Kinross Gold Corporation (TSX: K, NYSE: KGC) (“Kinross” or the
“Company”) today announced its results for the third-quarter ended
September 30, 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 30 of this release. All dollar amounts
are expressed in U.S. dollars, unless otherwise noted.
Results from the Company’s Russian and Ghanaian
assets have been excluded from its Q3 2022 continuing results,
along with comparative figures, due to the classification of these
assets as discontinued as at September 30, 2022.
Q3 2022 highlights from continuing
operations:
- Gold equivalent
production of 529,155 Au eq. oz. produced, an increase of
17% compared with Q2.
- Production cost of
sales1 of $941 per Au eq. oz. sold and
all-in sustaining cost2 of $1,282 per Au eq. oz.
sold, representing reductions of 8% and 4%, respectively, compared
with Q2.
- Margins3 of $791
per Au eq. oz. sold.
- Operating cash
flow4 of $173.2 million and adjusted operating
cash flow2 of $259.4 million.
- Reported net
earnings5 of $65.9 million, or $0.05 per share, with
adjusted net earnings2, 6 of $68.7 million, or
$0.05 per share2.
- Cash and cash
equivalents of $488.4 million, and total
liquidity7 of approximately $2 billion at
September 30, 2022.
Return of capital:
- Kinross returned approximately $300
million of capital to its shareholders year-to-date through its
enhanced share buyback and quarterly dividend programs, or
approximately $0.23 per share. Full year return of capital
is expected to be approximately $450 million.
- Since launching an enhanced share
buyback program in September, the Company has re-purchased
approximately $180 million in shares, or 60%, out of the
$300 million planned for 2022.
- Kinross’ Board of Directors
declared a quarterly dividend of $0.03 per common
share payable on December 15, 2022 to shareholders of
record at the close of business on December 1, 2022.
________________________1 “Production cost of sales from
continuing operations per equivalent ounce sold” is defined as
production cost of sales, as reported on the interim condensed
consolidated statements of operations, divided by total gold
equivalent ounces sold from continuing operations.2 These figures
are non-GAAP financial measures and ratios, as applicable, and are
defined and reconciled on pages 18 to 23 of this news release.
Non-GAAP financial measures and ratios have no standardized meaning
under IFRS and therefore, may not be comparable to similar measures
presented by other issuers. 3 “Margins” from continuing
operations per equivalent ounce sold is defined as average realized
gold price per ounce from continuing operations less production
cost of sales from continuing operations per equivalent ounce sold.
4 Operating cash flow figures in this release represent “Net cash
flow of continuing operations provided from operating activities,”
as reported on the interim condensed consolidated statements of
cash flows. 5 Reported net earnings (loss) figures in this news
release represent “Net earnings (loss) from continuing operations
attributable to common shareholders,” as reported on the interim
condensed consolidated statements of operations. 6
Adjusted net earnings figures in this news release represent
“Adjusted net earnings from continuing operations attributable to
common shareholders.”7 “Total liquidity” is defined as the sum of
cash and cash equivalents, as reported on the interim condensed
consolidated balance sheets, and available credit under the
Company’s credit facilities (as calculated in Section 6 – Liquidity
and Capital Resources of Kinross’ MD&A for the three and nine
months ended September 30, 2022).
Company guidance:
- Kinross is expecting its 2022
production to be approximately 2 million Au eq. oz., mainly due to
the temporary delays in La Coipa’s mill ramp-up and commissioning
related to the Tasiast 21k project. Full-year production from
continuing operations for the year ended December 31, 2021 was
1,447,240 Au eq. oz.
- The Company expects its 2022
production cost of sales to be slightly above $900 per Au eq. oz.
All-in sustaining cost is expected to be approximately $1,240 per
Au eq. oz. sold2. Consolidated production cost of sales was $8328
per Au eq. oz. sold and attributable all-in sustaining cost of
sales was $1,1382, 8 per Au eq. oz. sold for the year ended
December 31, 2021.
- The Company now anticipates its
2022 capital expenditures to be approximately $750 million mainly
due to deferred capital development across the portfolio. Capital
expenditures from continuing operations were $822 million for the
year ended December 31, 2021.
- Kinross has updated its forecast to
produce approximately 2.1 million attributable9 Au eq. oz. in 2023
and 2024, respectively, and approximately 2 million attributable9
Au eq. oz. in 2025.
Development projects:
- The Great Bear
project in Red Lake, Ontario, continues to make excellent progress
and the Company plans to declare an initial mineral resource
estimate in early 2023. Drilling results continue to confirm
Kinross’ vision of developing a large, long-life mining
complex.
- The Tasiast 24k
project is on schedule to reach 24,000 tonnes per day throughput in
mid-2023.
- The Manh Choh
project advanced well during the quarter with production expected
in the second half of 2024.
CEO Commentary:J. Paul Rollinson, President and
CEO, made the following comments in relation to 2022 third-quarter
results:
“During the quarter, our operations increased
production and lowered costs, primarily driven by higher grades at
Paracatu, enhanced seasonal recoveries from our U.S.-based heap
leaches, and the ramp-up at La Coipa, which progressed well and is
expected to continue trending upwards with the mill averaging
throughput levels of approximately 9,500 tonnes per day in October.
Tasiast is on track to significantly increase production in the
fourth quarter, with higher recoveries and increased throughput,
which is expected to contribute to our strongest quarter of
2022.
“We are excited about our pipeline of
development and exploration projects, which all made strong
progress during the quarter. At the world-class Great Bear project,
drilling results continue to fulfill our expectations, including
high-grade intercepts at depth, and we are on track to declare an
initial mineral resource early next year.
“We have returned approximately $300 million of
capital to shareholders so far this year and expect to return a
total of approximately $450 million by year-end through our share
repurchase and dividend programs. Since launching our enhanced
share buyback program in September, we have spent $180 million,
effectively repurchasing for cancellation the shares that were
issued as part of the Great Bear transaction while maintaining our
quarterly dividend and investment-grade balance sheet.
“During the quarter we continued to advance our ESG goals. On
climate change and emissions reductions, we have completed an
analysis of climate-related scenarios and their potential impacts
on our future business, advanced our pipeline of energy-efficiency
projects, and entered into strategic partnerships with various
technology providers, suppliers and electric utilities.”
________________________8 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 20 of this news
release.9 Attributable production guidance
includes Kinross' share of Manh Choh (70%) production.
Summary of financial and operating results
|
Three months ended |
Nine months ended |
|
September 30, |
September 30, |
(unaudited, in millions of U.S. dollars, except ounces, per share
amounts, and per ounce amounts) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
2021 |
|
Operating Highlights |
|
|
|
|
Total gold equivalent ounces(a) |
|
|
|
|
Produced(c) |
|
542,677 |
|
|
486,819 |
|
|
1,612,770 |
|
1,591,939 |
|
Sold(c) |
|
509,431 |
|
|
481,959 |
|
|
1,517,337 |
|
1,586,028 |
|
|
|
|
|
|
Total gold equivalent ounces from continuing operations(g) |
|
|
|
|
Produced(c) |
|
529,155 |
|
|
328,409 |
|
|
1,361,554 |
|
1,106,903 |
|
Sold(c) |
|
494,413 |
|
|
325,162 |
|
|
1,307,219 |
|
1,104,293 |
|
|
|
|
|
|
Attributable gold equivalent ounces(a) |
|
|
|
|
Produced(c) |
|
541,325 |
|
|
483,060 |
|
|
1,604,564 |
|
1,579,928 |
|
Sold(c) |
|
507,930 |
|
|
478,459 |
|
|
1,508,555 |
|
1,574,362 |
|
|
|
|
|
|
Financial Highlights from Continuing
Operations(g) |
|
|
|
|
Metal sales |
$ |
856.5 |
|
$ |
582.4 |
|
$ |
2,378.9 |
$ |
1,984.7 |
|
Production cost of sales |
$ |
465.3 |
|
$ |
289.8 |
|
$ |
1,279.2 |
$ |
914.0 |
|
Depreciation, depletion and amortization |
$ |
185.1 |
|
$ |
173.2 |
|
$ |
532.1 |
$ |
530.3 |
|
Operating earnings (loss) |
$ |
111.3 |
|
$ |
(23.7 |
) |
$ |
277.8 |
$ |
209.8 |
|
Net earnings (loss) from continuing operations attributable to
common shareholders |
$ |
65.9 |
|
$ |
(72.9 |
) |
$ |
137.9 |
$ |
36.3 |
|
Basic earnings (loss) per share from continuing operations
attributable to common shareholders |
$ |
0.05 |
|
$ |
(0.06 |
) |
$ |
0.11 |
$ |
0.03 |
|
Diluted earnings (loss) per share from continuing operations
attributable to common shareholders |
$ |
0.05 |
|
$ |
(0.06 |
) |
$ |
0.11 |
$ |
0.03 |
|
Adjusted net earnings from continuing operations attributable to
common shareholders(b) |
$ |
68.7 |
|
$ |
11.2 |
|
$ |
174.9 |
$ |
183.4 |
|
Adjusted net earnings from continuing operations per share(b) |
$ |
0.05 |
|
$ |
0.01 |
|
$ |
0.14 |
$ |
0.15 |
|
Net cash flow of continuing operations provided from operating
activities |
$ |
173.2 |
|
$ |
140.3 |
|
$ |
528.2 |
$ |
547.1 |
|
Adjusted operating cash flow from continuing operations(b) |
$ |
259.4 |
|
$ |
141.3 |
|
$ |
760.4 |
$ |
671.7 |
|
Capital expenditures from continuing operations(d) |
$ |
197.3 |
|
$ |
203.8 |
|
$ |
447.4 |
$ |
566.0 |
|
Free cash flow from continuing operations(b) |
$ |
(24.1 |
) |
$ |
(63.5 |
) |
$ |
80.8 |
$ |
(18.9 |
) |
Average realized gold price per ounce from continuing
operations(e) |
$ |
1,732 |
|
$ |
1,792 |
|
$ |
1,821 |
$ |
1,797 |
|
Production cost of sales from continuing operations per equivalent
ounce(c) sold(f) |
$ |
941 |
|
$ |
891 |
|
$ |
979 |
$ |
828 |
|
Production cost of sales from continuing operations per ounce sold
on a by-product basis(b) |
$ |
919 |
|
$ |
881 |
|
$ |
966 |
$ |
818 |
|
All-in sustaining cost from continuing operations per ounce sold on
a by-product basis(b) |
$ |
1,269 |
|
$ |
1,365 |
|
$ |
1,279 |
$ |
1,162 |
|
All-in sustaining cost from continuing operations per equivalent
ounce(c) sold(b) |
$ |
1,282 |
|
$ |
1,369 |
|
$ |
1,287 |
$ |
1,169 |
|
Attributable all-in cost(h) from continuing operations per ounce
sold on a by-product basis(b) |
$ |
1,555 |
|
$ |
1,766 |
|
$ |
1,543 |
$ |
1,552 |
|
Attributable all-in cost(h) from continuing operations per
equivalent ounce(c) sold(b) |
$ |
1,560 |
|
$ |
1,766 |
|
$ |
1,547 |
$ |
1,555 |
|
(a) Total gold equivalent ounces
produced and sold and attributable gold equivalent ounces produced
and sold include results from the Kupol, Dvoinoye and Chirano mines
up to their disposal. "Total gold equivalent ounces" includes 100%
of Chirano production. "Attributable gold equivalent ounces"
includes Kinross' share of Chirano (90%)
production.(b) The definition and reconciliation
of these non-GAAP financial measures and ratios is included in on
pages 18 to 23 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 third quarter of
2022 was 89.91:1 (third quarter of 2021 – 73.45:1). The ratio for
the first nine months of 2022 was 83.22:1 (first nine months of
2021 – 69.90:1).(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) “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) On June 15, 2022, the Company
announced that it had completed the sale of its Russian operations,
which includes the Kupol and Dvoinoye mines and the Udinsk project.
On August 10, 2022, the Company announced that it had completed the
sale of its Chirano mine in Ghana. Results for the three and nine
months ended September 30, 2022 and 2021 are from continuing
operations and exclude results from the Company’s Chirano and
Russian operations due to the classification of these operations as
discontinued as at September 30,
2022.(h) “Attributable all-in cost” includes
Kinross’ share of Manh Choh (70%) costs.
The following operating and financial results
are based on third-quarter gold equivalent production and exclude
Russian and Ghanaian operations except where noted:
Production: Kinross produced
529,155 Au eq. oz. in Q3 2022 from continuing operations, a 61%
increase compared with 328,409 Au eq. oz. in Q3 2021. The
year-over-year increase was primarily attributable to higher
production at Tasiast due to the temporary suspension of milling
operations as a result of the mill fire in June 2021, at Paracatu
due to an increase in grade and recovery, and at La Coipa due to
the restart and mill ramp-up.
Average realized gold price:
The average realized gold price from continuing operations in Q3
2022 was $1,732 per ounce, compared with $1,792 per ounce in Q3
2021.
Revenue: During the third
quarter, revenue from continuing operations increased to $856.5
million, compared with $582.4 million during Q3 2021.
Production cost of sales:
Production cost of sales from continuing operations per Au eq. oz.
sold increased to $941 for the quarter, compared with $891 in Q3
2021, mainly as a result of inflationary cost pressures on key
consumables, such as fuel, emulsion and reagents across the
portfolio.
Production cost of sales from continuing
operations per Au oz. sold2 on a by-product basis was $919 in Q3
2022, compared with $881 in Q3 2021, based on gold sales of
480,775 ounces and silver sales of 1,226,108 ounces.
Margins3: Kinross’ margin from
continuing operations per Au eq. oz. sold was $791 for Q3 2022,
compared with the Q3 2021 margin of $901.
All-in sustaining cost2: All-in
sustaining cost from continuing operations per Au eq. oz. sold was
$1,282 in Q3 2022, compared with $1,369 in Q3 2021.
In Q3 2022, all-in sustaining cost from
continuing operations per Au oz. sold on a by-product basis was
$1,269, compared with $1,365 in Q3 2021.
Operating cash flow: Operating
cash flow from continuing operations4 was $173.2 million for Q3
2022, compared with $140.3 million for Q3 2021.
Adjusted operating cash flow from continuing
operations2 increased to $259.4 million in Q3 2022, compared with
$141.3 million for Q3 2021.
Free cash
flow2: Free cash flow from continuing
operations in Q3 2022 was an outflow of $24.1 million, however
included total working capital changes representing an outflow of
$86.2 million10. In Q3 2021, free cash flow was an outflow of $63.5
million.
Earnings: Reported net
earnings5 from continuing operations was $65.9 million, or $0.05
per share for Q3 2022, compared with reported net loss of $72.9
million, or $0.06 per share, for Q3 2021. The increase in reported
net earnings was mainly due to the temporary suspension of milling
operations at Tasiast in June 2021.
Adjusted net earnings from continuing
operations2,6 were $68.7 million, or $0.05 per share, for Q3 2022,
compared with $11.2 million, or $0.01 per share, for Q3
2021.
Capital expenditures: Capital
expenditures from continuing operations decreased to $197.3 million
for Q3 2022, compared with $203.8 million for Q3 2021. The decrease
was primarily due to mine sequencing at Tasiast, Fort Knox and
Round Mountain involving a decrease in capital stripping, partially
offset by increased expenditures at La Coipa and an increase in
capital stripping at Bald Mountain.
Balance sheet
As of September 30, 2022, Kinross had cash and
cash equivalents of $488.4 million, compared with $719.1 million at
June 30, 2022.
During the quarter, the Company made net
repayments of $100 million on the outstanding balance on its
revolving credit facility and maintained its investment grade
balance sheet.
As of September 30, 2022, the Company had
additional available credit11 of approximately $1.5 billion
and total liquidity7 of approximately $2 billion.
________________________10 Total working
capital changes is defined as the sum of the changes in operating
assets and liabilities, including income taxes paid, as reported on
the interim condensed consolidated statements of cash flows (as
shown in the adjusted operating cash flow from continuing
operations reconciliation table on page 19 of this news release).
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
and nine months ended September 30, 2022.
Return of capital
On September 19, 2022, Kinross announced an
enhanced share buyback program, allocating an increased portion of
asset sales’ proceeds and excess free cash flow to share buybacks.
The Company believes Kinross’ shares offer exceptional returns on
invested capital, and that the buyback offers a highly attractive
use of excess cash. The buyback program will also allow
reinvestment in the business and the maintenance of a strong credit
profile.
Reflecting the Company’s financial strength and
proceeds from recent asset sales, under the enhanced share buyback
program Kinross has re-purchased approximately $180 million in
shares, or 60% of the $300 million target for 2022. Year-to-date
Kinross has returned approximately $300 million of capital through
its enhanced share buyback and quarterly dividend programs, and
expects to return total capital of approximately $450 million by
year end.
On September 29, 2022, Kinross received approval
from the Toronto Stock Exchange to increase its normal course
issuer bid (“NCIB”) program. Under the amended NCIB program, the
Company is authorized to purchase up to 114,047,070 of its common
shares (out of the 1,300,045,558 common shares outstanding as at
July 27, 2022) representing 10% of the Company’s public float,
during the period starting on August 3, 2022 and ending on August
2, 2023.
As part of its continuing quarterly dividend
program, the Company declared a dividend of $0.03 per common share
payable on December 15, 2022 to shareholders of record at the close
of business on December 1, 2022.
Operating resultsMine-by-mine
summaries for 2022 third-quarter operating results may be found on
pages 13 and 17 of this news release. Highlights include the
following:
At Tasiast, production was
largely in line with the previous two quarters, and higher
year-over-year due to the temporary suspension of milling
operations in June 2021. During the third quarter, planned mill
availability, throughput and recovery were lower than expected due
to some commissioning challenges. Three new leach tanks were
brought online in September and October, which has enabled a new
pre-oxidation stage and increased retention time, and is expected
to drive higher recoveries. Higher recoveries and mill throughput
are expected to result in an increase in fourth quarter
production.
Cost of sales per ounce sold was lower
quarter-over-quarter due to lower operating waste mined, and lower
year-over-year due to the increase in production as a result of the
temporary suspension of milling operations in 2021. Cost of sales
per ounce sold is expected to decrease in the fourth quarter with
the anticipated increase in production.
Paracatu performed well during
the quarter, increasing production significantly compared with Q2
2022 and Q3 2021 mainly as a result of higher grade and higher
recoveries, with continued high-grade material expected for the
remainder of the year driving a further increase in production.
Cost of sales per ounce sold was lower quarter-over-quarter mainly
due to the increase in production and higher year-over-year mainly
due to inflationary pressure on consumables, contractors, labour
and maintenance costs.
At Fort Knox, production was
largely in line with Q2 2022, and increased compared with Q3 2021
primarily due to higher mill throughput. The site had another
strong quarter of stacking onto the leach pad, and solution grades
from heap leach processing are increasing, positioning Q4 to be
another strong quarter. Cost of sales per ounce sold was in line
quarter-over-quarter and increased year-over-year primarily due to
inflationary pressure on consumables and higher contractor
costs.
At Round Mountain, production
was higher than the previous quarter mainly due to more ounces
recovered from the heap leach pads, and year-over-year production
was largely in line. Cost of sales per ounce sold was lower
quarter-over-quarter mainly due to higher production, and higher
year-over-year related to inflationary cost pressures on
consumables.
The Company has completed the Round Mountain optimization
program, which evaluated four primary options to exploit the
significant resources at the site: Phase S open pit pushback, Phase
W3 open pit pushback, Phase X underground, and Gold Hill
underground.
Given the high levels of inflation experienced
in Nevada, and the Company’s focus on capital discipline, cash flow
generation, and resiliency, Kinross is prioritizing the underground
opportunities at Phase X and Gold Hill, and continuing to mine
Phase W (W1 and W2). The expansion opportunities at Phase W3 and
Phase S have been deferred, and the associated ounces will remain
in reserves and could potentially be exploited in the future as the
environment improves. The two underground opportunities show
potential for higher-margin, higher-return operations at Round
Mountain compared to open pit, along with increased flexibility and
optionality. A team with underground expertise has been assembled
and the Company will be in position to start construction of an
underground decline at Phase X next year.
Bald Mountain performed well
during the quarter, with production increasing and cost of sales
per ounce sold decreasing compared with Q2 2022. The
quarter-over-quarter production increase was mainly due to more
ounces recovered from the heap leach pads, partially offset by
lower grades, while cost of sales per ounce was down mainly as a
result of higher capitalized stripping. Year-over-year production
was higher primarily due to more ounces recovered from the heap
leach pads and, for the same time period, cost of sales per ounce
sold was higher largely as a result of inflationary pressure on
consumables.
At La Coipa, production
increased significantly compared to the second quarter as the mill
continued to ramp up and resolve commissioning challenges, and cost
of sales per ounce sold were lower quarter-over-quarter mainly due
to higher production. The pump and supply chain issues encountered
earlier in the year have largely been resolved, with mill
throughput steadily increasing month-over-month and October
averaging approximately 9,500 tonnes per day (t/d) with multiple
days at or above 13,000 t/d. The mill is now expected to steadily
increase to a sustained design capacity of 13,000 t/d by the end of
Q1 2023.
Development projects
Tasiast
The Tasiast 24k project
continues to progress on schedule to reach throughput of 24,000 t/d
by mid-2023. Following project completion, it is expected that a
ramp-up period will see 24,000 t/d plant throughput transitioning
from an intermittent to consistent basis by the end of the year.
Procurement is substantially complete, with all major equipment
either on site or expected to arrive by year-end. Construction has
commenced, and civil and concrete works are well advanced.
The 34MW Tasiast solar power
plant continues to advance and is on schedule for
completion in the second half of 2023. Engineering design is
essentially complete and focused on deliverables for integration,
procurement is well advanced with all long-lead critical
procurement items ordered and site preparation started in October.
The solar project is contributing to the Company’s efforts to
reduce its greenhouse gas emissions and is expected to provide
approximately 20% of the site’s power.
Great Bear
At the Great Bear project in Red Lake, Ontario,
the Company continues to make excellent progress and is on schedule
to declare an initial mineral resource in early 2023. The Company
also plans to issue a Technical Report to support the resource.
To date, Kinross has drilled approximately
160,000 metres and is on track to complete at least 200,000 metres
of exploration and infill drilling in 2022 at the Limb and LP Fault
zones. Since its last update on July 27, 2022, the Company has
received additional assay results, with a selection of the new
results from targets at the LP Fault zone highlighted in the table
below.
Drilling results continue to support the view of
a high-grade, world-class deposit that underpins the prospect of a
large, long-life mining complex. Results have also confirmed gold
mineralization with good widths and high grades, including
high-grade mineralization at depths of more than 500 metres. These
results support the view that the LP Fault zone can support a
long-life, high-grade, open-pit and underground mine. The initial
results from the recently-completed 35,000 metre grade control
drill program have also helped confirm the high grade, continuous
nature of the intercepts observed in the LP Fault zone.
The Company is also analyzing an advanced
exploration program that would establish an underground decline and
allow 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, local community
socio-economic studies and engineering activities required for the
permitting process are progressing well. Kinross continues to
advance its comprehensive local outreach and engagement program for
all Red Lake regional communities, including the establishment of a
community office. The Company is taking steps to build technical
capacity and active site participation in the area of environmental
monitoring with Wabauskang and Lac Seul First Nation partners, on
whose traditional territories the project is located.
Selected Great Bear Drill
Results
See Appendix A for full results.
Hole ID |
|
From (m) |
To (m) |
Width (m) |
True Width (m) |
Au (g/t) |
Target |
|
|
|
|
|
|
|
|
BR-545 |
|
428.5 |
453.8 |
25.3 |
24.5 |
3.64 |
Yauro |
BR-545 |
including |
429.5 |
431.4 |
1.95 |
1.8 |
36.34 |
|
BR-545 |
and |
459.5 |
472.8 |
13.35 |
10.3 |
0.38 |
|
BR-545 |
and |
486.9 |
492.5 |
5.6 |
5.0 |
0.60 |
|
BR-576 |
|
666.8 |
670.0 |
3.25 |
2.8 |
0.60 |
Yuma |
BR-576 |
and |
703.0 |
711.1 |
8.1 |
7.1 |
11.83 |
|
BR-576 |
including |
704.0 |
707.0 |
3 |
2.8 |
29.54 |
|
BR-576 |
and |
742.3 |
755.3 |
13 |
10.3 |
0.43 |
|
BR-576 |
and |
809.7 |
815.7 |
6 |
5.0 |
0.59 |
|
BR-596 |
|
687.1 |
694.5 |
7.4 |
6.6 |
3.73 |
Yuma |
BR-596 |
including |
687.1 |
691.0 |
3.9 |
3.7 |
6.85 |
|
BR-596 |
and |
701.0 |
738.8 |
37.75 |
28.3 |
1.03 |
|
BR-612 |
|
399.0 |
412.5 |
13.5 |
12.7 |
1.91 |
Auro |
BR-612 |
including |
402.0 |
405.0 |
3 |
2.8 |
4.27 |
|
BR-612 |
and |
436.0 |
441.0 |
5 |
4.1 |
19.97 |
|
BR-612 |
including |
436.0 |
439.5 |
3.5 |
3.1 |
27.77 |
|
BR-612 |
and |
461.0 |
466.6 |
5.6 |
4.1 |
1.39 |
|
BR-621 |
|
174.0 |
178.6 |
4.6 |
4.2 |
0.67 |
Auro |
BR-621 |
and |
189.7 |
205.3 |
15.6 |
14.4 |
0.38 |
|
BR-621 |
and |
245.3 |
250.0 |
4.7 |
3.8 |
0.68 |
|
BR-621 |
and |
311.5 |
320.0 |
8.5 |
7.7 |
0.51 |
|
BR-621 |
and |
330.0 |
374.9 |
44.9 |
43.1 |
2.27 |
|
BR-621 |
including |
347.0 |
365.8 |
18.75 |
16.5 |
3.16 |
|
BR-621 |
and including |
372.0 |
373.0 |
1 |
1.0 |
26.50 |
|
BR-621 |
and |
468.0 |
471.9 |
3.9 |
3.6 |
0.62 |
|
BR-621 |
and |
480.5 |
495.0 |
14.5 |
11.2 |
0.48 |
|
BR-623 |
|
545.0 |
551.0 |
6 |
4.4 |
2.03 |
Auro |
BR-623 |
and |
578.0 |
608.8 |
30.75 |
22.8 |
7.62 |
|
BR-623 |
including |
585.7 |
597.0 |
11.3 |
10.9 |
18.60 |
|
BR-623 |
and |
627.3 |
628.0 |
0.75 |
0.7 |
18.90 |
|
BR-623 |
and |
755.0 |
763.3 |
8.3 |
7.1 |
0.36 |
|
BR-623 |
and |
806.7 |
809.6 |
2.95 |
2.8 |
3.23 |
|
BR-624 |
|
634.8 |
652.0 |
17.2 |
13.4 |
0.43 |
Auro |
BR-624 |
and |
670.0 |
698.5 |
28.5 |
23.1 |
7.11 |
|
BR-624 |
including |
677.1 |
684.0 |
6.95 |
5.1 |
26.83 |
|
BR-624 |
and |
823.0 |
832.0 |
9.05 |
7.5 |
0.58 |
|
BR-700 |
|
682.8 |
761.3 |
78.5 |
65.9 |
0.67 |
Yuma |
BR-700 |
and |
802.0 |
817.0 |
15 |
11.9 |
1.88 |
|
BR-700 |
including |
812.1 |
813.7 |
1.6 |
1.2 |
15.10 |
|
BR-700 |
and |
924.4 |
932.0 |
7.6 |
5.9 |
0.44 |
|
BR-700 |
and |
940.7 |
945.5 |
4.75 |
4.1 |
0.45 |
|
Results are preliminary in nature and are subject to on-going
QA/QC.
See Appendix B for a LP Fault zone long section.
See Appendix C for a visual representation of the conceptual
geological interpretation of the potential Great Bear deposit.
View an interactive 3D model of the Great Bear project
here:https://vrify.com/decks/Great-Bear-Project-Ontario-Canada-September-15-2022 (Updated
to September 15, 2022).
Manh Choh
On July 27, 2022, the Company, as the operator
of the joint venture, announced that it will proceed with
development of the 70%-owned Manh Choh project in Alaska. The
project is expected to increase the Company’s production profile in
Alaska by a total of approximately 640,000 attributable Au eq. oz.
over the life of mine at lower costs. Initial production from Manh
Choh is expected in the second half of 2024.
Early works at Manh Choh are focused on camp and
initial road access, which are proceeding on schedule and on
budget. At Fort Knox foundation work for the processing
infrastructure upgrades are underway. Permitting is progressing
well and the Company received its wetland permit in the third
quarter. Procurement and contracting activities are advancing well,
prioritizing local employment and contracting, including with the
Native Village of Tetlin.
Lobo-Marte
Kinross continues to advance permitting
activities at Lobo-Marte in order to preserve its
optionality for Kinross’ long-term portfolio. The Company continues
to study opportunities to extend La Coipa’s mine life up to the end
of the decade, with the potential additions of a new Puren
pushback, as well as the adjacent Coipa Norte and Can-Can
pushbacks. Those extensions would enter into the regular permitting
cycle in the upcoming years. As a result, the Company has decided
to defer submission of the Lobo-Marte Environmental Impact
Assessment (EIA), as the content of that application will depend,
in part, on the extent of any mine life extensions at La Coipa and
other factors such as gold price, local permitting process, and
other economic considerations. The Company continues to believe in
the project’s long-term development potential as a large, low-cost
mine upon the conclusion of mining at La Coipa.
Curlew Basin exploration
At
the Curlew exploration project in
Washington State, located approximately 35 kilometres north of the
Company’s Kettle River mill by paved road, drilling from
underground has confirmed the understanding of mineralized vein
orientations. The Company is on schedule to declare a mineral
resource in early 2023 with the drilling information to date.
Underground exploration drilling is still underway and will
continue into 2023 after which an updated resource will be
presented at a later date as the project is expected to grow beyond
the year-end resource.
Exploration drill results received during the quarter
include:
- Hole # 1116 – 2.4m @ 11.59
g/t Au – West Zone target
- Hole # 1118– 2.9m @ 7.12 g/t
Au – Stealth target
- Hole # 1120– 5.2m @ 5.37 g/t
Au – LP target
Round Mountain Gold Hill exploration
At the Gold
Hill exploration project, located approximately seven
kilometres northeast of Round Mountain in Nevada, exploration
drilling continued to return encouraging results. Drilling at the
main zone (extension of the Gold Hill pit) has confirmed multiple
>150m strike and dip extensions of the primary vein and parallel
vein structures. Results received this quarter include:
- D-1175 – 2.5m @ 8.04 g/t Au
(incl. 0.8m @ 23.3 g/t Au)
- D-1173A – 2.3m @ 6.93 g/t Au
(incl. 0.3m @ 36.90 g/t Au)
Drilling along the parallel Alexandria vein
(600m south of Main) has also returned encouraging results such as
D-1176 – 1.9m @ 24.24g/t Au (Incl. 0.4m @
107g/t Au), as well as visible gold in veins beneath the
sinter (assays pending).
Gold Hill is a low sulfidation epithermal vein
system consisting of high-grade narrow quartz veins with
significant strike continuity. Historic underground mining (current
pit area) produced approximately 40koz with a grade of 10g/t Au.
Exploration this year focused on testing the strike and dip limits
of Main and Alexandria, both of which remain open along strike.
Exploration work will continue these efforts, as well as test for
parallel veins outside of the two primary zones.
Company guidance The following
section of the news release represents forward-looking information
and users are cautioned that actual results may vary. We refer to
the risks and assumptions contained in the Cautionary Statement on
Forward-Looking Information on page 30 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 23 of this news release.
The Company’s Russian and Ghanaian assets have
been excluded from its guidance due to the classification of these
assets as discontinued as at September 30, 2022.
As Kinross’ share of Chirano (90%) is excluded
from guidance, all 2022 guidance figures are no longer on an
attributable basis, but on a total basis.
Production guidance
The Company expects its 2022 production to be
approximately 2 million Au eq. oz., mainly due to
slower-than-expected ramp-up at La Coipa and challenges associated
with commissioning the Tasiast 21k project.
Kinross previously guided 2.3 million and 2.1
million Au eq. oz. (+/- 5%) in 2023 and 2024, respectively. The
Company now expects to produce approximately 2.1 million
attributable9 Au eq. oz. in 2023 and 2024, respectively, and
approximately 2 million attributable9 Au eq. oz. in 2025. This
deferral of production is based on thorough assessments that have
been completed by our new operations leadership with a focus on
more resilient, balanced and de-risked mine plans.
Cost
guidance12
The Company expects to be slightly above its
revised 2022 production cost of sales guidance of approximately
$900 per Au eq. oz. and in line with its revised all-in sustaining
cost guidance of approximately $1,240 per Au eq. oz. sold2. In
20218, production cost of sales was $832 per Au eq. oz. and all-in
sustaining cost was $1,138 per Au eq. oz. sold2.
________________________12 Based on a gold price
of $1,800 per ounce and 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), as disclosed in Kinross’ Q2
2022 results news release from July 27, 2022. The other key
assumptions and sensitivities disclosed in the Company’s original
guidance on February 16, 2022 have not changed.
Capital expenditures
guidance
Kinross expects its 2022 capital expenditures to
be approximately $750 million mainly due to less capitalized
stripping across the portfolio and delayed spending on the
Tasiast solar power project. Capital expenditures from continuing
operations was $822 million for the year ended December 31, 2021.
Kinross’ previous 2022 guidance for capital expenditures was $850
million (+/- 5%).
Organizational update
On August 10, 2022, Kinross announced that it
had completed the sale of all its interest in the Chirano mine in
Ghana to Asante Gold Corporation for total consideration of $225
million in cash and shares. Kinross received $60 million in cash
and approximately 35 million Asante common shares upon close, with
the remainder in deferred payments.
Since completing the Chirano divestment, as well
as completing the divestment of the Company’s assets in Russia on
July 15, 2022, Kinross has adjusted its regional head office
presence to be more in line with its Americas-focused portfolio.
The optimized operating model is expected to keep our go-forward
overhead costs at approximately the same per ounce level going
forward as we had expected prior to the divestitures.
Further, during the quarter, the Company
appointed Claude Schimper to the position of Executive
Vice-President and Chief Operating Officer, where he will be
responsible for the Company’s operational success. Ned Jalil,
Senior Vice-President, Technical Services, has assumed leadership
of Kinross’ project development, exploration, geology, metallurgy,
mine planning, operations strategy and supply chain functions.
At Tasiast, the Company is engaged in
discussions with employee delegates regarding the collective labour
agreement, which is set to expire at year-end.
Environment, Social and Governance (ESG)
update
Following the publication of Kinross’ 2021
Sustainability and Climate reports in Q1 and Q2 respectively, the
Company updated its contributions towards the Sustainable
Development Goals developed by the United Nations as important
societal goals, including a summary of results at the Chirano mine
in Ghana, which was sold during the quarter.
In Mauritania, severe flooding in the Inchiri
region in early September affected local cities and communities
around the Tasiast mine, including the regional hospital. Kinross
provided significant and timely humanitarian relief including food
and supplies, as well as the delivery of a container of medical
supplies and equipment through our partnership with health NGO,
Project C.U.R.E., with a value of approximately $450,000.
Advancing our climate change strategy, Kinross
completed an analysis of climate-related scenarios, following the
governance recommendations of the Task Force on Climate-related
Financial Disclosures. The Company also continued to advance its
pipeline of energy efficiency projects, as well as strategic
partnerships with various technology providers, Original Equipment
Manufacturers and electric utilities. We have continued to improve
our governance of climate change risks and opportunities by
embedding the forecasting of emissions directly into the life of
mine models of each of our assets and projects.
Kinross’ strong ESG performance was
externally-recognized in major ESG rankings and ratings. The
Company’s S&P Global ESG score increased three points in
2022, ranking in the 96th percentile, the Company’s
highest score since 2014, which was driven primarily by improved
scores in the Environment dimension. The Company’s Sustainalytics
risk rating improved to medium from high and its MSCI score was
maintained at “A.”
Conference call details
In connection with this news release, Kinross
will hold a conference call and audio webcast on Thursday, November
10, 2022 at 8:00 a.m. EDT to discuss the results, followed by a
question-and-answer session. To access the call, please dial:
Canada & US toll-free – +1
(888) 330-2446; Passcode: 4915537Outside of Canada &
US – +1 (240) 789-2732; Passcode: 4915537
Replay (available up to 14 days after the
call):
Canada & US toll-free – +1
(800) 770-2030; Passcode: 4915537Outside of Canada &
US – +1 (647) 362-9199; Passcode: 4915537
You may also access the conference call on a
listen-only basis via webcast at our website www.kinross.com. The
audio webcast will be archived on www.kinross.com.
This release should be read in conjunction with
Kinross’ 2022 third-quarter unaudited Financial Statements and
Management’s Discussion and Analysis report at www.kinross.com.
Kinross’ 2022 third-quarter unaudited Financial Statements and
Management’s Discussion and Analysis have been filed with Canadian
securities regulators (available at www.sedar.com) and furnished
with the U.S. Securities and Exchange Commission (available at
www.sec.gov). Kinross shareholders may obtain a copy of the
financial statements free of charge upon request to the
Company.
About Kinross Gold Corporation
Kinross is a Canadian-based global senior gold
mining company with operations and projects in the United States,
Brazil, Mauritania, Chile and Canada. Our focus is on delivering
value based on the core principles of responsible mining,
operational excellence, disciplined growth, and balance sheet
strength. Kinross maintains listings on the Toronto Stock Exchange
(symbol:K) and the New York Stock Exchange (symbol:KGC).
Media Contact
Samantha SheffieldSenior Manager, Corporate Communicationsphone:
416-365-3034samantha.sheffield@kinross.com
Investor Relations ContactChris Lichtenheldt
Vice-President, Investor Relations phone:
416-365-2761chris.lichtenheldt@kinross.com
Review of operations
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, (unaudited) |
|
Gold equivalent ounces |
|
|
|
|
|
|
|
|
Produced |
|
Sold |
|
Production cost ofsales ($millions) |
|
Production cost ofsales/equivalent ounce sold |
|
2022 |
2021 |
|
2022 |
2021 |
|
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
Fort Knox |
75,522 |
71,336 |
|
74,221 |
71,482 |
|
$ |
88.6 |
$ |
67.7 |
|
$ |
1,194 |
$ |
947 |
Round Mountain |
62,417 |
63,242 |
|
61,757 |
61,405 |
|
|
87.0 |
|
60.8 |
|
|
1,409 |
|
990 |
Bald Mountain |
65,394 |
55,559 |
|
52,472 |
52,874 |
|
|
51.2 |
|
48.8 |
|
|
976 |
|
923 |
Paracatu |
159,113 |
134,425 |
|
152,616 |
133,924 |
|
|
131.1 |
|
103.7 |
|
|
859 |
|
774 |
La Coipa |
33,955 |
- |
|
24,681 |
- |
|
|
12.1 |
|
- |
|
|
490 |
|
- |
Maricunga |
- |
- |
|
652 |
655 |
|
|
0.5 |
|
0.5 |
|
|
767 |
|
763 |
Americas Total |
396,401 |
324,562 |
|
366,399 |
320,340 |
|
|
370.5 |
|
281.5 |
|
|
1,011 |
|
879 |
|
|
|
|
|
|
|
|
|
|
|
|
Tasiast |
132,754 |
3,847 |
|
128,014 |
4,822 |
|
|
94.8 |
|
8.3 |
|
|
741 |
|
1,721 |
West Africa Total |
132,754 |
3,847 |
|
128,014 |
4,822 |
|
|
94.8 |
|
8.3 |
|
|
741 |
|
1,721 |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations Total |
529,155 |
328,409 |
|
494,413 |
325,162 |
|
|
465.3 |
|
289.8 |
|
|
941 |
|
891 |
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued Operations |
|
|
|
|
|
|
|
|
|
|
|
Kupol |
- |
120,822 |
|
- |
121,798 |
|
|
- |
|
81.8 |
|
$ |
- |
$ |
672 |
Chirano (100%) |
13,522 |
37,588 |
|
15,018 |
34,999 |
|
|
24.3 |
|
49.4 |
|
|
1,618 |
|
1,411 |
|
13,522 |
158,410 |
|
15,018 |
156,797 |
|
|
24.3 |
|
131.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, (unaudited) |
|
Gold equivalent ounces |
|
|
|
|
|
|
|
|
Produced |
|
Sold |
|
Production cost ofsales ($millions) |
|
Production cost ofsales/equivalent ounce sold |
|
2022 |
2021 |
|
2022 |
2021 |
|
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
Fort Knox |
207,509 |
190,453 |
|
204,732 |
189,206 |
|
$ |
248.6 |
$ |
193.1 |
|
$ |
1,214 |
$ |
1,021 |
Round Mountain |
164,445 |
205,456 |
|
160,171 |
207,218 |
|
|
214.1 |
|
184.1 |
|
|
1,337 |
|
888 |
Bald Mountain |
155,573 |
143,854 |
|
147,961 |
142,507 |
|
|
146.0 |
|
127.4 |
|
|
987 |
|
894 |
Paracatu |
396,545 |
411,891 |
|
387,974 |
404,209 |
|
|
367.3 |
|
295.2 |
|
|
947 |
|
730 |
La Coipa |
41,893 |
- |
|
31,780 |
- |
|
|
17.8 |
|
- |
|
|
560 |
|
- |
Maricunga |
- |
- |
|
2,328 |
1,966 |
|
|
1.5 |
|
1.4 |
|
|
644 |
|
712 |
Americas Total |
965,965 |
951,654 |
|
934,946 |
945,106 |
|
|
995.3 |
|
801.2 |
|
|
1,065 |
|
848 |
|
|
|
|
|
|
|
|
|
|
|
|
Tasiast |
395,589 |
155,249 |
|
372,273 |
159,187 |
|
|
283.9 |
|
112.8 |
|
|
763 |
|
709 |
West Africa Total |
395,589 |
155,249 |
|
372,273 |
159,187 |
|
|
283.9 |
|
112.8 |
|
|
763 |
|
709 |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations Total |
1,361,554 |
1,106,903 |
|
1,307,219 |
1,104,293 |
|
|
1,279.2 |
|
914.0 |
|
|
979 |
|
828 |
|
|
|
|
|
|
|
|
|
|
|
Discontinued Operations |
|
|
|
|
|
|
|
|
|
|
|
Kupol |
169,156 |
364,929 |
|
122,295 |
365,075 |
|
|
83.8 |
|
231.0 |
|
|
685 |
|
633 |
Chirano (100%) |
82,060 |
120,107 |
|
87,823 |
116,660 |
|
|
131.2 |
|
155.9 |
|
|
1,494 |
|
1,336 |
|
251,216 |
485,036 |
|
210,118 |
481,735 |
|
|
215.0 |
|
386.9 |
|
|
|
Interim condensed consolidated balance
sheets
(unaudited, expressed in millions of U.S. dollars, except share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at |
|
|
|
September 30,2022 |
|
|
December 31,2021 |
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
488.4 |
|
|
$ |
531.5 |
|
|
Restricted cash |
|
8.2 |
|
|
11.4 |
|
|
Accounts receivable and other assets |
|
292.2 |
|
|
214.5 |
|
|
Current income tax recoverable |
|
6.5 |
|
|
10.2 |
|
|
Inventories |
|
1,092.1 |
|
|
1,151.3 |
|
|
Unrealized fair value of derivative assets |
|
26.7 |
|
|
30.0 |
|
|
|
|
1,914.1 |
|
|
1,948.9 |
|
|
Non-current assets |
|
|
|
|
|
|
|
Property, plant and equipment |
|
7,860.3 |
|
|
7,617.7 |
|
|
Goodwill |
|
- |
|
|
158.8 |
|
|
Long-term investments |
|
99.0 |
|
|
98.2 |
|
|
Other long-term assets |
|
666.1 |
|
|
598.0 |
|
|
Deferred tax assets |
|
- |
|
|
6.5 |
|
|
Total assets |
|
$ |
10,539.5 |
|
|
$ |
10,428.1 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
495.6 |
|
|
$ |
492.70 |
|
|
Current income tax payable |
|
52.6 |
|
|
95.00 |
|
|
Current portion of long-term debt and credit facilities |
|
40.0 |
|
|
40.00 |
|
|
Current portion of provisions |
|
35.8 |
|
|
90.00 |
|
|
Other current liabilities |
|
19.1 |
|
|
23.70 |
|
|
|
|
643.1 |
|
|
741.40 |
|
|
Non-current liabilities |
|
|
|
|
|
|
|
Long-term debt and credit facilities |
|
2,471.6 |
|
|
1,589.90 |
|
|
Provisions |
|
678.1 |
|
|
847.90 |
|
|
Long-term lease liabilities |
|
25.50 |
|
|
35.10 |
|
|
Other long-term liabilities |
|
131.20 |
|
|
127.40 |
|
|
Deferred tax liabilities |
|
356.80 |
|
|
436.80 |
|
|
Total liabilities |
|
$ |
4,306.30 |
|
|
$ |
3,778.50 |
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
Common shareholders' equity |
|
|
|
|
|
|
|
Common share capital |
|
$ |
4,679.60 |
|
|
$ |
4,427.70 |
|
|
Contributed surplus |
|
10,675.00 |
|
|
10,664.40 |
|
|
Accumulated deficit |
|
(9,108.50 |
) |
|
(8,492.40 |
) |
|
Accumulated other comprehensive income (loss) |
|
(69.20 |
) |
|
(18.80 |
) |
|
Total common shareholders' equity |
|
6,176.90 |
|
|
6,580.90 |
|
|
Non-controlling interests |
|
56.30 |
|
|
68.70 |
|
|
Total equity |
|
6,233.20 |
|
|
6,649.60 |
|
|
Total liabilities and equity |
|
$ |
10,539.50 |
|
|
$ |
10,428.10 |
|
|
|
|
|
|
|
|
|
|
Common shares |
|
|
|
|
|
|
|
Authorized |
|
Unlimited |
|
|
Unlimited |
|
|
Issued and outstanding |
|
1,285,406,778 |
|
|
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 |
|
Nine months ended |
|
|
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Revenue |
|
|
|
|
|
|
|
|
|
Metal sales |
|
$ |
856.5 |
|
|
$ |
582.4 |
|
|
$ |
2,378.9 |
|
|
$ |
1,984.7 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
|
|
|
|
|
|
|
Production cost of sales |
|
|
465.3 |
|
|
|
289.8 |
|
|
|
1,279.2 |
|
|
|
914.0 |
|
|
Depreciation, depletion and amortization |
|
|
185.1 |
|
|
|
173.2 |
|
|
|
532.1 |
|
|
|
530.3 |
|
|
Total cost of sales |
|
|
650.4 |
|
|
|
463.0 |
|
|
|
1,811.3 |
|
|
|
1,444.3 |
|
|
Gross profit |
|
|
206.1 |
|
|
|
119.4 |
|
|
|
567.6 |
|
|
|
540.4 |
|
|
Other operating expense |
|
|
12.2 |
|
|
|
92.3 |
|
|
|
83.7 |
|
|
|
181.7 |
|
|
Exploration and business development |
|
|
42.3 |
|
|
|
24.4 |
|
|
|
105.6 |
|
|
|
63.4 |
|
|
General and administrative |
|
|
40.3 |
|
|
|
26.4 |
|
|
|
100.5 |
|
|
|
85.5 |
|
|
Operating earnings (loss) |
|
|
111.3 |
|
|
|
(23.7 |
) |
|
|
277.8 |
|
|
|
209.8 |
|
|
Other income (expense) - net |
|
|
5.6 |
|
|
|
3.3 |
|
|
|
(0.4 |
) |
|
|
(8.7 |
) |
|
Finance income |
|
|
6.5 |
|
|
|
1.2 |
|
|
|
10.7 |
|
|
|
4.1 |
|
|
Finance expense |
|
|
(23.3 |
) |
|
|
(18.5 |
) |
|
|
(68.0 |
) |
|
|
(56.0 |
) |
|
Earnings (loss) from continuing operations before
tax |
|
|
100.1 |
|
|
|
(37.7 |
) |
|
|
220.1 |
|
|
|
149.2 |
|
|
Income tax expense - net |
|
|
(34.5 |
) |
|
|
(35.4 |
) |
|
|
(82.7 |
) |
|
|
(113.6 |
) |
|
Earnings (loss) from continuing operations after tax |
|
|
65.6 |
|
|
|
(73.1 |
) |
|
|
137.4 |
|
|
|
35.6 |
|
|
Earnings (loss) from discontinued operations after tax |
|
|
(0.8 |
) |
|
|
27.2 |
|
|
|
(636.3 |
) |
|
|
186.1 |
|
|
Net earnings (loss) |
|
$ |
64.8 |
|
|
$ |
(45.9 |
) |
|
$ |
(498.9 |
) |
|
$ |
221.7 |
|
|
Net earnings (loss) from continuing operations attributable
to: |
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
$ |
(0.3 |
) |
|
$ |
(0.2 |
) |
|
$ |
(0.5 |
) |
|
$ |
(0.7 |
) |
|
Common shareholders |
|
$ |
65.9 |
|
|
$ |
(72.9 |
) |
|
$ |
137.9 |
|
|
$ |
36.3 |
|
|
Net earnings (loss) from discontinued operations
attributable to: |
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
$ |
0.2 |
|
|
$ |
(0.8 |
) |
|
$ |
0.8 |
|
|
$ |
(1.5 |
) |
|
Common shareholders |
|
$ |
(1.0 |
) |
|
$ |
28.0 |
|
|
$ |
(637.1 |
) |
|
$ |
187.6 |
|
|
Net earnings (loss) attributable to: |
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
$ |
(0.1 |
) |
|
$ |
(1.0 |
) |
|
$ |
0.3 |
|
|
$ |
(2.2 |
) |
|
Common shareholders |
|
$ |
64.9 |
|
|
$ |
(44.9 |
) |
|
$ |
(499.2 |
) |
|
$ |
223.9 |
|
|
Earnings (loss) per share from continuing operations
attributable to common shareholders |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.05 |
|
|
$ |
(0.06 |
) |
|
$ |
0.11 |
|
|
$ |
0.03 |
|
|
Diluted |
|
$ |
0.05 |
|
|
$ |
(0.06 |
) |
|
$ |
0.11 |
|
|
$ |
0.03 |
|
|
Earnings (loss) per share from discontinued operations
attributable to common shareholders |
|
$ |
- |
|
|
$ |
0.02 |
|
|
$ |
(0.49 |
) |
|
$ |
0.15 |
|
|
Basic |
|
$ |
- |
|
|
$ |
0.02 |
|
|
$ |
(0.49 |
) |
|
$ |
0.15 |
|
|
Diluted |
|
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to common
shareholders |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.05 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.39 |
) |
|
$ |
0.18 |
|
|
Diluted |
|
$ |
0.05 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.39 |
) |
|
$ |
0.18 |
|
|
Interim condensed consolidated statements of cash
flows
(unaudited, expressed in millions of U.S. dollars) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Nine months ended |
|
|
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Net inflow (outflow) of cash related to the following
activities: |
|
|
|
|
|
|
|
|
|
Operating: |
|
|
|
|
|
|
|
|
|
Earnings (loss) from continuing operations after tax |
|
$ |
65.6 |
|
|
$ |
(73.1 |
) |
|
$ |
137.4 |
|
|
$ |
35.6 |
|
|
Adjustments to reconcile net earnings (loss) from continuing
operations to net cash provided from operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
185.1 |
|
|
|
173.2 |
|
|
|
532.1 |
|
|
|
530.3 |
|
|
Share-based compensation expense |
|
|
1.4 |
|
|
|
2.4 |
|
|
|
7.4 |
|
|
|
8.4 |
|
|
Finance expense |
|
|
23.3 |
|
|
|
18.5 |
|
|
|
68.0 |
|
|
|
56.0 |
|
|
Deferred tax expense |
|
|
5.5 |
|
|
|
8.2 |
|
|
|
3.4 |
|
|
|
4.5 |
|
|
Foreign exchange (gains) losses and other |
|
|
(1.5 |
) |
|
|
12.1 |
|
|
|
8.2 |
|
|
|
36.9 |
|
|
Reclamation (recovery) expense |
|
|
(20.0 |
) |
|
|
- |
|
|
|
3.9 |
|
|
|
- |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Accounts receivable and other assets |
|
|
(15.6 |
) |
|
|
(11.3 |
) |
- |
|
47.0 |
|
|
|
(2.0 |
) |
|
Inventories |
|
|
(70.0 |
) |
|
|
(11.6 |
) |
|
|
(222.4 |
) |
|
|
(71.2 |
) |
|
Accounts payable and accrued liabilities |
|
|
12.9 |
|
|
|
32.6 |
|
|
|
64.0 |
|
|
|
81.3 |
|
|
Cash flow provided from operating activities |
|
|
186.7 |
|
|
|
151.0 |
|
|
|
649.0 |
|
|
|
679.8 |
|
|
Income taxes paid |
|
|
(13.5 |
) |
|
|
(10.7 |
) |
|
|
(120.8 |
) |
|
|
(132.7 |
) |
|
Net cash flow of continuing operations provided from
operating activities |
|
|
173.2 |
|
|
|
140.3 |
|
|
|
528.2 |
|
|
|
547.1 |
|
|
Net cash flow of discontinued operations (used in) provided
from operating activities |
|
|
(1.6 |
) |
|
|
129.6 |
|
|
|
47.6 |
|
|
|
390.8 |
|
|
Investing: |
|
|
|
|
|
|
|
|
|
Additions to property, plant and equipment |
|
|
(197.3 |
) |
|
|
(203.8 |
) |
|
|
(447.4 |
) |
|
|
(566.0 |
) |
|
Interest paid capitalized to property, plant and equipment |
|
|
(20.5 |
) |
|
|
(13.0 |
) |
|
|
(36.7 |
) |
|
|
(43.2 |
) |
|
Acquisitions net of cash acquired |
|
|
- |
|
|
|
- |
|
|
|
(1,027.5 |
) |
|
|
- |
|
|
Net additions to long-term investments and other assets |
|
|
(9.5 |
) |
|
|
(12.4 |
) |
|
|
(43.6 |
) |
|
|
(28.9 |
) |
|
(Increase) decrease in restricted cash - net |
|
|
(1.2 |
) |
|
|
0.5 |
|
|
|
(2.3 |
) |
|
|
- |
|
|
Interest received and other - net |
|
|
2.0 |
|
|
|
(2.4 |
) |
|
|
6.7 |
|
|
|
(1.4 |
) |
|
Net cash flow of continuing operations used in investing
activities |
|
|
(226.5 |
) |
|
|
(231.1 |
) |
|
|
(1,550.8 |
) |
|
|
(639.5 |
) |
|
Net cash flow of discontinued operations provided from
(used in) investing activities |
|
|
43.3 |
|
|
|
(27.9 |
) |
|
|
296.2 |
|
|
|
(215.1 |
) |
|
Financing: |
|
|
|
|
|
|
|
|
|
Proceeds from drawdown of debt |
|
|
100.0 |
|
|
|
- |
|
|
|
1,197.6 |
|
|
|
- |
|
|
Repayment of debt |
|
|
(200.0 |
) |
|
|
- |
|
|
|
(320.0 |
) |
|
|
(500.0 |
) |
|
Interest paid |
|
|
(26.2 |
) |
|
|
(20.0 |
) |
|
|
(51.8 |
) |
|
|
(46.9 |
) |
|
Payment of lease liabilities |
|
|
(6.0 |
) |
|
|
(8.5 |
) |
|
|
(17.1 |
) |
|
|
(24.1 |
) |
|
Dividends paid to common shareholders |
|
|
(39.0 |
) |
|
|
(37.8 |
) |
|
|
(116.9 |
) |
|
|
(113.5 |
) |
|
Repurchase and cancellation of shares |
|
|
(60.2 |
) |
|
|
(31.8 |
) |
|
|
(60.2 |
) |
|
|
(31.8 |
) |
|
Other - net |
|
|
(4.9 |
) |
|
|
(1.0 |
) |
|
|
3.9 |
|
|
|
7.9 |
|
|
Net cash flow of continuing operations (used in) provided
from financing activities |
|
|
(236.3 |
) |
|
|
(99.1 |
) |
|
|
635.5 |
|
|
|
(708.4 |
) |
|
Net cash flow of discontinued operations used in financing
activities |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Effect of exchange rate changes on cash and cash
equivalents of continuing operations |
|
|
(1.0 |
) |
|
|
(0.5 |
) |
|
|
(1.4 |
) |
|
|
(0.5 |
) |
|
Effect of exchange rate changes on cash and cash
equivalents of discontinued operations |
|
|
(0.3 |
) |
|
|
(0.8 |
) |
|
|
1.6 |
|
|
|
0.8 |
|
|
Decrease in cash and cash equivalents |
|
|
(249.2 |
) |
|
|
(89.5 |
) |
|
|
(43.1 |
) |
|
|
(624.8 |
) |
|
Cash and cash equivalents, beginning of
period |
|
|
719.1 |
|
|
|
675.6 |
|
|
|
531.5 |
|
|
|
1,210.9 |
|
|
Cash and cash equivalents of assets held for sale,
beginning of period |
|
|
18.5 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Cash and cash equivalents, end of period |
|
$ |
488.4 |
|
|
$ |
586.1 |
|
|
$ |
488.4 |
|
|
$ |
586.1 |
|
|
|
Operating Summary |
|
Mine |
Period |
Tonnes OreMined (d) |
OreProcessed(Milled) |
OreProcessed(HeapLeach) |
Grade(Mill) (d) |
Grade(HeapLeach) |
Recovery(a)(d) |
Gold EqProduction(b) |
Gold EqSales (b) |
Productioncost ofsales |
Productioncost ofsales/oz
(c) |
Total CapEx (e) |
DD&A |
|
|
|
('000 tonnes) |
('000 tonnes) |
('000 tonnes) |
(g/t) |
(g/t) |
(%) |
(ounces) |
(ounces) |
($ millions) |
($/ounce) |
($ millions) |
($ millions) |
Americas |
Fort Knox |
Q3 2022 |
15,547 |
2,477 |
13,120 |
0.71 |
0.21 |
80 |
% |
75,522 |
74,221 |
$ |
88.6 |
$ |
1,194 |
$ |
31.0 |
$ |
21.8 |
Q2 2022 |
14,591 |
2,260 |
12,785 |
0.72 |
0.19 |
81 |
% |
77,184 |
77,698 |
$ |
92.6 |
$ |
1,192 |
$ |
13.1 |
$ |
26.1 |
Q1 2022 |
13,743 |
1,852 |
13,010 |
0.66 |
0.17 |
80 |
% |
54,803 |
52,813 |
$ |
67.4 |
$ |
1,276 |
$ |
2.9 |
$ |
20.9 |
Q4 2021 |
9,203 |
2,148 |
8,185 |
0.73 |
0.19 |
82 |
% |
73,830 |
74,384 |
$ |
74.1 |
$ |
996 |
$ |
31.6 |
$ |
30.9 |
Q3 2021 |
8,024 |
2,221 |
6,395 |
0.77 |
0.20 |
82 |
% |
71,336 |
71,482 |
$ |
67.7 |
$ |
947 |
$ |
37.4 |
$ |
29.7 |
Round Mountain |
Q3 2022 |
8,856 |
1,021 |
8,336 |
0.64 |
0.27 |
79 |
% |
62,417 |
61,757 |
$ |
87.0 |
$ |
1,409 |
$ |
24.7 |
$ |
17.6 |
Q2 2022 |
6,702 |
945 |
6,515 |
0.67 |
0.32 |
78 |
% |
56,709 |
51,455 |
$ |
74.8 |
$ |
1,454 |
$ |
20.6 |
$ |
11.7 |
Q1 2022 |
3,767 |
929 |
3,208 |
0.80 |
0.36 |
79 |
% |
45,319 |
46,959 |
$ |
52.3 |
$ |
1,114 |
$ |
16.0 |
$ |
12.1 |
Q4 2021 |
1,755 |
1,057 |
1,529 |
0.64 |
0.33 |
75 |
% |
51,549 |
52,723 |
$ |
51.8 |
$ |
982 |
$ |
50.3 |
$ |
14.5 |
Q3 2021 |
1,531 |
915 |
4,442 |
0.63 |
0.29 |
76 |
% |
63,242 |
61,405 |
$ |
60.8 |
$ |
990 |
$ |
23.7 |
$ |
16.3 |
Bald Mountain |
Q3 2022 |
4,152 |
- |
4,152 |
- |
0.37 |
nm |
65,394 |
52,472 |
$ |
51.2 |
$ |
976 |
$ |
28.2 |
$ |
39.1 |
Q2 2022 |
4,945 |
- |
4,945 |
- |
0.60 |
nm |
54,108 |
54,472 |
$ |
54.5 |
$ |
1,001 |
$ |
16.2 |
$ |
38.4 |
Q1 2022 |
3,870 |
- |
3,870 |
- |
0.63 |
nm |
36,071 |
41,017 |
$ |
40.3 |
$ |
983 |
$ |
5.8 |
$ |
35.1 |
Q4 2021 |
5,222 |
- |
5,222 |
- |
0.52 |
nm |
61,036 |
53,559 |
$ |
50.1 |
$ |
935 |
$ |
17.2 |
$ |
57.2 |
Q3 2021 |
5,941 |
- |
5,941 |
- |
0.46 |
nm |
55,559 |
52,874 |
$ |
48.8 |
$ |
923 |
$ |
7.7 |
$ |
59.4 |
Paracatu |
Q3 2022 |
11,752 |
13,797 |
- |
0.45 |
- |
79 |
% |
159,113 |
152,616 |
$ |
131.1 |
$ |
859 |
$ |
33.6 |
$ |
47.2 |
Q2 2022 |
11,011 |
15,133 |
- |
0.35 |
- |
75 |
% |
129,423 |
133,472 |
$ |
129.6 |
$ |
971 |
$ |
31.2 |
$ |
46.0 |
Q1 2022 |
6,165 |
13,645 |
- |
0.33 |
- |
75 |
% |
108,009 |
101,886 |
$ |
106.6 |
$ |
1,046 |
$ |
16.0 |
$ |
39.6 |
Q4 2021 |
13,036 |
15,451 |
- |
0.35 |
- |
77 |
% |
138,669 |
145,691 |
$ |
116.9 |
$ |
802 |
$ |
49.6 |
$ |
47.7 |
Q3 2021 |
14,107 |
15,085 |
- |
0.37 |
- |
76 |
% |
134,425 |
133,924 |
$ |
103.7 |
$ |
774 |
$ |
30.0 |
$ |
44.5 |
La Coipa |
Q3 2022 |
1,079 |
637 |
- |
1.19 |
- |
83 |
% |
33,955 |
24,681 |
$ |
12.1 |
$ |
490 |
$ |
34.7 |
$ |
- |
Q2 2022 |
550 |
321 |
- |
0.74 |
- |
69 |
% |
7,414 |
7,099 |
$ |
5.6 |
$ |
789 |
$ |
39.0 |
$ |
- |
Q1 2022 |
174 |
58 |
- |
nm |
- |
nm |
524 |
- |
$ |
- |
$ |
- |
$ |
35.8 |
$ |
- |
Q4 2021 |
nm |
- |
- |
- |
- |
- |
|
- |
- |
$ |
- |
$ |
- |
$ |
43.2 |
$ |
- |
Q3 2021 |
nm |
- |
- |
- |
- |
- |
|
- |
- |
$ |
- |
$ |
- |
$ |
28.1 |
$ |
- |
West Africa |
Tasiast |
Q3 2022 |
4,437 |
1,741 |
- |
2.72 |
- |
89 |
% |
132,754 |
128,014 |
$ |
94.8 |
$ |
741 |
$ |
33.4 |
$ |
58.0 |
Q2 2022 |
3,053 |
1,680 |
- |
2.51 |
- |
89 |
% |
129,140 |
114,064 |
$ |
93.3 |
$ |
818 |
$ |
24.3 |
$ |
56.4 |
Q1 2022 |
3,462 |
1,524 |
- |
2.54 |
- |
94 |
% |
133,695 |
130,195 |
$ |
95.8 |
$ |
736 |
$ |
19.4 |
$ |
57.1 |
Q4 2021 |
1,061 |
1,068 |
- |
1.50 |
- |
94 |
% |
15,253 |
15,006 |
$ |
10.8 |
$ |
720 |
$ |
52.5 |
$ |
13.1 |
Q3 2021 |
822 |
- |
- |
- |
- |
- |
|
3,847 |
4,822 |
$ |
8.3 |
$ |
1,721 |
$ |
68.1 |
$ |
21.3 |
(a) Due to the nature of heap leach operations,
recovery rates at Bald Mountain cannot be accurately measured on a
quarterly basis. Recovery rates at Fort Knox, Round Mountain and
Tasiast represent mill recovery only.(b) Gold equivalent
ounces include silver ounces produced and sold converted to a gold
equivalent based on the ratio of the average spot market prices for
the commodities for each period. The ratios for the quarters
presented are as follows: Q3 2022: 89.91:1; Q2 2022: 82.76:1; Q1
2022: 78.19:1; Q4 2021: 76.89:1; Q3 2021:
73.45:1.(c) “Production cost of sales per equivalent ounce
sold” is defined as production cost of sales divided by gold
equivalent ounces sold.(d) "nm" means not
meaningful.(e) "Capital expenditures" is as reported as
“Additions to property, plant and equipment” on the interim
condensed consolidated statements of cash flows.
Reconciliation of non-GAAP financial measures and
ratios
The Company has included certain non-GAAP
financial measures and ratios in this document. These measures and
ratios are not defined under International Financial Reporting
Standards (IFRS) and should not be considered in isolation. The
Company believes that these financial measures and ratios, together
with financial measures and ratios determined in accordance with
IFRS, provide investors with an improved ability to evaluate the
underlying performance of the Company. The inclusion of these
financial measures and ratios is meant to provide additional
information and should not be used as a substitute for performance
measures prepared in accordance with IFRS. These financial measures
and ratios are not necessarily standard and therefore may not be
comparable to other issuers.
All the non-GAAP financial measures and ratios
in this document are from continuing operations and exclude results
from the Company’s Chirano and Russian operations due to the
classification of these operations as discontinued. The comparative
information has been recast to exclude Chirano and Russia. As a
result of the exclusion of Chirano, the following non-GAAP
financial measures and ratios are no longer on an attributable
basis, but on a total basis: production cost of sales from
continuing operations per ounce sold on a by-product basis and
all-in-sustaining cost from continuing operations per equivalent
ounce sold and per ounce sold on a by-product basis.
Adjusted net earnings from continuing
operations attributable to common shareholders and
adjusted net earnings from continuing operations per
share are non-GAAP financial measures and ratios which
determine the performance of the Company, excluding certain impacts
which the Company believes are not reflective of the Company’s
underlying performance for the reporting period, such as the impact
of foreign exchange gains and losses, reassessment of prior year
taxes and/or taxes otherwise not related to the current period,
impairment charges (reversals), gains and losses and other one-time
costs related to acquisitions, dispositions and other transactions,
and non-hedge derivative gains and losses. Although some of the
items are recurring, the Company believes that they are not
reflective of the underlying operating performance of its current
business and are not necessarily indicative of future operating
results. Management believes that these measures and ratios, which
are used internally to assess performance and in planning and
forecasting future operating results, provide investors with the
ability to better evaluate underlying performance, particularly
since the excluded items are typically not included in public
guidance. However, adjusted net earnings from continuing operations
and adjusted net earnings from continuing operations per share
measures and ratios are not necessarily indicative of net earnings
from continuing operations and earnings per share measures and
ratios as determined under IFRS.
The following table provides a reconciliation of
net earnings (loss) 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 |
|
Nine months ended |
September 30, |
|
September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Net earnings (loss) from continuing operations attributable to
common shareholders - as reported |
$ |
65.9 |
|
$ |
(72.9 |
) |
|
$ |
137.9 |
|
$ |
36.3 |
|
Adjusting items: |
|
|
|
|
|
|
Foreign exchange (gains) losses |
|
(5.9 |
) |
|
(5.6 |
) |
|
|
(0.1 |
) |
|
1.5 |
|
|
Foreign exchange losses (gains) on translation of tax basis and
foreign exchange on deferred income taxes within income tax
expense |
|
3.1 |
|
|
15.0 |
|
|
|
(8.4 |
) |
|
9.5 |
|
|
Taxes in respect of prior periods |
|
5.0 |
|
|
4.4 |
|
|
|
15.8 |
|
|
17.0 |
|
|
Reclamation (recovery) expense |
|
(20.0 |
) |
|
15.0 |
|
|
|
3.9 |
|
|
25.0 |
|
|
Tasiast mill fire related costs |
|
- |
|
|
28.9 |
|
|
|
- |
|
|
41.0 |
|
|
COVID-19 costs(a) |
|
- |
|
|
4.1 |
|
|
|
- |
|
|
13.1 |
|
|
Round Mountain pit wall stabilization costs |
|
- |
|
|
16.1 |
|
|
|
- |
|
|
42.7 |
|
|
Tasiast definitive agreement settlement |
|
- |
|
|
10.0 |
|
|
|
- |
|
|
10.0 |
|
|
Other(b) |
|
16.9 |
|
|
4.7 |
|
|
|
21.4 |
|
|
5.6 |
|
|
Tax effects of the above adjustments |
|
3.7 |
|
|
(8.5 |
) |
|
|
4.4 |
|
|
(18.3 |
) |
|
|
|
2.8 |
|
|
84.1 |
|
|
|
37.0 |
|
|
147.1 |
|
Adjusted net earnings from continuing operations attributable to
common shareholders |
$ |
68.7 |
|
$ |
11.2 |
|
|
$ |
174.9 |
|
$ |
183.4 |
|
Weighted average number of common shares outstanding - Basic |
|
1,299.8 |
|
|
1,261.2 |
|
|
|
1,288.0 |
|
|
1,260.6 |
|
Adjusted net earnings from continuing operations per share |
$ |
0.05 |
|
$ |
0.01 |
|
|
$ |
0.14 |
|
$ |
0.15 |
|
Basic earnings (loss) from continuing operations per share
attributable to common shareholders |
$ |
0.05 |
|
$ |
(0.06 |
) |
|
$ |
0.11 |
|
$ |
0.03 |
|
|
|
|
|
|
|
|
(a) Includes COVID-19 related labour, health
and safety, donations and other support program costs. For the
third quarter and first nine months of 2022, adjusted net earnings
has not been adjusted for COVID-19 related costs of $1.2 million
and $8.0 million, respectively, incurred at operating
sites.(b) Other includes restructuring costs of
$13.0 million for the third quarter and first nine months of 2022
as well as other various impacts, such as one-time costs at sites,
and gains and losses on the sale of assets and hedges, which the
Company believes are not reflective of the Company’s underlying
performance for the reporting period.
Free cash flow from continuing
operations is a non-GAAP financial measure and is defined
as net cash flow of continuing operations provided from operating
activities less additions to property, plant and equipment. The
Company believes that this measure, which is used internally to
evaluate the Company’s underlying cash generation performance and
the ability to repay creditors and return cash to shareholders,
provides investors with the ability to better evaluate the
Company’s underlying performance. However, the free cash flow from
continuing operations measure is not necessarily indicative of
operating earnings or net cash flow of continuing operations
provided from operating activities as determined under IFRS.
The following table provides a reconciliation of
free cash flow from continuing operations for the periods
presented:
|
|
|
|
|
|
|
Three months ended |
|
Nine months ended |
(unaudited, expressed in millions of U.S dollars) |
September 30, |
|
September 30, |
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
Net cash flow of continuing operations provided from operating
activities - as reported |
$ |
173.2 |
|
$ |
140.3 |
|
|
$ |
528.2 |
|
$ |
547.1 |
|
|
|
|
|
|
|
Less: Additions to property, plant and equipment |
|
(197.3 |
) |
|
(203.8 |
) |
|
|
(447.4 |
) |
|
(566.0 |
) |
|
|
|
|
|
|
Free cash flow from continuing operations |
$ |
(24.1 |
) |
$ |
(63.5 |
) |
|
$ |
80.8 |
|
$ |
(18.9 |
) |
|
|
|
|
|
|
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 |
|
Nine months ended |
September 30, |
|
September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Net cash flow of continuing operations provided from operating
activities - as reported |
$ |
173.2 |
|
$ |
140.3 |
|
|
$ |
528.2 |
|
$ |
547.1 |
|
|
|
|
|
|
|
|
Adjusting items: |
|
|
|
|
|
|
Working capital changes: |
|
|
|
|
|
|
Accounts receivable and other assets |
|
15.6 |
|
|
11.3 |
|
|
|
(47.0 |
) |
|
2.0 |
|
|
Inventories |
|
70.0 |
|
|
11.6 |
|
|
|
222.4 |
|
|
71.2 |
|
|
Accounts payable and other liabilities, including income taxes
paid |
|
0.6 |
|
|
(21.9 |
) |
|
|
56.8 |
|
|
51.4 |
|
|
Total working capital changes |
|
86.2 |
|
|
1.0 |
|
|
|
232.2 |
|
|
124.6 |
|
Adjusted operating cash flow from continuing operations |
$ |
259.4 |
|
$ |
141.3 |
|
|
$ |
760.4 |
|
$ |
671.7 |
|
|
|
|
|
|
|
|
Production cost of sales from continuing
operations per ounce sold on a by-product basis is a
non-GAAP ratio which calculates the Company’s non-gold production
as a credit against its per ounce production costs, rather than
converting its non-gold production into gold equivalent ounces and
crediting it to total production, as is the case in co-product
accounting. Management believes that this ratio provides investors
with the ability to better evaluate Kinross’ production cost of
sales per ounce on a comparable basis with other major gold
producers who routinely calculate their cost of sales per ounce
using by-product accounting rather than co-product accounting.
The following table provides a reconciliation of
production cost of sales from continuing operations per ounce sold
on a by-product basis for the periods presented:
|
|
(unaudited, expressed in millions of U.S. dollars, |
Three months ended |
|
Nine months ended |
except ounces and production cost of sales per ounce) |
September 30, |
|
September 30, |
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
Production cost of sales from continuing operations - as
reported |
$ |
465.3 |
|
$ |
289.8 |
|
|
$ |
1,279.2 |
|
$ |
914.0 |
|
Less: silver revenue(a) |
|
(23.6 |
) |
|
(6.4 |
) |
|
|
(37.0 |
) |
|
(20.0 |
) |
Production cost of sales from continuing operations net of silver
by-product revenue |
$ |
441.7 |
|
$ |
283.4 |
|
|
$ |
1,242.2 |
|
$ |
894.0 |
|
|
|
|
|
|
|
Gold ounces sold from continuing operations |
|
480,775 |
|
|
321,528 |
|
|
|
1,286,196 |
|
|
1,093,121 |
|
Total gold equivalent ounces sold from continuing operations |
|
494,413 |
|
|
325,162 |
|
|
|
1,307,219 |
|
|
1,104,293 |
|
Production cost of sales from continuing operations per ounce sold
on a by-product basis |
$ |
919 |
|
$ |
881 |
|
|
$ |
966 |
|
$ |
818 |
|
Production cost of sales from continuing operations per equivalent
ounce sold(b) |
$ |
941 |
|
$ |
891 |
|
|
$ |
979 |
|
$ |
828 |
|
|
|
|
|
|
|
See page 22 for details of the footnotes referenced
within the table above.
All-in sustaining cost and attributable
all-in cost from continuing operations per ounce sold on a
by-product basis are non-GAAP financial measures and
ratios, as applicable, calculated based on guidance published by
the World Gold Council (“WGC”). The WGC is a market development
organization for the gold industry and is an association whose
membership comprises leading gold mining companies including
Kinross. Although the WGC is not a mining industry regulatory
organization, it worked closely with its member companies to
develop these metrics. Adoption of the all-in sustaining cost and
all-in cost metrics is voluntary and not necessarily standard, and
therefore, these measures and ratios presented by the Company may
not be comparable to similar measures and ratios presented by other
issuers. The Company believes that the all-in sustaining cost and
all-in cost measures complement existing measures and ratios
reported by Kinross.
All-in sustaining cost includes both operating
and capital costs required to sustain gold production on an ongoing
basis. The value of silver sold is deducted from the total
production cost of sales as it is considered residual production.
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.
All-in sustaining cost and attributable
all-in cost from continuing operations per ounce sold on a
by-product basis are calculated by adjusting production
cost of sales from continuing operations, as reported on the
interim condensed consolidated statements of operations, as
follows:
|
|
|
|
|
|
|
(unaudited, expressed in millions of U.S. dollars, |
Three months ended |
|
Nine months ended |
except ounces and costs per ounce) |
September 30, |
|
September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Production cost of sales from continuing operations - as
reported |
$ |
465.3 |
|
$ |
289.8 |
|
|
$ |
1,279.2 |
|
$ |
914.0 |
|
Less: silver revenue from continuing operations(a) |
|
(23.6 |
) |
|
(6.4 |
) |
|
|
(37.0 |
) |
|
(20.0 |
) |
Production cost of sales from continuing operations net of silver
by-product revenue |
$ |
441.7 |
|
$ |
283.4 |
|
|
$ |
1,242.2 |
|
$ |
894.0 |
|
Adjusting items: |
|
|
|
|
|
|
General and administrative(d) |
|
27.3 |
|
|
26.4 |
|
|
|
87.5 |
|
|
85.5 |
|
|
Other operating expense - sustaining(e) |
|
11.7 |
|
|
2.5 |
|
|
|
23.5 |
|
|
7.8 |
|
|
Reclamation and remediation - sustaining(f) |
|
10.7 |
|
|
10.2 |
|
|
|
28.5 |
|
|
29.2 |
|
|
Exploration and business development - sustaining(g) |
|
7.4 |
|
|
10.1 |
|
|
|
22.9 |
|
|
24.7 |
|
|
Additions to property, plant and equipment - sustaining(h) |
|
105.9 |
|
|
98.5 |
|
|
|
224.6 |
|
|
206.3 |
|
|
Lease payments - sustaining(i) |
|
5.6 |
|
|
7.8 |
|
|
|
16.3 |
|
|
23.2 |
|
All-in Sustaining Cost on a by-product basis |
$ |
610.3 |
|
$ |
438.9 |
|
|
$ |
1,645.5 |
|
$ |
1,270.7 |
|
Adjusting items on an attributable(c) basis: |
|
|
|
|
|
|
Other operating expense - non-sustaining(e) |
|
11.2 |
|
|
8.9 |
|
|
|
32.3 |
|
|
28.1 |
|
|
Reclamation and remediation - non-sustaining(f) |
|
2.8 |
|
|
0.8 |
|
|
|
6.1 |
|
|
2.5 |
|
|
Exploration and business development - non-sustaining(g) |
|
34.6 |
|
|
14.2 |
|
|
|
82.2 |
|
|
38.1 |
|
|
Additions to property, plant and equipment - non-sustaining(h) |
|
88.4 |
|
|
104.2 |
|
|
|
218.0 |
|
|
356.5 |
|
|
Lease payments - non-sustaining(i) |
|
0.4 |
|
|
0.7 |
|
|
|
0.8 |
|
|
0.9 |
|
All-in Cost on a by-product basis - attributable(c) |
$ |
747.7 |
|
$ |
567.7 |
|
|
$ |
1,984.9 |
|
$ |
1,696.8 |
|
Gold ounces sold from continuing operations |
|
480,775 |
|
|
321,528 |
|
|
|
1,286,196 |
|
|
1,093,121 |
|
All-in sustaining cost from continuing operations per ounce sold on
a by-product basis |
$ |
1,269 |
|
$ |
1,365 |
|
|
$ |
1,279 |
|
$ |
1,162 |
|
Attributable(c) all-in cost from continuing operations per ounce
sold on a by-product basis |
$ |
1,555 |
|
$ |
1,766 |
|
|
$ |
1,543 |
|
$ |
1,552 |
|
Production cost of sales from continuing operations per equivalent
ounce sold(b) |
$ |
941 |
|
$ |
891 |
|
|
$ |
979 |
|
$ |
828 |
|
|
|
|
|
|
|
|
See page 22 for details of the footnotes referenced
within the table above.
The Company also assesses its all-in sustaining
cost and attributable all-in cost from continuing operations on a
gold equivalent ounce basis. Under these non-GAAP financial
measures and ratios, the Company’s production of silver is
converted into gold equivalent ounces and credited to total
production.
All-in sustaining cost and attributable
all-in cost from continuing operations per equivalent ounce
sold are calculated by adjusting 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 equivalent ounce) |
Three months ended |
|
Nine months ended |
September 30, |
|
September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Production cost of sales from continuing operations - as
reported |
$ |
465.3 |
|
$ |
289.8 |
|
|
$ |
1,279.2 |
|
$ |
914.0 |
|
Adjusting items: |
|
|
|
|
|
|
General and administrative(d) |
|
27.3 |
|
|
26.4 |
|
|
|
87.5 |
|
|
85.5 |
|
|
Other operating expense - sustaining(e) |
|
11.7 |
|
|
2.5 |
|
|
|
23.5 |
|
|
7.8 |
|
|
Reclamation and remediation - sustaining(f) |
|
10.7 |
|
|
10.2 |
|
|
|
28.5 |
|
|
29.2 |
|
|
Exploration and business development - sustaining(g) |
|
7.4 |
|
|
10.1 |
|
|
|
22.9 |
|
|
24.7 |
|
|
Additions to property, plant and equipment - sustaining(h) |
|
105.9 |
|
|
98.5 |
|
|
|
224.6 |
|
|
206.3 |
|
|
Lease payments - sustaining(i) |
|
5.6 |
|
|
7.8 |
|
|
|
16.3 |
|
|
23.2 |
|
All-in Sustaining Cost |
$ |
633.9 |
|
$ |
445.3 |
|
|
$ |
1,682.5 |
|
$ |
1,290.7 |
|
Adjusting items on an attributable(c) basis: |
|
|
|
|
|
|
Other operating expense - non-sustaining(e) |
|
11.2 |
|
|
8.9 |
|
|
|
32.3 |
|
|
28.1 |
|
|
Reclamation and remediation - non-sustaining(f) |
|
2.8 |
|
|
0.8 |
|
|
|
6.1 |
|
|
2.5 |
|
|
Exploration and business development - non-sustaining(g) |
|
34.6 |
|
|
14.2 |
|
|
|
82.2 |
|
|
38.1 |
|
|
Additions to property, plant and equipment - non-sustaining(h) |
|
88.4 |
|
|
104.2 |
|
|
|
218.0 |
|
|
356.5 |
|
|
Lease payments - non-sustaining(i) |
|
0.4 |
|
|
0.7 |
|
|
|
0.8 |
|
|
0.9 |
|
All-in Cost - attributable(c) |
$ |
771.3 |
|
$ |
574.1 |
|
|
$ |
2,021.9 |
|
$ |
1,716.8 |
|
Gold equivalent ounces sold from continuing operations |
|
494,413 |
|
|
325,162 |
|
|
|
1,307,219 |
|
|
1,104,293 |
|
All-in sustaining cost from continuing operations per equivalent
ounce sold |
$ |
1,282 |
|
$ |
1,369 |
|
|
$ |
1,287 |
|
$ |
1,169 |
|
Attributable(c) all-in cost from continuing operations per
equivalent ounce sold |
$ |
1,560 |
|
$ |
1,766 |
|
|
$ |
1,547 |
|
$ |
1,555 |
|
Production cost of sales from continuing operations per equivalent
ounce sold(b) |
$ |
941 |
|
$ |
891 |
|
|
$ |
979 |
|
$ |
828 |
|
|
|
|
|
|
|
|
See page 22 for details of the footnotes referenced
within the table above.
Attributable All-In Sustaining Cost and
All-In Cost per Equivalent Ounce Sold – Years Ended December 31,
2021 and 2020
Attributable all-in sustaining cost and all-in
cost per equivalent ounce sold are calculated by adjusting total
production cost of sales, as reported on the consolidated
statements of operations for the years ended December 31, 2021 and
2020, as follows:
|
|
|
|
(expressed in millions of U.S. dollars,except ounces and costs per
equivalent ounce) |
|
|
Years ended December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
Production cost of sales - as reported |
$ |
1,726.1 |
|
$ |
1,725.7 |
|
Less: portion attributable to Chirano non-controlling
interest(j) |
|
(20.2 |
) |
|
(19.6 |
) |
Attributable(k) production cost of sales |
$ |
1,705.9 |
|
$ |
1,706.1 |
|
Adjusting items on an attributable(k) basis: |
|
|
|
General and administrative(m) |
|
126.6 |
|
|
117.9 |
|
|
Other operating expense - sustaining(n) |
|
10.6 |
|
|
9.6 |
|
|
Reclamation and remediation - sustaining(o) |
|
43.2 |
|
|
54.0 |
|
|
Exploration and business development - sustaining(p) |
|
40.0 |
|
|
48.3 |
|
|
Additions to property, plant and equipment - sustaining(q) |
|
386.0 |
|
|
373.5 |
|
|
Lease payments - sustaining(r) |
|
32.8 |
|
|
19.7 |
|
All-in Sustaining Cost - attributable(k) |
$ |
2,345.1 |
|
$ |
2,329.1 |
|
|
Other operating expense - non-sustaining(n) |
|
38.1 |
|
|
55.9 |
|
|
Reclamation and remediation - non-sustaining(o) |
|
3.4 |
|
|
5.0 |
|
|
Exploration and business development - non-sustaining(p) |
|
91.3 |
|
|
43.3 |
|
|
Additions to property, plant and equipment - non-sustaining(q) |
|
544.6 |
|
|
536.9 |
|
|
Lease payments - non-sustaining(r) |
|
1.0 |
|
|
1.0 |
|
All-in Cost - attributable(k) |
$ |
3,023.5 |
|
$ |
2,971.2 |
|
Gold equivalent ounces sold |
|
2,075,738 |
|
|
2,375,548 |
|
Less: portion attributable to Chirano non-controlling
interest(l) |
|
(14,829 |
) |
|
(16,621 |
) |
Attributable(k) gold equivalent ounces sold |
|
2,060,909 |
|
|
2,358,927 |
|
Attributable(k) all-in sustaining cost per equivalent ounce
sold |
$ |
1,138 |
|
$ |
987 |
|
Attributable(k) all-in cost per equivalent ounce sold |
$ |
1,467 |
|
$ |
1,260 |
|
Consolidated production cost of sales per equivalent ounce
sold(s) |
$ |
832 |
|
$ |
726 |
|
|
|
|
|
(a) “Silver revenue” represents the
portion of metal sales realized from the production of the
secondary or by-product metal (i.e., silver). Revenue from the sale
of silver, which is produced as a by-product of the process used to
produce gold, effectively reduces the cost of gold
production.(b) “Production cost of sales from
continuing operations per equivalent ounce sold” is defined as
production cost of sales from continuing operations divided by
total gold equivalent ounces sold from continuing
operations.(c) “Attributable” includes Kinross’ share
of Manh Choh (70%) costs. As Manh Choh is a non-operating site, the
attributable costs are non-sustaining costs and as such only impact
the all-in-cost measures. (d) “General and
administrative” expenses is as reported on the interim condensed
consolidated statements of operations, net of certain restructuring
expenses. General and administrative expenses are considered
sustaining costs as they are required to be absorbed on a
continuing basis for the effective operation and governance of the
Company.(e) “Other operating expense – sustaining”
is calculated as “Other operating expense” as reported on the
interim condensed consolidated statements of operations, less other
operating and reclamation and remediation expenses related to
non-sustaining activities as well as other items not reflective of
the underlying operating performance of our business. Other
operating expenses are classified as either sustaining or
non-sustaining based on the type and location of the expenditure
incurred. The majority of other operating expenses that are
incurred at existing operations are considered costs necessary to
sustain operations, and are therefore classified as sustaining.
Other operating expenses incurred at locations where there is no
current operation or related to other non-sustaining activities are
classified as non-sustaining.(f) “Reclamation and
remediation - sustaining” is calculated as current period accretion
related to reclamation and remediation obligations plus current
period amortization of the corresponding reclamation and
remediation assets, and is intended to reflect the periodic cost of
reclamation and remediation for currently operating mines.
Reclamation and remediation costs for development projects or
closed mines are excluded from this amount and classified as
non-sustaining.(g) “Exploration and business
development – sustaining” is calculated as “Exploration and
business development” expenses as reported on the interim condensed
consolidated statements of operations, less non-sustaining
exploration and business development expenses. Exploration expenses
are classified as either sustaining or non-sustaining based on a
determination of the type and location of the exploration
expenditure. Exploration expenditures within the footprint of
operating mines are considered costs required to sustain current
operations and so are included in sustaining costs. Exploration
expenditures focused on new ore bodies near existing mines (i.e.
brownfield), new exploration projects (i.e., greenfield) or for
other generative exploration activity not linked to existing mining
operations are classified as non-sustaining. Business development
expenses are classified as either sustaining or non-sustaining
based on a determination of the type of expense and requirement for
general or growth related
operations.(h) “Additions to property, plant and
equipment – sustaining” 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 and nine
months ended September 30, 2022, primarily related to major
projects at La Coipa and Tasiast. Non-sustaining capital
expenditures during the three and nine months ended September 30,
2021, primarily related to major projects at Tasiast, Fort Knox, La
Coipa and Lobo-Marte.(i) “Lease payments –
sustaining” represents the majority of lease payments as reported
on the interim condensed consolidated statements of cash flows and
is made up of the principal and financing components of such cash
payments, less non-sustaining lease payments. Lease payments for
development projects or closed mines are classified as
non-sustaining.(j) The portion attributable to
Chirano non-controlling interest represents the non-controlling
interest (10%) in the production cost of sales for the Chirano mine
for the years ended December 31, 2021 and 2020.
(k) “Attributable” includes Kinross' share of
Chirano (90%) production and costs, and Manh Choh (70%) costs for
the years ended December 31, 2021 and
2020.(l) “Portion attributable to Chirano
non-controlling interest” represents the non-controlling interest
(10%) in the ounces sold from the Chirano mine for the years ended
December 31, 2021 and 2020.(m) “General and
administrative” expenses is as reported on the consolidated
statements of operations for the years ended December 31, 2021 and
2020, 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.(n) “Other
operating expense – sustaining” is calculated as “Other operating
expense” as reported on the consolidated statements of operations
for the years ended December 31, 2021 and 2020, 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.(o) “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 years
ended December 31, 2021 and 2020, 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.(p) “Exploration and
business development – sustaining” is calculated as “Exploration
and business development” expenses as reported on the consolidated
statements of operations for the years ended December 31, 2021 and
2020, 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.(q) “Additions to property, plant and
equipment – sustaining” represents the majority of capital
expenditures at existing operations for the years ended December
31, 2021 and 2020, 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. Non-sustaining capital expenditures
during the year ended December 31, 2020, primarily related to major
projects at Tasiast, Fort Knox and Round
Mountain.(r) “Lease payments – sustaining”
represents the majority of lease payments as reported on the
consolidated statements of cash flows for the years ended December
31, 2021 and 2020, 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.(s) “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 years ended December 31, 2021 and
2020, divided by total gold equivalent ounces sold.
APPENDIX A
Recent LP Fault zone assay results
Hole ID |
|
From(m) |
To(m) |
Width(m) |
TrueWidth(m) |
Au(g/t) |
Target |
|
|
|
|
|
|
|
|
BR-535 |
|
89.0 |
96.9 |
7.9 |
6.8 |
1.23 |
Yuma |
BR-535 |
and |
152.8 |
177.2 |
24.4 |
20.7 |
1.05 |
|
BR-535 |
and |
189.0 |
236.6 |
47.6 |
43.3 |
0.45 |
|
BR-545 |
|
428.5 |
453.8 |
25.3 |
24.5 |
3.64 |
Yauro |
BR-545 |
including |
429.5 |
431.4 |
1.95 |
1.8 |
36.34 |
|
BR-545 |
and |
459.5 |
472.8 |
13.35 |
10.3 |
0.38 |
|
BR-545 |
and |
486.9 |
492.5 |
5.6 |
5.0 |
0.60 |
|
BR-567 |
|
54.2 |
57.2 |
3 |
2.3 |
1.74 |
Viggo |
BR-576 |
|
666.8 |
670.0 |
3.25 |
2.8 |
0.60 |
Yuma |
BR-576 |
and |
703.0 |
711.1 |
8.1 |
7.1 |
11.83 |
|
BR-576 |
including |
704.0 |
707.0 |
3 |
2.8 |
29.54 |
|
BR-576 |
and |
742.3 |
755.3 |
13 |
10.3 |
0.43 |
|
BR-576 |
and |
809.7 |
815.7 |
6 |
5.0 |
0.59 |
|
BR-577 |
|
803.8 |
823.2 |
19.4 |
16.3 |
0.53 |
Yuma |
BR-577 |
and |
886.0 |
892.0 |
6 |
5.6 |
0.89 |
|
BR-587 |
|
513.1 |
516.1 |
3 |
2.5 |
0.66 |
Yauro |
BR-587 |
and |
529.2 |
563.0 |
33.8 |
26.4 |
0.35 |
|
BR-587 |
and |
575.6 |
584.9 |
9.3 |
8.9 |
0.63 |
|
BR-587 |
and |
626.0 |
634.0 |
8 |
6.7 |
0.35 |
|
BR-587 |
and |
642.3 |
697.5 |
55.2 |
48.6 |
0.67 |
|
BR-587 |
and |
761.8 |
772.4 |
10.6 |
9.9 |
1.86 |
|
BR-587 |
including |
767.9 |
769.7 |
1.8 |
1.4 |
6.66 |
|
BR-587 |
and |
790.9 |
802.5 |
11.6 |
10.1 |
0.31 |
|
BR-587 |
and |
849.6 |
854.5 |
4.9 |
4.0 |
0.39 |
|
BR-596 |
|
687.1 |
694.5 |
7.4 |
6.6 |
3.73 |
Yuma |
BR-596 |
including |
687.1 |
691.0 |
3.9 |
3.7 |
6.85 |
|
BR-596 |
and |
701.0 |
738.8 |
37.75 |
28.3 |
1.03 |
|
BR-597 |
|
402.1 |
421.3 |
19.15 |
17.8 |
0.31 |
Yuma |
BR-597 |
and |
432.3 |
442.3 |
10.05 |
8.5 |
0.77 |
|
BR-597 |
and |
452.7 |
461.8 |
9.05 |
7.2 |
0.40 |
|
BR-597 |
and |
473.8 |
484.4 |
10.55 |
10.2 |
0.53 |
|
BR-597 |
and |
677.0 |
688.0 |
11 |
10.6 |
1.14 |
|
BR-598 |
|
426.7 |
458.4 |
31.7 |
23.1 |
0.43 |
Yuma |
BR-598 |
and |
485.8 |
491.8 |
6 |
4.9 |
0.32 |
|
BR-598 |
and |
498.3 |
501.3 |
3 |
2.6 |
0.79 |
|
BR-598 |
and |
506.8 |
515.5 |
8.7 |
6.8 |
0.42 |
|
BR-611 |
|
482.0 |
498.5 |
16.5 |
14.5 |
0.76 |
Auro |
BR-611 |
and |
508.7 |
525.8 |
17.1 |
15.6 |
0.79 |
|
BR-611 |
and |
563.1 |
567.2 |
4.1 |
3.7 |
0.48 |
|
BR-611 |
and |
590.7 |
606.0 |
15.3 |
13.8 |
0.60 |
|
BR-611 |
and |
683.1 |
684.4 |
1.3 |
1.1 |
7.48 |
|
BR-612 |
|
399.0 |
412.5 |
13.5 |
12.7 |
1.91 |
Auro |
BR-612 |
including |
402.0 |
405.0 |
3 |
2.8 |
4.27 |
|
BR-612 |
and |
436.0 |
441.0 |
5 |
4.1 |
19.97 |
|
BR-612 |
including |
436.0 |
439.5 |
3.5 |
3.1 |
27.77 |
|
BR-612 |
and |
461.0 |
466.6 |
5.6 |
4.1 |
1.39 |
|
BR-613 |
|
493.8 |
501.3 |
7.5 |
7.1 |
0.46 |
Auro |
BR-614A |
|
327.0 |
330.0 |
3 |
2.3 |
0.36 |
Auro |
BR-614A |
and |
359.3 |
366.7 |
7.45 |
6.3 |
1.42 |
|
BR-614A |
and |
390.0 |
394.8 |
4.8 |
3.9 |
1.44 |
|
BR-614A |
and |
453.0 |
457.1 |
4.1 |
3.9 |
0.39 |
|
BR-621 |
|
174.0 |
178.6 |
4.6 |
4.2 |
0.67 |
Auro |
BR-621 |
and |
189.7 |
205.3 |
15.6 |
14.4 |
0.38 |
|
BR-621 |
and |
245.3 |
250.0 |
4.7 |
3.8 |
0.68 |
|
BR-621 |
and |
311.5 |
320.0 |
8.5 |
7.7 |
0.51 |
|
BR-621 |
and |
330.0 |
374.9 |
44.9 |
43.1 |
2.27 |
|
BR-621 |
including |
347.0 |
365.8 |
18.75 |
16.5 |
3.16 |
|
BR-621 |
and including |
372.0 |
373.0 |
1 |
1.0 |
26.50 |
|
BR-621 |
and |
468.0 |
471.9 |
3.9 |
3.6 |
0.62 |
|
BR-621 |
and |
480.5 |
495.0 |
14.5 |
11.2 |
0.48 |
|
BR-622 |
|
597.0 |
600.4 |
3.4 |
2.7 |
0.33 |
Auro |
BR-622 |
and |
618.0 |
621.0 |
3 |
2.9 |
0.32 |
|
BR-622 |
and |
777.1 |
793.5 |
16.4 |
14.3 |
0.69 |
|
BR-622 |
and |
804.5 |
807.5 |
3 |
2.3 |
0.33 |
|
BR-622 |
and |
833.5 |
838.3 |
4.75 |
4.6 |
0.85 |
|
BR-623 |
|
545.0 |
551.0 |
6 |
4.4 |
2.03 |
Auro |
BR-623 |
and |
578.0 |
608.8 |
30.75 |
22.8 |
7.62 |
|
BR-623 |
including |
585.7 |
597.0 |
11.3 |
10.9 |
18.60 |
|
BR-623 |
and |
627.3 |
628.0 |
0.75 |
0.7 |
18.90 |
|
BR-623 |
and |
755.0 |
763.3 |
8.3 |
7.1 |
0.36 |
|
BR-623 |
and |
806.7 |
809.6 |
2.95 |
2.8 |
3.23 |
|
BR-624 |
|
634.8 |
652.0 |
17.2 |
13.4 |
0.43 |
Auro |
BR-624 |
and |
670.0 |
698.5 |
28.5 |
23.1 |
7.11 |
|
BR-624 |
including |
677.1 |
684.0 |
6.95 |
5.1 |
26.83 |
|
BR-624 |
and |
823.0 |
832.0 |
9.05 |
7.5 |
0.58 |
|
BR-632 |
|
33.2 |
37.6 |
4.4 |
4.2 |
0.69 |
Viggo |
BR-632 |
and |
52.8 |
63.3 |
10.5 |
8.4 |
0.73 |
|
BR-632 |
and |
69.0 |
69.7 |
0.7 |
0.6 |
21.20 |
|
BR-633 |
|
80.5 |
89.1 |
8.6 |
7.6 |
0.34 |
Viggo |
BR-633 |
and |
114.7 |
121.6 |
6.9 |
5.9 |
0.35 |
|
BR-637 |
|
315.0 |
324.7 |
9.7 |
7.3 |
1.20 |
Viggo |
BR-638 |
|
184.5 |
189.0 |
4.5 |
4.2 |
1.26 |
Viggo |
BR-639 |
|
193.5 |
202.5 |
9 |
8.3 |
0.72 |
Viggo |
BR-640 |
|
256.9 |
263.5 |
6.6 |
5.4 |
1.36 |
Viggo |
BR-640 |
and |
277.5 |
287.3 |
9.8 |
9.5 |
0.63 |
|
BR-640 |
and |
311.0 |
316.0 |
5 |
4.4 |
0.85 |
|
BR-641 |
|
325.5 |
333.0 |
7.5 |
7.3 |
1.09 |
Viggo |
BR-641 |
and |
379.3 |
382.5 |
3.25 |
2.4 |
1.71 |
|
BR-641 |
and |
407.0 |
410.0 |
3 |
2.2 |
0.34 |
|
BR-641 |
and |
420.0 |
424.9 |
4.9 |
3.8 |
0.32 |
|
BR-642 |
|
413.0 |
419.3 |
6.3 |
4.6 |
0.36 |
Viggo |
BR-643 |
|
325.5 |
330.5 |
5 |
4.8 |
0.88 |
Viggo |
BR-643 |
and |
353.7 |
355.0 |
1.3 |
1.0 |
6.98 |
|
BR-643 |
and |
379.0 |
383.0 |
4 |
3.0 |
0.39 |
|
BR-643 |
and |
513.0 |
513.7 |
0.7 |
0.7 |
17.70 |
|
BR-644 |
|
405.0 |
421.8 |
16.75 |
14.4 |
0.39 |
Viggo |
BR-646 |
|
339.7 |
350.9 |
11.2 |
10.4 |
0.58 |
Viggo |
BR-646 |
and |
397.5 |
402.0 |
4.5 |
4.0 |
0.38 |
|
BR-647 |
|
495.0 |
498.0 |
3 |
2.7 |
0.40 |
Viggo |
BR-650 |
|
42.0 |
47.5 |
5.5 |
5.0 |
0.61 |
Discovery |
BR-650 |
and |
60.0 |
119.3 |
59.3 |
56.3 |
0.74 |
|
BR-651 |
|
470.4 |
473.7 |
3.3 |
3.2 |
0.38 |
Discovery |
BR-651 |
and |
751.2 |
758.5 |
7.3 |
6.9 |
0.30 |
|
BR-651 |
and |
766.7 |
772.3 |
5.6 |
4.7 |
0.84 |
|
BR-651 |
and |
805.5 |
813.8 |
8.3 |
6.9 |
0.55 |
|
BR-651 |
and |
861.5 |
867.5 |
6 |
5.7 |
1.51 |
|
BR-651 |
including |
865.1 |
867.0 |
1.9 |
1.6 |
3.06 |
|
BR-660 |
|
86.9 |
149.5 |
62.65 |
49.5 |
1.56 |
Discovery |
BR-660 |
including |
116.8 |
122.5 |
5.7 |
5.2 |
5.10 |
|
BR-660 |
and including |
128.8 |
134.8 |
6 |
5.5 |
5.29 |
|
BR-660 |
and |
155.3 |
158.8 |
3.5 |
3.3 |
0.35 |
|
BR-660 |
and |
167.2 |
172.5 |
5.35 |
3.9 |
0.73 |
|
BR-660 |
and |
181.6 |
201.5 |
19.9 |
16.5 |
0.55 |
|
BR-661 |
|
61.9 |
67.8 |
5.9 |
5.7 |
6.59 |
Discovery |
BR-661 |
including |
66.8 |
67.8 |
1 |
1.0 |
35.00 |
|
BR-661 |
and |
76.2 |
93.4 |
17.2 |
15.0 |
0.63 |
|
BR-661 |
and |
99.2 |
111.3 |
12.1 |
10.8 |
0.32 |
|
BR-661 |
and |
117.0 |
120.0 |
3 |
2.5 |
0.47 |
|
BR-661 |
and |
148.0 |
179.8 |
31.85 |
26.8 |
1.18 |
|
BR-661 |
and |
192.8 |
201.3 |
8.5 |
6.7 |
0.37 |
|
BR-661 |
and |
211.0 |
215.0 |
4 |
3.7 |
0.44 |
|
BR-661 |
and |
222.0 |
234.4 |
12.4 |
11.3 |
0.33 |
|
BR-661 |
and |
240.5 |
259.1 |
18.6 |
17.7 |
0.60 |
|
BR-661 |
and |
267.8 |
296.6 |
28.8 |
26.2 |
1.04 |
|
BR-661 |
and |
400.0 |
408.3 |
8.3 |
7.5 |
1.37 |
|
BR-662 |
|
60.0 |
63.5 |
3.5 |
2.7 |
0.42 |
Discovery |
BR-662 |
and |
94.0 |
103.0 |
9 |
6.7 |
0.37 |
|
BR-662 |
and |
124.5 |
136.3 |
11.8 |
10.9 |
0.51 |
|
BR-662 |
and |
141.8 |
151.4 |
9.6 |
7.4 |
0.61 |
|
BR-662 |
and |
173.0 |
220.3 |
47.3 |
42.1 |
0.72 |
|
BR-670 |
|
No significant intersections |
Viggo |
BR-671 |
|
114.0 |
121.0 |
7 |
6.5 |
0.56 |
Viggo |
BR-673 |
|
381.0 |
389.5 |
8.5 |
7.1 |
0.93 |
Viggo |
BR-674 |
|
306.7 |
311.0 |
4.3 |
3.9 |
6.1 |
Viggo |
BR-675 |
|
313.2 |
317.8 |
4.6 |
4.2 |
0.44 |
Viggo |
BR-680 |
|
628.9 |
634.7 |
5.75 |
4.4 |
2.57 |
Yuma |
BR-680 |
and |
684.0 |
692.7 |
8.7 |
6.7 |
0.51 |
|
BR-680 |
and |
782.6 |
787.5 |
4.95 |
4.8 |
0.44 |
|
BR-680 |
and |
868.5 |
887.2 |
18.7 |
15.2 |
1.15 |
|
BR-680 |
and |
896.4 |
904.0 |
7.6 |
6.5 |
0.68 |
|
BR-690 |
|
72.1 |
80.0 |
7.95 |
5.9 |
0.61 |
Auro |
BR-700 |
|
682.8 |
761.3 |
78.5 |
65.9 |
0.67 |
Yuma |
BR-700 |
and |
802.0 |
817.0 |
15 |
11.9 |
1.88 |
|
BR-700 |
including |
812.1 |
813.7 |
1.6 |
1.2 |
15.10 |
|
BR-700 |
and |
924.4 |
932.0 |
7.6 |
5.9 |
0.44 |
|
BR-700 |
and |
940.7 |
945.5 |
4.75 |
4.1 |
0.45 |
|
Results are preliminary in nature and are subject to on-going
QA/QC.
APPENDIX BLP Fault zone
long section
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/7f52127f-8bdc-4523-bd45-2ee56104bd31
Composites generated from drill intersections received since
July 27, 2022 news release includes assays from 42 fully assayed
drill holes at the LP Fault. Composites are generated using 0.3 g/t
minimum grade, maximum linear internal dilution of 5.0 m, and
allows short high grade intervals greater than 8 GXM to be
retained. Results are preliminary in nature and are subject to
on-going QA/QC. For full list of significant, composited assay
results, see Appendix A.
APPENDIX C
LP grade thickness long section demonstrating depth
extension potential
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/90afcb6c-3a2c-48f2-8bb9-1cf48b161ce3
LP grade thickness long section showing conceptual high grade
mineralization at depth.
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) “Return of Capital”, “Company Guidance”,
“Development Projects”, “CEO Commentary”, “Operating Results”, and
“Organizational Update”, 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; identification of
additional resources and reserves; the Company’s liquidity; the
schedules and budgets for the Company’s development projects; the
Company’s 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”, “forecast”, “guidance”, “on schedule”, “on
track”, “opportunity” “outlook”, “plan”, “potential”, “priority”,
“prospect”, or variations of or similar such words and phrases or
statements that certain actions, events or results may, could,
should or will be achieved, received or taken, or will occur or
result and similar such expressions identify forward-looking
statements. Forward-looking statements are necessarily based upon a
number of estimates and assumptions that, while considered
reasonable by Kinross as of the date of such statements, are
inherently subject to significant business, economic and
competitive uncertainties and contingencies. The estimates, models
and assumptions of Kinross referenced, contained or incorporated by
reference in this news release, which may prove to be incorrect,
include, but are not limited to, the various assumptions set forth
herein and in our Management’s Discussion and Analysis (“MD&A”)
for the year ended December 31, 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, 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 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; (5) the exchange
rate between the Canadian dollar, Brazilian real, Chilean peso,
Mauritanian ouguiya and the U.S. dollar being approximately
consistent with current levels; (6) certain price assumptions for
gold and silver; (7) prices for diesel, natural gas, fuel oil,
electricity and other key supplies being approximately consistent
with the Company’s expectations; (8) attributable production and
cost of sales forecasts for the Company meeting expectations; (9)
the accuracy of: the current mineral reserve and mineral resource
estimates of the Company and Kinross’ analysis thereof being
consistent with expectations (including but not limited to ore
tonnage and ore grade estimates), future mineral resource and
mineral reserve estimates being consistent with preliminary work
undertaken by the Company, mine plans for the Company’s current and
future mining operations, and the Company’s internal models; (10)
labour and materials costs increasing on a basis consistent with
Kinross’ current expectations; (11) the terms and conditions of the
legal and fiscal stability agreements for Tasiast being interpreted
and applied in a manner consistent with their intent and Kinross’
expectations and without material amendment or formal dispute
(including without limitation the application of tax, customs and
duties exemptions and royalties); (12) 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 COVID-19;
(16) changes in national and local government legislation or other
government actions; (17) litigation, regulatory proceedings and
audits, and the potential ramifications thereof, being concluded in
a manner consistent with the Corporation’s expectations (including
without limitation litigation in Chile relating to the alleged
damage of wetlands and the scope of any remediation plan or other
environmental obligations arising therefrom); (18) the Company’s
financial results, cash flows and future prospects being consistent
with Company expectations in amounts sufficient to permit sustained
dividend payments and share buybacks; (19) the impacts of potential
future pit wall issues at Round Mountain and carbonaceous material
at Bald Mountain being consistent with the Company’s expectations;
(20) 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; (21) the
Company’s estimates regarding the timing of completion of the
Tasiast 24k project; and (22) that deferred payments in respect of
the Ghana divestitures will be paid and, in the event any deferred
payment is not paid, the applicable security package will be
realized and enforceable in a manner consistent with the Company’s
expectations. Known and unknown factors could cause actual results
to differ materially from those projected in the forward-looking
statements. Such factors include, but are not limited to: the
inaccuracy of any of the foregoing assumptions, 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 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, Mauritania, or other
countries in which Kinross does business or may carry on business;
business opportunities that may be presented to, or pursued by, us;
our ability to successfully integrate acquisitions and complete
divestitures; operating or technical difficulties in connection
with mining, development or refining activities; employee
relations; litigation or other claims against, or regulatory
investigations and/or any enforcement actions, administrative
orders or sanctions in respect of the Company (and/or its
directors, officers, or employees) including, but not limited to,
securities class action litigation in Canada and/or the United
States, environmental litigation or regulatory proceedings or any
investigations, enforcement actions and/or sanctions under any
applicable anti-corruption, international sanctions and/or
anti-money laundering laws and regulations in Canada, the United
States or any other applicable jurisdiction; the speculative nature
of gold exploration and development including, but not limited to,
the risks of obtaining 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.
Key Sensitivities
Approximately 70%-80% of the Company's costs are
denominated in U.S. dollars.
A 10% change in foreign currency exchange rates
would be expected to result in an approximate $20 impact on
production cost of sales per equivalent ounce sold13.
Specific to the Brazilian real, a 10% change in
the exchange rate would be expected to result in an approximate $30
impact on Brazilian production cost of sales per equivalent ounce
sold.
A $10 per barrel change in the price of oil
would be expected to result in an approximate $4 impact on
production cost of sales per equivalent ounce sold.
A $100 change in the price of gold would be
expected to result in an approximate $5 impact on production cost
of sales per equivalent ounce sold as a result of a change in
royalties.
Other information
Where we say ‘‘we’’, ‘‘us’’, ‘‘our’’, the
‘‘Company’’, or ‘‘Kinross’’ in this news release, we mean Kinross
Gold Corporation and/or one or more or all of its subsidiaries, as
may be applicable.
The technical information about the Company’s
mineral properties contained in this news release has been prepared
under the supervision of Mr. John Sims who is a “qualified person”
within the meaning of National Instrument 43-101.
All dollar amounts are expressed as U.S.
dollars, unless otherwise noted.
Source: Kinross Gold Corporation
________________________13 Refers to all of the currencies in
the countries where the Company has mining operations, fluctuating
simultaneously by 10% in the same direction, either appreciating or
depreciating, taking into consideration the impact of hedging and
the weighting of each currency within our consolidated cost
structure.
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