Kinross Gold Corporation (TSX: K, NYSE: KGC) (“Kinross” or the
“Company”) today announced its results for the fourth-quarter and
year ended December 31, 2021.
(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 24 of this release. All dollar amounts
are expressed in U.S. dollars, unless otherwise noted.)
2021 full-year results and 2022 guidance:
|
2021 guidance (+/- 5%) |
2021 full-year results |
2022 guidance (+/- 5%) |
Attributable gold equivalent
production1(ounces) |
2.1 million |
2.07 million |
2.65 million |
Attributable production cost of sales1, 2 ($ per
Au eq. oz.) |
$830 |
$828 |
$830 |
Consolidated production cost of sales3($ per Au
eq. oz.) |
- |
$832 |
$835 |
Attributable all-in sustaining cost1, 2($ per Au
eq. oz.) |
$1,110 |
$1,138 |
$1,130 |
Capital expenditures |
$900 million |
$939 million |
$1,050 million |
- Attributable production1 is
expected to increase 28% year-over-year to 2.65 million Au
eq. oz. in 2022, and to further increase to 2.8
million Au eq. oz. in 2023 driving significant
free cash flow2 growth.
- Kinross expects to produce
2.6 million attributable Au eq. oz. in 2024 and an
average of at least 2.5 million attributable Au eq. oz. per
year over the remainder of the decade.
2021 Q4 highlights:
- Tasiast achieved
Q4 2021 production target as throughput successfully ramped up to
complete mill re-start.
- La Coipa project
began commissioning on time and on budget in February 2022. Life of
mine production estimates increased by 45% to 1 million Au eq. oz.
extending mine life to early 2026.
- Kinross increased proven
and probable mineral reserve estimates to 32.6 million Au
oz.4, adding 2.7 million Au oz. in 2021, mainly due to additions at
Udinsk and Round Mountain.
- In 2021, Kinross returned
more than $250 million in capital to shareholders
consisting of $151.1 million in dividends and, as part of its share
buyback program, $100.2 million in the repurchase and cancellation
of 17.6 million common shares.
- Kinross’ Board of Directors
declared a quarterly dividend of $0.03 per common
share payable on March 24, 2022 to shareholders of record
at the close of business on March 9, 2022.
- On December 8, 2021, Kinross
announced an agreement to acquire Great Bear
Resources and its flagship Dixie project in Red Lake,
Ontario, which has significant potential to become a top-tier,
large scale operation.
2021 Q4 and year-end financial
results:
- Attributable
production1 of 487,621 Au eq. oz. produced in Q4 2021, and
2,067,549 Au eq. oz. in 2021.
- Attributable production
cost of sales1,2 of $864 per Au eq. oz. in Q4 2021, and
$828 per Au eq. oz. in 2021.
- Consolidated production
cost of sales3 of $868 per Au eq. oz. in
Q4 2021 and $832 per Au eq. oz. in 2021.
- Attributable all-in
sustaining cost1,2 of $1,312 per Au eq. oz. sold in Q4
2021, and $1,138 per Au eq. oz. sold in 2021.
- Margins5 of $929
per Au eq. oz. sold in Q4 2021, and $965 for 2021.
- Adjusted operating cash
flow2 was $356.0 million in Q4 2021, and $1,309.9 million
in 2021.
- Operating cash
flow6 of $197.3 million in Q4 2021, and $1,135.2 million
in 2021.
- Free cash flow2
was a net outflow of $100.7 million in Q4 2021, and a net inflow of
$196.6 million in 2021.
- Reported net loss7
of $2.7 million in Q4 2021, and reported net
earnings of $221.2 million, or $0.18 per share, in
2021.
- Adjusted net
earnings2, 8 of $101.8 million, or $0.08 per share in Q4
2021, and $541.3 million, or $0.43 per share, in 2021.
- Cash and cash
equivalents of $531.5 million, and total
liquidity9 of $1.9 billion at December 31, 2021.
The Company repaid $500 million in Senior Notes on
June 1, 2021.
Environment, Social, Governance
(ESG):
- Kinross’ ESG performance continued
to rank in the top quartile of its peer group, as measured by
Sustainalytics, MSCI, ISS, Vigeo, Refinitiv and S&P Global
CSA’s ESG ratings.
- The Company outlined its Climate
Change Strategy, with the target of reducing the intensity of its
scope 1 and scope 2 emissions by 30% by 2030.
- Injury frequency rates remained in
line with Kinross’ three-year averages, however, this was
overshadowed by a tragic fatality at Chirano and a mill fire at
Tasiast.
- Kinross continued to work to
mitigate the risks associated with the ongoing COVID-19 pandemic,
and provided support to bolster vaccination rates of its
workforce.
- The Company established an ESG
Executive Committee to help further strengthen ESG governance.
CEO Commentary:J. Paul Rollinson, President and
CEO, made the following comments in relation to 2021 fourth-quarter
and year-end results:
“Despite some challenges during 2021, we
produced approximately 2.1 million ounces. We expect to increase
our production in 2022 and 2023 to 2.65 million and 2.8 million
ounces, respectively, to drive robust free cash flow. Our long-term
production profile remains strong, with expected production of 2.6
million ounces in 2024 and an annual average production estimate of
at least 2.5 million ounces over the remainder of the
decade.
“We are pleased to report that the Tasiast mill
is now operating at sustained throughput levels comparable to the
first half of 2021. Our development projects are also advancing
well and we have started commissioning at La Coipa, where we have
increased life of mine production estimates to approximately 1
million ounces and extended estimated mine life to early 2026.
Kinross also successfully added to its mineral reserve estimates,
which increased by 2.7 million ounces to 32.6 million gold
equivalent ounces at year-end 2021.
“In addition, we enhanced our return of capital
to shareholders by returning more than $250 million through our
quarterly dividend and share buyback programs. We also finalized
our agreement with the Government of Mauritania to underpin our
strong partnership and announced an agreement to acquire Great Bear
Resources to further strengthen our long-term growth pipeline.
“Safety and sustainability continue to be
priorities, and we again ranked in the top quartile of our peer
group as measured by a number of ESG ranking agencies in 2021. We
also outlined a Climate Change Strategy, with the objective of a
30% reduction in intensity of scope 1 and scope 2 emissions by
2030.”
Financial results
Summary of financial and operating
results
|
Three months ended |
Years ended |
|
December 31, |
December 31, |
(in millions of U.S. dollars, except ounces, per share amounts, and
per ounce amounts) |
|
2021 |
|
|
2020 |
|
|
2021 |
|
2020 |
|
Operating
Highlights |
|
|
|
|
Total gold equivalent ounces(a) |
|
|
|
|
Produced(c) |
|
491,077 |
|
|
627,944 |
|
|
2,083,016 |
|
2,383,307 |
|
Sold(c) |
|
489,710 |
|
|
637,169 |
|
|
2,075,738 |
|
2,375,548 |
|
|
|
|
|
|
Attributable gold equivalent ounces(a) |
|
|
|
|
Produced(c) |
|
487,621 |
|
|
624,032 |
|
|
2,067,549 |
|
2,366,648 |
|
Sold(c) |
|
486,547 |
|
|
633,149 |
|
|
2,060,909 |
|
2,358,927 |
|
|
|
|
|
|
Financial
Highlights |
|
|
|
|
Metal
sales |
$ |
879.5 |
|
$ |
1,195.1 |
|
$ |
3,729.4 |
$ |
4,213.4 |
|
Production cost of sales |
$ |
425.2 |
|
$ |
436.5 |
|
$ |
1,726.1 |
$ |
1,725.7 |
|
Depreciation, depletion and amortization |
$ |
199.3 |
|
$ |
234.0 |
|
$ |
840.9 |
$ |
842.3 |
|
Impairment charges (reversals) and asset derecognition - net |
$ |
144.5 |
|
$ |
(602.6 |
) |
$ |
144.5 |
$ |
(650.9 |
) |
Operating
(loss) earnings |
$ |
(45.5 |
) |
$ |
992.3 |
|
$ |
463.6 |
$ |
1,899.4 |
|
Net
(loss) earnings attributable to common shareholders |
$ |
(2.7 |
) |
$ |
783.3 |
|
$ |
221.2 |
$ |
1,342.4 |
|
Basic
(loss) earnings per share attributable to common shareholders |
$ |
- |
|
$ |
0.62 |
|
$ |
0.18 |
$ |
1.07 |
|
Diluted
(loss) earnings per share attributable to common shareholders |
$ |
- |
|
$ |
0.62 |
|
$ |
0.17 |
$ |
1.06 |
|
Adjusted
net earnings attributable to common shareholders(b) |
$ |
101.8 |
|
$ |
335.1 |
|
$ |
541.3 |
$ |
966.8 |
|
Adjusted
net earnings per share(b) |
$ |
0.08 |
|
$ |
0.27 |
|
$ |
0.43 |
$ |
0.77 |
|
Net cash
flow provided from operating activities |
$ |
197.3 |
|
$ |
681.1 |
|
$ |
1,135.2 |
$ |
1,957.6 |
|
Adjusted
operating cash flow(b) |
$ |
356.0 |
|
$ |
527.6 |
|
$ |
1,309.9 |
$ |
1,912.7 |
|
Capital
expenditures(d) |
$ |
298.0 |
|
$ |
298.3 |
|
$ |
938.6 |
$ |
916.1 |
|
Free cash
flow(b) |
$ |
(100.7 |
) |
$ |
382.8 |
|
$ |
196.6 |
$ |
1,041.5 |
|
Average
realized gold price per ounce(e) |
$ |
1,797 |
|
$ |
1,875 |
|
$ |
1,797 |
$ |
1,774 |
|
Consolidated production cost of sales per equivalent ounce(c)
sold(f) |
$ |
868 |
|
$ |
685 |
|
$ |
832 |
$ |
726 |
|
Attributable(a) production cost of sales per equivalent ounce(c)
sold(b) |
$ |
864 |
|
$ |
682 |
|
$ |
828 |
$ |
723 |
|
Attributable(a) production cost of sales per ounce sold on a
by-product basis(b) |
$ |
839 |
|
$ |
653 |
|
$ |
799 |
$ |
700 |
|
Attributable(a) all-in sustaining cost per ounce sold on a
by-product basis(b) |
$ |
1,299 |
|
$ |
991 |
|
$ |
1,118 |
$ |
970 |
|
Attributable(a) all-in sustaining cost per equivalent ounce(c)
sold(b) |
$ |
1,312 |
|
$ |
1,013 |
|
$ |
1,138 |
$ |
987 |
|
Attributable(a) all-in cost per ounce sold on a by-product
basis(b) |
$ |
1,681 |
|
$ |
1,309 |
|
$ |
1,458 |
$ |
1,248 |
|
Attributable(a) all-in cost per equivalent ounce(c) sold(b) |
$ |
1,684 |
|
$ |
1,322 |
|
$ |
1,467 |
$ |
1,260 |
|
(a) |
"Total includes 100% of Chirano production. “Attributable" includes
Kinross' share of Chirano (90%) production and costs and Manh Choh
(70%) costs. |
(b) |
The definition and reconciliation
of these non-GAAP financial measures and ratios is included on
pages 19 to 24 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 2021 was 71.51:1 (2020 -
86.32:1). The ratio for Q4 2021 was 76.89:1 (Q4 2020 –
77.02:1). |
(d) |
“Capital expenditures” is as
reported as “Additions to property, plant and equipment” on the
consolidated statements of cash flows. |
(e) |
“Average realized gold price per
ounce” is defined as gold metal sales divided by the total number
of gold ounces sold. |
(f) |
“Consolidated production cost of
sales per equivalent ounce sold” is defined as production cost of
sales divided by total gold equivalent ounces sold. |
The following operating and financial results are based on
fourth-quarter and year-end 2021 gold equivalent production:
Attributable production1:
Kinross produced 487,621 attributable Au eq. oz. in Q4 2021,
compared with 624,032 attributable Au eq. oz. in Q4 2020. The
decrease was largely due to lower production at Tasiast and Round
Mountain.
Over the full year, Kinross produced 2,067,549
attributable Au eq. oz., in line with the Company’s revised
production guidance, compared with full-year 2020 production of
2,366,648 attributable Au eq. oz. The decrease was mainly due to
the temporary suspension of milling operations at Tasiast as a
result of a mill fire in June 2021 and deferred mining activities
at Round Mountain after wall instability was detected in Q1 2021.
The decrease was slightly offset by increases in production at Fort
Knox and at Bald Mountain.
Average realized gold price:
The average realized gold price in Q4 2021 was $1,797 per ounce,
compared with $1,875 per ounce in Q4 2020. For full-year 2021, the
average realized gold price per ounce was $1,797, compared with
$1,774 per ounce for full-year 2020.
Revenue: During the fourth
quarter, revenue was $879.5 million, compared with $1,195.1 million
during Q4 2020. Revenue was $3,729.4 million for full-year 2021,
compared with $4,213.4 million for full-year 2020.
Attributable production cost of
sales1, 2: Attributable production cost
of sales per Au eq. oz. sold was $864 for Q4 2021, compared with
$682 in Q4 2020, mainly as a result of higher costs at Paracatu,
and higher costs and an increase in sales at Fort Knox.
Attributable production cost of sales per Au eq. oz. sold was $828
for full-year 2021, in line with the Company’s revised guidance,
compared with $723 per Au eq. oz. for full-year 2020. The increase
was mainly due to higher costs at Paracatu and Round Mountain, and
an increase in sales at Fort Knox.
Attributable production cost of sales per Au oz.
sold on a by-product basis was $839 in Q4 2021 compared with $653
in Q4 2020, based on gold sales of 473,306 ounces and silver sales
of 1,018,034 ounces. Attributable production cost of sales per Au
eq. oz. sold on a by-product basis was $799 for full-year 2021,
compared with $700 for full-year 2020, based on 2021 gold sales of
2,000,262 ounces and silver sales of 4,341,895 ounces.
Consolidated production cost of
sales: Consolidated production cost of sales per Au eq.
oz. sold was $868 for Q4 2021, compared with $685 in Q4 2020, and
was $832 for full-year 2021 versus $726 in 2020.
Margins5: Kinross’ margin per
Au eq. oz. sold was $929 for Q4 2021, compared with the Q4 2020
margin of $1,190. Full-year 2021 margin per Au eq. oz. sold was
$965, compared with $1,048 for full-year 2020.
Attributable all-in sustaining
cost1, 2: Attributable all-in sustaining cost per Au eq.
oz. sold was $1,312 in Q4 2021, compared with $1,013 in Q4 2020.
Full-year attributable all-in sustaining cost per Au eq. oz. sold
was $1,138, and was within the Company’s 2021 revised guidance
range, compared with $987 for full-year 2020.
In Q4 2021, attributable all-in sustaining cost
per Au oz. sold on a by-product basis was $1,299, compared with
$991 in Q4 2020. Attributable all-in sustaining cost per Au oz.
sold on a by-product basis was $1,118 for full-year 2021, compared
with $970 in 2020.
Operating cash flow: Adjusted
operating cash flow2 for Q4 2021 was $356.0 million, compared with
$527.6 million for Q4 2020. Adjusted operating cash flow2 for
full-year 2021 was $1,309.9 million, compared with $1,912.7 million
in 2020.
Operating cash flow was $197.3 million for Q4
2021, compared with $681.1 million for Q4 2020. Operating cash flow
for full-year 2021 was $1,135.2 million, compared with $1,957.6
million for full-year 2020 mainly due to the decrease in operating
earnings, higher taxes paid and unfavourable working capital
movements.
Free cash
flow2: Free cash flow was a net cash
outflow of $100.7 million in Q4 2021, compared with a net cash
inflow of $382.8 million for Q4 2020. For the full year, free cash
flow was $196.6 million, compared with $1,041.5 million the
previous year. The decrease in both periods were mainly due to
lower margins, higher taxes paid and unfavourable working capital
movements.
Earnings: Adjusted net
earnings2 were $101.8 million, or $0.08 per share, for Q4 2021,
compared with $335.1 million, or $0.27 per share, for Q4 2020.
Full-year adjusted net earnings2 were $541.3 million, or $0.43 per
share, compared with $966.8 million, or $0.77 per share, for
full-year 2020, primarily due to the decrease in revenue and an
increase in exploration expenses.
Reported net loss8 was $2.7 million for Q4 2021,
compared with reported net earnings of $783.3 million, or $0.62 per
share, for Q4 2020. Reported net earnings in full-year 2021
were $221.2 million, or $0.18 per share, compared with $1,342.4
million, or $1.07 per share, in 2020. The decrease in reported net
earnings for both periods was mainly as a result of the temporary
suspension of milling operations at Tasiast and the deferred mining
activity at Round Mountain. A non-cash, after-tax write-down of
$106.1 million at Bald Mountain related to a reduced estimate of
recoverable ounces from the Vantage heap leach pad in the South
area of the mine also contributed to the decrease in net
earnings.
Capital expenditures: Capital
expenditures were $298.0 million for Q4 2021, in line with $298.3
million for Q4 2020. Capital expenditures for full-year 2021 were
$938.6 million and were within the Company’s annual guidance range,
compared with $916.1 in 2020. The increase was primarily due to
higher expenditures for development activities at La Coipa, the
studies at Lobo-Marte and Udinsk, and an increase in capital
stripping at Tasiast, partially offset by reduced capital stripping
at Bald Mountain, Round Mountain and Fort Knox.
Balance sheet
As of December 31, 2021, Kinross had cash and
cash equivalents of $531.5 million, compared with $1,210.9 million
at December 31, 2020. The decrease was primarily due to capital
expenditures, the $500.0 million repayment of senior notes, the
final installment of $141.5 million paid for the Chulbatkan
license, and the return of capital of $251.3 million in the form of
dividends and share buybacks, partially offset by operating cash
flows.
The Company had additional available
credit10 of $1,361.2 million as of December 31, 2021 and total
liquidity9 of approximately $1.9 billion.
Share buyback and dividend
In 2021, Kinross enhanced shareholder returns
through its share buyback and quarterly dividend programs, which
are underpinned by the Company’s investment grade balance sheet,
free cash flow profile and expected production growth. During the
past year, Kinross returned a total of $251.3 million in capital to
shareholders.
Kinross has repurchased and cancelled 17.6
million of its common shares for $100.2 million as of December 31,
2021 through its share buyback program.
The Company declared a dividend of $0.03 per
common share payable on March 24, 2022 to shareholders of record as
of March 9, 2022, as part of its quarterly dividend program. In
2021, Kinross returned a total of $151.1 million in dividends.
Operating results
Mine-by-mine summaries for 2021 fourth-quarter
and full-year operating results may be found on pages 14 and 18 of
this news release. Highlights include the following:
Americas
Paracatu production for the
full year increased compared with full-year 2020 largely due to
higher throughput and the timing of ounces processed through the
mill, which was largely offset by a decrease in grades. Full-year
production cost of sales per ounce sold was higher year-over-year
mainly due to increases in operating waste mined, contractor and
energy costs, as well as inflationary pressures on consumables,
partially offset by favourable foreign exchange movements. In Q4
2021, higher mill throughput contributed to the increase in
production compared with the previous quarter, while higher
operating waste mined and maintenance costs contributed to the
increase in cost of sales per ounce sold.
Fort Knox performed well in
2021, as full-year production increased, and cost of sales per
ounce sold decreased, compared with full-year 2020. Fort Knox’s
positive results were largely as a result of lower-cost ounces
recovered from the new Barnes Creek heap leach pad after
construction was completed at the Gilmore project in early 2021.
Production in Q4 2021 improved quarter-over-quarter, mainly due to
timing of ounces processed at the mill, largely offset by fewer
ounces recovered from the heap leach pads. Cost of sales per ounce
sold was higher quarter-over-quarter primarily as a result of
increases in operating waste mined and energy costs. Fort Knox also
achieved first production at the Gil satellite deposits during Q4
2021.
At Round Mountain, full-year
production was lower year-over-year as a result of deferred mining
activities in the north wall of the Phase W area after wall
instability was detected in Q1 2021. Production decreased
quarter-over-quarter primarily due to fewer ounces recovered from
the heap leach pads. Full-year cost of sales per ounce sold
increased year-over-year mainly due to lower production, higher
operating waste mined, and higher taxes related to production. Cost
of sales per ounce sold was largely in line
quarter-over-quarter.
The Company implemented initiatives to stabilize
the wall in 2021, including dewatering and moving waste material
from the pit rim. As a result of the mine optimization program,
which was initiated in Q1 2021, 938 Au koz. at Phase S were
converted to proven and probable mineral reserves at December 31,
2021 and additional challenges were identified in the west wall of
the Phase W area which may affect Round Mountain’s annual
production plans post 2024. The program is evaluating further
initiatives to enhance wall stability, including shallower pit wall
slope angles over a more extensive area, and alternative mine plan
opportunities, such as incorporating the Phase S pushback.
The alternative mine plan opportunities also
include modified open pit sequencing for Phase W and Phase S and
the potential for underground mining for portions of Phase W and
Phase X. The Company is planning to construct a drift for
underground exploration at Phase X in 2022 after positive
exploration results in 2021. Given the mine optimization program’s
expanded parameters, results of the analysis are now expected in
the second half of 2022.
At Bald Mountain, full-year
production increased compared with 2020 mainly due to timing of
ounces recovered from the heap leach pads, but was less than
expected due to the carbonaceous material encountered at the
Vantage heap leach pad. Full-year cost of sales per ounce sold was
higher year-over-year largely due to higher operating waste mined
and taxes related to production. During Q4 2021, production and
cost of sales per ounce sold increased versus the prior quarter
mainly due to more ounces recovered from the pads in the North area
and higher fuel costs, respectively.
Russia
At Kupol and
Dvoinoye, full-year production was lower than
full-year 2020 mainly as a result of anticipated lower grades after
mining activities were completed at Dvoinoye in November 2020 and
the continued processing of related stockpiles.
Quarter-over-quarter, lower grades resulted in lower production, as
Kupol continued to transition to mining narrower veins. Full-year
cost of sales per ounce sold increased compared with 2020 largely
as a result of lower production, and decreased quarter-over-quarter
mainly due to lower labour costs.
West Africa
Tasiast’s full-year and
quarterly production was lower, and cost of sales per ounce sold
higher, versus the comparable periods in 2020 primarily due to the
mill fire in June 2021. Tasiast made excellent progress re-starting
the mill in the second half of the year and completed a successful
recommissioning with no material mechanical issues encountered. In
Q4 2021, the site achieved its production target of 15,000 Au eq.
oz. after re-starting the plant processing lower grade stockpile
ore. Throughput gradually ramped up during the quarter, with the
mill reaching throughput of 19,000-20,000 tonnes per day in January
2022 on a sustained basis.
In January 2022, the Company reached an
agreement with the Government of Mauritania (“Government”)
regarding two licenses located west, east and north of the main
Tasiast operation. Kinross has agreed to renew exploration
activities at these licenses and has committed to spend $10 million
in exploration over the next three years. As part of its
commitment, the Company is budgeting $5 million for exploration in
2022 at these licenses.
At Chirano, full-year
production decreased compared with 2020 mainly due to lower grades,
partially offset by higher throughput. Full-year cost of sales per
ounce sold was higher mainly due to lower production and higher
contractor and energy costs. Production decreased
quarter-over-quarter mainly due to lower grades, and cost of sales
per ounce sold increased over Q3 2021 mainly as a result of the
lower production. The mine site exploration program continued to
yield excellent results in 2021 and added 400 Au koz. to Chirano’s
mineral resource estimates, helping extend mine life by one year to
2026, with opportunities for further mine life extensions.
Great Bear Resources acquisition
update
On December 8, 2021, Kinross announced that it
had entered into a definitive agreement (“Agreement”) to acquire
Great Bear Resources Ltd. (“Great Bear”), which includes the
flagship Dixie project located in the prolific Red Lake mining
district in Ontario, Canada. The Dixie project has excellent
potential to become a top tier deposit that could support a large,
long-life mine complex and bolster Kinross’ long-term production
outlook.
Under the terms of the Agreement, Kinross has
agreed to an upfront payment of approximately $1.4 billion (C$1.8
billion), representing C$29.0011 per Great Bear common share on a
fully-diluted basis. The upfront payment will be payable at the
election of Great Bear shareholders in cash and Kinross common
shares subject to pro-ration to a maximum cash consideration of
approximately $1.1 billion (C$1.4 billion) and a maximum of
approximately 80.7 million Kinross common shares. The Agreement
also includes a payment of contingent consideration in the form of
contingent value rights that may be exchanged for 0.1330 of a
Kinross common share per Great Bear common share. The contingent
consideration will be payable in connection with Kinross’ public
announcement of commercial production at the Dixie project,
provided that a cumulative total of at least 8.5 million gold
ounces of mineral reserves and measured and indicated mineral
resources are disclosed.
Upon completion of the transaction, Kinross
expects to rapidly advance exploration activities at the LP Fault
zone, the most significant discovery to date at Dixie. These
activities include 200,000 metres of planned drilling in 2022,
which is expected to largely focus on infill drilling and multiple
other targets. Kinross plans to undertake a comprehensive
exploration and development program at the Dixie project which aims
to support Kinross’ vision of a quality, high-grade, open-pit mine
and a longer-term, sizeable underground mine.
Great Bear security holders approved the
Agreement on February 14, 2022, with approximately 98% of
the votes cast in favour of the acquisition. The Company received
final court approval on February 16, 2022, and the transaction is
expected to close next week.
Company Guidance The following
section of the news release represents forward-looking information
and users are cautioned that actual results may vary. We refer to
the risks and assumptions contained in the Cautionary Statement on
Forward-Looking Information on page 24] of this news release.
This Company Guidance section references
attributable production cost of sales per equivalent ounce sold and
per ounce sold on a by-product basis and attributable all-in
sustaining cost per equivalent ounce sold and per ounce sold on a
by-product basis, all of which are non-GAAP financial ratios. The
definitions of these non-GAAP financial ratios and comparable
reconciliations are included on pages 19 to 24 of this news
release.
Attributable production
guidance1
In 2022, Kinross expects to produce 2.65 million
attributable Au eq. oz. (+/- 5%) from its operations, which is a
28% increase from the Company’s 2021 production. Kinross’ annual
production is expected to further increase to 2.8 million
attributable Au eq. oz. (+/- 5%) in 2023. The Company expects to
produce 2.6 million attributable Au eq. oz. in 2024 and has
maintained its strong production profile of estimated average
production of at least 2.5 million Au eq. oz. per year over the
remainder of the decade.
Annual attributable gold equivalent production
guidance(+/- 5%) |
2022 |
2.65 million oz. |
2023 |
2.8 million oz. |
2024 |
2.6 million oz. |
In 2022, attributable production is expected to
be higher in the second half of the year, which is largely driven
by production from La Coipa, as it is scheduled to reach full
operating capacity at mid-year, as well as higher production
expected at Paracatu and Tasiast.
Kinross made modest adjustments to its 2022 and
2023 production mid-point guidance estimates, with 2022 expected to
be impacted by the COVID-19 Omicron variant’s effect on
productivity and supply chain logistics at Tasiast, and fewer
ounces expected from the Vantage heap leach pad at Bald Mountain.
In 2023, the Company’s production outlook is expected to be
impacted by the deferral of some production at several sites,
including La Coipa, Bald Mountain, Kupol and Chirano. These
deferrals are expected to extend mine life and increase total life
of mine production. The Phase W deferral at Round Mountain also
impacted the Company’s 2023 production outlook, while the 2024
production outlook excludes the Manh Choh project.
The expected attributable production growth in
2022 and 2023, and Kinross’ strong long-term production profile,
represents additional ounces enabled by planned life of mine
extensions and projects resulting from the Company’s previous
capital investments, continuous improvement programs, and an
exploration strategy focused on promising prospects around existing
operations.
Inflation impact
The ongoing global impacts of the COVID-19
pandemic and inflation have been factored into the Company’s 2022
attributable cost of sales and capital expenditures guidance.
Potential additional inflationary impacts have been excluded from
the Company’s directional forecasts on 2023 attributable cost of
sales and 2023-2024 capital costs.
Attributable cost of sales
guidance1
Attributable production cost of sales is
expected to be $830 per Au eq. oz. (+/- 5%) for 2022. Attributable
production cost of sales per ounce is expected to be higher in the
first half of the year and decrease during the second half of the
year largely due to the anticipated increase in production.
Kinross’ attributable production cost of sales
per ounce sold outlook for 2023 is expected to be lower compared
with 2022, excluding impacts of inflation, mainly due to the
planned growth in production.
The Company expects its attributable all-in
sustaining cost to be $1,130 per equivalent ounce sold (+/- 5%) for
2022, which is largely in line with 2021 results.
2022 by-product production and cost
guidance
Accounting basis |
2022 Guidance(+/- 5%) |
2021 Actual |
Gold equivalent basis |
|
|
Attributable production (Au eq. oz.)1 |
2.65 million |
2.07 million |
Attributable production cost of sales per Au eq. oz. 1,2 |
$830 |
$828 |
Consolidated production cost of sales per Au eq. oz. |
$835 |
$832 |
Attributable all-in sustaining cost per Au eq. oz. 1,2 |
$1,130 |
$1,138 |
By-product basis |
|
|
Gold ounces1 |
2.5 million |
2.02 million |
Silver ounces |
11.6 million |
4.3 million |
Attributable production cost of sales per Au oz. 1,2 |
$790 |
$799 |
Attributable all-in sustaining cost per Au oz. 1,2 |
$1,100 |
$1,118 |
2022 regional attributable production
guidance1
Region |
2022 production guidance (Au eq. oz.) |
Percentage of total forecast
production12 |
Americas |
1.53
million (+/- 5%) |
58% |
West Africa (attributable) |
770,000
(+/- 10%) |
29% |
Russia |
350,000 (+/- 5%) |
13% |
TOTAL (attributable) |
2.65 million (+/- 5%) |
100% |
2022 regional attributable cost guidance1
Region |
2022 guidance production cost of
sales (per Au eq. oz. sold) |
2021 production cost of sales (per Au eq. oz.
sold) |
Americas |
$880 (+/- 5%) |
$860 |
West Africa (consolidated) |
$710 (+/-10%) |
$1,008 |
West Africa (attributable) 1,2, 13 |
$700 (+/- 10%) |
$991 |
Russia |
$870 (+/- 5%) |
$637 |
TOTAL |
$835 (+/- 5%) |
$832 |
TOTAL (attributable) 1,2 |
$830 (+/- 5%) |
$828 |
Material assumptions used to forecast 2022
production cost of sales are as follows:
- a gold price of $1,500 per ounce;
- a silver price of $20 per ounce;
- an oil price of $70 per barrel;
- foreign exchange rates of:
- 5.0 Brazilian reais to the U.S. dollar;
- 1.25 Canadian dollars to the U.S. dollar;
- 70 Russian roubles to the U.S. dollar;
- 750 Chilean pesos to the U.S. dollar;
- 5.50 Ghanaian cedis to the U.S. dollar;
- 35 Mauritanian ouguiyas to the U.S. dollar; and
- 0.85 U.S. dollar 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 $20
impact on attributable production cost of sales per
ounce14;
- specific to the Russian rouble, a
10% change in this exchange rate would be expected to result in an
approximate $25 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 $30 impact on Brazilian production cost of sales per
ounce;
- a $10 per barrel change in the
price of oil would be expected to result in an approximate $3
impact on fuel consumption costs on attributable production cost of
sales per ounce; and
- a $100 change in the price of gold
would be expected to result in an approximate $5 impact on
attributable production cost of sales per ounce as a result of a
change in royalties.
Capital expenditures
guidance
Total capital expenditures for 2022 are forecast
to be approximately $1,050 million (+/- 5%) and are summarized in
the table below. The capital expenditures guidance is higher than
previous estimates mainly due to inflationary pressures, a pull
forward of planned spending at Udinsk to de-risk the project
schedule, additional stripping at La Coipa with the inclusion of
Puren into the project plan, and the inclusion of approximately $50
million for ESG initiatives such as the Tasiast solar power
project.
Kinross’ capital expenditures outlook for 2023
and 2024 is expected to be largely in line with 2022 at
approximately $1 billion per year. The outlook is based on Kinross’
current baseline production guidance and includes projects such as
Udinsk, La Coipa’s Puren deposit and scope changes in the
portfolio, which were not included in the Company’s previous
multi-year capital expenditure outlook. As Kinross continues to
develop and optimize its portfolio, other projects may be
incorporated into its capital expenditures, as well as inflation
impacts, over the 2023-2024 timeframe. These projects include Manh
Choh, which is not included in the 2023 and 2024 capital
expenditures outlook.
Region |
Forecast 2022sustaining
capital (million) |
Forecast 2022non-sustaining
capital(million) |
Total forecast capital (+/- 5%)
(million) |
Americas |
$430 |
$235 |
$665 |
West Africa |
$40 |
$170 |
$210 |
Russia |
$30 |
$140 |
$170 |
Corporate |
$5________ |
$0________ |
$5________ |
TOTAL |
$505 |
$545 |
$1,050 |
2022 sustaining capital includes the following
forecast spending estimates:
• |
Mine development: |
$170 million (Americas); $10 million (Russia); $5 million (West
Africa) |
• |
Mobile equipment: |
$65 million (Americas); $10 million (Russia); $5 million (West
Africa) |
• |
Tailings facilities: |
$65 million (Americas); $5 million (West Africa) |
• |
Mill facilities: |
$30 million (Americas); $10 million (West Africa); $5 million
(Russia) |
• |
Leach facilities: |
$40 million (Americas) |
2022 non-sustaining capital includes the
following forecast spending estimates:
• |
Development
and growth projects and studies: |
$135
million |
• |
La Coipa Restart (including Puren): |
$130 million |
• |
Udinsk: |
$120 million |
• |
Tasiast West Branch stripping: |
$65 million |
• |
ESG projects: |
$50 million |
• |
Tasiast 24k project: |
$45 million |
Other 2022 guidance
The 2022 forecast for
exploration is approximately $130 million, all of
which is expected to be expensed, and is a $10 million increase
from last year’s forecast. The exploration program (greenfields and
brownfields) will follow up on 2021’s exploration success,
including focusing on the Kupol Synergy Zone of Influence (“KSP”),
the 130 kilometre radius around Kupol based on an economic trucking
distance to the mill, and starting an underground exploration drift
at Round Mountain. The exploration forecast does not include
activities planned at the Dixie project in Red Lake, Ontario,
pending the expected closing of the Great Bear acquisition.
The 2022 forecast for overhead (general
and administrative and business development expenses) is
approximately $160 million, which is largely in line with last
year’s guidance. The Company has made cost improvements over recent
years, with 2022 annual overhead guidance down $45 million over the
past five years.
Other operating costs expected
to be incurred in 2022 are approximately $125 million (+/- 5%),
which are principally due to care and maintenance, reclamation, and
pandemic-related mitigation measures.
Based on an assumed gold price of $1,500 per
ounce and other budget assumptions, tax expense is
expected to be $50 million and taxes paid is
expected to be $170 million. Adjusting the Brazilian real and
Russian rouble to the respective exchange rates of 5.58 and 74.3 to
the U.S. dollar in effect at December 31, 2021, tax expense would
be expected to be $105 million. Tax expense is expected to increase
by 24% of any profit resulting from higher gold prices. Taxes paid
is expected to increase by approximately $20 million for every $100
increase in the realized gold price.
Depreciation, depletion and
amortization is forecast to be approximately $400 per Au
eq. oz. (+/- 5%).
Interest paid is forecast to be
approximately $85 million, which includes $35 million of
capitalized interest. The interest paid forecast does not include
any interest payment related to the expected financing of the Great
Bear acquisition.
Environment, Social and
Governance
In alignment with its values and culture,
Kinross continued to deliver strong ESG performance over the year,
ranking in the top quartile of its peer group as measured by ESG
ratings from Sustainalytics, MSCI, ISS, Vigeo, Refinitiv and
S&P Global’s CSA. Kinross was recognized as one of the
industry’s top 10 for ESG performance in the S&P Global
Sustainability Yearbook. The Company also retained its “A” level
rating by MSCI, and is on track to complete external assurance in
conformance with the World Gold Council’s Responsible Gold Mining
Principles.
The Company’s injury frequency rates remained
low and were in line with its three-year averages, however, these
results were overshadowed by a tragic fatality at its Chirano mine
and a mill fire at Tasiast. While the latter did not result in
injuries, these incidents prompted Safety Stand-Downs, and
company-wide, cross-functional discussions about Kinross’ safety
culture to share learnings and improve safety performance.
In Alaska, Kinross’ commitment to
environmental stewardship was highlighted by its
partnership with Trout Unlimited to support the Alaska Abandoned
Mine Restoration Initiative (click here for
video). The Company committed over $500,000 to
support the initiative’s first project, the continued restoration
of a historic mining district in which Kinross has not operated.
The initiative is the first partnership of its kind in Alaska, with
a major mining company and a conservation organization working
alongside federal and state land-management agencies to restore the
environment and mitigate the impact of historic mining. The Company
met or exceeded all site level targets for permitting, water
management and closure planning, and also maintained its record of
zero tailings breaches for the 29th consecutive year.
In recognition of the global importance of
addressing climate change, Kinross outlined its
Climate Change Strategy, and has set a target to achieve a 30%
reduction in intensity of scope 1 and scope 2 emissions by 2030.
Please see the following news release for more information:
https://www.kinross.com/Kinross-announces-details-of-its-Climate-Change-Strategy.
In 2021, the Company published its inaugural
Climate Report following the Task Force on Climate-related
Financial Disclosures (TCFD) recommendations. Kinross also
continues to incorporate energy efficient projects into its
portfolio and embed climate change considerations into strategic
business decisions, including initiating development of a solar
power plant at Tasiast, studying to build a power line to connect
Udinsk to the regional grid and signing a power purchase agreement
for 100% renewable power at La Coipa.
Kinross’ global teams continued efforts to
mitigate the risks associated with the ongoing COVID-19 pandemic,
and provided support to bolster vaccination rates of its workforce.
In February 2022, Kinross donated over $1 million to support
response efforts and those affected by the tragic explosion in
Apiate, Ghana as the community works to recover and rebuild.
Kinross established an ESG Executive Committee
that will report to Senior Leadership and to the Board of Directors
on a quarterly basis to help further evolve and strengthen its ESG
governance and strategy. The Company also advanced its Inclusion
and Diversity (“I&D”) commitment with the establishment of a
Global Inclusion and Diversity Council (“GIDC”), which is made up
of Kinross’ senior leaders, including the President and CEO. The
GIDC was established following a commitment made to the BlackNorth
Initiative and is tasked with providing input into the Company’s
I&D strategy and action plan.
For more information on Kinross’ sustainability
performance, see the Company’s 2020 Sustainability Report and its
ESG Analyst Centre page. The Report follows the Global Reporting
Initiative (GRI) and Sustainability Accounting Board (SASB)
reporting standards and fulfills Kinross’ commitment as a
participant in the UN Global Compact.
Conference call details
In connection with this news release, Kinross
will hold a conference call and audio webcast on Thursday, February
17, 2022 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 – +1
(833) 968-2237; Passcode: 6090916Outside of Canada &
US – +1 (825) 312-2059; Passcode: 6090916
Replay (available up to 14 days after the
call):
Canada & US toll-free – +1
(800) 585-8367; Passcode: 6090916Outside of Canada &
US – +1 (416) 621-4642; Passcode: 6090916
You may also access the conference call on a
listen-only basis via webcast at our website www.kinross.com. The
audio webcast will be archived on www.kinross.com.
This release should be read in conjunction with
Kinross’ 2021 year-end Financial Statements and Management’s
Discussion and Analysis report at www.kinross.com. Kinross’ 2021
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. Our focus is on delivering
value based on the core principles of operational excellence,
balance sheet strength, disciplined growth and responsible mining.
Kinross maintains listings on the Toronto Stock Exchange (symbol:K)
and the New York Stock Exchange (symbol:KGC).
Media Contact Louie
DiazVice-President, Corporate Communicationsphone:
416-369-6469louie.diaz@kinross.com
Investor Relations
ContactChris LichtenheldtVice-President, Investor
Relationsphone: 416-365-2761chris.lichtenheldt@kinross.com
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 |
|
2021 |
|
2020 |
|
|
2021 |
|
2020 |
|
|
|
2021 |
|
|
2020 |
|
|
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
Fort Knox |
73,830 |
|
57,523 |
|
|
74,384 |
|
57,849 |
|
|
$ |
74.1 |
|
$ |
51.1 |
|
|
$ |
996 |
$ |
883 |
Round Mountain |
51,549 |
|
89,422 |
|
|
52,723 |
|
89,709 |
|
|
|
51.8 |
|
|
62.2 |
|
|
|
982 |
|
693 |
Bald Mountain |
61,036 |
|
51,487 |
|
|
53,559 |
|
57,087 |
|
|
|
50.1 |
|
|
45.4 |
|
|
|
935 |
|
795 |
Paracatu |
138,669 |
|
148,218 |
|
|
145,691 |
|
150,881 |
|
|
|
116.9 |
|
|
91.2 |
|
|
|
802 |
|
604 |
Maricunga |
- |
|
414 |
|
|
821 |
|
2,035 |
|
|
|
0.6 |
|
|
1.1 |
|
|
|
731 |
|
541 |
Americas Total |
325,084 |
|
347,064 |
|
|
327,178 |
|
357,561 |
|
|
|
293.5 |
|
|
251.0 |
|
|
|
897 |
|
702 |
|
|
|
|
|
|
|
|
|
|
|
|
Kupol |
116,179 |
|
130,731 |
|
|
115,893 |
|
131,541 |
|
|
|
75.2 |
|
|
79.1 |
|
|
|
649 |
|
601 |
Russia Total |
116,179 |
|
130,731 |
|
|
115,893 |
|
131,541 |
|
|
|
75.2 |
|
|
79.1 |
|
|
|
649 |
|
601 |
|
|
|
|
|
|
|
|
|
|
|
|
Tasiast |
15,253 |
|
111,028 |
|
|
15,006 |
|
107,865 |
|
|
|
10.8 |
|
|
60.8 |
|
|
|
720 |
|
564 |
Chirano
(100%) |
34,561 |
|
39,121 |
|
|
31,633 |
|
40,202 |
|
|
|
45.7 |
|
|
45.6 |
|
|
|
1,445 |
|
1,134 |
West Africa Total |
49,814 |
|
150,149 |
|
|
46,639 |
|
148,067 |
|
|
|
56.5 |
|
|
106.4 |
|
|
|
1,211 |
|
719 |
|
|
|
|
|
|
|
|
|
|
|
|
Less: Chirano non-controlling interest (10%) |
(3,456 |
) |
(3,912 |
) |
|
(3,163 |
) |
(4,020 |
) |
|
|
(4.6 |
) |
|
(4.6 |
) |
|
|
|
West Africa Attributable Total |
46,358 |
|
146,237 |
|
|
43,476 |
|
144,047 |
|
|
|
51.9 |
|
|
101.8 |
|
|
$ |
1,194 |
$ |
707 |
|
|
|
|
|
|
|
|
|
|
|
|
Attributable Total |
487,621 |
|
624,032 |
|
|
486,547 |
|
633,149 |
|
|
|
420.6 |
|
|
431.9 |
|
|
|
864 |
|
682 |
Add: Chirano non-controlling interest (10%) |
3,456 |
|
3,912 |
|
|
3,163 |
|
4,020 |
|
|
|
4.6 |
|
|
4.6 |
|
|
|
|
Operations Total |
491,077 |
|
627,944 |
|
|
489,710 |
|
637,169 |
|
|
|
425.2 |
|
|
436.5 |
|
|
$ |
868 |
$ |
685 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended December 31, |
|
Gold equivalent ounces |
|
|
|
|
|
|
|
|
Produced |
|
Sold |
|
Production cost of sales ($millions) |
|
Production cost of sales/equivalent ounce
sold |
|
2021 |
|
2020 |
|
|
2021 |
|
2020 |
|
|
|
2021 |
|
|
2020 |
|
|
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
Fort Knox |
264,283 |
|
237,925 |
|
|
263,590 |
|
238,349 |
|
|
$ |
267.2 |
|
$ |
251.3 |
|
|
$ |
1,014 |
$ |
1,054 |
Round Mountain |
257,005 |
|
324,277 |
|
|
259,941 |
|
319,228 |
|
|
|
235.9 |
|
|
219.6 |
|
|
|
908 |
|
688 |
Bald Mountain |
204,890 |
|
191,282 |
|
|
196,066 |
|
186,549 |
|
|
|
177.5 |
|
|
155.9 |
|
|
|
905 |
|
836 |
Paracatu |
550,560 |
|
542,435 |
|
|
549,900 |
|
541,506 |
|
|
|
412.1 |
|
|
358.9 |
|
|
|
749 |
|
663 |
Maricunga |
- |
|
3,546 |
|
|
2,787 |
|
8,947 |
|
|
|
2.0 |
|
|
3.7 |
|
|
|
718 |
|
414 |
Americas Total |
1,276,738 |
|
1,299,465 |
|
|
1,272,284 |
|
1,294,579 |
|
|
|
1,094.7 |
|
|
989.4 |
|
|
|
860 |
|
764 |
|
|
|
|
|
|
|
|
|
|
|
|
Kupol |
481,108 |
|
510,743 |
|
|
480,968 |
|
510,973 |
|
|
|
306.2 |
|
|
304.5 |
|
|
|
637 |
|
596 |
Russia Total |
481,108 |
|
510,743 |
|
|
480,968 |
|
510,973 |
|
|
|
306.2 |
|
|
304.5 |
|
|
|
637 |
|
596 |
|
|
|
|
|
|
|
|
|
|
|
|
Tasiast |
170,502 |
|
406,509 |
|
|
174,193 |
|
403,789 |
|
|
|
123.6 |
|
|
235.7 |
|
|
|
710 |
|
584 |
Chirano
(100%) |
154,668 |
|
166,590 |
|
|
148,293 |
|
166,207 |
|
|
|
201.6 |
|
|
196.1 |
|
|
|
1,359 |
|
1,180 |
West Africa Total |
325,170 |
|
573,099 |
|
|
322,486 |
|
569,996 |
|
|
|
325.2 |
|
|
431.8 |
|
|
|
1,008 |
|
758 |
|
|
|
|
|
|
|
|
|
|
|
|
Less: Chirano non-controlling interest (10%) |
(15,467 |
) |
(16,659 |
) |
|
(14,829 |
) |
(16,621 |
) |
|
|
(20.2 |
) |
|
(19.6 |
) |
|
|
|
West Africa Attributable Total |
309,703 |
|
556,440 |
|
|
307,657 |
|
553,375 |
|
|
|
305.0 |
|
|
412.2 |
|
|
|
991 |
|
745 |
|
|
|
|
|
|
|
|
|
|
|
|
Attributable Total |
2,067,549 |
|
2,366,648 |
|
|
2,060,909 |
|
2,358,927 |
|
|
|
1,705.9 |
|
|
1,706.1 |
|
|
$ |
828 |
$ |
723 |
Add: Chirano non-controlling interest (10%) |
15,467 |
|
16,659 |
|
|
14,829 |
|
16,621 |
|
|
|
20.2 |
|
|
19.6 |
|
|
|
|
Operations Total |
2,083,016 |
|
2,383,307 |
|
|
2,075,738 |
|
2,375,548 |
|
|
|
1,726.1 |
|
|
1,725.7 |
|
|
$ |
832 |
$ |
726 |
Consolidated balance sheets
(expressed in millions of U.S. dollars, except share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
As at |
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
531.5 |
|
|
$ |
1,210.9 |
|
|
Restricted cash |
|
|
11.4 |
|
|
|
13.7 |
|
|
Accounts receivable and other assets |
|
|
214.5 |
|
|
|
115.8 |
|
|
Current income tax recoverable |
|
|
10.2 |
|
|
|
29.9 |
|
|
Inventories |
|
|
1,151.3 |
|
|
|
1,072.9 |
|
|
Unrealized fair value of derivative assets |
|
|
30.0 |
|
|
|
6.5 |
|
|
|
|
|
1,948.9 |
|
|
|
2,449.7 |
|
|
Non-current assets |
|
|
|
|
|
Property, plant and equipment |
|
|
7,617.7 |
|
|
|
7,653.5 |
|
|
Goodwill |
|
|
158.8 |
|
|
|
158.8 |
|
|
Long-term investments |
|
|
98.2 |
|
|
|
113.0 |
|
|
Investment in joint venture |
|
|
7.1 |
|
|
|
18.3 |
|
|
Other long-term assets |
|
|
590.9 |
|
|
|
537.2 |
|
|
Deferred tax assets |
|
|
6.5 |
|
|
|
2.7 |
|
|
Total assets |
|
$ |
10,428.1 |
|
|
$ |
10,933.2 |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
492.7 |
|
|
$ |
479.2 |
|
|
Current income tax payable |
|
|
95.0 |
|
|
|
114.5 |
|
|
Current portion of long-term debt and credit facilities |
|
|
40.0 |
|
|
|
499.7 |
|
|
Current portion of provisions |
|
|
90.0 |
|
|
|
63.8 |
|
|
Other current liabilities |
|
|
23.7 |
|
|
|
49.7 |
|
|
Deferred payment obligation |
|
|
- |
|
|
|
141.5 |
|
|
|
|
|
741.4 |
|
|
|
1,348.4 |
|
|
Non-current liabilities |
|
|
|
|
|
Long-term debt and credit facilities |
|
|
1,589.9 |
|
|
|
1,424.2 |
|
|
Provisions |
|
|
847.9 |
|
|
|
861.1 |
|
|
Long-term lease liabilities |
|
|
35.1 |
|
|
|
46.3 |
|
|
Other long-term liabilities |
|
|
127.4 |
|
|
|
102.4 |
|
|
Deferred tax liabilities |
|
|
436.8 |
|
|
|
487.8 |
|
|
Total liabilities |
|
$ |
3,778.5 |
|
|
$ |
4,270.2 |
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Common shareholders' equity |
|
|
|
|
|
Common share capital |
|
$ |
4,427.7 |
|
|
$ |
4,473.7 |
|
|
Contributed surplus |
|
|
10,664.4 |
|
|
|
10,709.0 |
|
|
Accumulated deficit |
|
|
(8,492.4 |
) |
|
|
(8,562.5 |
) |
|
Accumulated other comprehensive income (loss) |
|
|
(18.8 |
) |
|
|
(23.7 |
) |
|
Total common shareholders' equity |
|
|
6,580.9 |
|
|
|
6,596.5 |
|
|
Non-controlling interests |
|
|
68.7 |
|
|
|
66.5 |
|
|
Total equity |
|
|
6,649.6 |
|
|
|
6,663.0 |
|
|
Total liabilities and equity |
|
$ |
10,428.1 |
|
|
$ |
10,933.2 |
|
|
|
|
|
|
|
|
Common shares |
|
|
|
|
|
Authorized |
|
Unlimited |
|
Unlimited |
|
Issued and outstanding |
|
|
1,244,332,772 |
|
|
|
1,258,320,461 |
|
|
|
|
|
|
|
|
Consolidated statements of operations
(expressed in millions of U.S. dollars, except share and per share
amounts) |
|
|
|
|
|
|
|
Years ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2021 |
|
|
|
2020 |
|
|
Revenue |
|
|
|
|
|
Metal sales |
|
$ |
3,729.4 |
|
|
$ |
4,213.4 |
|
|
|
|
|
|
|
|
Cost of sales |
|
|
|
|
|
Production cost of sales |
|
|
1,726.1 |
|
|
|
1,725.7 |
|
|
Depreciation, depletion and amortization |
|
|
840.9 |
|
|
|
842.3 |
|
|
Impairment charges (reversals) and asset derecognition - net |
|
|
144.5 |
|
|
|
(650.9 |
) |
|
Total cost of sales |
|
|
2,711.5 |
|
|
|
1,917.1 |
|
|
Gross profit |
|
|
1,017.9 |
|
|
|
2,296.3 |
|
|
Other operating expense |
|
|
294.6 |
|
|
|
186.5 |
|
|
Exploration and business development |
|
|
133.1 |
|
|
|
92.5 |
|
|
General and administrative |
|
|
126.6 |
|
|
|
117.9 |
|
|
Operating earnings |
|
|
463.6 |
|
|
|
1,899.4 |
|
|
Other income - net |
|
|
79.2 |
|
|
|
7.4 |
|
|
Finance income |
|
|
12.3 |
|
|
|
4.3 |
|
|
Finance expense |
|
|
(85.7 |
) |
|
|
(112.6 |
) |
|
Earnings before tax |
|
|
469.4 |
|
|
|
1,798.5 |
|
|
Income tax expense - net |
|
|
(250.7 |
) |
|
|
(439.8 |
) |
|
Net earnings |
|
$ |
218.7 |
|
|
$ |
1,358.7 |
|
|
Net (loss) earnings attributable to: |
|
|
|
|
|
Non-controlling interests |
|
$ |
(2.5 |
) |
|
$ |
16.3 |
|
|
Common shareholders |
|
$ |
221.2 |
|
|
$ |
1,342.4 |
|
|
|
|
|
|
|
|
Earnings per share attributable to common
shareholders |
|
|
|
|
|
Basic |
|
$ |
0.18 |
|
|
$ |
1.07 |
|
|
Diluted |
|
$ |
0.17 |
|
|
$ |
1.06 |
|
|
|
|
|
|
|
|
Weighted average number of common shares
outstanding (millions) |
|
|
|
|
|
Basic |
|
|
1,259.1 |
|
|
|
1,257.2 |
|
|
Diluted |
|
|
1,269.1 |
|
|
|
1,268.0 |
|
|
Consolidated statements of cash flows
(expressed in millions of U.S. dollars) |
|
|
|
|
|
|
|
|
|
Years ended |
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
|
2021 |
|
|
|
2020 |
|
|
Net inflow (outflow) of cash related to the following
activities: |
|
|
|
|
|
|
Operating: |
|
|
|
|
|
|
Net earnings |
|
|
$ |
218.7 |
|
|
$ |
1,358.7 |
|
|
Adjustments to reconcile net earnings to net cash provided from
operating activities: |
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
|
840.9 |
|
|
|
842.3 |
|
|
Impairment charges (reversals) and asset derecognition - net |
|
|
|
144.5 |
|
|
|
(650.9 |
) |
|
Share-based compensation expense |
|
|
|
10.8 |
|
|
|
13.7 |
|
|
Finance expense |
|
|
|
85.7 |
|
|
|
112.6 |
|
|
Deferred tax (recovery) expense |
|
|
|
(63.7 |
) |
|
|
217.9 |
|
|
Foreign exchange losses and other |
|
|
|
72.9 |
|
|
|
11.8 |
|
|
Reclamation expense |
|
|
|
0.1 |
|
|
|
6.6 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable and other assets |
|
|
|
(50.0 |
) |
|
|
(120.9 |
) |
|
Inventories |
|
|
|
(86.7 |
) |
|
|
(6.8 |
) |
|
Accounts payable and accrued liabilities |
|
|
|
265.4 |
|
|
|
279.0 |
|
|
Cash flow provided from operating activities |
|
|
|
1,438.6 |
|
|
|
2,064.0 |
|
|
Income taxes paid |
|
|
|
(303.4 |
) |
|
|
(106.4 |
) |
|
Net cash flow provided from operating
activities |
|
|
|
1,135.2 |
|
|
|
1,957.6 |
|
|
Investing: |
|
|
|
|
|
|
Additions to property, plant and equipment |
|
|
|
(938.6 |
) |
|
|
(916.1 |
) |
|
Interest paid capitalized to property, plant and equipment |
|
|
|
(51.1 |
) |
|
|
(47.9 |
) |
|
Acquisitions |
|
|
|
(141.5 |
) |
|
|
(267.0 |
) |
|
Net additions to long-term investments and other assets |
|
|
|
(66.3 |
) |
|
|
(5.9 |
) |
|
Net proceeds from the sale of property, plant and equipment |
|
|
|
1.3 |
|
|
|
8.4 |
|
|
Decrease (increase) in restricted cash - net |
|
|
|
2.3 |
|
|
|
(23.5 |
) |
|
Interest received and other - net |
|
|
|
1.3 |
|
|
|
2.9 |
|
|
Net cash flow used in investing activities |
|
|
|
(1,192.6 |
) |
|
|
(1,249.1 |
) |
|
Financing: |
|
|
|
|
|
|
Proceeds from drawdown of debt |
|
|
|
200.0 |
|
|
|
950.0 |
|
|
Repayment of debt |
|
|
|
(500.0 |
) |
|
|
(850.0 |
) |
|
Interest paid |
|
|
|
(46.9 |
) |
|
|
(63.1 |
) |
|
Payment of lease liabilities |
|
|
|
(33.8 |
) |
|
|
(20.7 |
) |
|
Dividends paid to common shareholders |
|
|
|
(151.1 |
) |
|
|
(75.5 |
) |
|
Dividends paid to non-controlling interest |
|
|
|
- |
|
|
|
(6.0 |
) |
|
Repurchase and cancellation of shares |
|
|
|
(100.2 |
) |
|
|
- |
|
|
Other - net |
|
|
|
8.8 |
|
|
|
(2.4 |
) |
|
Net cash flow used in financing activities |
|
|
|
(623.2 |
) |
|
|
(67.7 |
) |
|
Effect of exchange rate changes on cash and cash
equivalents |
|
|
|
1.2 |
|
|
|
(5.0 |
) |
|
(Decrease) increase in cash and cash
equivalents |
|
|
|
(679.4 |
) |
|
|
635.8 |
|
|
Cash and cash equivalents, beginning of
period |
|
|
|
1,210.9 |
|
|
|
575.1 |
|
|
Cash and cash equivalents, end of period |
|
|
$ |
531.5 |
|
|
$ |
1,210.9 |
|
|
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 |
Q4 2021 |
100 |
9,203 |
2,148 |
8,185 |
0.73 |
0.19 |
82 |
% |
73,830 |
74,384 |
$ |
74.1 |
$ |
996 |
$ |
31.6 |
$ |
30.9 |
Q3 2021 |
100 |
8,024 |
2,221 |
6,395 |
0.77 |
0.20 |
82 |
% |
71,336 |
71,482 |
$ |
67.7 |
$ |
947 |
$ |
37.4 |
$ |
29.7 |
Q2 2021 |
100 |
9,560 |
1,939 |
7,864 |
0.70 |
0.22 |
81 |
% |
63,302 |
62,163 |
$ |
67.7 |
$ |
1,089 |
$ |
18.7 |
$ |
26.7 |
Q1 2021 |
100 |
8,174 |
1,751 |
7,396 |
0.57 |
0.20 |
80 |
% |
55,815 |
55,561 |
$ |
57.7 |
$ |
1,038 |
$ |
25.4 |
$ |
22.5 |
Q4 2020 |
100 |
8,456 |
2,583 |
7,021 |
0.61 |
0.20 |
80 |
% |
57,523 |
57,849 |
$ |
51.1 |
$ |
883 |
$ |
46.0 |
$ |
23.2 |
Round Mountain |
Q4 2021 |
100 |
1,755 |
1,057 |
1,529 |
0.64 |
0.33 |
75 |
% |
51,549 |
52,723 |
$ |
51.8 |
$ |
982 |
$ |
50.3 |
$ |
14.5 |
Q3 2021 |
100 |
1,531 |
915 |
4,442 |
0.63 |
0.29 |
76 |
% |
63,242 |
61,405 |
$ |
60.8 |
$ |
990 |
$ |
23.7 |
$ |
16.3 |
Q2 2021 |
100 |
2,551 |
1,133 |
2,552 |
0.54 |
0.38 |
76 |
% |
67,928 |
71,935 |
$ |
60.2 |
$ |
837 |
$ |
20.2 |
$ |
17.4 |
Q1 2021 |
100 |
3,843 |
976 |
4,019 |
0.70 |
0.46 |
81 |
% |
74,286 |
73,878 |
$ |
63.1 |
$ |
854 |
$ |
31.3 |
$ |
17.0 |
Q4 2020 |
100 |
6,542 |
988 |
6,315 |
0.92 |
0.50 |
83 |
% |
89,422 |
89,709 |
$ |
62.2 |
$ |
693 |
$ |
41.2 |
$ |
15.2 |
Bald Mountain |
Q4 2021 |
100 |
5,222 |
- |
5,222 |
- |
0.52 |
nm |
61,036 |
53,559 |
$ |
50.1 |
$ |
935 |
$ |
17.2 |
$ |
57.2 |
Q3 2021 |
100 |
5,941 |
- |
5,941 |
- |
0.46 |
nm |
55,559 |
52,874 |
$ |
48.8 |
$ |
923 |
$ |
7.7 |
$ |
59.4 |
Q2 2021 |
100 |
5,875 |
- |
5,875 |
- |
0.57 |
nm |
36,887 |
41,383 |
$ |
41.6 |
$ |
1,005 |
$ |
5.2 |
$ |
39.1 |
Q1 2021 |
100 |
2,025 |
- |
2,025 |
- |
0.48 |
nm |
51,408 |
48,250 |
$ |
37.0 |
$ |
767 |
$ |
8.9 |
$ |
40.2 |
Q4 2020 |
100 |
6,076 |
- |
6,076 |
- |
0.42 |
nm |
51,487 |
57,087 |
$ |
45.4 |
$ |
795 |
$ |
19.3 |
$ |
44.3 |
Paracatu |
Q4 2021 |
100 |
13,036 |
15,451 |
- |
0.35 |
- |
77 |
% |
138,669 |
145,691 |
$ |
116.9 |
$ |
802 |
$ |
49.6 |
$ |
47.7 |
Q3 2021 |
100 |
14,107 |
15,085 |
- |
0.37 |
- |
76 |
% |
134,425 |
133,924 |
$ |
103.7 |
$ |
774 |
$ |
30.0 |
$ |
44.5 |
Q2 2021 |
100 |
12,624 |
14,138 |
- |
0.37 |
- |
76 |
% |
150,919 |
143,474 |
$ |
108.7 |
$ |
758 |
$ |
27.5 |
$ |
50.7 |
Q1 2021 |
100 |
12,612 |
15,372 |
- |
0.38 |
- |
75 |
% |
126,547 |
126,811 |
$ |
82.8 |
$ |
653 |
$ |
20.8 |
$ |
37.7 |
Q4 2020 |
100 |
12,611 |
12,655 |
- |
0.51 |
- |
77 |
% |
148,218 |
150,881 |
$ |
91.2 |
$ |
604 |
$ |
61.6 |
$ |
58.2 |
Maricunga |
Q4 2021 |
100 |
- |
- |
- |
- |
- |
nm |
- |
821 |
$ |
0.6 |
$ |
731 |
$ |
- |
$ |
0.1 |
Q3 2021 |
100 |
- |
- |
- |
- |
- |
nm |
- |
655 |
$ |
0.5 |
$ |
763 |
$ |
- |
$ |
0.3 |
Q2 2021 |
100 |
- |
- |
- |
- |
- |
nm |
- |
580 |
$ |
0.4 |
$ |
690 |
$ |
- |
$ |
0.1 |
Q1 2021 |
100 |
- |
- |
- |
- |
- |
nm |
- |
731 |
$ |
0.5 |
$ |
684 |
$ |
- |
$ |
0.1 |
Q4 2020 |
100 |
- |
- |
- |
- |
- |
nm |
414 |
2,035 |
$ |
1.1 |
$ |
541 |
$ |
- |
$ |
0.1 |
Russia |
Kupol (c)(d)(f) |
Q4 2021 |
100 |
333 |
430 |
- |
7.74 |
- |
95 |
% |
116,179 |
115,893 |
$ |
75.2 |
$ |
649 |
$ |
8.8 |
$ |
17.1 |
Q3 2021 |
100 |
316 |
425 |
- |
8.29 |
- |
96 |
% |
120,822 |
121,798 |
$ |
81.8 |
$ |
672 |
$ |
5.4 |
$ |
18.3 |
Q2 2021 |
100 |
319 |
424 |
- |
8.43 |
- |
95 |
% |
121,855 |
121,124 |
$ |
74.5 |
$ |
615 |
$ |
5.5 |
$ |
16.9 |
Q1 2021 |
100 |
312 |
418 |
- |
8.71 |
- |
94 |
% |
122,252 |
122,153 |
$ |
74.7 |
$ |
612 |
$ |
6.8 |
$ |
18.2 |
Q4 2020 |
100 |
293 |
432 |
- |
9.24 |
- |
95 |
% |
130,731 |
131,541 |
$ |
79.1 |
$ |
601 |
$ |
15.1 |
$ |
31.0 |
West Africa |
Tasiast |
Q4 2021 |
100 |
1,061 |
1,068 |
- |
1.50 |
- |
94 |
% |
15,253 |
15,006 |
$ |
10.8 |
$ |
720 |
$ |
52.5 |
$ |
13.1 |
Q3 2021 |
100 |
822 |
- |
- |
- |
- |
0 |
% |
3,847 |
4,822 |
$ |
8.3 |
$ |
1,721 |
$ |
68.1 |
$ |
21.3 |
Q2 2021 |
100 |
818 |
1,161 |
- |
1.67 |
- |
95 |
% |
62,438 |
70,695 |
$ |
53.2 |
$ |
753 |
$ |
70.2 |
$ |
54.2 |
Q1 2021 |
100 |
843 |
1,504 |
- |
1.85 |
- |
96 |
% |
88,964 |
83,670 |
$ |
51.3 |
$ |
613 |
$ |
68.6 |
$ |
48.3 |
Q4 2020 |
100 |
1,206 |
1,470 |
- |
2.48 |
- |
94 |
% |
111,028 |
107,865 |
$ |
60.8 |
$ |
564 |
$ |
65.0 |
$ |
46.5 |
Chirano - 100% |
Q4 2021 |
100 |
625 |
869 |
- |
1.48 |
- |
85 |
% |
34,561 |
31,633 |
$ |
45.7 |
$ |
1,445 |
$ |
7.5 |
$ |
15.8 |
Q3 2021 |
100 |
802 |
881 |
- |
1.54 |
- |
87 |
% |
37,588 |
34,999 |
$ |
49.4 |
$ |
1,411 |
$ |
9.3 |
$ |
17.0 |
Q2 2021 |
100 |
933 |
862 |
- |
1.54 |
- |
88 |
% |
38,625 |
40,517 |
$ |
53.7 |
$ |
1,325 |
$ |
12.8 |
$ |
19.0 |
Q1 2021 |
100 |
735 |
821 |
- |
1.81 |
- |
88 |
% |
43,894 |
41,144 |
$ |
52.8 |
$ |
1,283 |
$ |
10.1 |
$ |
21.2 |
Q4 2020 |
100 |
915 |
801 |
- |
1.75 |
- |
88 |
% |
39,121 |
40,202 |
$ |
45.6 |
$ |
1,134 |
$ |
11.3 |
$ |
13.1 |
Chirano - 90% |
Q4 2021 |
90 |
625 |
869 |
- |
1.48 |
- |
85 |
% |
31,105 |
28,470 |
$ |
41.1 |
$ |
1,445 |
$ |
6.8 |
$ |
14.2 |
Q3 2021 |
90 |
802 |
881 |
- |
1.54 |
- |
87 |
% |
33,829 |
31,499 |
$ |
44.5 |
$ |
1,411 |
$ |
8.4 |
$ |
15.3 |
Q2 2021 |
90 |
933 |
862 |
- |
1.54 |
- |
88 |
% |
34,762 |
36,465 |
$ |
48.3 |
$ |
1,325 |
$ |
11.5 |
$ |
17.1 |
Q1 2021 |
90 |
735 |
821 |
- |
1.81 |
- |
88 |
% |
39,505 |
37,030 |
$ |
47.5 |
$ |
1,283 |
$ |
9.1 |
$ |
19.1 |
Q4 2020 |
90 |
915 |
801 |
- |
1.75 |
- |
88 |
% |
35,209 |
36,182 |
$ |
41.0 |
$ |
1,134 |
$ |
10.2 |
$ |
11.8 |
(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. Mining activities were completed at
Dvoinoye in the fourth quarter of 2020. |
(d) |
Kupol silver grade and recovery
were as follows: Q4 2021: 67.11 g/t, 85%; Q3 2021: 72.71 g/t, 87%;
Q2 2021: 77.19 g/t, 85%; Q1 2021: 69.95 g/t, 83%; Q4 2020: 65.05
g/t, 84%. |
(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: Q4 2021: 76.89:1; Q3 2021: 73.45:1; Q2 2021:
68.05:1; Q1 2021: 68.33:1; Q4 2020: 77.02:1. |
(f) |
Dvoinoye tonnes of ore processed
and grade were as follows: Q4 2021: 110,552, 6.16 g/t; Q3 2021:
111,060, 6.21 g/t; Q2 2021: 103,607, 7.33 g/t; Q1 2021: 109,559,
6.56 g/t; Q4 2020: 115,998, 9.25 g/t. |
(g) |
"Capital expenditures" is as
reported as “Additions to property, plant and equipment” on the
consolidated statements of cash flows. |
(h) |
"nm" means not meaningful. |
Reconciliation of non-GAAP financial measures and
ratios
The Company has included certain non-GAAP
financial measures and ratios in this document. These measures and
ratios are not defined under International Financial Reporting
Standards (IFRS) and should not be considered in isolation. The
Company believes that these measures and ratios, together with
measures and ratios determined in accordance with IFRS, provide
investors with an improved ability to evaluate the underlying
performance of the Company. The inclusion of these measures and
ratios is meant to provide additional information and should not be
used as a substitute for performance measures and ratios prepared
in accordance with IFRS. These measures and ratios 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 and ratios which determine the
performance of the Company, excluding certain impacts which the
Company believes are not reflective of the Company’s underlying
performance for the reporting period, such as the impact of foreign
exchange gains and losses, reassessment of prior year taxes and/or
taxes otherwise not related to the current period, impairment
charges (reversals), gains and losses and other one-time costs
related to acquisitions, dispositions and other transactions, and
non-hedge derivative gains and losses. Although some of the items
are recurring, the Company believes that they are not reflective of
the underlying operating performance of its current business and
are not necessarily indicative of future operating results.
Management believes that these measures and ratios, which are used
internally to assess performance and in planning and forecasting
future operating results, provide investors with the ability to
better evaluate underlying performance, particularly since the
excluded items are typically not included in public guidance.
However, adjusted net earnings and adjusted net earnings per share
measures and ratios are not necessarily indicative of net earnings
and earnings per share measures and ratios as determined under
IFRS.
The following table provides a reconciliation of
net (loss) earnings to adjusted net earnings for the periods
presented:
|
|
|
|
|
|
|
|
|
Adjusted Net Earnings |
(expressed in millions of U.S dollars, except per share
amounts) |
Three months ended |
|
Years ended |
December 31, |
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
Net (loss) earnings attributable to common shareholders - as
reported |
$ |
(2.7 |
) |
$ |
783.3 |
|
|
$ |
221.2 |
|
$ |
1,342.4 |
|
Adjusting
items: |
|
|
|
|
|
|
Foreign exchange losses |
|
3.3 |
|
|
8.2 |
|
# |
|
4.7 |
|
|
7.3 |
|
|
Foreign exchange losses on
translation of tax basis and foreign exchange on
deferred income taxes within income tax expense |
|
16.7 |
|
|
4.6 |
|
# |
|
24.1 |
|
|
101.2 |
|
|
Taxes in respect of prior
periods |
|
7.3 |
|
|
39.7 |
|
# |
|
86.3 |
|
|
51.3 |
|
|
Impairment charges (reversals)
and asset derecognition - net(a) |
|
144.5 |
|
|
(602.6 |
) |
|
|
144.5 |
|
|
(650.9 |
) |
|
COVID-19 costs(b) |
|
10.5 |
|
|
23.3 |
|
|
|
34.8 |
|
|
64.1 |
|
|
Tasiast insurance
recoveries |
|
(90.0 |
) |
|
- |
|
|
|
(90.0 |
) |
|
- |
|
|
Tasiast mill fire related
costs |
|
19.3 |
|
|
- |
|
|
|
60.3 |
|
|
- |
|
|
Round Mountain pit wall
stabilization costs |
|
7.4 |
|
|
- |
|
|
|
50.1 |
|
|
- |
|
|
Mediation settlement
provision |
|
17.1 |
|
|
- |
|
|
|
42.1 |
|
|
- |
|
|
Tasiast definitive agreement
settlement |
|
- |
|
|
- |
|
|
|
10.0 |
|
|
- |
|
|
U.S. CARES Act net
benefit |
|
- |
|
|
- |
|
# |
|
- |
|
|
(25.4 |
) |
|
Tasiast strike costs |
|
- |
|
|
- |
|
|
|
- |
|
|
8.3 |
|
|
Other(c) |
|
13.8 |
|
|
9.7 |
|
# |
|
19.0 |
|
|
6.8 |
|
|
Tax effect of the above
adjustments |
|
(45.4 |
) |
|
68.9 |
|
# |
|
(65.8 |
) |
|
61.7 |
|
|
|
|
104.5 |
|
|
(448.2 |
) |
|
|
320.1 |
|
|
(375.6 |
) |
Adjusted net earnings attributable to common shareholders |
$ |
101.8 |
|
$ |
335.1 |
|
|
$ |
541.3 |
|
$ |
966.8 |
|
Weighted average number of common shares outstanding - Basic |
|
1,254.6 |
|
|
1,258.3 |
|
|
|
1,259.1 |
|
|
1,257.2 |
|
Adjusted net earnings per share |
$ |
0.08 |
|
$ |
0.27 |
|
|
$ |
0.43 |
|
$ |
0.77 |
|
Basic earnings per share attributable to common shareholders |
$ |
- |
|
$ |
0.62 |
|
|
$ |
0.18 |
|
$ |
1.07 |
|
|
|
|
|
|
|
|
(a) |
During the year ended December 31, 2021, the Company recognized
impairment and asset derecognition charges of $144.5 million at
Bald Mountain, of which $95.2 million related to impairment of
metal inventory and $49.3 million related to the derecognition of
property, plant and equipment. The tax impacts of the impairment
and derecognition charges were income tax recoveries of $25.3
million and $13.1 million, respectively. During the year ended
December 31, 2020, the Company recorded non-cash reversals of
impairment charges of $689.0 million related to property, plant and
equipment at Tasiast, Chirano and Lobo-Marte. The tax impacts on
the impairment reversals at Chirano and Lobo-Marte were expenses of
$71.6 million and $4.6 million, respectively. There was no tax
impact on the impairment reversal at Tasiast. In addition, the
Company recorded impairment charges of $38.1 million related to
certain supplies inventories. |
(b) |
Includes COVID-19 related labour, health and safety, donations and
other support program costs. |
(c) |
Other includes various non-recurring impacts, such as one-time
costs at sites, and recurring impacts, such as gains and losses on
the sale of assets and hedges, which the Company believes are not
reflective of the Company’s underlying performance for the
reporting period. |
Free cash flow is a non-GAAP
measure and is defined as net cash flow provided from operating
activities less capital expenditures. The Company believes that
this measure, which is used internally to evaluate the Company’s
underlying cash generation performance and the ability to repay
creditors and return cash to shareholders, provides investors with
the ability to better evaluate the Company’s underlying
performance. However, the free cash flow measure is not necessarily
indicative of operating earnings or net cash flow from operations
as determined under IFRS.
The following table provides a reconciliation of
free cash flow for the periods presented:
|
|
|
|
|
|
|
|
|
Free Cash Flow |
(expressed in millions of U.S dollars) |
Three months ended |
|
Years ended |
December 31, |
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
Net cash flow provided from operating activities - as reported |
$ |
197.3 |
|
$ |
681.1 |
|
|
$ |
1,135.2 |
|
$ |
1,957.6 |
|
|
|
|
|
|
|
|
Less:
Additions to property, plant and equipment |
|
(298.0 |
) |
|
(298.3 |
) |
|
|
(938.6 |
) |
|
(916.1 |
) |
|
|
|
|
|
|
|
Free cash
flow |
$ |
(100.7 |
) |
$ |
382.8 |
|
|
$ |
196.6 |
|
$ |
1,041.5 |
|
|
|
|
|
|
|
|
Adjusted operating cash flow is
a non-GAAP measure and 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 |
(expressed in millions of U.S dollars) |
Three months ended |
|
Years ended |
December 31, |
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
Net cash flow provided from operating activities - as reported |
$ |
197.3 |
|
$ |
681.1 |
|
|
$ |
1,135.2 |
|
$ |
1,957.6 |
|
|
|
|
|
|
|
|
Adjusting
items: |
|
|
|
|
|
|
Working capital changes: |
|
|
|
|
|
|
Accounts receivable and other assets |
|
20.6 |
|
|
(47.7 |
) |
|
|
50.0 |
|
|
120.9 |
|
|
Inventories |
|
68.6 |
|
|
33.1 |
|
|
|
86.7 |
|
|
6.8 |
|
|
Accounts payable and other liabilities, including income taxes
paid |
|
69.5 |
|
|
(138.9 |
) |
|
|
38.0 |
|
|
(172.6 |
) |
|
|
|
158.7 |
|
|
(153.5 |
) |
|
|
174.7 |
|
|
(44.9 |
) |
Adjusted
operating cash flow |
$ |
356.0 |
|
$ |
527.6 |
|
|
$ |
1,309.9 |
|
$ |
1,912.7 |
|
|
|
|
|
|
|
|
Attributable production cost of sales
per gold equivalent ounce sold is a non-GAAP ratio 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
attributable production cost of sales per equivalent ounce sold for
the periods presented:
|
|
Attributable Production Cost of Sales Per
Equivalent Ounce Sold |
(expressed in millions of U.S. dollars, except ounces and
production cost of sales per equivalent ounce) |
Three months ended |
|
Years ended |
December 31, |
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
Production cost of sales - as reported |
$ |
425.2 |
|
$ |
436.5 |
|
|
$ |
1,726.1 |
|
$ |
1,725.7 |
|
Less: portion attributable to Chirano non-controlling
interest(a) |
|
(4.6 |
) |
|
(4.6 |
) |
|
|
(20.2 |
) |
|
(19.6 |
) |
Attributable(b) production cost of sales |
$ |
420.6 |
|
$ |
431.9 |
|
|
$ |
1,705.9 |
|
$ |
1,706.1 |
|
|
|
|
|
|
|
|
Gold
equivalent ounces sold |
|
489,710 |
|
|
637,169 |
|
|
|
2,075,738 |
|
|
2,375,548 |
|
Less: portion attributable to Chirano non-controlling
interest(c) |
|
(3,163 |
) |
|
(4,020 |
) |
|
|
(14,829 |
) |
|
(16,621 |
) |
Attributable(b) gold equivalent ounces sold |
|
486,547 |
|
|
633,149 |
|
|
|
2,060,909 |
|
|
2,358,927 |
|
Attributable(b) production cost of sales per equivalent ounce
sold |
$ |
864 |
|
$ |
682 |
|
|
$ |
828 |
|
$ |
723 |
|
Consolidated production cost of sales per equivalent ounce
sold(d) |
$ |
868 |
|
$ |
685 |
|
|
$ |
832 |
|
$ |
726 |
|
|
|
|
|
|
|
See page 24 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 ratio
which calculates the Company’s non-gold production as a credit
against its per ounce production costs, rather than converting its
non-gold production into gold equivalent ounces and crediting it to
total production, as is the case in co-product accounting.
Management believes that this ratio provides investors with the
ability to better evaluate Kinross’ production cost of sales per
ounce on a comparable basis with other major gold producers who
routinely calculate their cost of sales per ounce using by-product
accounting rather than co-product accounting.
The following table provides a reconciliation of
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 |
(expressed in millions of U.S. dollars, except ounces and
production cost of sales per ounce) |
Three months ended |
|
Years ended |
December 31, |
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
Production cost of sales - as reported |
$ |
425.2 |
|
$ |
436.5 |
|
|
$ |
1,726.1 |
|
$ |
1,725.7 |
|
Less: portion attributable to Chirano non-controlling
interest(a) |
|
(4.6 |
) |
|
(4.6 |
) |
|
|
(20.2 |
) |
|
(19.6 |
) |
Less: attributable(b) silver revenue(e) |
|
(23.6 |
) |
|
(28.3 |
) |
|
|
(107.9 |
) |
|
(91.0 |
) |
Attributable(b) production cost of sales net of silver by-product
revenue |
$ |
397.0 |
|
$ |
403.6 |
|
|
$ |
1,598.0 |
|
$ |
1,615.1 |
|
|
|
|
|
|
|
|
Gold
ounces sold |
|
476,466 |
|
|
622,235 |
|
|
|
2,015,068 |
|
|
2,324,324 |
|
Less:
portion attributable to Chirano non-controlling interest(c) |
|
|
(3,160 |
) |
|
(4,014 |
) |
|
|
(14,806 |
) |
|
(16,589 |
) |
Attributable(b) gold ounces sold |
|
473,306 |
|
|
618,221 |
|
|
|
2,000,262 |
|
|
2,307,735 |
|
Attributable(b) production cost of sales per ounce sold on a
by-product basis |
$ |
839 |
|
$ |
653 |
|
|
$ |
799 |
|
$ |
700 |
|
Consolidated production cost of sales per equivalent ounce
sold(d) |
$ |
868 |
|
$ |
685 |
|
|
$ |
832 |
|
$ |
726 |
|
|
|
|
|
|
|
|
See page 24 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 and ratios
presented by the Company may not be comparable to similar measures
and ratios presented by other issuers. The Company believes that
the all-in sustaining cost and all-in cost measures complement
existing measures and ratios reported by Kinross.
All-in sustaining cost includes both operating
and capital costs required to sustain gold production on an ongoing
basis. The value of silver sold is deducted from the total
production cost of sales as it is considered residual production.
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 |
|
|
(expressed in millions of U.S. dollars, except ounces and costs per
ounce) |
Three months ended |
|
Years ended |
December 31, |
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
Production cost of sales - as reported |
$ |
425.2 |
|
$ |
436.5 |
|
|
$ |
1,726.1 |
|
$ |
1,725.7 |
|
Less: portion attributable to Chirano non-controlling
interest(a) |
|
(4.6 |
) |
|
(4.6 |
) |
|
|
(20.2 |
) |
|
(19.6 |
) |
Less: attributable(b) silver revenue(e) |
|
(23.6 |
) |
|
(28.3 |
) |
|
|
(107.9 |
) |
|
(91.0 |
) |
Attributable(b) production cost of sales net of silver by-product
revenue |
$ |
397.0 |
|
$ |
403.6 |
|
|
$ |
1,598.0 |
|
$ |
1,615.1 |
|
Adjusting items on an attributable(b) basis: |
|
|
|
|
|
|
General and
administrative(f) |
|
32.0 |
|
|
36.1 |
|
|
|
126.6 |
|
|
117.9 |
|
|
Other operating expense -
sustaining(g) |
|
1.6 |
|
|
0.7 |
|
|
|
10.6 |
|
|
9.6 |
|
|
Reclamation and remediation -
sustaining(h) |
|
11.0 |
|
|
16.0 |
|
|
|
43.2 |
|
|
54.0 |
|
|
Exploration and business
development - sustaining(i) |
|
9.2 |
|
|
13.2 |
|
|
|
40.0 |
|
|
48.3 |
|
|
Additions to property, plant
and equipment - sustaining(j) |
|
154.5 |
|
|
136.2 |
|
|
|
386.0 |
|
|
373.5 |
|
|
Lease payments -
sustaining(k) |
|
9.6 |
|
|
7.1 |
|
|
|
32.8 |
|
|
19.7 |
|
All-in Sustaining Cost on a by-product basis - attributable(b) |
$ |
614.9 |
|
$ |
612.9 |
|
|
$ |
2,237.2 |
|
$ |
2,238.1 |
|
|
Other operating expense -
non-sustaining(g) |
|
10.3 |
|
|
17.2 |
|
|
|
38.1 |
|
|
55.9 |
|
|
Reclamation and remediation -
non-sustaining(h) |
|
0.9 |
|
|
1.3 |
|
|
|
3.4 |
|
|
5.0 |
|
|
Exploration and business
development - non-sustaining(i) |
|
27.7 |
|
|
17.4 |
|
|
|
91.3 |
|
|
43.3 |
|
|
Additions to property, plant
and equipment - non-sustaining(j) |
|
141.8 |
|
|
160.1 |
|
|
|
544.6 |
|
|
536.9 |
|
|
Lease payments -
non-sustaining(k) |
|
0.1 |
|
|
0.1 |
|
|
|
1.0 |
|
|
1.0 |
|
All-in Cost on a by-product basis - attributable(b) |
$ |
795.7 |
|
$ |
809.0 |
|
|
$ |
2,915.6 |
|
$ |
2,880.2 |
|
Gold
ounces sold |
|
476,466 |
|
|
622,235 |
|
|
|
2,015,068 |
|
|
2,324,324 |
|
Less:
portion attributable to Chirano non-controlling
interest(c) |
|
(3,160 |
) |
|
(4,014 |
) |
|
|
(14,806 |
) |
|
(16,589 |
) |
Attributable(b) gold ounces sold |
|
473,306 |
|
|
618,221 |
|
|
|
2,000,262 |
|
|
2,307,735 |
|
Attributable(b) all-in sustaining cost per ounce sold on a
by-product basis |
$ |
1,299 |
|
$ |
991 |
|
|
$ |
1,118 |
|
$ |
970 |
|
Attributable(b) all-in cost per ounce sold on a by-product
basis |
$ |
1,681 |
|
$ |
1,309 |
|
|
$ |
1,458 |
|
$ |
1,248 |
|
Consolidated production cost of sales per equivalent ounce
sold(d) |
$ |
868 |
|
$ |
685 |
|
|
$ |
832 |
|
$ |
726 |
|
|
|
|
|
|
|
|
See page 24 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 and ratios, 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 |
(expressed in millions of U.S. dollars, except ounces and costs per
equivalent ounce) |
Three months ended |
|
Years ended |
December 31, |
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
Production cost of sales - as reported |
$ |
425.2 |
|
$ |
436.5 |
|
|
$ |
1,726.1 |
|
$ |
1,725.7 |
|
Less: portion attributable to Chirano non-controlling
interest(a) |
|
(4.6 |
) |
|
(4.6 |
) |
|
|
(20.2 |
) |
|
(19.6 |
) |
Attributable(b) production cost of sales |
$ |
420.6 |
|
$ |
431.9 |
|
|
$ |
1,705.9 |
|
$ |
1,706.1 |
|
Adjusting items on an attributable(b) basis: |
|
|
|
|
|
|
General and
administrative(f) |
|
32.0 |
|
|
36.1 |
|
|
|
126.6 |
|
|
117.9 |
|
|
Other operating expense -
sustaining(g) |
|
1.6 |
|
|
0.7 |
|
|
|
10.6 |
|
|
9.6 |
|
|
Reclamation and remediation -
sustaining(h) |
|
11.0 |
|
|
16.0 |
|
|
|
43.2 |
|
|
54.0 |
|
|
Exploration and business
development - sustaining(i) |
|
9.2 |
|
|
13.2 |
|
|
|
40.0 |
|
|
48.3 |
|
|
Additions to property, plant
and equipment - sustaining(j) |
|
154.5 |
|
|
136.2 |
|
|
|
386.0 |
|
|
373.5 |
|
|
Lease payments -
sustaining(k) |
|
9.6 |
|
|
7.1 |
|
|
|
32.8 |
|
|
19.7 |
|
All-in Sustaining Cost - attributable(b) |
$ |
638.5 |
|
$ |
641.2 |
|
|
$ |
2,345.1 |
|
$ |
2,329.1 |
|
|
Other operating expense -
non-sustaining(g) |
|
10.3 |
|
|
17.2 |
|
|
|
38.1 |
|
|
55.9 |
|
|
Reclamation and remediation -
non-sustaining(h) |
|
0.9 |
|
|
1.3 |
|
|
|
3.4 |
|
|
5.0 |
|
|
Exploration and business
development - non-sustaining(i) |
|
27.7 |
|
|
17.4 |
|
|
|
91.3 |
|
|
43.3 |
|
|
Additions to property, plant
and equipment - non-sustaining(j) |
|
141.8 |
|
|
160.1 |
|
|
|
544.6 |
|
|
536.9 |
|
|
Lease payments -
non-sustaining(k) |
|
0.1 |
|
|
0.1 |
|
|
|
1.0 |
|
|
1.0 |
|
All-in Cost - attributable(b) |
$ |
819.3 |
|
$ |
837.3 |
|
|
$ |
3,023.5 |
|
$ |
2,971.2 |
|
Gold equivalent ounces sold |
|
489,710 |
|
|
637,169 |
|
|
|
2,075,738 |
|
|
2,375,548 |
|
Less: portion attributable to Chirano non-controlling
interest(c) |
|
(3,163 |
) |
|
(4,020 |
) |
|
|
(14,829 |
) |
|
(16,621 |
) |
Attributable(b) gold equivalent ounces sold |
|
486,547 |
|
|
633,149 |
|
|
|
2,060,909 |
|
|
2,358,927 |
|
Attributable(b) all-in sustaining cost per equivalent ounce
sold |
$ |
1,312 |
|
$ |
1,013 |
|
|
$ |
1,138 |
|
$ |
987 |
|
Attributable(b) all-in cost per equivalent ounce sold |
$ |
1,684 |
|
$ |
1,322 |
|
|
$ |
1,467 |
|
$ |
1,260 |
|
Consolidated production cost of sales per equivalent ounce
sold(d) |
$ |
868 |
|
$ |
685 |
|
|
$ |
832 |
|
$ |
726 |
|
|
|
|
|
|
|
|
See page 24 for details of the footnotes referenced
within the table above.
(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%) production
and costs, and Manh Choh (70%) costs. |
(c) |
“Portion attributable to Chirano non-controlling interest”
represents the non-controlling interest (10%) in the ounces sold
from the Chirano mine. |
(d) |
“Consolidated production cost of sales per equivalent ounce sold”
is defined as production cost of sales divided by total gold
equivalent ounces sold. |
(e) |
“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. |
(f) |
“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. |
(g) |
“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. |
(h) |
“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. |
(i) |
“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 and business development expenses. Exploration expenses
are classified as either sustaining or non-sustaining based on a
determination of the type and location of the exploration
expenditure. Exploration expenditures within the footprint of
operating mines are considered costs required to sustain current
operations and so are included in sustaining costs. Exploration
expenditures focused on new ore bodies near existing mines (i.e.
brownfield), new exploration projects (i.e. greenfield) or for
other generative exploration activity not linked to existing mining
operations are classified as non-sustaining. Business development
expenses are classified as either sustaining or non-sustaining
based on a determination of the type of expense and requirement for
general or growth related operations. |
(j) |
“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, 2021, primarily related to major projects at Tasiast, La Coipa,
Udinsk, Fort Knox and Round Mountain. Non-sustaining capital
expenditures during the year ended December 31, 2020, primarily
related to major projects at Tasiast, Fort Knox and Round
Mountain. |
(k) |
“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. |
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) “2021 full-year results and guidance”, “2021
Q4 highlights”, “Environment, Social Governance (ESG)”, “CEO
Commentary”, “Operating Results”, “Great Bear Resources acquisition
update”, “Development Projects”, and “Company Guidance” as well as
statements with respect to our guidance for production, production
costs of sales, cash flow, free cash flow, all-in sustaining cost
of sales, and capital expenditures; the declaration, payment and
sustainability of the Company’s dividends or share repurchases;
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 greenhouse gas emissions reduction targets; 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, restarting
suspended or disrupted operations; environmental risks and
proceedings; and resolution of pending litigation. The words
“advance”, “believe”, “continue”, “estimates”, “expects”,
“explore”, “forecast”, “future”, “growth”, “goal”, “guidance”,
“outlook”, “plan”, “potential”, 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, 2021, and the
Annual Information Form dated March 30, 2021 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 or otherwise; (2) permitting,
development, operations and production from the Company’s
operations and development projects being consistent with Kinross’
current expectations including, without limitation: the maintenance
of existing permits and approvals and the timely receipt of all
permits and authorizations necessary for the operation of Tasiast;
water and power supply and continued operation of the tailings
reprocessing facility at Paracatu; permitting and development of
the Lobo-Marte project; ramp-up of production at the La Coipa
project; in each case in a manner consistent with the Company’s
expectations; and the successful completion of exploration
consistent with the Company’s expectations at the Company’s
projects; (3) political and legal developments in any jurisdiction
in which the Company operates being consistent with its current
expectations including, without limitation, 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, potential
amendments to minerals and mining laws and energy levies laws, new
regulations relating to work permits, potential amendments to
customs and mining laws (including but not limited to amendments to
the VAT) and the potential application of the tax code in
Mauritania, the European Union’s General Data Protection Regulation
or similar legislation in other jurisdictions, potential amendments
to and enforcement of tax laws in Russia, Ghana and Mauritania
(including, but not limited to, the interpretation, implementation,
application and enforcement of any such laws and amendments
thereto), the modification or revocation of Russia’s international
tax treaties, 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 Manh Choh 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 the Company’s expectations; (8)
attributable production and cost of sales forecasts for the Company
meeting expectations; (9) the accuracy of: the current mineral
reserve and mineral resource estimates of the Company and Kinross’
analysis thereof being consistent with expectations (including but
not limited to ore tonnage and ore grade estimates), future mineral
resource and mineral reserve estimates being consistent with
preliminary work undertaken by the Company, mine plans for the
Company’s current and future mining operations, and the Company’s
internal models; (10) labour and materials costs increasing on a
basis consistent with Kinross’ current expectations; (11) the terms
and conditions of the legal and fiscal stability agreements for 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) potential direct or indirect operational impacts resulting
from infectious diseases or pandemics such as the ongoing COVID-19
pandemic; (17) 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, travel restrictions, business continuity plans, and
efforts to mitigate supply chain disruptions; (18) changes in
national and local government legislation or other government
actions, particularly in response to the COVID-19 pandemic; (19)
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
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, and the ongoing
Sunnyside settlement regarding potential liability under the U.S.
Comprehensive Environmental Response, Compensation, and Liability
Act); (20) that the benefits of the definitive agreement with the
Government of Mauritania will result in increased stability at the
Company’s operations in Mauritania; (21) the Company’s financial
results, cash flows and future prospects being consistent with
Company expectations in amounts sufficient to permit sustained
dividend payments; (22) the impacts of the pit wall issues at Round
Mountain being consistent with the Company’s expectations; (23)
that the Great Bear Resources acquisition will close in accordance
with, and on the timeline contemplated by, the terms and conditions
of the relevant agreements, on a basis consistent with our
expectations; (24) the anticipated mineralization of the Dixie
Project being consistent with expectations and the potential
benefits to Kinross from the project and any upside from the
project; and (25) the Company’s estimates regarding the timing of
completion of the 21k and 24k projects. 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);
price inflation of goods and services; changes in the discount
rates applied to calculate the present value of net future cash
flows based on country-specific real weighted average cost of
capital; changes in the market valuations of peer group gold
producers and the Company, and the resulting impact on market price
to net asset value multiples; changes in various market variables,
such as interest rates, foreign exchange rates, gold or silver
prices and lease rates, or global fuel prices, that could impact
the mark-to-market value of outstanding derivative instruments and
ongoing payments/receipts under any financial obligations; risks
arising from holding derivative instruments (such as credit risk,
market liquidity risk and mark-to-market risk); changes in national
and local government legislation, taxation (including but not
limited to income tax, advance income tax, stamp tax, withholding
tax, capital tax, tariffs, value-added or sales tax, capital
outflow tax, capital gains tax, windfall or windfall profits tax,
production royalties, excise tax, customs/import or export
taxes/duties, asset taxes, asset transfer tax, property use or
other real estate tax, together with any related fine, penalty,
surcharge, or interest imposed in connection with such taxes),
controls, policies and regulations; the security of personnel and
assets; political or economic developments in Canada, the United
States, Chile, Brazil, 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, development or refining activities; employee
relations; litigation or other claims against, or regulatory
investigations and/or any enforcement actions, administrative
orders or sanctions in respect of the Company (and/or its
directors, officers, or employees) including, but not limited to,
securities class action litigation in Canada and/or the United
States, environmental litigation or regulatory proceedings or any
investigations, enforcement actions and/or sanctions under any
applicable anti-corruption, international sanctions and/or
anti-money laundering laws and regulations in Canada, the United
States or any other applicable jurisdiction; the speculative nature
of gold exploration and development including, but not limited to,
the risks of obtaining 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, 2021, the Annual
Information Form dated March 30, 2021 and the “Cautionary Statement
on Forward-Looking Information” in our greenhouse gas emissions
news release dated February 16, 2022. 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 news release, we mean Kinross Gold Corporation
and/or one or more or all of its subsidiaries, as may be
applicable.
The technical information about the Company’s
mineral properties contained in this news release has been prepared
under the supervision of Mr. John Sims who is a “qualified person”
within the meaning of National Instrument 43-101.Mr. Sims was an
officer of Kinross until December 31, 2020. Mr. Sims remains the
Company’s qualified person as an external consultant.
Source: Kinross Gold Corporation
1 ”Attributable” includes Kinross’ 90% share of Chirano
production and costs, and 70% of Manh Choh costs.2 These figures
are non-GAAP financial measures and ratios and are defined and
reconciled on pages 19 to 24 of this news release. Non-GAAP
financial measures and ratios have no standardized meaning under
IFRS and therefore, may not be comparable to similar measures
presented by other issuers. 3 “Consolidated production cost of
sales per equivalent ounce sold” is defined as production cost of
sales, as reported on the consolidated statements of operations,
divided by total gold equivalent ounces sold.4 See Kinross’ Annual
Mineral Reserve and Mineral Resource Statement, estimated as at
December 31, 2021, at www.kinross.com for more information.5
“Margin" per equivalent ounce sold is defined as average realized
gold price per ounce less consolidated production cost of sales per
gold equivalent ounce sold.6 Operating cash flow figures in this
release represent “Net cash flow provided from operating
activities,” as reported on the consolidated statements of
cash flows.7 Net earnings (loss) figures in this release represent
“net earnings (loss) attributable to common shareholders,” as
reported on the consolidated statements of operations.8 Adjusted
net earnings figures in this news release represent “Adjusted net
earnings attributable to common shareholders.”9 “Total liquidity”
is defined as the sum of cash and cash equivalents, as reported on
the consolidated balance sheets, and total available credit under
our credit facilities (as calculated in Section 6 Liquidity and
Capital Resources of the MD&A).10 “Available credit” is defined
as available credit under the Company’s credit facilities and is
calculated in Section 6 Liquidity and Capital Resources of the
MD&A.11 Based upon the closing price of a Kinross share on the
Toronto Stock Exchange as at December 7, 2021.12 The percentages
are calculated based on the mid-point of regional 2022 forecast
production.13 Refer to page 14 for reconciliation of West Africa
attributable production cost of sales per Au eq. oz. sold.14 Refers
to all of the currencies in the countries where the Company has
mining operations, fluctuating simultaneously by 10% in the same
direction, either appreciating or depreciating, taking into
consideration the impact of hedging and the weighting of each
currency within our consolidated cost structure.
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