Kinross Gold Corporation (TSX: K, NYSE: KGC) (“Kinross” or the
“Company”) today announced its results for the first-quarter ended
March 31, 2022.
This news release contains forward-looking
information about expected future events and financial and
operating performance of the Company. Please refer to the risks and
assumptions set out in our Cautionary Statement on Forward-Looking
Information located on page 28 of this release. All dollar amounts
are expressed in U.S. dollars, unless otherwise noted.
In Q1 2022, Kinross announced its plan to divest
all of its Russian assets. As such, the Company’s Russian assets
have been excluded from its Q1 2022 results, along with comparative
figures, due to the classification of these assets as discontinued
as of March 31, 2022.
Q1 2022 highlights from continuing
operations:
- Tasiast achieved
record production in Q1 2022, with the 24k project progressing well
and on schedule.
- La Coipa poured
its first gold bar in February, on schedule and under budget.
- At the Great Bear
project, exploration, study and permitting activities have ramped
up since the completion of the acquisition on February 24, 2022,
with assay results reaffirming the world-class potential of the
deposit.
- Kinross’ Board of Directors
declared a quarterly dividend of $0.03 per common
share payable on June 16, 2022 to shareholders of record
at the close of business on June 2, 2022.
- Attributable gold
equivalent production1 of 409,857 Au eq. oz.
produced.
- Attributable production
cost of sales1, 2 of $1,000 per Au eq. oz.,
consolidated production cost of sales3 of $1,003
per Au eq. oz., and attributable all-in sustaining
cost1,2 of $1,245 per Au eq. oz. sold.
- Margins4 of $872
per Au eq. oz. sold.
- Adjusted operating cash
flow2 of $261.0 million and operating cash
flow5 of $105.2 million.
- Reported net
earnings6 of $82.3 million, or $0.07 per share, with
adjusted net earnings2, 7 of $70.6 million, or
$0.06 per share2.
- Cash and cash
equivalents of $454.2 million, and total
liquidity8 of approximately $1.7 billion at March
31, 2022.
Pro-forma Company guidance:
- Kinross maintained its 2022
company-wide guidance for its pro-forma portfolio after excluding
its assets from Russia and Ghana due to their pending divestments.
The Company has adjusted gold and oil price assumptions for cost of
sales and all-in sustaining cost guidance to reflect current
prices.
- Kinross expects to produce
2.15 and 2.3 million Au eq. oz. (+/- 5%) in 2022
and 2023, respectively, which is expected to drive strong free cash
flow.
- The Company expects to produce
2.1 million Au eq. oz. in 2024 and an average of
two million Au eq. oz. per year over the remainder of the
decade.
- Taking into account current gold
and oil prices, the Company maintained its production cost
of sales guidance of $830 per Au eq. oz.
sold (+/- 5%) for the year, with all-in
sustaining cost of sales2 of $1,150 per eq. oz. sold
(+/-5%). Consolidated production cost of sales was $8329 per Au eq.
oz. sold and attributable all-in sustaining cost of sales was
$1,138 per eq. oz. sold1, 2, 9 for the year ended December 31,
2021.
- Capital
expenditures expected to decrease to $850
million (+/- 5%) in 2022. Capital expenditures are
expected to be approximately $750 million per year in 2023
and 2024, excluding potential inflationary impacts and
based on the Company’s current production guidance.
Russia and Ghana divestments:
- Kinross entered into an agreement
with the Highland Gold group of companies to sell 100% of its
Russian assets for total consideration of $680 million in cash on
April 5, 2022. The parties are continuing to advance the closing
process and the transaction remains subject to Russian government
approval.
- Kinross entered into an agreement
with Asante Gold Corporation (“Asante”) to sell the Company’s 90%
interest in the Chirano mine in Ghana for total consideration of
$225 million in cash and shares on April 25, 2022. The transaction
closing is targeted for the end of May.
Environment, Social, Governance
(ESG):
- Kinross published its 2021
Sustainability Report, detailing its approach and strong record on
ESG. The Company continued to rank well among peers in major ESG
rankings and ratings.
- In 2021, Kinross generated $3.5
billion in economic benefits in host countries through taxes,
wages, procurement and community support.
- The Company recycled 80% of water
used at site, maintaining a high rate consistent with its five-year
average.
- Across the Company, approximately
99% of the total workforce and 92% of all management are from
within host countries, both record highs for the Company.
CEO Commentary:J. Paul Rollinson, President and
CEO, made the following comments in relation to 2022 first-quarter
results:
“During the quarter, we announced the sale of
our Russian assets, and in late April, announced the sale of our
Chirano mine in Ghana. With these pending divestments, and the
close of the acquisition of Great Bear Resources, our overall
portfolio has been re-balanced, with approximately 70% of our
production now expected to be generated by our mines in the
Americas.
“We have maintained our guidance for our
pro-forma portfolio, with a substantial production outlook of 2.15
million gold ounces in 2022, which is expected to grow to 2.3
million gold ounces in 2023. Going forward, we will prioritize
balance sheet strength while also returning capital to our
shareholders through dividends and our share buyback program.
“We are excited about the future for Kinross
which includes a production profile that averages two million
ounces a year to the end of the decade, anchored by two tier one
assets – Paracatu and Tasiast – accounting for more than half of
our production, and a world-class development project in
Canada.
“Over the quarter, we achieved record production
at Tasiast, and our project pipeline continued to advance well. The
Tasiast 24k project remains on track, and we poured first gold at
the La Coipa project. We are already making good progress on our
exploration program at the Great Bear project and are seeing
positive results to support our goal of declaring an initial
inferred resource estimate with our 2022 year-end results and our
vision of developing a large, long-life mining complex.
“In the important area of ESG, mining
responsibly will remain at the core of our business. We were
pleased to release our 2021 Sustainability Report, which detailed
another year of strong performance. We continued to deliver on our
responsible mining goals, ranked well among our peers in major ESG
ratings, and provided significant economic benefits to the host
countries and communities in which we do business. We are committed
to continuously improving our ESG performance, as indicated by our
commitment to reduce greenhouse gas emission intensity by 30% by
2030.”
Summary of financial and operating
results
|
|
Three months ended |
|
|
March 31, |
(unaudited, in millions of U.S. dollars, except ounces, per share
amounts, and per ounce amounts) |
|
2022 |
|
|
2021 |
|
Operating Highlights |
|
|
|
Total
gold equivalent ounces(a),(g) |
|
|
|
Produced(c) |
|
509,241 |
|
|
563,166 |
|
Sold(c) |
|
495,475 |
|
|
552,198 |
|
|
|
|
|
Total
gold equivalent ounces from continuing operations(a),(h) |
|
|
Produced(c) |
|
413,350 |
|
|
440,914 |
|
Sold(c) |
|
409,538 |
|
|
430,045 |
|
|
|
|
|
Attributable gold equivalent ounces(a),(g) |
|
|
Produced(c) |
|
505,748 |
|
|
558,777 |
|
Sold(c) |
|
491,894 |
|
|
548,084 |
|
|
|
|
|
Attributable gold equivalent ounces from continuing
operations(a),(h) |
|
|
Produced(c) |
|
409,857 |
|
|
436,525 |
|
Sold(c) |
|
405,957 |
|
|
425,931 |
|
|
|
|
|
Financial Highlights from Continuing
Operations(h) |
|
|
|
Metal sales |
|
$ |
768.0 |
|
$ |
768.7 |
|
Production cost of sales |
|
$ |
410.6 |
|
$ |
345.2 |
|
Depreciation, depletion and amortization |
|
$ |
180.8 |
|
$ |
188.8 |
|
Operating
earnings |
|
$ |
102.5 |
|
$ |
144.3 |
|
Net
earnings from continuing operations attributable to common
shareholders |
|
$ |
82.3 |
|
$ |
76.2 |
|
Basic
earnings per share from continuing operations attributable to
common shareholders |
|
$ |
0.07 |
|
$ |
0.06 |
|
Diluted
earnings per share from continuing operations attributable to
common shareholders |
|
$ |
0.06 |
|
$ |
0.06 |
|
Adjusted
net earnings from continuing operations attributable to common
shareholders(b) |
|
$ |
70.6 |
|
$ |
102.4 |
|
Adjusted
net earnings from continuing operations per share(b) |
|
$ |
0.06 |
|
$ |
0.08 |
|
Net cash
flow of continuing operations provided from operating
activities |
|
$ |
105.2 |
|
$ |
145.1 |
|
Adjusted
operating cash flow from continuing operations(b) |
|
$ |
261.0 |
|
$ |
298.9 |
|
Capital
expenditures from continuing operations(d) |
|
$ |
106.3 |
|
$ |
191.6 |
|
Free cash
flow from continuing operations(b) |
|
$ |
(1.1 |
) |
$ |
(46.5 |
) |
Average
realized gold price per ounce from continuing operations(e) |
|
$ |
1,875 |
|
$ |
1,787 |
|
Consolidated production cost of sales from continuing operations
per equivalent ounce(c) sold(f) |
|
$ |
1,003 |
|
$ |
803 |
|
Attributable(a) production cost of sales from continuing
operations per equivalent ounce(c) sold(b) |
|
$ |
1,000 |
|
$ |
798 |
|
Attributable(a) production cost of sales from continuing
operations per ounce sold on a by-product basis(b) |
|
$ |
994 |
|
$ |
789 |
|
Attributable(a) all-in sustaining cost from continuing
operations per ounce sold on a by-product basis(b) |
|
$ |
1,241 |
|
$ |
1,044 |
|
Attributable(a) all-in sustaining cost from continuing
operations per equivalent ounce(c) sold(b) |
|
$ |
1,245 |
|
$ |
1,051 |
|
Attributable(a) all-in cost from continuing operations per
ounce sold on a by-product basis(b) |
|
$ |
1,471 |
|
$ |
1,432 |
|
Attributable(a) all-in cost from continuing operations per
equivalent ounce(c) sold(b) |
|
$ |
1,473 |
|
$ |
1,435 |
|
(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 18 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.(c) “Gold equivalent
ounces” include silver ounces produced and sold converted to a gold
equivalent based on a ratio of the average spot market prices for
the commodities for each period. The ratio for the first quarter of
2022 was 78.19:1 (first quarter of 2021 -
68.33:1).(d) “Capital expenditures from continuing
operations” is as reported as “Additions to property, plant and
equipment” on the interim condensed consolidated statements of cash
flows. (e) “Average realized gold price per ounce
from continuing operations” is defined as gold metal sales from
continuing operations divided by total gold ounces sold from
continuing operations.(f) “Consolidated production
cost of sales from continuing operations per equivalent ounce sold”
is defined as production cost of sales divided by total gold
equivalent ounces sold from continuing
operations.(g) Total gold equivalent ounces
produced and sold and attributable gold equivalent ounces produced
and sold include results from the Kupol and Dvoinoye mines up to
March 31, 2022.(h) In the first quarter of 2022,
the Company announced its plan to divest its Russian operations,
which includes the Kupol and Dvoinoye mines and the Udinsk project.
Results for the three months ended March 31, 2022 and 2021 are from
continuing operations and exclude results from the Company’s
Russian operations due to the classification of these operations as
discontinued as of March 31, 2022.
The following operating and financial results
are based on first-quarter gold equivalent production and include
the results of Chirano, but exclude Russian operations except where
noted:
Attributable production1:
Kinross produced 409,857 attributable Au eq. oz. in Q1 2022 from
continuing operations, compared with 436,525 attributable Au eq.
oz. in Q1 2021. The decrease was largely due to lower production at
Round Mountain and Paracatu, partially offset by record high
quarterly production at Tasiast.
Average realized gold price:
The average realized gold price from continuing operations in Q1
2022 was $1,875 per ounce, compared with $1,787 per ounce in Q1
2021.
Revenue: During the first
quarter, revenue from continuing operations was $768.0 million, in
line with $768.7 million during Q1 2021.
Attributable production cost of
sales1, 2: Attributable production cost
of sales from continuing operations per Au eq. oz. sold increased
to $1,000 for Q1 2022, compared with $798 in Q1 2021, mainly as a
result of a decrease in ounces sold, inflationary pressures on
consumables, and increases in operating waste mined at Tasiast,
Paracatu and Fort Knox.
Attributable production cost of sales from
continuing operations per Au oz. sold on a by-product basis was
$994 in Q1 2022, compared with $789 in Q1 2021, based on gold
sales of 407,104 ounces and silver sales of 190,342 ounces.
Consolidated production cost of
sales: Consolidated production cost of sales from
continuing operations per Au eq. oz. sold was $1,003 for Q1 2022,
compared with $803 in Q1 2021.
Margins4: Kinross’ margin from
continuing operations per Au eq. oz. sold was $872 for Q1 2022,
compared with the Q1 2021 margin of $984.
Attributable all-in sustaining
cost1, 2: Attributable all-in sustaining cost from
continuing operations per Au eq. oz. sold was $1,245 in Q1 2022,
compared with $1,051 in Q1 2021.
In Q1 2022, attributable all-in sustaining cost
from continuing operations per Au oz. sold on a by-product basis
from continuing operations was $1,241, compared with $1,044 in Q1
2021.
Operating cash flow: Adjusted
operating cash flow from continuing operations2 was $261.0
million in Q1 2022, compared with $298.9 million for Q1 2021.
Operating cash flow from continuing operations
was $105.2 million for Q1 2022, compared with $145.1 million
for Q1 2021.
Free cash
flow2: Free cash flow from continuing
operations was a net outflow of $1.1 million in Q1 2022, compared
with a net outflow of $46.5 million for Q1 2021. The decrease in
free cash outflow was mainly due to lower capital
expenditures. The net free cash outflow of $1.1 million in Q1
2022 includes $156 million of working capital outflows.
Earnings: Adjusted net
earnings from continuing operations2, 7 were $70.6
million, or $0.06 per share2, for Q1 2022, compared with
$102.4 million, or $0.08 per share, for Q1 2021.
Reported net earnings6 from continuing
operations were $82.3 million, or $0.07 per share for Q1 2022,
compared with reported net earnings of $76.2 million, or $0.06 per
share, for Q1 2021. The increase in reported net earnings was
mainly due to a decrease in income tax expense, partially offset by
an increase in production cost of sales.
Reported net loss from the Russian discontinued
operations10 was $606.1 million in Q1 2022, which includes an
impairment charge of $671.0 million related to the re-measurement
of the Russian operations to fair value less costs to sell.
Capital expenditures: Capital
expenditures from continuing operations decreased to $106.3 million
for Q1 2022, compared with $191.6 million for Q1 2021. The decrease
was primarily due to mine sequencing at Fort Knox, Tasiast and
Round Mountain involving an increase in operating waste mined and a
decrease in capital stripping, partially offset by increased
expenditures for development activities at La Coipa.
Balance sheet
As of March 31, 2022, Kinross had cash and cash
equivalents of $454.2 million, compared with $531.5 million at
December 31, 2021. The decrease was primarily due to the
reclassification of $134.0 million of cash and cash equivalents to
assets held for sale as a result of the Company’s announced sale of
its Russian assets.
On March 7, 2022, the Company arranged a new
$1.0 billion term loan. The three-year term loan will mature on
March 7, 2025, has no mandatory amortization payments, and has a
flexible repayment schedule. Kinross used the proceeds of the
financing to settle amounts drawn under its $1.5 billion revolving
credit facility in connection with the closing of its acquisition
of Great Bear Resources.
The Company had additional available
credit11 of $1,261.0 million as of March 31, 2022 and total
liquidity8 of approximately $1.7 billion.
Operating resultsMine-by-mine
summaries for 2022 first-quarter operating results may be found on
pages 13 and 17 of this news release. Highlights include the
following:
Tasiast performed well and
achieved record production during the quarter. The increase in
production was mainly due to higher grades, with higher mill
throughput contributing to the production increase versus the
previous quarter. Cost of sales per ounce sold increased
quarter-over-quarter and year-over-year mainly as a result of
higher operating waste mined, with higher contractor and
maintenance costs also contributing to the increase versus Q1 2021.
Tasiast expects to increase production over the year as it mines
higher grades and increases throughput.
At Paracatu, production
decreased quarter-over-quarter and year-over-year primarily due to
lower throughput and lower grades as a result of planned mine
sequencing and temporary mill downtime. Cost of sales per ounce
sold was higher compared with the previous quarter and year mainly
due to lower production. Higher operating waste mined, maintenance
costs and inflationary pressures also contributed to the higher
costs versus Q1 2021. Production and costs are expected to improve
at Paracatu throughout the year, as mining is expected to move to
higher grade areas of the orebody.
At Fort Knox, production was
lower compared with the previous quarter mainly due to lower
grades, mill throughput and ounces recovered from the heap leach
pads, and was largely in line with Q1 2021. Production is expected
to increase in the second half of the year as ounces recovered from
the heap leach pads typically improve due to seasonality. Cost of
sales per ounce sold was higher quarter-over-quarter mainly due to
lower production, and increased year-over-year mainly due to higher
operating waste mined and increased costs related to contractors,
reagents, power, and fuel.
At Round Mountain, production
decreased quarter-over-quarter due to lower ounces recovered from
the heap leach pads and lower mill throughput, partially offset by
higher mill grade. Compared with the same period in 2021,
production decreased mainly due to fewer ounces recovered from the
heap leach pads. Cost of sales per ounce sold increased
quarter-over-quarter and year-over-year primarily due to lower
production, higher operating waste mined and higher fuel, power and
maintenance costs.
The Round Mountain mine optimization program is
progressing on schedule to be completed in the second half of the
year. The program is continuing to assess shallower pit wall slope
angles over a larger area of the pit to enhance stability, along
with an optimal mine plan sequence for Phase W, Phase S and Phase
X. These include longer-term mine plan scenarios post-2024 that
optimize stripping requirements while continuing to evaluate the
underground potential for portions of Phase W and Phase X.
The program’s interim results are now
contemplating a mine plan sequence that divides mining of Phase W
into four parts. The first two parts would be mined over the next
three to four years as part of the open pit, given stripping had
already commenced in these areas, and would account for
approximately 20% of Round Mountain’s mineral reserve estimates.
Phase S mining is expected to start later this year (at December
31, 2021, 938 Au koz. at Phase S were converted to proven and
probable reserves). Mining for the third and fourth parts of Phase
W is expected to commence post-2024 and could potentially include
underground mining as the Company continues to explore
opportunities at Phase X.
At Bald Mountain, production
was lower quarter-over-quarter and year-over-year mainly due to
timing of ounces recovered from the heap leach pads in the north
area of the mine. Production is expected to increase in the second
half of the year due to higher heap leach recoveries. Cost of sales
per ounce sold was higher compared with the previous quarter and
year primarily due to lower production and higher contractor and
fuel costs.
At La Coipa, the first gold bar
was poured in February 2022 and the mine produced 524 Au eq. oz.
during the quarter. The project was delivered on schedule and under
budget despite the challenging global environment over the past two
years. The plant is expected to ramp up over the next few months to
reach full operating capacity mid-year. The Company continues to
study opportunities to further extend mine life by incorporating
adjacent pits into the mine plan.
At Chirano, production was
largely in line quarter-over-quarter and decreased year-over-year
mainly due to lower grades from underground mining. Cost of sales
per ounce sold was lower compared with the previous quarter due to
higher gold sales, and was higher year-over-year mainly due to
lower production.
Development projects
Tasiast 24k
At the Tasiast 24k project, the
process plant is now regularly reaching throughput of 21,000 tonnes
per day (t/d), with efforts underway to further reduce
commissioning downtime. The second phase of the project continues
to progress well and is on track to meet throughput of 24,000 t/d
by mid-2023. Engineering is planned to be substantially completed
during Q2 2022 and construction of the site’s third leach tank is
now 70% complete.
Great Bear project update
On February 24, 2022, Kinross announced that it
had completed the acquisition of Great Bear Resources Ltd. On April
7, 2022, the Company provided an update on development at the
Great Bear project in Red Lake, Ontario, with
assay results from 60 holes drilled in the LP Fault zone continuing
to confirm gold mineralization, which is open along strike and at
depth. Kinross has received additional assay results from 25 holes
since the last update which continue to support the Company’s view
of a high-grade, top tier deposit that underpins the prospect of
developing a large, long-life mining complex.
Kinross remains on track to declare an initial
inferred mineral resource for the Great Bear project as part of its
2022 year-end results and commence a pre-feasibility study in
2023.
See Appendix A: Figure 1 for a LP Fault zone
long section and the location of drill holes in the table below,
and Appendix B for a full list of recent significant, composited
assay results.
Hole ID |
|
From(m) |
To(m) |
Width(m) |
True Width(m) |
Au(g/t) |
Target |
BR-470 |
|
140.25 |
143.25 |
3.00 |
2.90 |
8.82 |
Discovery |
BR-471 |
|
151.60 |
160.00 |
8.40 |
7.90 |
1.82 |
Discovery |
BR-471 |
including |
153.10 |
153.75 |
0.65 |
0.60 |
18.20 |
|
BR-471 |
and |
202.50 |
204.00 |
1.50 |
1.40 |
7.38 |
|
BR-478 |
|
38.40 |
39.00 |
0.60 |
0.50 |
10.40 |
Discovery |
BR-517 |
|
544.80 |
545.55 |
0.75 |
0.70 |
8.87 |
Yauro |
BR-517 |
and |
550.30 |
562.75 |
12.45 |
11.70 |
0.49 |
|
BR-530 |
|
498.75 |
499.25 |
0.50 |
0.50 |
8.11 |
Discovery |
BR-534 |
|
604.60 |
605.50 |
0.90 |
0.80 |
10.70 |
BR Discovery |
BR-534 |
and |
631.00 |
664.70 |
33.70 |
30.70 |
1.73 |
|
BR-553 |
|
514.15 |
517.75 |
3.60 |
3.40 |
2.61 |
Yauro |
BR-553 |
and |
725.60 |
730.20 |
4.60 |
4.40 |
4.68 |
|
BR-553 |
and |
758.00 |
758.65 |
0.65 |
0.60 |
24.70 |
|
BR-561 |
|
219.80 |
225.25 |
5.45 |
5.40 |
1.05 |
Viggo |
BR-561 |
including |
222.35 |
223.55 |
1.20 |
1.20 |
3.20 |
|
BR-565 |
|
175.05 |
196.50 |
21.45 |
20.10 |
7.50 |
Viggo |
BR-565 |
including |
176.50 |
180.00 |
3.50 |
3.30 |
37.69 |
|
BR-565 |
and |
376.35 |
377.50 |
1.15 |
1.10 |
21.00 |
|
BR-565 |
and |
394.50 |
396.00 |
1.50 |
1.40 |
7.27 |
|
Exploration, study, and permitting activities
continue to ramp up at the project, with approximately 200,000
metres of exploration and infill drilling expected to be completed
in 2022. The drilling program will continue to focus on the LP
Fault zone, the most significant discovery to date at the project.
There are currently eight diamond drills and two
reverse-circulation (RC) rigs active on site. The RC rigs are being
utilized for a grade control program that is expected to inform the
continuity and distribution of the high grade in the LP zone, while
also testing grade control methodology. Since March 2022,
approximately 11,800 metres of the planned 35,000-metre grade
control program have been drilled.
Kinross is also analyzing an advanced
exploration program that would establish an underground decline and
workings. The advanced program would allow for underground drilling
for more efficient exploration of deeper areas of the LP Fault,
along with the nearby Hinge and Limb gold zones, as well as bulk
sampling. The Company is targeting a potential start of the
advanced program as early as 2024.
Baseline environmental surveys and local
community socio-economic studies required for the permitting
process are underway, and the Company is now working with a team of
experts who have permitted multiple operating mines in Ontario.
Kinross is also continuing its local stakeholder engagement program
and working to foster strong relationships with local communities
and with its partners in the Wabauskang and Lac Seul First Nations,
on whose traditional territories the project is located.
Manh Choh
At the 70%-owned Manh Choh
project in Alaska, feasibility study work is progressing well and
is expected to be completed on schedule by the end of 2022. Permit
applications are advancing as planned, with the Company now
liaising with regulators on comments received regarding key permit
applications submitted at the end of last year. Kinross has also
signed an extension of the community support agreement with the
Native Village of Tetlin and is continuing to prioritize
transparent community engagements and generating local economic
benefits as it develops the project. Initial production is on
schedule to commence in late 2024, subject to permitting.
Lobo-Marte
The Lobo-Marte project in Chile
continues to provide optionality for Kinross’ long-term portfolio
as a potential large, low-cost mine, following the completion of
the project feasibility study in November 2021. The timing and
go-forward decision for the project will depend on a range of
factors, including the gold price environment and projections,
economic returns, permitting, priorities in the Company’s portfolio
and other potential opportunities in the region, including mine
life extensions at La Coipa. Should further La Coipa mine life
extension opportunities be successful, Lobo-Marte’s timing is
expected to be affected accordingly.
Company guidance updateThe
following section of the news release represents forward-looking
information and users are cautioned that actual results may vary.
We refer to the risks and assumptions contained in the Cautionary
Statement on Forward-Looking Information on page 28 of this news
release. This Company Guidance section references all-in sustaining
cost per equivalent ounce sold, which is a non-GAAP ratio with no
standardized meaning under IFRS and therefore, may not be
comparable to similar measures presented by other issuers. The
definition of this non-GAAP ratio and comparable reconciliation is
included on pages 18 to 24 of this news release.
Kinross has adjusted its 2022 company-wide
guidance previously disclosed on February 16, 2022 to exclude its
assets from Russia and Ghana for full-year 2022 and other future
guidance figures due to their pending divestments. As Kinross’
share of Chirano (90%) is now excluded from guidance, all guidance
figures are no longer on an attributable basis, but on a total
basis.
Production guidance
On a pro-forma portfolio basis, Kinross
maintained its 2022 production guidance of 2.15 million Au eq. oz.
(+/- 5%). The Company continues to expect higher production in the
second half of the year, which is largely driven by increased
production at Paracatu, Tasiast and La Coipa.
The Company’s 2023 and 2024 production guidance
have been adjusted to 2.3 and 2.1 million Au eq. oz. (+/- 5%),
respectively. Kinross expects to maintain a substantial production
profile with estimated average production of two million Au eq. oz.
per year over the remainder of the decade.
Annual gold equivalent production guidance(+/-
5%) |
2022 |
2.15 million oz. |
2023 |
2.3 million oz. |
2024 |
2.1 million oz. |
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 forecast for its 2023 and 2024 capital forecast.
Kinross continues to closely monitor the impact of inflationary
pressures on its operations and projects.
Cost guidance
|
2022 Guidance(+/- 5%) |
2021 Actual9 |
Production cost of sales per Au eq. oz. |
$830 |
$832 |
All-in sustaining cost per Au eq. oz.2 |
$1,150 |
$1,1381 |
Taking into account current gold and oil prices,
Kinross’ production cost of sales forecast has been maintained at
$830 per Au eq. oz. (+/- 5%) for 2022. Production cost of sales per
ounce is expected to decrease during the second half of the year
largely due to the anticipated increase in production.
The 2022 guidance for all-in sustaining cost
will be $1,150 per eq. oz. sold (+/- 5%).
The following assumptions related to gold and
oil prices have been used to forecast the Company’s cost of sales
and all-in sustaining cost guidance:
- a gold price of $1,800 per
ounce;
- an oil price of $100 per barrel;
- including a $10 per barrel change
in the price of oil would be expected to result in an approximate
$4 impact on fuel consumption costs on production cost of sales per
ounce.
The other key assumptions and sensitivities
disclosed in the Company’s original guidance on February 16, 2022
have not changed.
Capital expenditures
guidance
The 2022 capital expenditures forecast has been
lowered to $850 million (+/- 5%). Kinross’ capital expenditures
outlook for 2023 and 2024 is approximately $750 million per year,
excluding inflationary impacts and based on Kinross’ current
production guidance. As the Company continues to develop and
optimize its portfolio, other projects, such as Manh Choh and Great
Bear, may be incorporated into its capital expenditures forecast
over the 2023 - 2024 timeframe.
Other 2022 guidance updates
The 2022 forecast for
exploration has been increased to approximately
$140 million, all of which is expected to be expensed. The increase
is primarily related to the inclusion of the comprehensive
exploration program planned at the Great Bear project.
The 2022 forecast for overhead
(general and administrative and business development expenses) has
been reduced to approximately $145 million.
Other operating costs expected
to be incurred in 2022 are now estimated to be $120 million (+/-
5%), which are principally due to care and maintenance,
reclamation, and pandemic-related mitigation measures.
Based on an assumed gold price of $1,800 per
ounce, and with other budget assumptions maintained, tax
expense is expected to be $150 million and taxes
paid is expected to be $125 million. Adjusting the
Brazilian real to the respective exchange rate of 5.58 to the U.S.
dollar in effect at December 31, 2021, tax expense would be
expected to be $190 million. Tax expense is expected to increase by
22% of any profit resulting from higher gold prices. Taxes paid is
expected to increase by approximately $5 million for every $100
increase in the realized gold price.
Depreciation, depletion and
amortization is now forecast to be approximately $440 per
Au eq. oz. sold (+/- 5%).
The interest paid forecast has
been updated to be approximately $95 million, which includes
approximately $40 million of capitalized interest.
Exploration update
Exploration activities continued to focus on
promising targets around current operations and areas where
existing infrastructure can be leveraged. Initial highlights from
2022 include:
Round Mountain: Activities
continued to focus on extending the Gold Hill
mineralized vein structures, with promising results, which includes
high grades, received during the quarter. Gold Hill is located
approximately seven kilometres north of Round Mountain.
- D-1165 – 3.2m @
10.32 g/t Au (incl. 2.1m @ 15.24 g/t Au) – the results confirm the
230-metre down-dip extension of the “Alexandria” vein, which was
discovered in late 2021.
- D-1164 – 1.9m @
5.82 g/t Au (incl. 0.4m @ 22.0 g/t Au)
- D-1164 – 2.1m @
5.94 g/t Au (incl. 0.4m @ 23.3 g/t Au).
The two intercepts at D-1164 are along a
100-metre west extension of several high-grade, sub-vertical holes
between the main Gold Hill vein and the Alexandria vein. New
geophysical data confirmed multiple deposit-scale trends open along
strike at Gold Hill. Work on the planned drift for underground
exploration at Phase X continues to advance
well.
Curlew Basin Exploration (CBX):
At the CBX program, located approximately 35 kilometres north of
the Kettle River mill, underground drilling continues to intersect
previously unidentified veins after underground drilling commenced
in Q3 2021 following the completion of dewatering and exploration
drift development. Recent drilling from late 2021 has identified 22
new mineralized veins, including an extension of the “Galaxie” vein
(which was discovered last year) along a 150-metre strike and at
100-metre depth. Drilling results from the quarter include:
- Hole# 1103 – 6.4m @ 4.95 g/t Au (TW) – Stealth
target
- Hole# 1103 – 3.2m @ 5.62 g/t Au (TW) – Galaxie
target
- Hole# 1101 – 6.8m @ 3.73 g/t Au (TW) – West
Zone target
Divestment of Russia assets
On April 5, 2022, Kinross announced that it had
entered into an agreement with the Highland Gold Mining group of
companies and its affiliates to sell 100% of its Russian assets for
total consideration of $680 million in cash. The total cash
consideration includes $400 million for the Kupol mine and $280
million for the Udinsk project. Kinross will receive $100 million
at closing and the remaining total consideration is scheduled to be
received in annual payments from 2023 through to 2027.
The deferred payments are secured by an
extensive security package that includes share pledges, financial
guarantees and an escrow account, with all payments payable in U.S.
dollars. The parties are continuing to advance the closing process
and the transaction remains subject to Russian government approval.
In light of unprecedented circumstances, the timing and outcome of
such an approval is uncertain.
Divestment of Ghana assets
On April 25, 2022, Kinross announced that it had
entered into an agreement with Asante to sell its 90% interest in
the Chirano mine in Ghana for total consideration of $225 million
in cash and shares. Upon closing of the transaction, Kinross is to
receive $115 million in cash and $50 million in Asante common
shares, provided that the issuance of Asante common shares will not
result in Kinross exceeding a 9.9% ownership in Asante. The
agreement also provides for total deferred payments of $60 million
in cash. If the 9.9% share ownership limit is reached, the
remainder of the $50 million is to be paid by increasing the
deferred cash payments. The transaction closing is targeted for the
end of May 2022.
Environment, Social and
Governance
Kinross published its 2021
Sustainability Report today, detailing the Company’s ESG
approach and performance. Through its values-based approach, the
Company ensures that ESG is a core part of its culture, business
strategy and future growth plans.
Access the full Sustainability Report here:
https://www.kinross.com/2021-Sustainability-Report
For highlights of the Report, read here:
https://www.kinross.com/Kinross-releases-2021-sustainability-report
Kinross ranked well among peers in major ESG
rankings and ratings and maintained its top-tier governance record.
The Company increased its S&P Global score, moving to the 94th
percentile for 2021, the highest ever ranking for Kinross, and
maintained its “A” position with MSCI.
Kinross obtained independent limited assurance
of selected ESG performance metrics and, following the Company’s
normal practice, has provided Global Reporting Initiative (GRI) and
Sustainability Accounting Standards Board (SASB) indices. The
Company expects to publish its 2021 Task Force on Climate-Related
Financial Disclosures (TCFD) climate report in Q2 2022.
Other highlights from the Report include:
- In 2021, Kinross generated $3.5
billion in economic benefits through taxes, wages, procurement and
community support, including donations. Since 2010, $40 billion has
been contributed to the economies of Kinross’ host countries.
- As part of Kinross’ commitment to
proactively mitigating and reducing environmental impacts, all
sites maintained robust water management systems and, in 2021, 80%
of total water withdrawn was recycled.
- The Company is committed to
fostering a safe, inclusive and diverse workplace that is
representative of the communities where it operates. Approximately
99% of Kinross’ total workforce, and 92% of management, are from
within host countries, record highs for the Company.
In the first quarter of 2022, Kinross provided
significant donations to several organizations. This includes a $1
million donation for response and rebuilding efforts to support the
Appiatse community in Ghana after a tragic explosion and a $1
million donation to the Canadian Red Cross Ukraine Humanitarian
Crisis Appeal to assist those affected by the ongoing conflict
in Ukraine. Kinross also donated $1 million to support the
development of the Troth Yeddha’ Indigenous Studies Center at the
University of Alaska Fairbanks (UAF) to support Indigenous-focused
academic, research and cultural programs.
Conference call details
In connection with this news release, Kinross
will hold a conference call and audio webcast on Wednesday, May 11,
2022 at 7:45 a.m. EDT to discuss the results, followed by a
question-and-answer session. To access the call, please dial:
Canada & US toll-free –
(833) 968-2237; Passcode: 5893677Outside of Canada &
US – (825) 312-2059; Passcode: 5893677
Replay (available up to 14 days after the
call):
Canada & US toll-free –
(800) 770-2030; Passcode: 5893677Outside of Canada &
US – +1 (647) 362-9199; Passcode: 5893677
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’ 2022 first-quarter unaudited Financial Statements and
Management’s Discussion and Analysis report at www.kinross.com.
Kinross’ 2022 first-quarter unaudited Financial Statements and
Management’s Discussion and Analysis have been filed with Canadian
securities regulators (available at www.sedar.com) and furnished
with the U.S. Securities and Exchange Commission (available at
www.sec.gov). Kinross shareholders may obtain a copy of the
financial statements free of charge upon request to the
Company.
Virtual Annual Meeting of
Shareholders
Kinross’ Annual Meeting of Shareholders will be
held on Wednesday, May 11, 2022 at 10:00 a.m. EDT.
The Company has again elected to hold a virtual
meeting via a live audio webcast given the continued impact and
uncertainty of the COVID-19 pandemic. Kinross believes this is a
prudent approach that prioritizes safety while still providing the
same level of disclosure, transparency and participation as
previous meetings.
The virtual meeting will be accessible online at:
web.lumiagm.com/468209904.
Voting and participation instructions for
eligible shareholders are provided in the Company’s Notice of
Annual Meeting of Shareholders and Management Information
Circular.
The link to the virtual meeting will also be
accessible at www.kinross.com and will be archived for later
use.
About Kinross Gold Corporation
Kinross is a Canadian-based global senior gold
mining company with operations and projects in the United States,
Brazil, Mauritania, Chile, Canada, Russia and Ghana. Our focus on
delivering value is based on our core principles of responsible
mining, operational excellence, disciplined growth and balance
sheet strength. Kinross maintains listings on the Toronto Stock
Exchange (symbol:K) and the New York Stock Exchange
(symbol:KGC).
Media Contact Louie DiazVice-President,
Corporate Communicationsphone:
416-369-6469louie.diaz@kinross.com
Investor Relations ContactChris Lichtenheldt
Vice-President, Investor Relations phone:
416-365-2761chris.lichtenheldt@kinross.com
Review of operations
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, (unaudited) |
|
Gold equivalent ounces |
|
|
|
|
|
|
|
|
Produced |
|
Sold |
|
Production cost of sales($millions) |
|
Production cost of sales/equivalent ounce
sold |
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
Fort
Knox |
54,803 |
|
55,815 |
|
|
52,813 |
|
55,561 |
|
|
$ |
67.4 |
|
$ |
57.7 |
|
|
$ |
1,276 |
$ |
1,038 |
Round
Mountain |
45,319 |
|
74,286 |
|
|
46,959 |
|
73,878 |
|
|
|
52.3 |
|
|
63.1 |
|
|
|
1,114 |
|
854 |
Bald
Mountain |
36,071 |
|
51,408 |
|
|
41,017 |
|
48,250 |
|
|
|
40.3 |
|
|
37.0 |
|
|
|
983 |
|
767 |
Paracatu |
108,009 |
|
126,547 |
|
|
101,886 |
|
126,811 |
|
|
|
106.6 |
|
|
82.8 |
|
|
|
1,046 |
|
653 |
La
Coipa |
524 |
|
- |
|
|
- |
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
- |
Maricunga |
- |
|
- |
|
|
858 |
|
731 |
|
|
|
0.6 |
|
|
0.5 |
|
|
|
699 |
|
684 |
Americas Total |
244,726 |
|
308,056 |
|
|
243,533 |
|
305,231 |
|
|
|
267.2 |
|
|
241.1 |
|
|
|
1,097 |
|
790 |
|
|
|
|
|
|
|
|
|
|
|
|
Tasiast |
133,695 |
|
88,964 |
|
|
130,195 |
|
83,670 |
|
|
|
95.8 |
|
|
51.3 |
|
|
|
736 |
|
613 |
Chirano
(100%) |
34,929 |
|
43,894 |
|
|
35,810 |
|
41,144 |
|
|
|
47.6 |
|
|
52.8 |
|
|
|
1,329 |
|
1,283 |
West Africa Total |
168,624 |
|
132,858 |
|
|
166,005 |
|
124,814 |
|
|
|
143.4 |
|
|
104.1 |
|
|
|
864 |
|
834 |
|
|
|
|
|
|
|
|
|
|
|
|
Less:
Chirano non-controllinginterest (10%) |
(3,493 |
) |
(4,389 |
) |
|
(3,581 |
) |
(4,114 |
) |
|
|
(4.8 |
) |
|
(5.3 |
) |
|
|
|
West Africa Attributable Total |
165,131 |
|
128,469 |
|
|
162,424 |
|
120,700 |
|
|
|
138.6 |
|
|
98.8 |
|
|
$ |
853 |
$ |
819 |
|
|
|
|
|
|
|
|
|
|
|
|
Attributable Total |
409,857 |
|
436,525 |
|
|
405,957 |
|
425,931 |
|
|
|
405.8 |
|
|
339.9 |
|
|
|
1,000 |
|
798 |
Add:
Chirano non-controllinginterest (10%) |
3,493 |
|
4,389 |
|
|
3,581 |
|
4,114 |
|
|
|
4.8 |
|
|
5.3 |
|
|
|
|
Continuing Operations Total |
413,350 |
|
440,914 |
|
|
409,538 |
|
430,045 |
|
|
|
410.6 |
|
|
345.2 |
|
|
$ |
1,003 |
$ |
803 |
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued Operations |
|
|
|
|
|
|
|
|
|
|
|
Kupol |
95,891 |
|
122,252 |
|
|
85,937 |
|
122,153 |
|
|
|
65.4 |
|
|
74.7 |
|
|
$ |
761 |
$ |
612 |
Interim condensed consolidated balance
sheets
(unaudited, expressed in
millions of U.S. dollars, except share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
As at |
|
|
|
March 31, |
|
December 31, |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
454.2 |
|
|
$ |
531.5 |
|
|
Restricted cash |
|
|
13.1 |
|
|
|
11.4 |
|
|
Accounts receivable and other assets |
|
|
123.6 |
|
|
|
214.5 |
|
|
Current income tax recoverable |
|
|
6.7 |
|
|
|
10.2 |
|
|
Inventories |
|
|
1,044.4 |
|
|
|
1,151.3 |
|
|
Unrealized fair value of derivative assets |
|
|
49.2 |
|
|
|
30.0 |
|
|
Assets held for sale |
|
|
498.4 |
|
|
|
- |
|
|
|
|
|
2,189.6 |
|
|
|
1,948.9 |
|
|
Non-current assets |
|
|
|
|
|
Property, plant and equipment |
|
|
8,248.3 |
|
|
|
7,617.7 |
|
|
Goodwill |
|
|
- |
|
|
|
158.8 |
|
|
Long-term investments |
|
|
108.2 |
|
|
|
98.2 |
|
|
Investment in joint venture |
|
|
7.0 |
|
|
|
7.1 |
|
|
Other long-term assets |
|
|
568.9 |
|
|
|
590.9 |
|
|
Deferred tax assets |
|
|
- |
|
|
|
6.5 |
|
|
Total assets |
|
$ |
11,122.0 |
|
|
$ |
10,428.1 |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
441.8 |
|
|
$ |
492.7 |
|
|
Current income tax payable |
|
|
16.8 |
|
|
|
95.0 |
|
|
Current portion of long-term debt and credit facilities |
|
|
40.0 |
|
|
|
40.0 |
|
|
Current portion of provisions |
|
|
85.4 |
|
|
|
90.0 |
|
|
Other current liabilities |
|
|
23.7 |
|
|
|
23.7 |
|
|
Liabilities held for sale |
|
|
53.4 |
|
|
|
- |
|
|
|
|
|
661.1 |
|
|
|
741.4 |
|
|
Non-current liabilities |
|
|
|
|
|
Long-term debt and credit facilities |
|
|
2,688.8 |
|
|
|
1,589.9 |
|
|
Provisions |
|
|
735.9 |
|
|
|
847.9 |
|
|
Long-term lease liabilities |
|
|
33.4 |
|
|
|
35.1 |
|
|
Other long-term liabilities |
|
|
146.1 |
|
|
|
127.4 |
|
|
Deferred tax liabilities |
|
|
418.9 |
|
|
|
436.8 |
|
|
Total liabilities |
|
$ |
4,684.2 |
|
|
$ |
3,778.5 |
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Common shareholders' equity |
|
|
|
|
|
Common share capital |
|
$ |
4,710.2 |
|
|
$ |
4,427.7 |
|
|
Contributed surplus |
|
|
10,698.4 |
|
|
|
10,664.4 |
|
|
Accumulated deficit |
|
|
(9,055.1 |
) |
|
|
(8,492.4 |
) |
|
Accumulated other comprehensive income (loss) |
|
|
14.2 |
|
|
|
(18.8 |
) |
|
Total common shareholders' equity |
|
|
6,367.7 |
|
|
|
6,580.9 |
|
|
Non-controlling interests |
|
|
70.1 |
|
|
|
68.7 |
|
|
Total equity |
|
|
6,437.8 |
|
|
|
6,649.6 |
|
|
Total liabilities and equity |
|
$ |
11,122.0 |
|
|
$ |
10,428.1 |
|
|
|
|
|
|
|
|
Common shares |
|
|
|
|
|
Authorized |
|
|
Unlimited |
|
|
|
Unlimited |
|
|
Issued and outstanding |
|
|
1,297,256,784 |
|
|
|
1,244,332,772 |
|
|
|
|
|
|
|
|
Interim condensed consolidated statements of
operations
(unaudited, expressed in
millions of U.S. dollars, except share and per share amounts) |
|
|
|
|
|
|
Three months ended |
|
|
March 31, |
|
March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Revenue |
|
|
|
|
Metal sales |
|
$ |
768.0 |
|
|
$ |
768.7 |
|
|
|
|
|
|
Cost of sales |
|
|
|
|
Production cost of sales |
|
|
410.6 |
|
|
|
345.2 |
|
Depreciation, depletion and amortization |
|
|
180.8 |
|
|
|
188.8 |
|
Total cost of sales |
|
|
591.4 |
|
|
|
534.0 |
|
Gross profit |
|
|
176.6 |
|
|
|
234.7 |
|
Other operating expense |
|
|
19.1 |
|
|
|
39.6 |
|
Exploration and business development |
|
|
24.8 |
|
|
|
20.1 |
|
General and administrative |
|
|
30.2 |
|
|
|
30.7 |
|
Operating earnings |
|
|
102.5 |
|
|
|
144.3 |
|
Other (expense) income - net |
|
|
(5.0 |
) |
|
|
4.2 |
|
Finance income |
|
|
2.2 |
|
|
|
1.5 |
|
Finance expense |
|
|
(22.0 |
) |
|
|
(19.0 |
) |
Earnings from continuing operations before
tax |
|
|
77.7 |
|
|
|
131.0 |
|
Income tax recovery (expense) - net |
|
|
4.5 |
|
|
|
(55.1 |
) |
Earnings
from continuing operations after tax |
|
|
82.2 |
|
|
|
75.9 |
|
(Loss)
earnings from discontinued operations after tax |
|
$ |
(606.1 |
) |
|
$ |
73.3 |
|
Net (loss) earnings |
|
$ |
(523.9 |
) |
|
$ |
149.2 |
|
Net (loss) earnings from continuing operations attributable
to: |
|
|
|
|
Non-controlling interests |
|
$ |
(0.1 |
) |
|
$ |
(0.3 |
) |
Common shareholders |
|
$ |
82.3 |
|
|
$ |
76.2 |
|
Net (loss) earnings attributable to: |
|
|
|
|
Non-controlling interests |
|
$ |
(0.1 |
) |
|
$ |
(0.3 |
) |
Common shareholders |
|
$ |
(523.8 |
) |
|
$ |
149.5 |
|
Earnings per share from continuing operations attributable
to common shareholders |
|
|
|
|
Basic |
|
$ |
0.07 |
|
|
$ |
0.06 |
|
Diluted |
|
$ |
0.06 |
|
|
$ |
0.06 |
|
(Loss) earnings per share attributable to common
shareholders |
|
|
|
|
Basic |
|
$ |
(0.41 |
) |
|
$ |
0.12 |
|
Diluted |
|
$ |
(0.41 |
) |
|
$ |
0.12 |
|
Interim condensed consolidated statements of cash
flows
(unaudited, expressed in
millions of U.S. dollars) |
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
March 31, |
|
March 31, |
|
|
|
|
|
2022 |
|
|
|
2021 |
|
|
Net inflow (outflow) of cash related to the following
activities: |
|
|
|
|
|
|
Operating: |
|
|
|
|
|
|
Earnings
from continuing operations after tax |
|
|
$ |
82.2 |
|
|
$ |
75.9 |
|
|
Adjustments to reconcile net earnings from continuing operations to
net cash provided from operating activities: |
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
|
180.8 |
|
|
|
188.8 |
|
|
Share-based compensation expense |
|
|
|
3.0 |
|
|
|
3.8 |
|
|
Finance expense |
|
|
|
22.0 |
|
|
|
19.0 |
|
|
Deferred tax (recovery) expense |
|
|
|
(20.0 |
) |
|
|
2.9 |
|
|
Foreign exchange losses and other |
|
|
|
4.9 |
|
|
|
8.5 |
|
|
Reclamation recovery |
|
|
|
(11.9 |
) |
|
|
- |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable and other assets |
|
|
|
43.8 |
|
|
|
(3.0 |
) |
|
Inventories |
|
|
|
(90.5 |
) |
|
|
(32.9 |
) |
|
Accounts payable and accrued liabilities |
|
|
|
(25.2 |
) |
|
|
(21.6 |
) |
|
Cash flow provided from operating activities |
|
|
|
189.1 |
|
|
|
241.4 |
|
|
Income taxes paid |
|
|
|
(83.9 |
) |
|
|
(96.3 |
) |
|
Net cash flow of continuing operations provided from
operating activities |
|
|
|
105.2 |
|
|
|
145.1 |
|
|
Net cash flow of discontinued operations provided from
operating activities |
|
|
|
91.4 |
|
|
|
134.7 |
|
|
Investing: |
|
|
|
|
|
|
Additions to property, plant and equipment |
|
|
|
(106.3 |
) |
|
|
(191.6 |
) |
|
Interest paid capitalized to property, plant and equipment |
|
|
|
(11.0 |
) |
|
|
(23.2 |
) |
|
Acquisitions net of cash acquired |
|
|
|
(1,027.5 |
) |
|
|
- |
|
|
Net additions to long-term investments and other assets |
|
|
|
(13.9 |
) |
|
|
(1.9 |
) |
|
(Increase) decrease in restricted cash - net |
|
|
|
(1.7 |
) |
|
|
2.4 |
|
|
Interest received and other - net |
|
|
|
1.1 |
|
|
|
0.5 |
|
|
Net cash flow of continuing operations used in investing
activities |
|
|
|
(1,159.3 |
) |
|
|
(213.8 |
) |
|
Net cash flow of discontinued operations used in investing
activities |
|
|
|
(11.2 |
) |
|
|
(155.0 |
) |
|
Financing: |
|
|
|
|
|
|
Proceeds from drawdown of debt |
|
|
|
1,097.6 |
|
|
|
- |
|
|
Interest paid |
|
|
|
(24.7 |
) |
|
|
(23.6 |
) |
|
Payment of lease liabilities |
|
|
|
(5.4 |
) |
|
|
(7.6 |
) |
|
Dividends paid to common shareholders |
|
|
|
(38.9 |
) |
|
|
(37.8 |
) |
|
Other - net |
|
|
|
5.9 |
|
|
|
4.6 |
|
|
Net cash flow of continuing operations provided from (used
in) financing activities |
|
|
|
1,034.5 |
|
|
|
(64.4 |
) |
|
Net cash flow of discontinued operations used in financing
activities |
|
|
|
- |
|
|
|
- |
|
|
Effect of exchange rate changes on cash and cash
equivalents of continuing operations |
|
|
|
- |
|
|
|
(0.2 |
) |
|
Effect of exchange rate changes on cash and cash
equivalents of discontinued operations |
|
|
|
(3.9 |
) |
|
|
(1.2 |
) |
|
Increase (decrease) in cash and cash
equivalents |
|
|
|
56.7 |
|
|
|
(154.8 |
) |
|
Cash and cash equivalents, beginning of
period |
|
|
|
531.5 |
|
|
|
1,210.9 |
|
|
Reclassified to assets held for sale |
|
|
|
(134.0 |
) |
|
|
- |
|
|
Cash and cash equivalents, end of period |
|
|
$ |
454.2 |
|
|
$ |
1,056.1 |
|
|
Operating Summary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mine |
Period |
Ownership |
Tonnes Ore Mined(a) |
OreProcessed
(Milled)(a) |
OreProcessed (Heap
Leach)(a) |
Grade (Mill) |
Grade (Heap Leach) |
Recovery(b)(e) |
Gold Eq Production(c) |
Gold Eq Sales(c) |
Production cost of sales |
Production cost of
sales/oz(d) |
Total Cap Ex(f) |
DD&A |
|
|
|
(%) |
('000 tonnes) |
('000 tonnes) |
('000 tonnes) |
(g/t) |
(g/t) |
(%) |
(ounces) |
(ounces) |
($ millions) |
($/ounce) |
($ millions) |
($ millions) |
Americas |
Fort Knox |
Q1 2022 |
100 |
13,743 |
1,852 |
13,010 |
0.66 |
0.17 |
80% |
|
54,803 |
52,813 |
$ |
67.4 |
$ |
1,276 |
$ |
2.9 |
$ |
20.9 |
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 |
Round Mountain |
Q1 2022 |
100 |
3,767 |
929 |
3,208 |
0.80 |
0.36 |
79% |
|
45,319 |
46,959 |
$ |
52.3 |
$ |
1,114 |
$ |
16.0 |
$ |
12.1 |
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 |
Bald Mountain |
Q1 2022 |
100 |
3,870 |
- |
3,870 |
- |
0.63 |
nm |
36,071 |
41,017 |
$ |
40.3 |
$ |
983 |
$ |
5.8 |
$ |
35.1 |
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 |
Paracatu |
Q1 2022 |
100 |
6,165 |
13,645 |
- |
0.33 |
- |
75% |
|
108,009 |
101,886 |
$ |
106.6 |
$ |
1,046 |
$ |
16.0 |
$ |
39.6 |
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 |
Maricunga |
Q1 2022 |
100 |
- |
- |
- |
- |
- |
nm |
- |
858 |
$ |
0.6 |
$ |
699 |
$ |
- |
$ |
0.1 |
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 |
West Africa |
Tasiast |
Q1 2022 |
100 |
3,462 |
1,524 |
- |
2.54 |
- |
94% |
|
133,695 |
130,195 |
$ |
95.8 |
$ |
736 |
$ |
19.4 |
$ |
57.1 |
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 |
Chirano - 100% |
Q1 2022 |
100 |
651 |
875 |
- |
1.32 |
- |
86% |
|
34,929 |
35,810 |
$ |
47.6 |
$ |
1,329 |
$ |
5.5 |
$ |
14.3 |
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 |
Chirano - 90%(g) |
Q1 2022 |
90 |
651 |
875 |
- |
1.32 |
- |
86% |
|
31,436 |
32,229 |
$ |
42.8 |
$ |
1,329 |
$ |
5.0 |
$ |
12.9 |
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 |
(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) Gold equivalent ounces include
silver ounces produced and sold converted to a gold equivalent
based on the ratio of the average spot market prices for the
commodities for each period. The ratios for the quarters presented
are as follows: Q1 2022: 78.19:1; Q4 2021: 76.89:1; Q3 2021:
73.45:1; Q2 2021: 68.05:1; Q1 2021:
68.33:1.(d) “Production cost of sales per equivalent
ounce sold” is defined as production cost of sales divided by gold
equivalent ounces sold.(e) "nm" means not
meaningful.(f) "Capital expenditures" is as reported as
“Additions to property, plant and equipment” on the interim
condensed consolidated statements of cash flows.(g) Figures
for gold equivalent production, gold equivalent sales, production
cost of sales, capital expenditures and depreciation, depletion and
amortization for all quarters presented are based on Kinross' 90%
share of Chirano and are calculated as Chirano 100% as reported
above, less 10%. For Q1 2022: Production cost of sales is
calculated as $47.6 million less 10%, or $4.8 million. Total
capital expenditures is calculated as $5.5 million less 10%, or
$0.5 million. Depreciation, depletion and amortization is
calculated as $14.3 million less 10%, or $1.4 million. All other
quarters presented are calculated in the same manner.
Reconciliation of non-GAAP financial measures and
ratios
The Company has included certain non-GAAP
financial measures and ratios in this document. These financial
measures and ratios are not defined under International Financial
Reporting Standards (IFRS) and should not be considered in
isolation. The Company believes that these financial measures and
ratios, together with financial measures and ratios determined in
accordance with IFRS, provide investors with an improved ability to
evaluate the underlying performance of the Company. The inclusion
of these financial measures and ratios is meant to provide
additional information and should not be used as a substitute for
performance measures and ratios prepared in accordance with IFRS.
These financial measures and ratios are not necessarily standard
and therefore may not be comparable to other issuers.
Adjusted net earnings from continuing
operations attributable to common shareholders and
adjusted net earnings from continuing operations per
share are non-GAAP financial measures and ratios which
determine the performance of the Company, excluding certain impacts
which the Company believes are not reflective of the Company’s
underlying performance for the reporting period, such as the impact
of foreign exchange gains and losses, reassessment of prior year
taxes and/or taxes otherwise not related to the current period,
impairment charges (reversals), gains and losses and other one-time
costs related to acquisitions, dispositions and other transactions,
and non-hedge derivative gains and losses. Although some of the
items are recurring, the Company believes that they are not
reflective of the underlying operating performance of its current
business and are not necessarily indicative of future operating
results. Management believes that these measures and ratios, which
are used internally to assess performance and in planning and
forecasting future operating results, provide investors with the
ability to better evaluate underlying performance, particularly
since the excluded items are typically not included in public
guidance. However, adjusted net earnings from continuing operations
and adjusted net earnings from continuing operations per share
measures and ratios are not necessarily indicative of net earnings
from continuing operations and earnings per share measures and
ratios as determined under IFRS.
The following table provides a reconciliation of
net earnings from continuing operations to adjusted net earnings
from continuing operations for the periods presented:
|
|
|
|
(unaudited, expressed in millions of U.S dollars, except per share
amounts) |
Three months ended |
March 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
Net
earnings from continuing operations attributable to common
shareholders - as reported |
$ |
82.3 |
|
$ |
76.2 |
|
Adjusting
items: |
|
|
|
Foreign exchange losses
(gains) |
|
2.4 |
|
|
(5.8 |
) |
|
Foreign exchange (gains)
losses on translation of tax basis and foreign exchangeon deferred
income taxes within income tax expense |
|
(15.7 |
) |
|
6.3 |
|
|
Taxes in respect of prior
periods |
|
5.9 |
|
|
8.7 |
|
|
Reclamation recovery |
|
(11.9 |
) |
|
- |
|
|
COVID-19 costs(a) |
|
- |
|
|
5.6 |
|
|
Round Mountain pit wall
stabilization costs |
|
- |
|
|
3.5 |
|
|
Other(b) |
|
9.3 |
|
|
12.0 |
|
|
Tax effects of the above
adjustments |
|
(1.7 |
) |
|
(4.1 |
) |
|
|
|
(11.7 |
) |
|
26.2 |
|
Adjusted
net earnings from continuing operations attributable to common
shareholders |
$ |
70.6 |
|
$ |
102.4 |
|
Weighted
average number of common shares outstanding - Basic |
|
1,264.5 |
|
|
1,259.2 |
|
Adjusted
net earnings from continuing operations per share |
$ |
0.06 |
|
$ |
0.08 |
|
Basic
earnings from continuing operations per share attributable to
common shareholders |
$ |
0.07 |
|
$ |
0.06 |
|
|
|
|
|
(a) Includes COVID-19 related labour, health
and safety, donations and other support program costs. For the
three months ended March 31, 2022, adjusted net earnings has not
been adjusted for COVID-19 related costs of $5.7 million incurred
at operating sites.(b) Other includes various
impacts, such as one-time costs at sites, and gains and losses on
the sale of assets and hedges, which the Company believes are not
reflective of the Company’s underlying performance for the
reporting period.
Free cash flow from continuing
operations is a non-GAAP financial measure and is defined
as net cash flow of continuing operations provided from operating
activities less capital expenditures. The Company believes that
that this measure, which is used internally to evaluate the
Company’s underlying cash generation performance and the ability to
repay creditors and return cash to shareholders, provides investors
with the ability to better evaluate the Company’s underlying
performance. However, the free cash flow from continuing operations
measure is not necessarily indicative of operating earnings or
net cash flow of continuing operations provided from operating
activities as determined under IFRS.
The following table provides a reconciliation of
free cash flow from continuing operations for the periods
presented:
|
|
|
|
(unaudited, expressed in millions of U.S dollars) |
Three months ended |
March 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
Net cash
flow of continuing operations provided from operating activities -
as reported |
$ |
105.2 |
|
$ |
145.1 |
|
|
|
|
|
Less:
Additions to property, plant and equipment |
|
(106.3 |
) |
|
(191.6 |
) |
|
|
|
|
Free cash
flow from continuing operations |
$ |
(1.1 |
) |
$ |
(46.5 |
) |
|
|
|
|
Adjusted operating cash flow
from continuing operations is a non-GAAP financial
measure and is defined as net cash flow of continuing
operations provided from operating activities excluding certain
impacts which the Company believes are not reflective of the
Company’s regular operating cash flow and excluding changes in
working capital. Working capital can be volatile due to numerous
factors, including the timing of tax payments. The Company uses
adjusted operating cash flow from continuing operations internally
as a measure of the underlying operating cash flow performance and
future operating cash flow-generating capability of the Company.
However, the adjusted operating cash flow from continuing
operations measure is not necessarily indicative of net cash
flow of continuing operations provided from operating
activities as determined under IFRS.
The following table provides a reconciliation of
adjusted operating cash flow from continuing operations for the
periods presented:
|
|
|
|
(unaudited, expressed in millions of U.S dollars) |
Three months ended |
March 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
Net cash
flow of continuing operations provided from operating activities -
as reported |
$ |
105.2 |
|
$ |
145.1 |
|
|
|
|
Adjusting
items: |
|
|
|
Working capital changes: |
|
|
|
Accounts receivable and other assets |
|
(43.8 |
) |
|
3.0 |
|
Inventories |
|
90.5 |
|
|
32.9 |
|
Accounts payable and other liabilities, including income taxes
paid |
|
109.1 |
|
|
117.9 |
|
|
|
155.8 |
|
|
153.8 |
Adjusted
operating cash flow from continuing operations |
$ |
261.0 |
|
$ |
298.9 |
|
|
|
|
Attributable production cost of sales
from continuing operations per equivalent ounce sold is a
non-GAAP ratio and is defined as attributable production cost of
sales from continuing operations divided by the attributable number
of gold equivalent ounces sold from continuing operations. 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 provides a reconciliation of
attributable production cost of sales from continuing operations
per equivalent ounce sold for the periods presented:
|
|
|
|
(unaudited, expressed in millions of U.S. dollars,except ounces and
production cost of sales per equivalent ounce) |
Three months ended |
March 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
Production cost of sales from continuing operations - as
reported |
$ |
410.6 |
|
$ |
345.2 |
|
Less:
portion attributable to Chirano non-controlling interest(a) |
|
(4.8 |
) |
|
(5.3 |
) |
Attributable(b) production cost of sales from continuing
operations |
$ |
405.8 |
|
$ |
339.9 |
|
|
|
|
|
Gold
equivalent ounces sold from continuing operations |
|
409,538 |
|
|
430,045 |
|
Less:
portion attributable to Chirano non-controlling interest(c) |
|
(3,581 |
) |
|
(4,114 |
) |
Attributable(b) gold equivalent ounces sold from continuing
operations |
|
405,957 |
|
|
425,931 |
|
Attributable(b) production cost of sales from continuing
operations per equivalent ounce sold |
$ |
1,000 |
|
$ |
798 |
|
Consolidated production cost of sales from continuing operations
per equivalent ounce sold(d) |
$ |
1,003 |
|
$ |
803 |
|
|
|
|
See page 24 for details of the footnotes referenced within
the table above.
Attributable production cost of sales
from continuing operations per ounce sold on a by-product
basis is a non-GAAP ratio which calculates the Company’s
non-gold production as a credit against its per ounce production
costs, rather than converting its non-gold production into gold
equivalent ounces and crediting it to total production, as is the
case in co-product accounting. Management believes that this ratio
provides investors with the ability to better evaluate Kinross’
production cost of sales per ounce on a comparable basis with other
major gold producers who routinely calculate their cost of sales
per ounce using by-product accounting rather than co-product
accounting.
The following table provides a reconciliation of
attributable production cost of sales from continuing operations
per ounce sold on a by-product basis for the periods presented:
|
|
|
|
(unaudited, expressed in millions of U.S. dollars, except ounces
and production cost of sales per ounce) |
Three months ended |
March 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
Production cost of sales from continuing operations - as
reported |
$ |
410.6 |
|
$ |
345.2 |
|
Less:
portion attributable to Chirano non-controlling interest(a) |
|
(4.8 |
) |
|
(5.3 |
) |
Less:
attributable(b) silver revenue(e) |
|
(4.5 |
) |
|
(6.6 |
) |
Attributable(b) production cost of sales from continuing operations
net of silver by-product revenue |
$ |
401.3 |
|
$ |
333.3 |
|
|
|
|
|
Gold
ounces sold from continuing operations |
|
407,104 |
|
|
426,327 |
|
Less:
portion attributable to Chirano non-controlling interest(c) |
|
|
(3,577 |
) |
|
(4,107 |
) |
Attributable(b) gold ounces sold from continuing operations |
|
403,527 |
|
|
422,220 |
|
Attributable(b) production cost of sales from continuing operations
per ounce sold on a by-product basis |
$ |
994 |
|
$ |
789 |
|
Consolidated production cost of sales from continuing operations
per equivalent ounce sold(d) |
$ |
1,003 |
|
$ |
803 |
|
|
|
|
|
See page 24 for details of the footnotes referenced
within the table above.
Attributable all-in sustaining cost and
all-in cost from continuing operations per ounce sold on a
by-product basis are non-GAAP financial measures and
ratios, as applicable, calculated based on guidance published by
the World Gold Council (“WGC”). The WGC is a market development
organization for the gold industry and is an association whose
membership comprises leading gold mining companies including
Kinross. Although the WGC is not a mining industry regulatory
organization, it worked closely with its member companies to
develop these metrics. Adoption of the all-in sustaining cost and
all-in cost metrics is voluntary and not necessarily standard, and
therefore, these measures and ratios presented by the Company may
not be comparable to similar measures and ratios presented by other
issuers. The Company believes that the all-in sustaining cost and
all-in cost measures complement existing measures and ratios
reported by Kinross.
All-in sustaining cost includes both operating
and capital costs required to sustain gold production on an ongoing
basis. The value of silver sold is deducted from the total
production cost of sales as it is considered residual production.
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 from continuing operations per ounce sold on a
by-product basis are calculated by adjusting total
production cost of sales from continuing operations, as reported on
the interim condensed consolidated statements of operations, as
follows:
|
|
|
|
(unaudited,
expressed in millions of U.S. dollars, except ounces and costs per
ounce) |
Three months ended |
March 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
Production cost of sales from continuing operations - as
reported |
$ |
410.6 |
|
$ |
345.2 |
|
Less:
portion attributable to Chirano non-controlling interest(a) |
|
(4.8 |
) |
|
(5.3 |
) |
Less:
attributable(b) silver revenue from continuing
operations(e) |
|
(4.5 |
) |
|
(6.6 |
) |
Attributable(b) production cost of sales from continuing
operations net of silver by-product revenue |
$ |
401.3 |
|
$ |
333.3 |
|
Adjusting
items on an attributable(b)basis: |
|
|
|
General and
administrative(f) |
|
30.2 |
|
|
30.7 |
|
|
Other operating expense -
sustaining(g) |
|
5.0 |
|
|
2.3 |
|
|
Reclamation and remediation -
sustaining(h) |
|
8.4 |
|
|
10.4 |
|
|
Exploration and business
development - sustaining(i) |
|
7.9 |
|
|
8.1 |
|
|
Additions to property, plant
and equipment - sustaining(j) |
|
42.9 |
|
|
48.6 |
|
|
Lease payments -
sustaining(k) |
|
5.2 |
|
|
7.5 |
|
All-in
Sustaining Cost on a by-product basis - attributable(b) |
$ |
500.9 |
|
$ |
440.9 |
|
|
Other operating expense -
non-sustaining(g) |
|
12.4 |
|
|
9.6 |
|
|
Reclamation and remediation -
non-sustaining(h) |
|
1.2 |
|
|
0.9 |
|
|
Exploration and business
development - non-sustaining(i) |
|
16.8 |
|
|
11.8 |
|
|
Additions to property, plant
and equipment - non-sustaining(j) |
|
62.0 |
|
|
141.2 |
|
|
Lease payments -
non-sustaining(k) |
|
0.2 |
|
|
0.1 |
|
All-in
Cost on a by-product basis - attributable(b) |
$ |
593.5 |
|
$ |
604.5 |
|
Gold
ounces sold from continuing operations |
|
407,104 |
|
|
426,327 |
|
Less:
portion attributable to Chirano non-controlling interest(c) |
|
(3,577 |
) |
|
(4,107 |
) |
Attributable(b) gold ounces sold from continuing
operations |
|
403,527 |
|
|
422,220 |
|
Attributable(b) all-in sustaining cost from continuing
operations per ounce sold on a by-product basis |
$ |
1,241 |
|
$ |
1,044 |
|
Attributable(b) all-in cost from continuing operations per
ounce sold on a by-product basis |
$ |
1,471 |
|
$ |
1,432 |
|
Consolidated production cost of sales from continuing operations
per equivalent ounce sold(d) |
$ |
1,003 |
|
$ |
803 |
|
|
|
|
|
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 financial 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 from continuing operations per equivalent ounce
sold are calculated by adjusting total production cost of
sales from continuing operations, as reported on the interim
condensed consolidated statement of operations, as follows:
|
|
|
|
(unaudited,
expressed in millions of U.S. dollars, except ounces and costs per
equivalent ounce) |
Three months ended |
March 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
Production cost of sales from continuing operations - as
reported |
$ |
410.6 |
|
$ |
345.2 |
|
Less:
portion attributable to Chirano non-controlling interest(a) |
|
(4.8 |
) |
|
(5.3 |
) |
Attributable(b) production cost of sales from continuing
operations |
$ |
405.8 |
|
$ |
339.9 |
|
Adjusting
items on an attributable(b)basis: |
|
|
|
General and
administrative(f) |
|
30.2 |
|
|
30.7 |
|
|
Other operating expense -
sustaining(g) |
|
5.0 |
|
|
2.3 |
|
|
Reclamation and remediation -
sustaining(h) |
|
8.4 |
|
|
10.4 |
|
|
Exploration and business
development - sustaining(i) |
|
7.9 |
|
|
8.1 |
|
|
Additions to property, plant
and equipment - sustaining(j) |
|
42.9 |
|
|
48.6 |
|
|
Lease payments -
sustaining(k) |
|
5.2 |
|
|
7.5 |
|
All-in
Sustaining Cost - attributable(b) |
$ |
505.4 |
|
$ |
447.5 |
|
|
Other operating expense -
non-sustaining(g) |
|
12.4 |
|
|
9.6 |
|
|
Reclamation and remediation -
non-sustaining(h) |
|
1.2 |
|
|
0.9 |
|
|
Exploration and business
development - non-sustaining(i) |
|
16.8 |
|
|
11.8 |
|
|
Additions to property, plant
and equipment - non-sustaining(j) |
|
62.0 |
|
|
141.2 |
|
|
Lease payments -
non-sustaining(k) |
|
0.2 |
|
|
0.1 |
|
All-in
Cost - attributable(b) |
$ |
598.0 |
|
$ |
611.1 |
|
Gold
equivalent ounces sold from continuing operations |
|
409,538 |
|
|
430,045 |
|
Less:
portion attributable to Chirano non-controlling interest(c) |
|
(3,581 |
) |
|
(4,114 |
) |
Attributable(b) gold equivalent ounces sold from continuing
operations |
|
405,957 |
|
|
425,931 |
|
Attributable(b) all-in sustaining cost from continuing
operations per equivalent ounce sold |
$ |
1,245 |
|
$ |
1,051 |
|
Attributable(b) all-in cost from continuing operations per
equivalent ounce sold |
$ |
1,473 |
|
$ |
1,435 |
|
Consolidated production cost of sales from continuing operations
per equivalent ounce sold(d) |
$ |
1,003 |
|
$ |
803 |
|
|
|
|
|
See page 24 for details of the footnotes referenced
within the table above.
Attributable All-In Sustaining Cost and
All-In Cost per Equivalent Ounce Sold – Year Ended December 31,
2021
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 year ended December
31, 2021 consolidated statements of operations, as follows:
|
|
|
(expressed
in millions of U.S. dollars, except ounces and costs per equivalent
ounce) |
Year ended |
December 31, |
|
|
|
2021 |
|
|
|
|
Production cost of sales - as reported |
$ |
1,726.1 |
|
Less:
portion attributable to Chirano non-controlling interest(a) |
|
(20.2 |
) |
Attributable(b) production cost of sales |
$ |
1,705.9 |
|
Adjusting
items on an attributable(b)basis: |
|
|
General and
administrative(l) |
|
126.6 |
|
|
Other operating expense -
sustaining(m) |
|
10.6 |
|
|
Reclamation and remediation -
sustaining(n) |
|
43.2 |
|
|
Exploration and business
development - sustaining(o) |
|
40.0 |
|
|
Additions to property, plant
and equipment - sustaining(p) |
|
386.0 |
|
|
Lease payments -
sustaining(q) |
|
32.8 |
|
All-in
Sustaining Cost - attributable(b) |
$ |
2,345.1 |
|
|
Other operating expense -
non-sustaining(m) |
|
38.1 |
|
|
Reclamation and remediation -
non-sustaining(n) |
|
3.4 |
|
|
Exploration and business
development - non-sustaining(o) |
|
91.3 |
|
|
Additions to property, plant
and equipment - non-sustaining(p) |
|
544.6 |
|
|
Lease payments -
non-sustaining(q) |
|
1.0 |
|
All-in
Cost - attributable(b) |
$ |
3,023.5 |
|
Gold
equivalent ounces sold |
|
2,075,738 |
|
Less:
portion attributable to Chirano non-controlling interest(c) |
|
(14,829 |
) |
Attributable(b) gold equivalent ounces sold |
|
2,060,909 |
|
Attributable(b) all-in sustaining cost per equivalent ounce
sold |
$ |
1,138 |
|
Attributable(b) all-in cost per equivalent ounce sold |
$ |
1,467 |
|
Consolidated production cost of sales per equivalent ounce
sold(r) |
$ |
832 |
|
|
|
|
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
from continuing operations per equivalent ounce sold” is defined as
production cost of sales from continuing operations divided by
total gold equivalent ounces sold from continuing
operations.(e) “Attributable silver revenue”
represents the attributable portion of metal sales realized from
the production of the secondary or by-product metal (i.e. silver).
Revenue from the sale of silver, which is produced as a by-product
of the process used to produce gold, effectively reduces the cost
of gold production.(f) “General and
administrative” expenses is as reported on interim condensed the
consolidated statements of operations, net of certain restructuring
expenses. General and administrative expenses are considered
sustaining costs as they are required to be absorbed on a
continuing basis for the effective operation and governance of the
Company.(g) “Other operating expense – sustaining”
is calculated as “Other operating expense” as reported on the
interim condensed consolidated statements of operations, less other
operating and reclamation and remediation expenses related to
non-sustaining activities as well as other items not reflective of
the underlying operating performance of our business. Other
operating expenses are classified as either sustaining or
non-sustaining based on the type and location of the expenditure
incurred. The majority of other operating expenses that are
incurred at existing operations are considered costs necessary to
sustain operations, and are therefore classified as sustaining.
Other operating expenses incurred at locations where there is no
current operation or related to other non-sustaining activities are
classified as non-sustaining.(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 interim condensed
consolidated statements of operations, less non-sustaining
exploration and business development expenses. Exploration expenses
are classified as either sustaining or non-sustaining based on a
determination of the type and location of the exploration
expenditure. Exploration expenditures within the footprint of
operating mines are considered costs required to sustain current
operations and so are included in sustaining costs. Exploration
expenditures focused on new ore bodies near existing mines (i.e.
brownfield), new exploration projects (i.e. greenfield) or for
other generative exploration activity not linked to existing mining
operations are classified as non-sustaining. Business development
expenses are classified as either sustaining or non-sustaining
based on a determination of the type of expense and requirement for
general or growth related
operations.(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 interim condensed consolidated statements of cash
flows), less non-sustaining capital. Non-sustaining capital
represents capital expenditures for major projects, including major
capital stripping projects at existing operations that are expected
to materially benefit the operation, as well as enhancement capital
for significant infrastructure improvements at existing operations.
Non-sustaining capital expenditures during the three months ended
March 31, 2022, primarily related to major projects at La Coipa and
Tasiast. Non-sustaining capital expenditures during the three
months ended March 31, 2021, primarily related to major projects at
Tasiast, Round Mountain, Fort Knox and La Coipa.
(k) “Lease payments – sustaining” represents the
majority of lease payments as reported on the interim condensed
consolidated statements of cash flows and is made up of the
principal and financing components of such cash payments, less
non-sustaining lease payments. Lease payments for development
projects or closed mines are classified as
non-sustaining.(l) “General and administrative”
expenses is as reported on the consolidated statements of
operations for the year ended December 31, 2021, 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.(m) “Other operating expense –
sustaining” is calculated as “Other operating expense” as reported
on the consolidated statements of operations for the year ended
December 31, 2021, 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.(n) “Reclamation and remediation -
sustaining” is calculated as accretion related to reclamation and
remediation obligations plus amortization of the corresponding
reclamation and remediation assets for the year ended December 31,
2021, 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.(o) “Exploration and business
development – sustaining” is calculated as “Exploration and
business development” expenses as reported on the consolidated
statements of operations for the year ended December 31, 2021, 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.(p) “Additions to property, plant and
equipment – sustaining” represents the majority of capital
expenditures at existing operations for the year ended December 31,
2021, 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 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.(q) “Lease payments –
sustaining” represents the majority of lease payments as reported
on the consolidated statements of cash flows for the year ended
December 31, 2021, 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.(r) “Consolidated
production cost of sales per equivalent ounce sold” is defined as
production cost of sales, as reported on the consolidated
statements of operations for the year ended December 31, 2021,
divided by total gold equivalent ounces sold.
APPENDIX A
Figure 1: LP Fault zone long section
Figure 1 is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/d5708880-d0ba-423f-b5d3-469dd5cd6618
APPENDIX B
LP Fault zone – Recent full assay results
Hole ID |
|
From (m) |
To (m) |
Width (m) |
True Width (m) |
Au (g/t) |
Target |
BR-408 |
|
412.00 |
422.50 |
10.50 |
10.20 |
0.62 |
Yauro |
BR-409 |
|
238.50 |
249.80 |
11.30 |
10.60 |
0.54 |
Yauro |
BR-409 |
and |
489.00 |
495.50 |
6.50 |
6.00 |
1.67 |
|
BR-409 |
including |
490.20 |
491.65 |
1.45 |
1.40 |
5.46 |
|
BR-447 |
No Significant Results |
|
|
|
|
|
Discovery |
BR-456 |
|
162.50 |
164.90 |
2.40 |
2.20 |
0.85 |
Discovery |
BR-457 |
|
60.80 |
75.20 |
14.40 |
13.90 |
1.66 |
Discovery |
BR-457 |
including |
69.60 |
75.20 |
5.60 |
5.30 |
3.31 |
|
BR-464 |
|
169.80 |
170.80 |
1.00 |
0.90 |
1.25 |
Auro |
BR-465 |
No Significant Results |
|
|
|
|
|
Auro |
BR-466 |
No Significant Results |
|
|
|
|
|
Auro |
BR-468 |
|
105.30 |
109.15 |
3.85 |
3.70 |
1.29 |
Auro |
BR-470 |
|
140.25 |
143.25 |
3.00 |
2.90 |
8.82 |
Discovery |
BR-471 |
|
151.60 |
160.00 |
8.40 |
7.90 |
1.82 |
Discovery |
BR-471 |
including |
153.10 |
153.75 |
0.65 |
0.60 |
18.20 |
|
BR-471 |
and |
202.50 |
204.00 |
1.50 |
1.40 |
7.38 |
|
BR-472 |
|
147.00 |
164.40 |
17.40 |
16.60 |
0.55 |
Discovery |
BR-478 |
|
38.40 |
39.00 |
0.60 |
0.50 |
10.40 |
Discovery |
BR-492 |
No Significant Results |
|
|
|
|
|
Discovery |
BR-502 |
No Significant Results |
|
|
|
|
|
Yauro |
BR-506 |
No Significant Results |
|
|
|
|
|
Yauro |
BR-510 |
No Significant Results |
|
|
|
|
|
Yauro |
BR-511 |
No Significant Results |
|
|
|
|
|
Yauro |
BR-517 |
|
544.80 |
545.55 |
0.75 |
0.70 |
8.87 |
Yauro |
BR-517 |
and |
550.30 |
562.75 |
12.45 |
11.70 |
0.49 |
|
BR-530 |
|
498.75 |
499.25 |
0.50 |
0.50 |
8.11 |
Discovery |
BR-534 |
|
604.60 |
605.50 |
0.90 |
0.80 |
10.70 |
BR Discovery |
BR-534 |
and |
631.00 |
664.70 |
33.70 |
30.70 |
1.73 |
|
BR-553 |
|
514.15 |
517.75 |
3.60 |
3.40 |
2.61 |
Yauro |
BR-553 |
and |
725.60 |
730.20 |
4.60 |
4.40 |
4.68 |
|
BR-553 |
and |
758.00 |
758.65 |
0.65 |
0.60 |
24.70 |
|
BR-561 |
|
219.80 |
225.25 |
5.45 |
5.40 |
1.05 |
Viggo |
BR-561 |
including |
222.35 |
223.55 |
1.20 |
1.20 |
3.20 |
|
BR-565 |
|
175.05 |
196.50 |
21.45 |
20.10 |
7.50 |
Viggo |
BR-565 |
including |
176.50 |
180.00 |
3.50 |
3.30 |
37.69 |
|
BR-565 |
and |
376.35 |
377.50 |
1.15 |
1.10 |
21.00 |
|
BR-565 |
and |
394.50 |
396.00 |
1.50 |
1.40 |
7.27 |
|
BR-570 |
|
747.75 |
760.70 |
12.95 |
11.70 |
0.54 |
Gap |
BR-570 |
and |
780.35 |
794.65 |
14.30 |
12.90 |
0.86 |
|
BR-570 |
and |
834.65 |
835.20 |
0.55 |
0.50 |
6.80 |
|
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) “Updated pro-forma Company guidance”,
“Russia and Ghana Divestments”, “CEO Commentary”, “Operating
Results”, “Development Projects”, “Company guidance update”,
“Exploration Update”, “Divestment of Russia Assets”, and
“Divestment of Ghana Assets” 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 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; price inflation; capital expenditures,
costs and timing of the development of projects and new deposits,
estimates and the realization of such estimates (such as mineral or
gold reserves and resources or mine life), success of exploration,
development and mining, currency fluctuations, capital
requirements, project studies, government regulation, permit
applications, restarting suspended or disrupted operations;
environmental risks and proceedings; and resolution of pending
litigation. The words “advance”, “believe”, “continue”,
“estimates”, “expects”, “explore”, “forecast”, “future”, “growth”,
“goal”, “guidance”, “on schedule”, “on track”, “opportunity”
“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 31, 2022 as well as: (1) there
being no significant disruptions affecting the operations of the
Company, whether due to extreme weather events (including, without
limitation, excessive 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 global
and domestic sanctions related to the Russian Federation 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 (including those related to financial
assurance requirements), potential amendments to water laws and/or
other water use restrictions and regulatory actions in Chile, new
dam safety regulations, potential amendments to minerals and mining
laws and energy levies laws, new regulations relating to work
permits, potential amendments to customs and mining laws (including
but not limited to amendments to the VAT) and the potential
application of the tax code in Mauritania, 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), 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) potential direct or
indirect operational impacts resulting from infectious diseases or
pandemics such as the ongoing COVID-19 pandemic; (16) 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; (17) changes in national and local
government legislation or other government actions, particularly in
response to the COVID-19 pandemic; (18) litigation, regulatory
proceedings and audits, and the potential ramifications thereof,
being concluded in a manner consistent with the Corporation’s
expectations (including without limitation litigation in Chile
relating to the alleged damage of wetlands and the scope of any
remediation plan or other environmental obligations arising
therefrom); (19) the Company’s financial results, cash flows and
future prospects being consistent with Company expectations in
amounts sufficient to permit sustained dividend payments; (20) the
impacts of the pit wall issues at Round Mountain and carbonaceous
material at Bald Mountain being consistent with the Company’s
expectations; (21) that the divesture of the Company’s Russia and
Ghana assets 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 or at all;
(22) the anticipated mineralization of the Great Bear project being
consistent with expectations and the potential benefits to Kinross
from the project and any upside from the project; and (23) the
Company’s estimates regarding the timing of completion of the
Tasiast 24k project. Known and unknown factors could cause actual
results to differ materially from those projected in the
forward-looking statements. Such factors include, but are not
limited to: the inaccuracy of any of the foregoing assumptions,
sanctions (any other similar restrictions or penalties) now or
subsequently imposed, other actions taken, by, against, in respect
of or otherwise impacting any jurisdiction in which the Company is
domiciled or operates (including but not limited to the Russian
Federation, Canada, the European Union and the United States), or
any government or citizens of, persons or companies domiciled in,
or the Company’s business, operations or other activities in, any
such jurisdiction; fluctuations in the currency markets;
fluctuations in the spot and forward price of gold or certain other
commodities (such as fuel and electricity); 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, and the “Risk
Factors” set forth in the Company’s Annual Information Form dated
March 31, 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, as applicable, and are
defined and reconciled on pages 18 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 from continuing operations per equivalent ounce sold”
is defined as production cost of sales, as reported on the interim
condensed consolidated statements of operations, divided by gold
equivalent ounces sold from continuing operations.4 “Margins” per
equivalent ounce sold is defined as average realized gold price per
ounce from continuing operations less consolidated production cost
of sales from continuing operations per gold equivalent ounce sold.
5 Operating cash flow figures in this release represent “Net cash
flow of continuing operations provided from operating activities,”
as reported on the interim condensed statements of cash flows. 6
Reported net earnings figures in this news release represent “Net
earnings from continuing operations attributable to common
shareholders,” as reported on the interim condensed consolidated
statements of operations. 7 Adjusted net earnings
figures in this news release represent “Adjusted net earnings from
continuing operations attributable to common shareholders.”8 “Total
liquidity” is defined as the sum of cash and cash equivalents, as
reported on the interim condensed consolidated balance sheets, and
available credit under the Company’s credit facilities (as
calculated in Section 6 – Liquidity and Capital Resources of
Kinross’ MD&A for the three months ended March 31, 2022).9
Results as previously reported for the year ended December 31, 2021
include Ghanaian and Russian operations. Production cost of sales
per equivalent ounce sold for the year ended December 31, 2021 is
“Consolidated production cost of sales per equivalent ounce sold”
and is defined as production cost of sales, as reported on the
consolidated statements of operations for the year ended December
31, 2021, divided by total gold equivalent ounces sold.
Attributable all-in sustaining cost per equivalent ounce sold of
$1,138 for the year ended December 31, 2021 includes Kinross' share
of Chirano (90%) production and costs. The definition and
reconciliation of this non-GAAP ratio is included on page 23 of
this news release.10 Reported net loss from the Russian
discontinued operations in this news release represents “(Loss)
earnings from discontinued operations after tax,” as reported on
the interim condensed consolidated statements of operations.11
“Available credit” is defined as available credit under the
Company’s credit facilities and is calculated in Section 6 –
Liquidity and Capital Resources of Kinross’ MD&A for the three
months ended March 31, 2022.
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