Inventories |
|
|
1,032.0 |
|
|
|
1,053.8 |
|
|
|
|
|
2,318.0 |
|
|
|
1,824.7 |
|
|
Non-current assets |
|
|
|
|
|
Property, plant and equipment |
|
|
6,836.3 |
|
|
|
6,340.0 |
|
|
Goodwill |
|
|
158.8 |
|
|
|
158.8 |
|
|
Long-term investments |
|
|
106.2 |
|
|
|
126.2 |
|
|
Investment in joint venture |
|
|
18.3 |
|
|
|
18.4 |
|
|
Other long-term assets |
|
|
570.4 |
|
|
|
572.7 |
|
|
Deferred tax assets |
|
|
- |
|
|
|
35.2 |
|
|
Total assets |
|
$ |
10,008.0 |
|
|
$ |
9,076.0 |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
468.2 |
|
|
$ |
469.3 |
|
|
Dividend payable |
|
|
37.7 |
|
|
|
- |
|
|
Current income tax payable |
|
|
72.8 |
|
|
|
68.0 |
|
|
Current portion of long-term debt and credit facilities |
|
|
499.6 |
|
|
|
- |
|
|
Current portion of provisions |
|
|
56.7 |
|
|
|
57.9 |
|
|
Other current liabilities |
|
|
40.2 |
|
|
|
20.3 |
|
|
Deferred payment obligation |
|
|
141.5 |
|
|
|
- |
|
|
|
|
|
1,316.7 |
|
|
|
615.5 |
|
|
Non-current liabilities |
|
|
|
|
|
Long-term debt and credit facilities |
|
|
1,423.1 |
|
|
|
1,837.4 |
|
|
Provisions |
|
|
815.6 |
|
|
|
838.6 |
|
|
Long-term lease liabilities |
|
|
28.9 |
|
|
|
38.9 |
|
|
Unrealized fair value of derivative
liabilities |
|
|
14.0 |
|
|
|
0.8 |
|
|
Other long-term liabilities |
|
|
94.6 |
|
|
|
107.7 |
|
|
Deferred tax liabilities |
|
|
435.5 |
|
|
|
304.5 |
|
|
Total liabilities |
|
$ |
4,128.4 |
|
|
$ |
3,743.4 |
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Common shareholders' equity |
|
|
|
|
|
Common share capital |
|
$ |
4,473.6 |
|
|
$ |
14,926.2 |
|
|
Contributed surplus |
|
|
10,705.7 |
|
|
|
242.1 |
|
|
Accumulated deficit |
|
|
(9,308.0 |
) |
|
|
(9,829.4 |
) |
|
Accumulated other comprehensive income (loss) |
|
|
(48.6 |
) |
|
|
(20.4 |
) |
|
Total common shareholders' equity |
|
|
5,822.7 |
|
|
|
5,318.5 |
|
|
Non-controlling interests |
|
|
56.9 |
|
|
|
14.1 |
|
|
Total equity |
|
|
5,879.6 |
|
|
|
5,332.6 |
|
|
Total liabilities and equity |
|
$ |
10,008.0 |
|
|
$ |
9,076.0 |
|
|
|
|
|
|
|
|
Common shares |
|
|
|
|
|
Authorized |
|
|
Unlimited |
|
|
|
Unlimited |
|
|
Issued and outstanding |
|
|
1,258,287,630 |
|
|
|
1,253,765,724 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim condensed consolidated
statements of operations
|
|
|
|
|
|
|
|
|
|
(unaudited,
expressed in millions of U.S. dollars, except share and per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Nine months ended |
|
|
|
September
30, |
|
September 30, |
|
September
30, |
|
September 30, |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
Revenue |
|
|
|
|
|
|
|
|
|
Metal sales |
|
$ |
1,131.3 |
|
|
$ |
877.1 |
|
|
$ |
3,018.3 |
|
|
$ |
2,501.1 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
|
|
|
|
|
|
|
Production cost of sales |
|
|
439.4 |
|
|
|
440.6 |
|
|
|
1,289.2 |
|
|
|
1,278.4 |
|
|
Depreciation, depletion and amortization |
|
|
204.8 |
|
|
|
176.9 |
|
|
|
608.3 |
|
|
|
520.9 |
|
|
Reversal of impairment charge |
|
|
- |
|
|
|
- |
|
|
|
(48.3 |
) |
|
|
- |
|
|
Total cost of sales |
|
|
644.2 |
|
|
|
617.5 |
|
|
|
1,849.2 |
|
|
|
1,799.3 |
|
|
Gross profit |
|
|
487.1 |
|
|
|
259.6 |
|
|
|
1,169.1 |
|
|
|
701.8 |
|
|
Other operating expense |
|
|
43.6 |
|
|
|
29.1 |
|
|
|
118.4 |
|
|
|
91.5 |
|
|
Exploration and business development |
|
|
24.8 |
|
|
|
35.6 |
|
|
|
61.8 |
|
|
|
83.5 |
|
|
General and administrative |
|
|
25.3 |
|
|
|
32.3 |
|
|
|
81.8 |
|
|
|
104.5 |
|
|
Operating earnings |
|
|
393.4 |
|
|
|
162.6 |
|
|
|
907.1 |
|
|
|
422.3 |
|
|
Other income (expense) - net |
|
|
(3.4 |
) |
|
|
5.2 |
|
|
|
5.2 |
|
|
|
5.4 |
|
|
Finance income |
|
|
0.8 |
|
|
|
2.3 |
|
|
|
3.8 |
|
|
|
6.3 |
|
|
Finance expense |
|
|
(27.4 |
) |
|
|
(23.8 |
) |
|
|
(85.9 |
) |
|
|
(77.4 |
) |
|
Earnings before tax |
|
|
363.4 |
|
|
|
146.3 |
|
|
|
830.2 |
|
|
|
356.6 |
|
|
Income tax expense - net |
|
|
(121.8 |
) |
|
|
(85.5 |
) |
|
|
(269.3 |
) |
|
|
(160.1 |
) |
|
Net earnings |
|
$ |
241.6 |
|
|
$ |
60.8 |
|
|
$ |
560.9 |
|
|
$ |
196.5 |
|
|
Net earnings (loss) attributable to: |
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
$ |
0.9 |
|
|
$ |
(0.1 |
) |
|
$ |
1.8 |
|
|
$ |
(0.6 |
) |
|
Common shareholders |
|
$ |
240.7 |
|
|
$ |
60.9 |
|
|
$ |
559.1 |
|
|
$ |
197.1 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to common
shareholders |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.19 |
|
|
$ |
0.05 |
|
|
$ |
0.44 |
|
|
$ |
0.16 |
|
|
Diluted |
|
$ |
0.19 |
|
|
$ |
0.05 |
|
|
$ |
0.44 |
|
|
$ |
0.16 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding
(millions) |
|
|
|
|
|
|
|
|
|
Basic |
|
|
1,258.1 |
|
|
|
1,252.8 |
|
|
|
1,256.8 |
|
|
|
1,251.9 |
|
|
Diluted |
|
|
1,269.0 |
|
|
|
1,263.9 |
|
|
|
1,267.6 |
|
|
|
1,261.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim condensed consolidated
statements of cash flows
|
|
|
|
|
|
|
|
|
|
(unaudited,
expressed in millions of U.S. dollars) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Nine months ended |
|
|
|
September
30, |
|
September 30, |
|
September
30, |
|
September 30, |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
Net inflow (outflow) of cash related to the following
activities: |
|
|
|
|
|
|
|
|
|
Operating: |
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
241.6 |
|
|
$ |
60.8 |
|
|
$ |
560.9 |
|
|
$ |
196.5 |
|
|
Adjustments to reconcile net earnings to net cash provided from
operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
204.8 |
|
|
|
176.9 |
|
|
|
608.3 |
|
|
|
520.9 |
|
|
Reversal of impairment charge |
|
|
- |
|
|
|
- |
|
|
|
(48.3 |
) |
|
|
- |
|
|
Share-based compensation expense |
|
|
3.1 |
|
|
|
3.3 |
|
|
|
10.4 |
|
|
|
10.9 |
|
|
Finance expense |
|
|
27.4 |
|
|
|
23.8 |
|
|
|
85.9 |
|
|
|
77.4 |
|
|
Deferred tax expense (recovery) |
|
|
63.4 |
|
|
|
15.3 |
|
|
|
175.9 |
|
|
|
(16.1 |
) |
|
Foreign exchange losses (gains) and other |
|
|
9.3 |
|
|
|
(1.4 |
) |
|
|
(8.0 |
) |
|
|
7.6 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Accounts receivable and other assets |
|
|
(40.9 |
) |
|
|
(76.2 |
) |
- |
|
(168.6 |
) |
|
|
(101.9 |
) |
|
Inventories |
|
|
(13.0 |
) |
|
|
(40.5 |
) |
|
|
26.3 |
|
|
|
9.5 |
|
|
Accounts payable and accrued liabilities |
|
|
78.4 |
|
|
|
131.6 |
|
|
|
190.6 |
|
|
|
174.0 |
|
|
Cash flow provided from operating activities |
|
|
574.1 |
|
|
|
293.6 |
|
|
|
1,433.4 |
|
|
|
878.8 |
|
|
Income taxes paid |
|
|
(30.0 |
) |
|
|
(61.9 |
) |
|
|
(156.9 |
) |
|
|
(62.5 |
) |
|
Net cash flow provided from operating
activities |
|
|
544.1 |
|
|
|
231.7 |
|
|
|
1,276.5 |
|
|
|
816.3 |
|
|
Investing: |
|
|
|
|
|
|
|
|
|
Additions to property, plant and equipment |
|
|
(212.1 |
) |
|
|
(242.6 |
) |
|
|
(617.8 |
) |
|
|
(762.3 |
) |
|
Interest paid capitalized to property, plant and equipment |
|
|
(16.9 |
) |
|
|
(22.9 |
) |
|
|
(43.0 |
) |
|
|
(44.7 |
) |
|
Acquisitions |
|
|
(122.5 |
) |
|
|
- |
|
|
|
(250.8 |
) |
|
|
(30.0 |
) |
|
Net proceeds from the sale of (additions
to) long-term investments and other assets |
|
2.4 |
|
|
|
(0.6 |
) |
|
|
(0.9 |
) |
|
|
(12.9 |
) |
|
Net proceeds from the sale of property, plant and equipment |
|
|
1.1 |
|
|
|
0.8 |
|
|
|
3.3 |
|
|
|
2.9 |
|
|
Decrease (increase) in restricted cash - net |
|
|
0.2 |
|
|
|
0.6 |
|
|
|
(22.9 |
) |
|
|
(0.2 |
) |
|
Interest received and other - net |
|
|
0.7 |
|
|
|
1.1 |
|
|
|
2.4 |
|
|
|
3.2 |
|
|
Net cash flow used in investing activities |
|
|
(347.1 |
) |
|
|
(263.6 |
) |
|
|
(929.7 |
) |
|
|
(844.0 |
) |
|
Financing: |
|
|
|
|
|
|
|
|
|
Proceeds from drawdown of debt |
|
|
- |
|
|
|
40.0 |
|
|
|
950.0 |
|
|
|
300.0 |
|
|
Repayment of debt |
|
|
(750.0 |
) |
|
|
(95.0 |
) |
|
|
(850.0 |
) |
|
|
(200.0 |
) |
|
Interest paid |
|
|
(34.1 |
) |
|
|
(26.6 |
) |
|
|
(63.1 |
) |
|
|
(55.0 |
) |
|
Payment of lease liabilities |
|
|
(4.0 |
) |
|
|
(3.2 |
) |
|
|
(13.5 |
) |
|
|
(10.4 |
) |
|
Other - net |
|
|
1.0 |
|
|
|
1.0 |
|
|
|
(3.6 |
) |
|
|
0.8 |
|
|
Net cash flow (used in) provided from financing
activities |
|
|
(787.1 |
) |
|
|
(83.8 |
) |
|
|
19.8 |
|
|
|
35.4 |
|
|
Effect of exchange rate changes on cash and cash
equivalents |
|
|
(3.5 |
) |
|
|
(1.7 |
) |
|
|
(8.2 |
) |
|
|
1.3 |
|
|
(Decrease) increase in cash and cash
equivalents |
|
|
(593.6 |
) |
|
|
(117.4 |
) |
|
|
358.4 |
|
|
|
9.0 |
|
|
Cash and cash equivalents, beginning of
period |
|
|
1,527.1 |
|
|
|
475.4 |
|
|
|
575.1 |
|
|
|
349.0 |
|
|
Cash and cash equivalents, end of period |
|
$ |
933.5 |
|
|
$ |
358.0 |
|
|
$ |
933.5 |
|
|
$ |
358.0 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Summary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mine |
Period |
Ownership |
Tonnes Ore Mined (a) |
Ore Processed (Milled) (a) |
Ore Processed (Heap Leach)
(a) |
Grade (Mill) |
Grade (Heap Leach) |
Recovery (b)(h) |
Gold Eq Production (e) |
Gold Eq Sales (e) |
Production cost of sales |
Production cost of sales/oz |
Cap Ex (g) |
DD&A |
|
|
|
(%) |
('000 tonnes) |
('000 tonnes) |
('000 tonnes) |
(g/t) |
(g/t) |
(%) |
(ounces) |
(ounces) |
($ millions) |
($/ounce) |
($ millions) |
($ millions) |
Americas |
Fort Knox |
Q3 2020 |
100 |
7,202 |
2,664 |
5,497 |
0.67 |
0.19 |
83 |
% |
72,705 |
73,267 |
$ |
69.5 |
$ |
949 |
$ |
39.7 |
$ |
27.9 |
Q2 2020 |
100 |
6,116 |
2,048 |
4,783 |
0.73 |
0.23 |
83 |
% |
56,031 |
56,465 |
|
66.1 |
$ |
1,171 |
|
33.9 |
|
23.3 |
Q1 2020 |
100 |
6,795 |
1,859 |
5,694 |
0.60 |
0.23 |
80 |
% |
51,667 |
50,768 |
|
64.6 |
$ |
1,272 |
|
19.1 |
|
22.8 |
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 |
|
37.4 |
|
24.7 |
Round Mountain |
Q3 2020 |
100 |
6,085 |
972 |
5,884 |
0.79 |
0.39 |
83 |
% |
76,039 |
72,717 |
$ |
49.7 |
$ |
683 |
$ |
39.2 |
$ |
11.6 |
Q2 2020 |
100 |
4,431 |
911 |
4,357 |
0.80 |
0.36 |
84 |
% |
74,351 |
71,087 |
|
51.6 |
$ |
726 |
|
36.9 |
|
10.2 |
Q1 2020 |
100 |
3,700 |
954 |
3,594 |
0.83 |
0.43 |
83 |
% |
84,465 |
85,715 |
|
56.1 |
$ |
654 |
|
41.8 |
|
12.6 |
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 |
|
43.1 |
|
9.1 |
Bald Mountain |
Q3 2020 |
100 |
4,922 |
- |
4,922 |
- |
0.56 |
nm |
49,339 |
37,492 |
$ |
32.1 |
$ |
856 |
$ |
23.4 |
$ |
27.1 |
Q2 2020 |
100 |
4,051 |
- |
4,051 |
- |
0.53 |
nm |
48,368 |
49,594 |
|
42.7 |
$ |
861 |
|
29.6 |
|
30.2 |
Q1 2020 |
100 |
3,254 |
- |
3,254 |
- |
0.55 |
nm |
42,087 |
42,376 |
|
35.7 |
$ |
842 |
|
31.5 |
|
26.7 |
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 |
|
38.9 |
|
14.8 |
Paracatu |
Q3 2020 |
100 |
12,468 |
13,673 |
- |
0.38 |
- |
74 |
% |
131,000 |
128,782 |
$ |
96.6 |
$ |
750 |
$ |
27.2 |
$ |
42.4 |
Q2 2020 |
100 |
15,223 |
14,703 |
- |
0.40 |
- |
74 |
% |
138,851 |
140,646 |
|
83.6 |
$ |
594 |
|
49.1 |
|
45.2 |
Q1 2020 |
100 |
12,350 |
13,224 |
- |
0.39 |
- |
75 |
% |
124,367 |
121,197 |
|
87.5 |
$ |
722 |
|
14.4 |
|
37.7 |
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 |
|
36.8 |
|
39.5 |
Maricunga |
Q3 2020 |
100 |
- |
- |
- |
- |
- |
nm |
3,132 |
4,442 |
$ |
1.0 |
$ |
225 |
$ |
- |
$ |
0.2 |
Q2 2020 |
100 |
- |
- |
- |
- |
- |
nm |
- |
1,159 |
|
0.8 |
$ |
690 |
|
- |
|
0.3 |
Q1 2020 |
100 |
- |
- |
- |
- |
- |
nm |
- |
1,311 |
|
0.8 |
$ |
610 |
|
- |
|
0.3 |
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 |
Russia |
Kupol (c)(d)(f) |
Q3 2020 |
100 |
365 |
430 |
- |
8.99 |
- |
95 |
% |
128,144 |
126,637 |
$ |
69.2 |
$ |
546 |
$ |
6.1 |
$ |
27.0 |
Q2 2020 |
100 |
386 |
416 |
- |
9.73 |
- |
95 |
% |
130,983 |
130,771 |
|
79.3 |
$ |
606 |
|
5.9 |
|
31.1 |
Q1 2020 |
100 |
500 |
425 |
- |
8.73 |
- |
95 |
% |
120,885 |
122,024 |
|
76.9 |
$ |
630 |
|
5.6 |
|
34.4 |
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 |
|
7.6 |
|
32.2 |
West Africa |
Tasiast |
Q3 2020 |
100 |
1,338 |
1,244 |
- |
2.78 |
- |
94 |
% |
103,065 |
103,295 |
$ |
65.2 |
$ |
631 |
$ |
50.0 |
$ |
50.2 |
Q2 2020 |
100 |
1,134 |
1,168 |
- |
2.40 |
|
94 |
% |
88,579 |
98,679 |
|
57.8 |
$ |
586 |
|
40.6 |
|
54.8 |
Q1 2020 |
100 |
1,160 |
1,467 |
- |
2.31 |
- |
95 |
% |
103,837 |
93,950 |
|
51.9 |
$ |
552 |
|
69.2 |
|
40.3 |
Q4 2019 |
100 |
1,129 |
1,379 |
- |
2.39 |
- |
96 |
% |
102,973 |
101,940 |
|
50.4 |
$ |
494 |
|
86.1 |
|
35.0 |
Q3 2019 |
100 |
1,010 |
1,297 |
- |
2.37 |
- |
97 |
% |
93,865 |
86,357 |
|
55.1 |
$ |
638 |
|
68.3 |
|
32.0 |
Chirano - 100% |
Q3 2020 |
100 |
768 |
815 |
- |
1.87 |
- |
88 |
% |
44,320 |
46,586 |
$ |
56.1 |
$ |
1,204 |
$ |
5.0 |
$ |
16.1 |
Q2 2020 |
100 |
679 |
785 |
- |
1.85 |
- |
88 |
% |
38,683 |
40,084 |
|
46.6 |
$ |
1,163 |
|
5.8 |
|
13.1 |
Q1 2020 |
100 |
690 |
873 |
- |
1.73 |
- |
88 |
% |
44,465 |
39,335 |
|
47.8 |
$ |
1,215 |
|
5.1 |
|
15.9 |
Q4 2019 |
100 |
737 |
844 |
- |
2.00 |
- |
91 |
% |
48,984 |
47,186 |
|
49.0 |
$ |
1,038 |
|
8.0 |
|
21.4 |
Q3 2019 |
100 |
714 |
801 |
- |
2.02 |
- |
92 |
% |
46,641 |
49,458 |
|
50.0 |
$ |
1,011 |
|
4.7 |
|
22.0 |
Chirano - 90% |
Q3 2020 |
90 |
768 |
815 |
- |
1.87 |
- |
88 |
% |
39,888 |
41,927 |
$ |
50.5 |
$ |
1,204 |
$ |
4.5 |
$ |
14.5 |
Q2 2020 |
90 |
679 |
785 |
- |
1.85 |
- |
88 |
% |
34,815 |
36,076 |
|
41.9 |
$ |
1,163 |
|
5.2 |
|
11.8 |
Q1 2020 |
90 |
690 |
873 |
- |
1.73 |
- |
88 |
% |
40,019 |
35,401 |
|
43.0 |
$ |
1,215 |
|
4.7 |
|
14.3 |
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Tonnes of ore mined
and processed represent 100% Kinross for all periods
presented. |
(b) |
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. |
(c) |
The Kupol segment
includes the Kupol and Dvoinoye mines. |
(d) |
Kupol silver grade and
recovery were as follows: Q3 2020: 74.19 g/t, 88%; Q2 2020: 70.36
g/t, 86%; Q1 2020: 80.02 g/t, 84%; Q4 2019: 65.63 g/t, 85%; Q3
2019: 67.44 g/t, 88%. |
(e) |
Gold equivalent ounces
include silver ounces produced and sold converted to a gold
equivalent based on the ratio of the average spot market prices for
the commodities for each period. The ratios for the quarters
presented are as follows: Q3 2020: 78.68:1; Q2 2020: 104.49:1, Q1
2020: 93.34:1, Q4 2019: 85.59:1; Q3 2019: 86.73:1. |
(f) |
Dvoinoye ore processed
and grade were as follows: Q3 2020: 115,054, 9.44 g/t; Q2 2020:
113,472, 9.55 g/t; Q1 2020: 117,502, 9.24 g/t; Q4 2019: 100,685,
9.89 g/t; Q3 2019: 113,497, 9.82 g/t; |
(g) |
"Capital expenditures"
is as reported as “Additions to property, plant and equipment” on
the interim condensed consolidated statement of cash flows and
excludes “Interest paid capitalized to property, plant and
equipment”. |
(h) |
"nm" means not
meaningful |
|
|
Reconciliation of non-GAAP financial
measures
The Company has included certain non-GAAP
financial measures in this document. These measures are not defined
under International Financial Reporting Standards (“IFRS”) and
should not be considered in isolation. The Company believes that
these measures, together with measures determined in accordance
with IFRS, provide investors with an improved ability to evaluate
the underlying performance of the Company. The inclusion of these
measures is meant to provide additional information and should not
be used as a substitute for performance measures prepared in
accordance with IFRS. These measures are not necessarily standard
and therefore may not be comparable to other issuers.
Adjusted net earnings attributable to
common shareholders and adjusted net earnings per
share are non-GAAP measures which determine the
performance of the Company, excluding certain impacts which the
Company believes are not reflective of the Company’s underlying
performance for the reporting period, such as the impact of foreign
exchange gains and losses, reassessment of prior year taxes and/or
taxes otherwise not related to the current period, impairment
charges (reversals), gains and losses and other one-time costs
related to acquisitions, dispositions and other transactions, and
non-hedge derivative gains and losses. Although some of the items
are recurring, the Company believes that they are not reflective of
the underlying operating performance of its current business and
are not necessarily indicative of future operating results.
Management believes that these measures, which are used internally
to assess performance and in planning and forecasting future
operating results, provide investors with the ability to better
evaluate underlying performance, particularly since the excluded
items are typically not included in public guidance. However,
adjusted net earnings and adjusted net earnings per share measures
are not necessarily indicative of net earnings and earnings per
share measures as determined under IFRS.
The following table provides a reconciliation of
net earnings to adjusted net earnings for the periods
presented:
|
|
|
|
|
|
|
|
|
Adjusted Net Earnings |
(unaudited, expressed in millions of U.S dollars, except per share
amounts) |
Three months
ended |
|
Nine months ended |
September 30, |
|
September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
Net earnings attributable to common shareholders - as reported |
$ |
240.7 |
|
$ |
60.9 |
|
|
$ |
559.1 |
|
$ |
197.1 |
|
Adjusting items: |
|
|
|
|
|
|
Foreign
exchange losses (gains) |
|
6.5 |
|
|
(8.6 |
) |
|
|
(0.9 |
) |
|
(6.6 |
) |
|
Foreign
exchange losses on translation of tax basis and foreign exchange on
deferred income taxes within income tax expense |
|
42.7 |
|
|
20.7 |
|
|
|
96.6 |
|
|
13.9 |
|
|
Taxes in
respect of prior periods |
|
5.5 |
|
|
22.0 |
|
|
|
11.6 |
|
|
33.4 |
|
|
Reversal of
impairment charge(a) |
|
- |
|
|
- |
|
|
|
(48.3 |
) |
|
- |
|
|
COVID-19 and
Tasiast strike costs(b) |
|
19.6 |
|
|
- |
|
|
|
49.1 |
|
|
- |
|
|
U.S. CARES
Act net benefit |
|
- |
|
|
- |
|
|
|
(25.4 |
) |
|
- |
|
|
Fort Knox
pit wall slide related costs |
|
- |
|
|
5.7 |
|
|
|
- |
|
|
17.1 |
|
|
Restructuring costs |
|
- |
|
|
3.0 |
|
|
|
- |
|
|
12.2 |
|
|
Other |
|
(3.1 |
) |
|
2.7 |
|
|
|
(2.9 |
) |
|
4.9 |
|
|
Tax effect
of the above adjustments |
|
(1.7 |
) |
|
(2.4 |
) |
|
|
(7.2 |
) |
|
(5.1 |
) |
|
|
|
69.5 |
|
|
43.1 |
|
|
|
72.6 |
|
|
69.8 |
|
Adjusted net earnings attributable to common shareholders |
$ |
310.2 |
|
$ |
104.0 |
|
|
$ |
631.7 |
|
$ |
266.9 |
|
Weighted average number of common shares outstanding - Basic |
|
1,258.1 |
|
|
1,252.8 |
|
|
|
1,256.8 |
|
|
1,251.9 |
|
Adjusted net earnings per share |
$ |
0.25 |
|
$ |
0.08 |
|
|
$ |
0.50 |
|
$ |
0.21 |
|
|
|
|
|
|
|
|
(a) During the nine months
ended September 30, 2020, the Company recognized a non-cash
reversal of impairment charge of $48.3 million related to property,
plant and equipment at Lobo-Marte. There was no tax impact of this
impairment reversal.(b) Includes $2.3 million and
$8.3 million of Tasiast strike costs in the third quarter and first
nine months of 2020, respectively, as well as additional COVID-19
related labour, health & safety, donations and other support
program costs of $17.3 million and $40.8 million in the third
quarter and first nine months of 2020,
respectively. 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 |
(unaudited, expressed in millions of U.S dollars, except per share
amounts) |
Three months
ended |
|
Nine months ended |
September 30, |
|
September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
Net cash flow provided from operating activities - as reported |
$ |
544.1 |
|
$ |
231.7 |
|
|
$ |
1,276.5 |
|
$ |
816.3 |
|
|
|
|
|
|
|
|
Adjusting items: |
|
|
|
|
|
|
Tax payments
in respect of prior years |
|
- |
|
|
16.7 |
|
|
|
- |
|
|
16.7 |
|
|
Working
capital changes: |
|
|
|
|
|
|
Accounts receivable and other assets |
|
40.9 |
|
|
76.2 |
|
|
|
168.6 |
|
|
101.9 |
|
|
Inventories |
|
13.0 |
|
|
40.5 |
|
|
|
(26.3 |
) |
|
(9.5 |
) |
|
Accounts payable and other liabilities, including income taxes
paid |
|
(48.4 |
) |
|
(69.7 |
) |
|
|
(33.7 |
) |
|
(111.5 |
) |
|
|
|
5.5 |
|
|
63.7 |
|
|
|
108.6 |
|
|
(2.4 |
) |
Adjusted operating cash flow |
$ |
549.6 |
|
$ |
295.4 |
|
|
$ |
1,385.1 |
|
$ |
813.9 |
|
|
|
|
|
|
|
|
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 interim condensed
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 |
(unaudited, expressed in millions of U.S. dollars, except ounces
and production cost of sales per equivalent ounce) |
Three months ended |
|
Nine months ended |
September 30, |
|
September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
Production cost of sales - as reported |
$ |
439.4 |
|
$ |
440.6 |
|
|
$ |
1,289.2 |
|
$ |
1,278.4 |
|
Less: portion attributable to Chirano non-controlling
interest(a) |
|
(5.6 |
) |
|
(5.0 |
) |
|
|
(15.0 |
) |
|
(14.1 |
) |
Attributable(b) production cost of sales |
$ |
433.8 |
|
$ |
435.6 |
|
|
$ |
1,274.2 |
|
$ |
1,264.3 |
|
|
|
|
|
|
|
|
Gold equivalent ounces sold |
|
593,218 |
|
|
597,635 |
|
|
|
1,738,379 |
|
|
1,841,841 |
|
Less: portion attributable to Chirano non-controlling
interest(j) |
|
(4,659 |
) |
|
(4,946 |
) |
|
|
(12,601 |
) |
|
(15,468 |
) |
Attributable(b) gold equivalent ounces sold |
|
588,559 |
|
|
592,689 |
|
|
|
1,725,778 |
|
|
1,826,373 |
|
Consolidated production cost of sales per equivalent ounce
sold |
$ |
741 |
|
$ |
737 |
|
|
$ |
742 |
|
$ |
694 |
|
Attributable(b) production cost of sales per equivalent ounce
sold |
$ |
737 |
|
$ |
735 |
|
|
$ |
738 |
|
$ |
692 |
|
|
|
|
|
|
|
See page 17 of this news release for details of
the footnotes referenced within the table above.
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 |
(unaudited, expressed in millions of U.S. dollars, except ounces
and production cost of sales per ounce) |
Three months ended |
|
Nine months ended |
September 30, |
|
September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
Production cost of sales - as reported |
$ |
439.4 |
|
$ |
440.6 |
|
|
$ |
1,289.2 |
|
$ |
1,278.4 |
|
Less: portion attributable to Chirano non-controlling
interest(a) |
|
(5.6 |
) |
|
(5.0 |
) |
|
|
(15.0 |
) |
|
(14.1 |
) |
Less: attributable(b) silver revenue(c) |
|
(28.8 |
) |
|
(22.1 |
) |
|
|
(62.7 |
) |
|
(54.7 |
) |
Attributable(b) production cost of sales net of silver by-product
revenue |
$ |
405.0 |
|
$ |
413.5 |
|
|
$ |
1,211.5 |
|
$ |
1,209.6 |
|
|
|
|
|
|
|
|
Gold ounces sold |
|
577,822 |
|
|
582,629 |
|
|
|
1,702,089 |
|
|
1,801,660 |
|
Less: portion attributable to Chirano non-controlling
interest(j) |
|
(4,649 |
) |
|
(4,938 |
) |
|
|
(12,575 |
) |
|
(15,444 |
) |
Attributable(b) gold ounces sold |
|
573,173 |
|
|
577,691 |
|
|
|
1,689,514 |
|
|
1,786,216 |
|
Attributable(b) production cost of sales per ounce sold on a
by-product basis |
$ |
707 |
|
$ |
716 |
|
|
$ |
717 |
|
$ |
677 |
|
|
|
|
|
|
|
|
See page 17 of this news release for details of
the footnotes referenced within the table above.
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 interim condensed consolidated statement of operations, as
follows:
|
|
Attributable All-In Sustaining Cost and All-In Cost Per
Ounce Sold on a By-Product Basis |
(unaudited, expressed in millions of U.S. dollars, except ounces
and costs per ounce) |
Three months
ended |
|
Nine months ended |
September 30, |
|
September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
Production cost of sales - as reported |
$ |
439.4 |
|
$ |
440.6 |
|
|
$ |
1,289.2 |
|
$ |
1,278.4 |
|
Less: portion attributable to Chirano non-controlling
interest(a) |
|
(5.6 |
) |
|
(5.0 |
) |
|
|
(15.0 |
) |
|
(14.1 |
) |
Less: attributable(b) silver revenue(c) |
|
(28.8 |
) |
|
(22.1 |
) |
|
|
(62.7 |
) |
|
(54.7 |
) |
Attributable(b) production cost of sales net of silver by-product
revenue |
$ |
405.0 |
|
$ |
413.5 |
|
|
$ |
1,211.5 |
|
$ |
1,209.6 |
|
Adjusting items on an attributable(b) basis: |
|
|
|
|
|
|
General and
administrative(d) |
|
25.3 |
|
|
29.3 |
|
|
|
81.8 |
|
|
92.3 |
|
|
Other
operating expense - sustaining(e) |
|
3.2 |
|
|
4.9 |
|
|
|
8.8 |
|
|
16.4 |
|
|
Reclamation
and remediation - sustaining(f) |
|
12.1 |
|
|
11.9 |
|
|
|
38.0 |
|
|
35.2 |
|
|
Exploration
and business development - sustaining(g) |
|
12.8 |
|
|
18.5 |
|
|
|
35.1 |
|
|
50.6 |
|
|
Additions to
property, plant and equipment - sustaining(h) |
|
73.0 |
|
|
106.2 |
|
|
|
237.3 |
|
|
282.4 |
|
|
Lease
payments - sustaining(i) |
|
3.8 |
|
|
2.8 |
|
|
|
12.6 |
|
|
9.2 |
|
All-in Sustaining Cost on a by-product basis - attributable(b) |
$ |
535.2 |
|
$ |
587.1 |
|
|
$ |
1,625.1 |
|
$ |
1,695.7 |
|
|
Other
operating expense - non-sustaining(e) |
|
15.6 |
|
|
12.5 |
|
|
|
38.9 |
|
|
40.7 |
|
|
Reclamation
and remediation - non-sustaining(f) |
|
1.2 |
|
|
1.7 |
|
|
|
3.7 |
|
|
5.2 |
|
|
Exploration
- non-sustaining(g) |
|
11.7 |
|
|
16.7 |
|
|
|
25.9 |
|
|
32.2 |
|
|
Additions to
property, plant and equipment - non-sustaining(h) |
|
138.7 |
|
|
135.6 |
|
|
|
376.8 |
|
|
478.1 |
|
|
Lease
payments - non-sustaining(i) |
|
0.2 |
|
|
0.4 |
|
|
|
0.9 |
|
|
1.2 |
|
All-in Cost on a by-product basis - attributable(b) |
$ |
702.6 |
|
$ |
754.0 |
|
|
$ |
2,071.3 |
|
$ |
2,253.1 |
|
Gold ounces sold |
|
577,822 |
|
|
582,629 |
|
|
|
1,702,089 |
|
|
1,801,660 |
|
Less: portion attributable to Chirano non-controlling
interest(j) |
|
(4,649 |
) |
|
(4,938 |
) |
|
|
(12,575 |
) |
|
(15,444 |
) |
Attributable(b) gold ounces sold |
|
573,173 |
|
|
577,691 |
|
|
|
1,689,514 |
|
|
1,786,216 |
|
Attributable(b) all-in sustaining cost per ounce sold on a
by-product basis |
$ |
934 |
|
$ |
1,016 |
|
|
$ |
962 |
|
$ |
949 |
|
Attributable(b) all-in cost per ounce sold on a by-product
basis |
$ |
1,226 |
|
$ |
1,305 |
|
|
$ |
1,226 |
|
$ |
1,261 |
|
|
|
|
|
|
|
|
See page 17 of this news release for details of
the footnotes referenced within the table above.
The Company also assesses its all-in sustaining cost and all-in
cost on a gold equivalent ounce basis. Under these non-GAAP
measures, the Company’s production of silver is converted into gold
equivalent ounces and credited to total production.
Attributable all-in sustaining cost and
all-in cost per equivalent ounce sold are calculated by
adjusting total production cost of sales, as reported on the
interim condensed consolidated statement of operations, as
follows:
|
|
Attributable All-In Sustaining Cost and All-In Cost Per
Equivalent Ounce Sold |
(unaudited, expressed in millions of U.S. dollars, except ounces
and costs per equivalent ounce) |
Three months
ended |
|
Nine months ended |
September 30, |
|
September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
Production cost of sales - as reported |
$ |
439.4 |
|
$ |
440.6 |
|
|
$ |
1,289.2 |
|
$ |
1,278.4 |
|
Less: portion attributable to Chirano non-controlling
interest(a) |
|
(5.6 |
) |
|
(5.0 |
) |
|
|
(15.0 |
) |
|
(14.1 |
) |
Attributable(b) production cost of sales |
$ |
433.8 |
|
$ |
435.6 |
|
|
$ |
1,274.2 |
|
$ |
1,264.3 |
|
Adjusting items on an attributable(b) basis: |
|
|
|
|
|
|
General and
administrative(d) |
|
25.3 |
|
|
29.3 |
|
|
|
81.8 |
|
|
92.3 |
|
|
Other
operating expense - sustaining(e) |
|
3.2 |
|
|
4.9 |
|
|
|
8.8 |
|
|
16.4 |
|
|
Reclamation
and remediation - sustaining(f) |
|
12.1 |
|
|
11.9 |
|
|
|
38.0 |
|
|
35.2 |
|
|
Exploration
and business development - sustaining(g) |
|
12.8 |
|
|
18.5 |
|
|
|
35.1 |
|
|
50.6 |
|
|
Additions to
property, plant and equipment - sustaining(h) |
|
73.0 |
|
|
106.2 |
|
|
|
237.3 |
|
|
282.4 |
|
|
Lease
payments - sustaining(i) |
|
3.8 |
|
|
2.8 |
|
|
|
12.6 |
|
|
9.2 |
|
All-in Sustaining Cost - attributable(b) |
$ |
564.0 |
|
$ |
609.2 |
|
|
$ |
1,687.8 |
|
$ |
1,750.4 |
|
|
Other
operating expense - non-sustaining(e) |
|
15.6 |
|
|
12.5 |
|
|
|
38.9 |
|
|
40.7 |
|
|
Reclamation
and remediation - non-sustaining(f) |
|
1.2 |
|
|
1.7 |
|
|
|
3.7 |
|
|
5.2 |
|
|
Exploration
- non-sustaining(g) |
|
11.7 |
|
|
16.7 |
|
|
|
25.9 |
|
|
32.2 |
|
|
Additions to
property, plant and equipment - non-sustaining(h) |
|
138.7 |
|
|
135.6 |
|
|
|
376.8 |
|
|
478.1 |
|
|
Lease
payments - non-sustaining(i) |
|
0.2 |
|
|
0.4 |
|
|
|
0.9 |
|
|
1.2 |
|
All-in Cost - attributable(b) |
$ |
731.4 |
|
$ |
776.1 |
|
|
$ |
2,134.0 |
|
$ |
2,307.8 |
|
Gold equivalent ounces sold |
|
593,218 |
|
|
597,635 |
|
|
|
1,738,379 |
|
|
1,841,841 |
|
Less: portion attributable to Chirano non-controlling
interest(j) |
|
(4,659 |
) |
|
(4,946 |
) |
|
|
(12,601 |
) |
|
(15,468 |
) |
Attributable(b) gold equivalent ounces sold |
|
588,559 |
|
|
592,689 |
|
|
|
1,725,778 |
|
|
1,826,373 |
|
Attributable(b) all-in sustaining cost per equivalent ounce
sold |
$ |
958 |
|
$ |
1,028 |
|
|
$ |
978 |
|
$ |
958 |
|
Attributable(b) all-in cost per equivalent ounce sold |
$ |
1,243 |
|
$ |
1,309 |
|
|
$ |
1,237 |
|
$ |
1,264 |
|
|
|
|
|
|
|
|
(a) The portion attributable to Chirano
non-controlling interest represents the non-controlling interest
(10%) in the production cost of sales for the Chirano
mine.(b) “Attributable” includes Kinross' share of
Chirano (90%) and Peak (70%) production and
costs.(c) “Attributable silver revenues”
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.(d) “General and
administrative” expenses is as reported on the interim condensed
consolidated statement of operations, net of certain restructuring
expenses. General and administrative expenses are considered
sustaining costs as they are required to be absorbed on a
continuing basis for the effective operation and governance of the
Company.(e) “Other operating expense – sustaining”
is calculated as “Other operating expense” as reported on the
interim condensed consolidated statement of operations, less other
operating and reclamation and remediation expenses related to
non-sustaining activities as well as other items not reflective of
the underlying operating performance of our business. Other
operating expenses are classified as either sustaining or
non-sustaining based on the type and location of the expenditure
incurred. The majority of other operating expenses that are
incurred at existing operations are considered costs necessary to
sustain operations, and are therefore classified as sustaining.
Other operating expenses incurred at locations where there is no
current operation or related to other non-sustaining activities are
classified as non-sustaining.(f) “Reclamation and
remediation - sustaining” is calculated as current period accretion
related to reclamation and remediation obligations plus current
period amortization of the corresponding reclamation and
remediation assets, and is intended to reflect the periodic cost of
reclamation and remediation for currently operating mines.
Reclamation and remediation costs for development projects or
closed mines are excluded from this amount and classified as
non-sustaining.(g) “Exploration and business
development – sustaining” is calculated as “Exploration and
business development” expenses as reported on the interim condensed
consolidated 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.(h) “Additions to property, plant and
equipment – sustaining” represents the majority of capital
expenditures at existing operations including capitalized
exploration costs, periodic capitalized stripping and underground
mine development costs, ongoing replacement of mine equipment and
other capital facilities and other capital expenditures and is
calculated as total additions to property, plant and equipment (as
reported on the interim condensed consolidated statements of cash
flows), less capitalized interest and non-sustaining capital.
Non-sustaining capital represents capital expenditures for major
projects, including major capital stripping projects at existing
operations that are expected to materially benefit the operation,
as well as enhancement capital for significant infrastructure
improvements at existing operations. Non-sustaining capital
expenditures during the three and nine months ended September 30,
2020, primarily related to major projects at Tasiast, Fort Knox and
Round Mountain. Non-sustaining capital expenditures during the
three and nine months ended September 30, 2019, primarily related
to major projects at Tasiast, Round Mountain, Bald Mountain and
Fort Knox.(i) “Lease payments – sustaining”
represents the majority of lease payments as reported on the
interim condensed consolidated statements of cash flows and is made
up of the principal and financing components of such cash payments,
less non-sustaining lease payments. Lease payments for development
projects or closed mines are classified as
non-sustaining.(j) “Portion attributable to
Chirano non-controlling interest” represents the non-controlling
interest (10%) in the ounces sold from the Chirano
mine.(k) “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.
______________________________________
1) Unless otherwise stated, production, production cost of sales
per Au eq. oz., and all-in-sustaining costs per Au eq. oz., in this
news release are based on Kinross’ 90% share of Chirano and 70%
share of Peak production and costs.2) These figures are non-GAAP
financial measures and are defined and reconciled on pages 13 to 17
of this news release.3) Attributable margin per equivalent ounce
sold is a non-GAAP financial measure and is defined as “average
realized gold price per ounce” less “attributable production cost
of sales per gold equivalent ounce sold.” 4) Average realized
gold price is a non-GAAP financial measure and is defined as gold
metal sales divided by the total number of gold ounces sold.5) Net
earnings figures in this release represent “net earnings
attributable to common shareholders.”6) Refers to all of the
currencies in the countries where the Company has mining
operations, fluctuating simultaneously by 10% in the same
direction, either appreciating or depreciating, taking into
consideration the impact of hedging and the weighting of each
currency within our consolidated cost structure.
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) “CEO commentary”, “Balance sheet and
financial position”, “Long-term production outlook”, “Development
Projects”, and “2020 guidance” and include, without limitation,
statements with respect to: our guidance for production, production
costs of sales, cash flow, free cash flow and capital expenditures;
the declaration, payment and sustainability of the Company’s
dividends; optimization of mine plans; identification of additional
resources and reserves; the schedules and budgets for the Company’s
development projects; mine life and any potential extensions; the
Company’s capital reinvestment program and continuous improvement
initiatives and project performance or outperformance, as well as
references to other possible events, the future price of gold and
silver, the timing and amount of estimated future production, costs
of production, operating costs; capital expenditures, costs and
timing of the development of projects and new deposits, estimates
and the realization of such estimates (such as mineral or gold
reserves and resources or mine life), success of exploration,
development and mining, currency fluctuations, capital
requirements, project studies, government regulation permit
applications and conversions, restarting suspended or disrupted
operations; environmental risks and proceedings; and resolution of
pending litigation. The words “anticipate”, “estimate”, “expect”,
“forecast”, “forward”, “guidance” “on track”, “on schedule”,
“opportunity”, “outlook”, “plan”, “potential”, “prioritize”,
“promising”, “prospect”, “target”, or variations of or similar such
words and phrases or statements that certain actions, events or
results may, could, should or will be achieved, received or taken,
or will occur or result and similar such expressions identify
forward-looking statements. Forward-looking statements are
necessarily based upon a number of estimates and assumptions that,
while considered reasonable by Kinross as of the date of such
statements, are inherently subject to significant business,
economic and competitive uncertainties and contingencies. The
estimates, models and assumptions of Kinross referenced, contained
or incorporated by reference in this news release, which may prove
to be incorrect, include, but are not limited to, the various
assumptions set forth herein and in our MD&A for the year ended
December 31, 2019, and the Annual Information Form dated March 30,
2020 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 strikes or 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; the Lobo-Marte project;
commencement of production at the La Coipa project; approval of an
enhanced mine plan at Fort Knox; in each case in a manner
consistent with the Company’s expectations; and the successful
completion of exploration consistent with the Company’s
expectations at the Company’s projects, including Kupol and
Chirano; (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 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 potential application of revisions to the tax code in
Mauritania, 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, improvement studies; scoping studies and pre-feasibility
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 Lobo-Marte and Peak
feasibility studies; (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 the Company’s expectations; (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 the accuracy and reliability of the
pre-acquisition mineral resource estimates of the Peak project and
Kinross’ analysis thereof being consistent with expectations
(including but not limited to ore tonnage and ore grade estimates),
future mineral resource and mineral reserve estimates being
consistent with preliminary work undertaken by the Company, mine
plans for the Company’s current and future mining operations, and
the Company’s internal models; (10) labour and materials costs
increasing on a basis consistent with Kinross’ current
expectations; (11) the terms and conditions of the legal and fiscal
stability agreements for 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 expectations; (16) that drawdown of
remaining 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 such as the ongoing COVID-19 pandemic; (18)
the effectiveness of preventative actions and contingency plans put
in place by the Company to respond to the COVID-19 pandemic,
including, but not limited to, social distancing, a non-essential
travel ban, business continuity plans, and efforts to mitigate
supply chain disruptions; (19) changes in national and local
government legislation or other government actions, particularly in
response to the COVID-19 outbreak; (20) litigation, regulatory
proceedings and audits, and the potential ramifications thereof,
being concluded in a manner consistent with the Corporation’s
expectations (including without limitation the ongoing
industry-wide audit of mining companies in Ghana which includes the
Corporation’s Ghanaian subsidiaries, 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 liability under the U.S. Comprehensive
Environmental Response, Compensation, and Liability Act); (21) that
the Company will enter into definitive documentation with the
Government of Mauritania in accordance with, and on the timeline
contemplated by, the terms and conditions of the term sheet, on a
basis consistent with our expectations and that the parties will
perform their respective obligations thereunder on the timelines
agreed; (22) that the exploitation permit for Tasiast Sud will be
issued on timelines consistent with our expectations; (23) that the
benefits of the contemplated arrangements related to the agreement
in principle will result in increased stability at the Company’s
operations in Mauritania; and (24) the Company’s financial results,
cash flows and future prospects being consistent with Company
expectations in amounts sufficient to permit sustained dividend
payments. Known and unknown factors could cause actual results to
differ materially from those projected in the forward-looking
statements. Such factors include, but are not limited to: the
inaccuracy of any of the foregoing assumption, 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; reductions in the ability of the Company to transport
and refine doré; 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 30, 2020. These factors are not
intended to represent a complete list of the factors that could
affect Kinross. Kinross disclaims any intention or obligation to
update or revise any forward-looking statements or to explain any
material difference between subsequent actual events and such
forward-looking statements, except to the extent required by
applicable law.
Key Sensitivities
Approximately 70%-80% of the Company's costs are denominated in
U.S. dollars.
A 10% change in foreign currency exchange rates would be
expected to result in an approximate $14 impact on production cost
of sales per ounce.6
Specific to the Russian rouble, a 10% change in the 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 the 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 $2 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.
Other information
Where we say "we", "us", "our", the "Company",
or "Kinross" in this news release, we mean Kinross Gold Corporation
and/or one or more or all of its subsidiaries, as may be
applicable.
The technical information about the Company’s
mineral properties contained in this news release has been prepared
under the supervision of Mr. John Sims, an officer of the Company
who is a “qualified person” within the meaning of National
Instrument 43-101.
Source: Kinross Gold Corporation
Kinross Gold (NYSE:KGC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Kinross Gold (NYSE:KGC)
Historical Stock Chart
From Apr 2023 to Apr 2024