Kinross Gold Corporation (TSX: K, NYSE: KGC) (“Kinross” or the
“Company”) today announced its results for the second-quarter ended
June 30, 2023.
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 26 of this release. All dollar amounts
are expressed in U.S. dollars, unless otherwise noted.
Q2 2023 highlights from continuing
operations:
- Production of
555,036 gold equivalent ounces (Au eq. oz.), a 22% year-over-year
increase.
- Production cost of
sales1 of $900 per Au eq. oz. sold and all-in
sustaining cost2 of $1,296 per Au eq. oz. sold.
- Margins3 of $1,076
per Au eq. oz. sold.
- Operating cash
flow4 of $528.6 million and adjusted operating
cash flow2 of $459.1 million.
- Reported net
earnings5 of $151.0 million, or $0.12 per share, with
adjusted net earnings2, 6 of $167.6 million, or
$0.14 per share2.
- Cash and cash
equivalents of $478.4 million, and total
liquidity7 of approximately $1.9 billion at June
30, 2023.
- Guidance
reaffirmed: Kinross expects to produce 2.1 million Au
eq. oz. (+/- 5%) and is on track to meet its 2023 guidance for
production cost of sales, all-in sustaining cost and attributable
capital expenditures.
- Debt
refinancing: In July, Kinross issued $500.0
million in Senior Notes to refinance its 2024 Notes, extending
the maturity to 2033.
-
Kinross’ Board of Directors declared a
quarterly dividend of $0.03 per common
share payable on September 8, 2023 to shareholders of record
at the close of business on August 24, 2023.
- Kinross published its 2022
Climate Report on July 21, 2023, detailing its Climate
Change Strategy and a comprehensive summary of its progress over
the past year with a target to be a net-zero greenhouse gas
emissions Company by 2050.
Operational and development project
highlights:
- Tasiast achieved
record quarterly production and sales driven by strong grades and
higher recoveries. The Tasiast 24k expansion
project achieved a major milestone as construction and initial
commissioning are now complete with the ramp-up process
underway.
- Paracatu delivered
another strong quarter with higher production and lower costs both
quarter-over-quarter and year-over-year.
- La Coipa delivered
higher quarterly and year-over-year production, and the lowest
costs in the portfolio.
- Manh Choh received
its key operating permits in May and remains on track for initial
production in the second half of 2024.
- At Great
Bear, Kinross recently signed an Advanced Exploration
Agreement with the Wabauskang and Lac Seul First Nations as the
Company moves from surface exploration to underground exploration.
The Company is using directional core drilling to more efficiently
target the resource, and is progressing studies and permitting for
its advanced exploration program.
CEO commentary:J. Paul Rollinson, President and
CEO, made the following comments in relation to 2023 second-quarter
results:
“Our portfolio of mines performed well during
the quarter contributing to a strong first half of the year. Our
margins grew by 27%, operating earnings were significantly higher,
and free cash flow more than doubled compared with the same period
last year. Tasiast, Paracatu and La Coipa delivered approximately
70% of our production and our lowest costs for the quarter,
including record production at Tasiast, and we remain on track to
meet our annual production and cost outlook for 2023.
“Our pipeline of projects continued to make
strong progress. During the quarter, construction and initial
commissioning was completed at the Tasiast 24k project, on schedule
and on budget. The Tasiast 24k project is expected to increase
production and lower costs while generating significant free cash
flow. Manh Choh is advancing on plan to come online in the second
half of 2024 following the receipt of its key operating permits in
May.
“At Great Bear, we are pleased to have recently
signed an Advanced Exploration Agreement with our partners the
Wabauskang and Lac Seul First Nations on whose traditional
territories the project is located. We recognize that respect,
collaboration and consideration for our First Nation partners is
central to our license to operate in the area. We are committed to
developing a project that honours Indigenous rights and brings
long-term socio-economic benefits, consistent with how Kinross
operates in all of our host communities.
“We also released our annual Climate Report,
which provides a transparent and comprehensive account of our
reporting in this important area. We advanced our climate change
strategy in 2022 as well as a number of energy-efficiency projects
that support our goal of achieving net-zero emissions by 2050. The
solar plant at Tasiast is on schedule to come online by the end of
the year and is expected to reduce greenhouse gas emissions by
approximately 530,000 tonnes over the life of mine.”
Summary of financial and operating
results
|
|
Three months ended |
Six months ended |
|
|
|
June 30, |
June 30, |
|
(unaudited, in millions of U.S. dollars, except ounces, per share
amounts, and per ounce amounts) |
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
Operating Highlights |
|
|
|
|
Total gold equivalent ounces from continuing operations(a),(b) |
|
Produced |
|
555,036 |
|
453,978 |
|
|
1,021,058 |
|
832,399 |
|
Sold |
|
552,969 |
|
439,078 |
|
|
1,043,299 |
|
812,806 |
|
|
|
|
|
|
|
Financial Highlights from Continuing
Operations(a) |
|
|
Metal sales |
$ |
1,092.3 |
$ |
821.5 |
|
$ |
2,021.6 |
$ |
1,522.4 |
|
Production cost of sales |
$ |
497.9 |
$ |
450.8 |
|
$ |
981.8 |
$ |
813.9 |
|
Depreciation, depletion and amortization |
$ |
239.3 |
$ |
180.5 |
|
$ |
451.2 |
$ |
347.0 |
|
Operating earnings |
$ |
237.8 |
$ |
64.0 |
|
$ |
381.7 |
$ |
166.5 |
|
Net earnings (loss) from continuing operations attributable to
common shareholders |
$ |
151.0 |
$ |
(9.3 |
) |
$ |
241.2 |
$ |
72.0 |
|
Basic earnings (loss) per share from continuing operations
attributable to common shareholders |
$ |
0.12 |
$ |
(0.01 |
) |
$ |
0.20 |
$ |
0.06 |
|
Diluted earnings (loss) per share from continuing operations
attributable to common shareholders |
$ |
0.12 |
$ |
(0.01 |
) |
$ |
0.20 |
$ |
0.06 |
|
Adjusted net earnings from continuing operations attributable to
common shareholders(c) |
$ |
167.6 |
$ |
37.4 |
|
$ |
255.2 |
$ |
106.2 |
|
Adjusted net earnings from continuing operations per share(c) |
$ |
0.14 |
$ |
0.03 |
|
$ |
0.21 |
$ |
0.08 |
|
Net cash flow of continuing operations provided from operating
activities |
$ |
528.6 |
$ |
257.1 |
|
$ |
787.6 |
$ |
355.0 |
|
Adjusted operating cash flow from continuing operations(c) |
$ |
459.1 |
$ |
251.9 |
|
$ |
791.9 |
$ |
501.0 |
|
Capital expenditures from continuing operations(d) |
$ |
281.9 |
$ |
149.4 |
|
$ |
503.1 |
$ |
250.1 |
|
Free cash flow from continuing operations(c) |
$ |
246.7 |
$ |
107.7 |
|
$ |
284.5 |
$ |
104.9 |
|
Average realized gold price per ounce from continuing
operations(e) |
$ |
1,976 |
$ |
1,872 |
|
$ |
1,937 |
$ |
1,874 |
|
Production cost of sales from continuing operations per equivalent
ounce(b) sold(f) |
$ |
900 |
$ |
1,027 |
|
$ |
941 |
$ |
1,001 |
|
Production cost of sales from continuing operations per ounce sold
on a by-product basis(c) |
$ |
845 |
$ |
1,018 |
|
$ |
885 |
$ |
994 |
|
All-in sustaining cost from continuing operations per ounce sold on
a by-product basis(c) |
$ |
1,262 |
$ |
1,335 |
|
$ |
1,272 |
$ |
1,285 |
|
All-in sustaining cost from continuing operations per equivalent
ounce(b) sold(c) |
$ |
1,296 |
$ |
1,341 |
|
$ |
1,308 |
$ |
1,290 |
|
Attributable all-in cost(g) from continuing operations per ounce
sold on a by-product basis(c) |
$ |
1,596 |
$ |
1,596 |
|
$ |
1,606 |
$ |
1,536 |
|
Attributable all-in cost(g) from continuing operations per
equivalent ounce(b) sold(c) |
$ |
1,614 |
$ |
1,599 |
|
$ |
1,624 |
$ |
1,539 |
|
(a) |
Results for the three and six months ended June 30, 2023 and 2022
are from continuing operations and exclude results from the
Company’s Chirano and Russian operations due to the classification
of these operations as discontinued and their sale in
2022. |
(b) |
“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 second quarter
and first six months of 2023 was 81.88:1 and 82.85:1, respectively
(second quarter and first six months of 2022 – 82.76:1 and 80.36:1,
respectively). |
(c) |
The definition and reconciliation
of these non-GAAP financial measures and ratios is included on
pages [x] to [x] 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. |
(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) |
“Attributable all-in cost”
includes Kinross’ share of Manh Choh (70%) costs. |
|
|
The following operating and financial results
are based on second-quarter gold equivalent production:
Production: Kinross produced
555,036 Au eq. oz. in Q2 2023 from continuing operations, compared
with 453,978 Au eq. oz. in Q2 2022. The 22% year-over-year increase
was primarily attributable to higher production at La Coipa, and
higher grades and recoveries at Paracatu and Tasiast.
Average realized gold price:
The average realized gold price from continuing operations in Q2
2023 was $1,976 per ounce, compared with $1,872 per ounce in Q2
2022.
Revenue: During the second
quarter, revenue from continuing operations increased to $1,092.3
million, compared with $821.5 million during Q2 2022. The 33%
increase is due to an increase in gold equivalent ounces sold and
an increase in average realized gold price.
Production cost of sales:
Production cost of sales1 from continuing operations per Au eq. oz.
sold was $900 for the quarter, compared with $1,027 in Q2 2022. The
12% decrease was primarily due to the increase in gold equivalent
ounces sold.
Production cost of sales from continuing
operations per Au oz. sold2 on a by-product basis was $845 in Q2
2023, compared with $1,018 in Q2 2022, based on gold sales of
525,921 ounces and silver sales of 2,214,686 ounces.
Margins3: Kinross’ margin from
continuing operations per Au eq. oz. sold increased to $1,076 for
Q2 2023, compared with the Q2 2022 margin of $845.
All-in sustaining cost2: All-in
sustaining cost from continuing operations per Au eq. oz. sold was
$1,296 in Q2 2023, compared with $1,341 in Q2 2022.
In Q2 2023, all-in sustaining cost from
continuing operations per Au oz. sold on a by-product basis was
$1,262, compared with $1,335 in Q2 2022.
Operating cash flow: Operating
cash flow from continuing operations4 was $528.6 million for Q2
2023, compared with $257.1 million for Q2 2022.
Adjusted operating cash flow from continuing
operations2 increased to $459.1 million in Q2 2023, compared
with $251.9 million for Q2 2022.
Free cash
flow2: Free cash flow from continuing
operations in Q2 2023 was $246.7 million, compared with $107.7
million in Q2 2022.
Earnings: Reported net
earnings5 from continuing operations was $151.0 million, or $0.12
per share for Q2 2023, compared with reported net loss of $9.3
million, or $0.01 per share, for Q2 2022. The increase in reported
net earnings was mainly due to the increase in margins.
Adjusted net earnings from continuing
operations2,6 was $167.6 million, or $0.14 per share, for Q2 2023,
compared with $37.4 million, or $0.03 per share, for Q2 2022.
Capital expenditures: Capital
expenditures from continuing operations increased to $281.9 million
for Q2 2023, compared with $149.4 million for Q2 2022, primarily
due to an increase in capital stripping at Tasiast, Fort Knox and
Bald Mountain and development activities at Manh Choh.
Balance sheet
As of June 30, 2023, Kinross had cash and cash
equivalents of $478.4 million, compared with $418.1 million at
December 31, 2022.
During the quarter, the Company repaid $200.0
million on its revolving credit facility and $20.0 million of
scheduled principal payments on its Tasiast Loan. On July 5, 2023,
Kinross completed a $500.0 million offering of debt securities and
will use the net proceeds towards the redemption of all of the
outstanding Senior Notes due March 15, 2024, on August 10,
2023.
In connection with the divestiture of its
Russian assets in 2022, the Company has received $40.0 million
during the quarter. All proceeds from the sale have now been
received.
The Company had available credit8 of
approximately $1.5 billion and total liquidity7 of approximately
$1.9 billion as of June 30, 2023.
Return of capital
As part of its continuing quarterly dividend
program, the Company declared a dividend of $0.03 per common share
payable on September 8, 2023, to shareholders of record as of
August 24, 2023.
In accordance with the parameters of the share
buyback program, Kinross has paused share repurchases to prioritize
debt reduction in the near term. Going forward, the Company
will continue to assess its capital allocation priorities dependent
on market conditions and other relevant factors.
Operating results
Mine-by-mine summaries for 2023 second-quarter
operating results may be found on pages 12 and 16 of this news
release. Across the portfolio, all projects are on plan and met
quarterly production targets. Highlights include the following:
Tasiast had another strong
quarter and achieved record quarterly production and sales, largely
due to strong grades and recoveries. Production was higher compared
with the first quarter primarily due to higher throughputs after
the planned shutdown in February, and as the operation continues
its commissioning and ramp-ups to the sustained 24k tonnes per day
(t/d). Production was higher year-over-year mainly due to improved
recoveries and an increase in mill grades as mining has moved to
the higher-grade section of West Branch 4. Cost of sales per ounce
sold was lower quarter-over-quarter and year-over-year due to the
increase in production.
Paracatu performed well during
the quarter, with an increase in quarterly production driven by
strong grades and recoveries, which contributed to the lower cost
of sales per ounce sold. Year-over-year, production increased due
to stronger grades and cost of sales per ounce sold decreased
mainly due to the increased production.
At La Coipa, production was
higher quarter-over-quarter mainly due to the planned mill shutdown
in the first quarter to increase mill reliability and sustain
higher throughput levels, partially offset by lower grades and
recoveries. Year-over-year production was higher as the mill ramped
up over the course of last year. Production cost of sales per ounce
sold was lower than both comparable periods due to the increase in
production.
At Fort Knox, production was
higher compared with the previous quarter mainly due to an increase
in mill throughput and higher grades. Year-over-year production
decreased primarily as a result of fewer tonnes placed on the
Barnes Creek heap leach facility, partially offset by higher
grades. Cost of sales per ounce sold was largely in line
quarter-over-quarter and year-over-year.
At Round Mountain, production
decreased slightly compared with the previous quarter mainly due to
lower grades and recoveries. Year-over-year production increased
slightly, largely due to an increase in tonnes placed on the heap
leach pads. Cost of sales per ounce sold was lower
quarter-over-quarter mainly due to an increase in ounces stacked on
the heap leach pads, and largely in line year-over-year.
At Bald Mountain, production
was higher quarter-over-quarter primarily due to an increase in
ounces recovered from the heap leach pads, partially offset by
lower grades. Year-over-year production was lower as a result of
fewer tonnes placed on the heap leach pads and lower grades. Cost
of sales per ounce sold was slightly higher quarter-over-quarter
due to higher maintenance costs, and year-over-year due to lower
production. Following the unprecedented winter snowfall, mining
rates have ramped up and Bald Mountain remains on target for
full-year production.
Development projects and exploration
update
Tasiast
Tasiast 24k construction and
initial commissioning is now complete, on schedule and on budget.
The successful tie-in of the new pre-classification circuit was
completed in June, all components of the 24k project are in
operation with the ramp-up process underway. The process plant has
regularly achieved the designed 24,000 t/d throughput for sustained
periods of time. The operation is expected to ramp-up for the
balance of the year to consistently achieve 24,000 t/d (average) on
an annual basis.
The 34MW Tasiast solar power
plant continues to advance and is on schedule for
completion by the end of the year. Civil works are nearly complete
and mechanical works are well advanced with a focus on the
installation of the photovoltaic modules. Electrical works are
underway and planning for commissioning has begun. Great
Bear
The Company continues to make excellent progress
at the Great Bear project in Red Lake,
Ontario. In the second quarter, Kinross drilled approximately
56,000 metres as part of its robust exploration and infill drilling
program. Kinross’ focus this year is on inferred drilling in the
area half a kilometre to one kilometre below surface. This work
will be complemented by exploration drilling along strike of the LP
Fault zone and around the Hinge and Limb zones that have seen
little exploration drilling for new mineralization beyond the known
zones, with the goal of further delineating the deposit at depth as
well as adding inferred resource ounces. Drilling-to-date has
demonstrated potential for a meaningful increase in the underground
resource and Kinross expects to declare a resource update as part
of its year-end results.
Since its last update on May 9, 2023, 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. Notable exploration results at Great Bear in
the second quarter include:
- BR-805 (Yauro) – 6.7 m @ 19.31 g/t
at a vertical depth of 730m*
- BR-796 (Yuma) – 4.6m @ 5.7 g/t at a
vertical depth of 860m
- BR-769A (Yauro) – 3.4m @ 4.2 g/t at
a vertical depth of 540m
- BR-804 (Yauro) – 3.8m @ 8.4 g/t, at
a vertical depth of 745m
Results-to-date continue to support the view of
a high-grade deposit that underpins the prospect of a large,
long-life mining complex with the recent results continuing to
demonstrate the high-grade nature of the mineralization. Holes
BR-805, BR-769A and BR-804 show the potential for continued
resource growth at Yauro below the existing mineral resource. Hole
BR-796 intercepted 4.6m @ 5.7 g/t at a depth of 860m at Yuma,
demonstrating the continuity of the LP Fault zone between 500 and
1,000 metres.
The Company recently began using directional
core drilling at Great Bear, which allows multiple drill holes to
branch off from a single pilot hole. This decreases the amount
of drilling required to reach deep targets, thereby reducing costs,
improving productivity, and enabling the precise targeting of the
resource from different angles. Initial trials earlier this year
were highly successful, and the system is now being used on 6 of
the 11 drills on site to target the LP Fault and Hinge zones.
The Company is also progressing studies and
permitting for an advanced exploration program that would establish
an underground decline to obtain a bulk sample and allow for more
efficient exploration of deeper areas of the LP Fault zone, along
with the nearby Hinge and Limb gold zones. Feasibility level
engineering for advanced exploration infrastructure is
approximately 70% complete, including geophysics and soils
geotechnical drilling, and the procurement process for long-lead
items such as the camp, power infrastructure and water treatment
plant has been initiated.
Further, on July 19th, the Company together with
the Wabauskang and Lac Seul First Nations signed an updated
Advanced Exploration Agreement (the “AEX Agreement”), which
replaces the existing Exploration Agreement. The
AEX Agreement is designed to better reflect the changing
nature of project activities in anticipation of the development of
the underground decline. The AEX Agreement also reflects the
importance of building positive and strong relationships through
meaningful dialogue and consultation and continues the process of
strengthening our partnership. Kinross is targeting a potential
start of the surface construction for the advanced exploration
program in 2024, subject to receipt of permits.
Chief Bill Petiquan, Wabauskang First
Nation, said: “Through the sands of time there was
foretold that a future of prosperity would come for our people. A
time prepared in life this day would come. For centuries past, the
hidden future is now being told. Our destiny has arrived. Today we
stand with Kinross as Brothers, it is written in the wind. We will
walk the same path the Creator left us.”
Chief Clifford Bull, Lac Seul First
Nation, said: “This Advanced Exploration Agreement marks
an important milestone in our relationship with Kinross. We are
pleased to welcome Kinross into our territory. We look forward to
building a strong relationship based on shared prosperity and
respect for all of Creation.”
For the main project, Kinross continues to
advance technical studies, including engineering and field testwork
campaigns, with plans to release the results of this work in the
form of a preliminary economic assessment in 2024. Metallurgical
testwork is underway, as well as geochemical work that includes
static testing, humidity cells, column testing, tailings residue
sampling and field leach barrels. An extensive field bedrock and
soils geotechnical drilling and testing program is planned to
kickoff in August.
A comprehensive baseline study program
encompassing air, noise, hydrogeology, geochemistry, archeology,
water quality and a number of other metrics is progressing well.
There are over 60 water monitoring wells installed around the site,
as well as 25 surface water stations and 11 hydrometric stations
which together enable understanding of the water quality and flow
of water in and around the site. Permitting activities are
progressing well, including pre-submission engagement with the
Impact Assessment Agency of Canada (IAAC) in preparation for the
Initial Project Description submission.
*Note: Hole BR-805 is considered a partial
result as some assay results from this drill hole remain
pending.
View an interactive 3D model of the Great Bear
project:
https://vrify.com/decks/13856?slide=278491
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-769A |
|
701.00 |
713.60 |
12.60 |
10.33 |
0.73 |
Yauro |
BR-769A |
and |
721.30 |
740.50 |
19.20 |
12.67 |
1.76 |
|
BR-769A |
including |
734.80 |
739.15 |
4.35 |
3.35 |
4.18 |
|
BR-769A |
and |
773.20 |
777.00 |
3.80 |
3.08 |
0.41 |
|
BR-796 |
|
1,048.75 |
1,056.00 |
7.25 |
6.60 |
0.53 |
Yuma |
BR-796 |
and |
1,072.00 |
1,078.75 |
6.75 |
4.66 |
0.46 |
|
BR-796 |
and |
1,106.00 |
1,111.95 |
5.95 |
4.64 |
5.71 |
|
BR-796 |
including |
1,109.35 |
1,110.65 |
1.30 |
0.96 |
23.87 |
|
BR-804 |
|
563.10 |
567.25 |
4.15 |
2.95 |
0.64 |
Yauro |
BR-804 |
and |
575.75 |
586.10 |
10.35 |
9.00 |
0.61 |
|
BR-804 |
and |
659.00 |
663.00 |
4.00 |
3.44 |
0.47 |
|
BR-804 |
and |
721.80 |
731.80 |
10.00 |
7.70 |
0.93 |
|
BR-804 |
and |
756.00 |
765.00 |
9.00 |
8.28 |
1.11 |
|
BR-804 |
and |
889.10 |
892.10 |
3.00 |
2.64 |
0.92 |
|
BR-804 |
and |
938.00 |
941.90 |
3.90 |
3.47 |
2.28 |
|
BR-804 |
and |
1,022.85 |
1,028.00 |
5.15 |
3.76 |
8.38 |
|
BR-804 |
including |
1,025.00 |
1,026.90 |
1.90 |
1.46 |
21.93 |
|
BR-804 |
and |
1,115.35 |
1,124.05 |
8.70 |
6.61 |
1.18 |
|
BR-805 |
|
543.70 |
549.55 |
5.85 |
4.45 |
0.53 |
Yauro |
BR-805 |
and |
556.80 |
560.90 |
4.10 |
3.32 |
0.50 |
|
BR-805 |
and |
718.80 |
722.40 |
3.60 |
3.13 |
1.10 |
|
BR-805 |
and |
792.35 |
834.50 |
42.15 |
36.25 |
4.52 |
|
BR-805 |
including |
826.00 |
834.50 |
8.50 |
6.72 |
19.31 |
|
BR-805 |
and |
923.30 |
926.85 |
3.55 |
2.80 |
0.57 |
|
BR-805 |
and |
941.00 |
949.30 |
8.30 |
6.14 |
0.54 |
|
BR-805 |
and |
961.60 |
970.00 |
8.40 |
7.06 |
0.51 |
|
BR-805 |
and |
993.90 |
1,005.00 |
11.10 |
8.88 |
2.35 |
|
BR-805 |
including |
993.90 |
994.70 |
0.80 |
0.64 |
26.40 |
|
BR-805 |
and |
1,015.00 |
1,020.00 |
5.00 |
4.40 |
0.92 |
|
BR-812 |
|
612.40 |
616.00 |
3.60 |
3.13 |
0.68 |
Yauro |
BR-812 |
and |
623.90 |
628.25 |
4.35 |
3.31 |
5.48 |
|
BR-812 |
including |
623.90 |
627.35 |
3.45 |
2.93 |
6.47 |
|
BR-812 |
and |
871.25 |
886.75 |
15.50 |
12.09 |
0.49 |
|
BR-812 |
and |
901.35 |
908.50 |
7.15 |
5.08 |
1.60 |
|
BR-821 |
|
995.30 |
996.00 |
0.70 |
0.60 |
57.00 |
Yauro |
BR-821 |
and |
1,023.00 |
1,035.10 |
12.10 |
11.13 |
1.13 |
|
BR-821 |
and |
1,053.40 |
1,057.80 |
4.40 |
2.95 |
0.38 |
|
BR-821 |
and |
1,066.00 |
1,075.70 |
9.70 |
6.89 |
1.43 |
|
BR-821 |
including |
1,072.70 |
1,075.70 |
3.00 |
1.95 |
3.06 |
|
BR-821 |
and |
1,157.15 |
1,160.60 |
3.45 |
2.52 |
8.21 |
|
BR-821 |
including |
1,159.25 |
1,159.75 |
0.50 |
0.45 |
53.40 |
|
BR-821 |
and |
1,175.30 |
1,187.50 |
12.20 |
8.05 |
0.88 |
|
Results are preliminary in nature and are subject to on-going
QA/QC. Lengths are subject to rounding.
See Appendix B for a LP Fault zone long section.
Manh Choh
At the 70%-owned Manh
Choh project, activities remain on schedule and on
budget, and the mine’s key operating permits were received in May.
Construction activities at the mine area have commenced and
continue to ramp-up with the mobilization of the mining business
partner and construction companies to install the site facilities.
Contracting and procurement activities are now complete for the
Manh Choh site. Construction activities have commenced on the mill
modifications at Fort Knox, where the Manh Choh ore will be
processed. The Kinross operations team is now fully staffed while
onboarding of key business partners to support the mining and ore
transport is ongoing. As a key priority, all parties remain focused
on local hiring and training opportunities to support the local
towns and villages including long-term skills for individuals after
mining concludes at Manh Choh.
The Company announced on July 27, 2022, that it
was proceeding with the Manh Choh project as the operator of the
joint venture. Initial production from Manh Choh is expected in the
second half of 2024 and is expected to add approximately 640,000
attributable Au eq. oz. to the Company’s production profile over
its approximately 4.5 year life-of-mine. Including Manh Choh, the
Company expects to produce an average of approximately 400,000
attributable Au eq. oz. per year from 2024 to 2027 from its Alaskan
assets.
Round Mountain and Gold Hill exploration
and studies
At Round Mountain, the Company has completed
Phase W1 and is continuing to mine Phase
W2 while progressing optimization work on Phase
S open pit and focusing on exploration and studies of the
underground options at Phase X and Gold
Hill.
The recent optimization work at Phase
S has shown positive initial results, reducing the capital
spend and strip ratio and improving economics. The Company will
continue to study Phase S, and the associated ounces remain in
reserves for potential future mining.
Construction of the Phase X
exploration decline is progressing well, with 350 metres developed
so far, and remains on plan to start definition drilling in early
2024.
View a Phase X animation here:
https://youtu.be/d3aYE5sFIIQ
In terms of sequencing, Round Mountain could
potentially transition open pit mining from Phase W2 to Phase S
while developing and ramping up the Phase X underground, which
could then be concurrently exploited with Phase S in the second
half of the decade. Gold Hill underground development could follow
Phase X, adding higher grade mill feed to supplement production
from Phase S and Phase X towards the end of the decade.
The Gold Hill exploration 2023 drill
program tested continuity within the mid-Atlantic vein zone and
confirmed an 800m west strike extension with multiple high-grade
intercepts within the Jersey vein zone.
Top Jersey vein zone intercepts
- D-1195 – 2.1m @ 41.5 g/t Au-eq
(400m strike extension)
- D-1195 – 2.3m @ 20.4 g/t Au-eq
(400m strike extension)
- D-1194 – 1.9m @ 29.8 g/t Au-eq, new
high grade in critical area
- D-1196 – 1.9m @ 6.1 g/t Au-eq (800m
strike extension)
The new strike extensions, including the best intercept received
to date in hole D-1195, demonstrate this robust system continues
and still remains open to the west at depth.
Chile
Kinross’ activities in Chile are currently
focused on La Coipa and potential opportunities to extend its mine
life. The Lobo-Marte project continues to provide
optionality as a potential large, low-cost mine upon the conclusion
of mining at La Coipa. While the Company focuses its technical
resources on La Coipa, it will continue to engage and build
relationships with communities related to Lobo-Marte and government
stakeholders.
Curlew Basin exploration
At the Curlew Basin exploration project in
Washington State, underground exploration drill results continue to
confirm vein extensions and continuity within high priority target
areas. Exploration drilling will continue throughout the third
quarter with the aim to build on the resource through proximal
growth and to test the area of upside potential.
The top three significant intercepts (of 72) received during the
quarter include:
- K5 (1148) – 2.2m @ 41.3 g/t Au
- K5 (1403) – 6.8m @ 9.1 g/t Au
including 3.1 @ 14.7 g/t Au
- K5 (1410) – 4.5m @ 10.8 g/t Au
Results-to-date demonstrate thicker intervals of
mineralization and are adding volume in key portions of the system.
Hole 1148, which represents the best Curlew intercept in 10 years,
tested the southern edge of K5 and documented a major change in
vein orientation, resulting in a new open zone of higher-grade
veins. Previous tests of K5-South from surface showed the zone had
limited growth potential, and now this intercept and follow-up
drilling unlock a new search space. Year-after-year, exploration
continues to define new veins, proving the thesis there is more to
explore within the entire Curlew Basin.
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 26.
The Company is on track to meet its 2023
production guidance of 2.1 million Au eq. oz. (+/- 5%). Production
increased in the second quarter, as planned, and is expected to
remain strong for the remainder of 2023. Kinross’ annual production
is expected to remain stable in 2024 and 2025 at 2.1 million and
2.0 million attributable9 Au eq. oz. (+/- 5%),
respectively.
The Company is also on track to meet its 2023
guidance for production cost of sales, all-in sustaining cost and
attributable10 capital expenditures.
Organizational update
To support the ongoing success of its global
projects and organic growth, Kinross is expanding on the changes to
its Senior Leadership Team (SLT) announced last year, which created
an enhanced focus on the technical and operational aspects of the
business.
Technical services will be divided into two
separate Senior Leadership Team roles - a Senior Vice President of
Technical Services and a Senior Vice President of Global Projects,
both of which will report to the President and CEO. This will
further facilitate hands-on senior level, dedicated oversight and
focused support of Kinross’ operations and projects. These changes
are expected to create organizational efficiencies and unlock the
full potential of Kinross’ existing assets and organic growth
related to major development projects.
As such, Ned Jalil, currently Senior Vice
President and Chief Technical Officer has decided to depart Kinross
to pursue other opportunities and will remain in a transitionary
role until the end of August. Kinross thanks Ned for his
contributions to Kinross over the years.
William Dunford will assume the role of Senior
Vice President, Technical Services. Since joining Kinross more than
16 years ago, William has held increasingly senior technical and
operational roles, including as the General Manager of Kupol prior
to its sale last year, and is currently the Vice President, Mining
Operations, overseeing Kinross’ Mine Planning, Geotechnical,
Strategic Business Planning, Maintenance, Continuous Improvement,
and Business Performance Management functions. William’s
combination of technical, operational, site and corporate
experience will be an asset in this position. The Company is
recruiting for the Senior Vice President, Global Projects role.
Environment, Social and Governance (ESG)
update
Kinross published its third
annual Climate Report, providing
comprehensive climate-related disclosures and the Company’s
greenhouse gas (GHG) emissions data for 2022. The Report outlines
the Company’s progress towards meeting the goals of the United
Nations Framework Convention on Climate Change (UNFCCC) Paris
Agreement. It also details Kinross’ Climate Change Strategy, which
aims to reduce Scope 1 and Scope 2 GHG emissions intensity per
ounce produced by 30% by 2030 over the 2021 baseline and achieve
net-zero GHG emissions by 2050. Click here to access the Climate
Report: https://www.kinross.com/2022-Climate-Report
As detailed in the Report, the Company advanced
its multi-faceted Climate Change Strategy in 2022 structured on
five key focus areas, which includes growing the role of renewable
energy in Kinross’ overall energy portfolio. For example, at the
Tasiast solar plant, the project, which is nearing completion, is
expected to provide annualized fuel savings of 17 million litres of
heavy oil, with a payback of less than five years. This translates
into an 18% reduction of GHG emissions from the power plant over
life of mine. Annualized GHG emissions reductions are
estimated at 50 kilotonnes CO2e, and henceforth 22.5% of
Tasiast’s energy generation will be from renewable sources.
Kinross has been reporting on climate-related
data since 2005 and began reporting in alignment with the
recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD) in 2020 with its inaugural Climate Report. The
Climate Report follows the recommended TCFD framework, providing
investors and broader stakeholders with timely information about
Kinross’ global efforts to address climate change and manage
climate-related risks to its business.
Conference call details
In connection with this news release, Kinross
will hold a conference call and audio webcast on Thursday, August
3, 2023, at 8:00 a.m. ET to discuss the results, followed by a
question-and-answer session. To access the call, please dial:
Canada & US toll-free – 1
(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’ 2023 second-quarter unaudited Financial Statements and
Management’s Discussion and Analysis report at www.kinross.com.
Kinross’ 2023 second-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
Victoria BarringtonSenior Director, Corporate
Communicationsphone:
647-788-4153victoria.barrington@kinross.com
Investor Relations ContactChris
LichtenheldtVice-President, Investor Relationsphone:
416-365-2761chris.lichtenheldt@kinross.com
Review of operations
Three months ended June 30, (unaudited) |
Gold equivalent ounces |
|
|
|
|
|
|
|
Produced |
|
Sold |
|
Production cost of sales ($millions) |
|
Production cost of sales/equivalent ounce
sold |
|
2023 |
2022 |
|
2023 |
2022 |
|
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Tasiast |
157,844 |
129,140 |
|
152,564 |
114,064 |
|
$ |
99.5 |
$ |
93.3 |
|
$ |
652 |
$ |
818 |
Paracatu |
164,243 |
129,423 |
|
163,889 |
133,472 |
|
|
135.2 |
|
129.6 |
|
|
825 |
|
971 |
La Coipa |
66,744 |
7,414 |
|
67,378 |
7,099 |
|
|
43.6 |
|
5.6 |
|
|
647 |
|
789 |
|
|
|
|
|
|
|
|
|
|
|
|
Fort Knox |
69,438 |
77,184 |
|
69,206 |
77,698 |
|
|
79.3 |
|
92.6 |
|
|
1,146 |
|
1,192 |
Round Mountain |
57,446 |
56,709 |
|
57,412 |
51,455 |
|
|
85.5 |
|
74.8 |
|
|
1,489 |
|
1,454 |
Bald Mountain |
39,321 |
54,108 |
|
42,181 |
54,472 |
|
|
54.5 |
|
54.5 |
|
|
1,292 |
|
1,001 |
United States Total |
166,205 |
188,001 |
|
168,799 |
183,625 |
|
|
219.3 |
|
221.9 |
|
|
1,299 |
|
1,208 |
|
|
|
|
|
|
|
|
|
|
|
|
Maricunga |
- |
- |
|
339 |
818 |
|
|
0.3 |
|
0.4 |
|
|
885 |
|
489 |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations Total |
555,036 |
453,978 |
|
552,969 |
439,078 |
|
|
497.9 |
|
450.8 |
|
|
900 |
|
1,027 |
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued Operations |
|
|
|
|
|
|
|
|
|
Kupol |
- |
73,265 |
|
- |
36,358 |
|
|
- |
|
18.4 |
|
$ |
- |
$ |
506 |
Chirano (100%) |
- |
33,609 |
|
- |
36,995 |
|
|
- |
|
59.3 |
|
|
- |
|
1,603 |
|
- |
106,874 |
|
- |
73,353 |
|
|
- |
|
77.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, (unaudited) |
Gold equivalent ounces |
|
|
|
|
|
|
|
Produced |
|
Sold |
|
Production cost of sales ($millions) |
|
Production cost of sales/equivalent ounce
sold |
|
2023 |
2022 |
|
2023 |
2022 |
|
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
Tasiast |
288,889 |
262,835 |
|
281,043 |
244,259 |
|
$ |
187.9 |
$ |
189.1 |
|
$ |
669 |
$ |
774 |
Paracatu |
287,577 |
237,432 |
|
292,233 |
235,358 |
|
|
253.2 |
|
236.2 |
|
|
866 |
|
1,004 |
La Coipa |
120,340 |
7,938 |
|
129,158 |
7,099 |
|
|
88.5 |
|
5.6 |
|
|
685 |
|
789 |
|
|
|
|
|
|
|
|
|
|
|
|
Fort Knox |
134,825 |
131,987 |
|
134,610 |
130,511 |
|
|
156.9 |
|
160.0 |
|
|
1,166 |
|
1,226 |
Round Mountain |
116,278 |
102,028 |
|
115,638 |
98,414 |
|
|
182.0 |
|
127.1 |
|
|
1,574 |
|
1,291 |
Bald Mountain |
73,149 |
90,179 |
|
89,464 |
95,489 |
|
|
112.5 |
|
94.8 |
|
|
1,257 |
|
993 |
United States Total |
324,252 |
324,194 |
|
339,712 |
324,414 |
|
|
451.4 |
|
381.9 |
|
|
1,329 |
|
1,177 |
|
|
|
|
|
|
|
|
|
|
|
|
Maricunga |
- |
- |
|
1,153 |
1,676 |
|
|
0.8 |
|
1.1 |
|
|
694 |
|
656 |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing Operations Total |
1,021,058 |
832,399 |
|
1,043,299 |
812,806 |
|
|
981.8 |
|
813.9 |
|
|
941 |
|
1,001 |
|
|
|
|
|
|
|
|
|
|
|
Discontinued Operations |
|
|
|
|
|
|
|
|
|
Kupol |
- |
169,156 |
|
- |
122,295 |
|
|
- |
|
83.8 |
|
|
- |
|
685 |
Chirano (100%) |
- |
68,538 |
|
- |
72,805 |
|
|
- |
|
106.9 |
|
|
- |
|
1,468 |
|
- |
237,694 |
|
- |
195,100 |
|
|
- |
|
190.7 |
|
|
|
Interim condensed consolidated balance
sheets
(unaudited, expressed
in millions of U.S. dollars, except share amounts) |
|
|
|
|
|
|
|
|
As at |
|
|
|
June
30, |
|
December 31, |
|
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
478.4 |
|
|
$ |
418.1 |
|
|
Restricted cash |
|
|
8.7 |
|
|
|
10.1 |
|
|
Accounts receivable and other assets |
|
|
240.2 |
|
|
|
318.2 |
|
|
Current income tax recoverable |
|
|
5.5 |
|
|
|
8.5 |
|
|
Inventories |
|
|
1,189.3 |
|
|
|
1,072.2 |
|
|
Unrealized fair value of derivative assets |
|
|
16.9 |
|
|
|
25.5 |
|
|
|
|
|
1,939.0 |
|
|
|
1,852.6 |
|
|
Non-current assets |
|
|
|
|
|
Property, plant and equipment |
|
|
7,815.4 |
|
|
|
7,741.4 |
|
|
Long-term investments |
|
|
89.4 |
|
|
|
116.9 |
|
|
Other long-term assets |
|
|
696.4 |
|
|
|
680.9 |
|
|
Deferred tax assets |
|
|
6.5 |
|
|
|
4.6 |
|
|
Total assets |
|
$ |
10,546.7 |
|
|
$ |
10,396.4 |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
556.4 |
|
|
$ |
550.0 |
|
|
Current income tax payable |
|
|
71.8 |
|
|
|
89.4 |
|
|
Current portion of long-term debt and credit facilities |
|
|
531.5 |
|
|
|
36.0 |
|
|
Current portion of provisions |
|
|
53.4 |
|
|
|
50.8 |
|
|
Other current liabilities |
|
|
19.8 |
|
|
|
25.3 |
|
|
|
|
|
1,232.9 |
|
|
|
751.5 |
|
|
Non-current liabilities |
|
|
|
|
|
Long-term debt and credit facilities |
|
|
1,943.9 |
|
|
|
2,556.9 |
|
|
Provisions |
|
|
806.1 |
|
|
|
755.9 |
|
|
Long-term lease liabilities |
|
|
19.5 |
|
|
|
23.1 |
|
|
Other long-term liabilities |
|
|
133.3 |
|
|
|
125.3 |
|
|
Deferred tax liabilities |
|
|
320.8 |
|
|
|
301.5 |
|
|
Total liabilities |
|
$ |
4,456.5 |
|
|
$ |
4,514.2 |
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Common shareholders' equity |
|
|
|
|
|
Common share capital |
|
$ |
4,480.2 |
|
|
$ |
4,449.5 |
|
|
Contributed surplus |
|
|
10,643.1 |
|
|
|
10,667.5 |
|
|
Accumulated deficit |
|
|
(9,084.1 |
) |
|
|
(9,251.6 |
) |
|
Accumulated other comprehensive income (loss) |
|
|
(41.4 |
) |
|
|
(41.7 |
) |
|
Total common shareholders' equity |
|
|
5,997.8 |
|
|
|
5,823.7 |
|
|
Non-controlling interests |
|
|
92.4 |
|
|
|
58.5 |
|
|
Total equity |
|
|
6,090.2 |
|
|
|
5,882.2 |
|
|
Total liabilities and equity |
|
$ |
10,546.7 |
|
|
$ |
10,396.4 |
|
|
|
|
|
|
|
|
Common shares |
|
|
|
|
Authorized |
|
Unlimited |
|
|
Unlimited |
|
Issued and outstanding |
|
|
1,227,579,280 |
|
|
|
1,221,891,341 |
|
|
|
|
|
|
|
Interim condensed consolidated statements of
operations
(unaudited, expressed in millions of U.S. dollars, except share and
per share amounts) |
|
|
|
|
Three months ended |
|
Six months ended |
|
|
|
June 30, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Revenue |
|
|
|
|
|
|
|
|
|
Metal sales |
|
$ |
1,092.3 |
|
|
$ |
821.5 |
|
|
$ |
2,021.6 |
|
|
$ |
1,522.4 |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
|
|
|
|
|
|
|
|
Production cost of sales |
|
|
497.9 |
|
|
|
450.8 |
|
|
|
981.8 |
|
|
|
813.9 |
|
|
Depreciation, depletion and amortization |
|
|
239.3 |
|
|
|
180.5 |
|
|
|
451.2 |
|
|
|
347.0 |
|
|
Total cost of sales |
|
|
737.2 |
|
|
|
631.3 |
|
|
|
1,433.0 |
|
|
|
1,160.9 |
|
|
Gross profit |
|
|
355.1 |
|
|
|
190.2 |
|
|
|
588.6 |
|
|
|
361.5 |
|
|
Other operating expense |
|
|
36.0 |
|
|
|
56.3 |
|
|
|
67.2 |
|
|
|
71.5 |
|
|
Exploration and business development |
|
|
49.3 |
|
|
|
39.9 |
|
|
|
83.3 |
|
|
|
63.3 |
|
|
General and administrative |
|
|
32.0 |
|
|
|
30.0 |
|
|
|
56.4 |
|
|
|
60.2 |
|
|
Operating earnings |
|
|
237.8 |
|
|
|
64.0 |
|
|
|
381.7 |
|
|
|
166.5 |
|
|
Other (expense) income - net |
|
|
(10.4 |
) |
|
|
0.7 |
|
|
|
(6.0 |
) |
|
|
(6.0 |
) |
|
Finance income |
|
|
11.5 |
|
|
|
2.0 |
|
|
|
20.9 |
|
|
|
4.2 |
|
|
Finance expense |
|
|
(26.0 |
) |
|
|
(23.5 |
) |
|
|
(53.5 |
) |
|
|
(44.7 |
) |
|
Earnings from continuing operations before
tax |
|
|
212.9 |
|
|
|
43.2 |
|
|
|
343.1 |
|
|
|
120.0 |
|
|
Income tax expense - net |
|
|
(62.0 |
) |
|
|
(52.7 |
) |
|
|
(101.8 |
) |
|
|
(48.2 |
) |
|
Earnings (loss) from continuing operations after tax |
|
|
150.9 |
|
|
|
(9.5 |
) |
|
|
241.3 |
|
|
|
71.8 |
|
|
Loss from discontinued operations after tax |
|
|
- |
|
|
|
(30.3 |
) |
|
|
- |
|
|
|
(635.5 |
) |
|
Net earnings (loss) |
|
$ |
150.9 |
|
|
$ |
(39.8 |
) |
|
$ |
241.3 |
|
|
$ |
(563.7 |
) |
|
Net earnings (loss) from continuing operations attributable
to: |
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
$ |
(0.1 |
) |
|
$ |
(0.2 |
) |
|
$ |
0.1 |
|
|
$ |
(0.2 |
) |
|
Common shareholders |
|
$ |
151.0 |
|
|
$ |
(9.3 |
) |
|
$ |
241.2 |
|
|
$ |
72.0 |
|
|
Net earnings (loss) from discontinued operations
attributable to: |
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
$ |
- |
|
|
$ |
0.7 |
|
|
$ |
- |
|
|
$ |
0.6 |
|
|
Common shareholders |
|
$ |
- |
|
|
$ |
(31.0 |
) |
|
$ |
- |
|
|
$ |
(636.1 |
) |
|
Net earnings (loss) attributable to: |
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
$ |
(0.1 |
) |
|
$ |
0.5 |
|
|
$ |
0.1 |
|
|
$ |
0.4 |
|
|
Common shareholders |
|
$ |
151.0 |
|
|
$ |
(40.3 |
) |
|
$ |
241.2 |
|
|
$ |
(564.1 |
) |
|
Earnings (loss) per share from continuing operations
attributable to common shareholders |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.12 |
|
|
$ |
(0.01 |
) |
|
$ |
0.20 |
|
|
$ |
0.06 |
|
|
Diluted |
|
$ |
0.12 |
|
|
$ |
(0.01 |
) |
|
$ |
0.20 |
|
|
$ |
0.06 |
|
|
Earnings (loss) per share from discontinued operations
attributable to common shareholders |
|
$ |
- |
|
|
$ |
(0.02 |
) |
|
$ |
- |
|
|
$ |
(0.50 |
) |
|
Basic |
|
$ |
- |
|
|
$ |
(0.02 |
) |
|
$ |
- |
|
|
$ |
(0.50 |
) |
|
Diluted |
|
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to common
shareholders |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.12 |
|
|
$ |
(0.03 |
) |
|
$ |
0.20 |
|
|
$ |
(0.44 |
) |
|
Diluted |
|
$ |
0.12 |
|
|
$ |
(0.03 |
) |
|
$ |
0.20 |
|
|
$ |
(0.44 |
) |
|
Interim condensed consolidated statements of cash
flows
(unaudited, expressed in millions of U.S. dollars) |
|
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
June 30, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net inflow (outflow) of cash related to the following
activities: |
|
|
|
|
|
|
|
|
Operating: |
|
|
|
|
|
|
|
|
Earnings (loss) from continuing operations after tax |
$ |
150.9 |
|
|
$ |
(9.5 |
) |
|
$ |
241.3 |
|
|
$ |
71.8 |
|
|
Adjustments to reconcile net earnings (loss) from continuing
operations to net cash provided from operating activities: |
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
239.3 |
|
|
|
180.5 |
|
|
|
451.2 |
|
|
|
347.0 |
|
|
Share-based compensation expense |
|
2.0 |
|
|
|
3.0 |
|
|
|
1.4 |
|
|
|
6.0 |
|
|
Finance expense |
|
26.0 |
|
|
|
23.5 |
|
|
|
53.5 |
|
|
|
44.7 |
|
|
Deferred tax expense (recovery) |
|
9.7 |
|
|
|
14.8 |
|
|
|
18.7 |
|
|
|
(2.1 |
) |
|
Foreign exchange losses and other |
|
31.2 |
|
|
|
5.9 |
|
|
|
21.8 |
|
|
|
9.7 |
|
|
Reclamation expense |
|
- |
|
|
|
33.7 |
|
|
|
4.0 |
|
|
|
23.9 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable and other assets |
|
42.2 |
|
|
|
14.3 |
|
|
|
87.6 |
|
|
|
62.6 |
|
|
Inventories |
|
(39.9 |
) |
|
|
(63.1 |
) |
|
|
(83.1 |
) |
|
|
(152.4 |
) |
|
Accounts payable and accrued liabilities |
|
91.2 |
|
|
|
78.9 |
|
|
|
85.4 |
|
|
|
51.1 |
|
|
Cash flow provided from operating activities |
|
552.6 |
|
|
|
282.0 |
|
|
|
881.8 |
|
|
|
462.3 |
|
|
Income taxes paid |
|
(24.0 |
) |
|
|
(24.9 |
) |
|
|
(94.2 |
) |
|
|
(107.3 |
) |
|
Net cash flow of continuing operations provided from
operating activities |
|
528.6 |
|
|
|
257.1 |
|
|
|
787.6 |
|
|
|
355.0 |
|
|
Net cash flow of discontinued operations (used in) provided
from operating activities |
|
- |
|
|
|
(49.2 |
) |
|
|
- |
|
|
|
49.2 |
|
|
Investing: |
|
|
|
|
|
|
|
|
Additions to property, plant and equipment |
|
(281.9 |
) |
|
|
(149.4 |
) |
|
|
(503.1 |
) |
|
|
(250.1 |
) |
|
Interest paid capitalized to property, plant and equipment |
|
(8.5 |
) |
|
|
(5.6 |
) |
|
|
(46.8 |
) |
|
|
(16.2 |
) |
|
Acquisitions net of cash acquired |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,027.5 |
) |
|
Net (additions) disposals to long-term investments and other
assets |
|
(10.4 |
) |
|
|
(20.2 |
) |
|
|
4.9 |
|
|
|
(34.1 |
) |
|
Decrease (increase) in restricted cash - net |
|
2.2 |
|
|
|
0.6 |
|
|
|
1.4 |
|
|
|
(1.1 |
) |
|
Interest received and other - net |
|
4.2 |
|
|
|
3.6 |
|
|
|
6.9 |
|
|
|
4.7 |
|
|
Net cash flow of continuing operations used in investing
activities |
|
(294.4 |
) |
|
|
(171.0 |
) |
|
|
(536.7 |
) |
|
|
(1,324.3 |
) |
|
Net cash flow of discontinued operations provided from
investing activities |
|
40.0 |
|
|
|
269.9 |
|
|
|
45.0 |
|
|
|
252.9 |
|
|
Financing: |
|
|
|
|
|
|
|
|
Proceeds from drawdown of debt |
|
- |
|
|
|
- |
|
|
|
100.0 |
|
|
|
1,097.6 |
|
|
Repayment of debt |
|
(220.0 |
) |
|
|
(120.0 |
) |
|
|
(220.0 |
) |
|
|
(120.0 |
) |
|
Interest paid |
|
(2.3 |
) |
|
|
(0.9 |
) |
|
|
(26.5 |
) |
|
|
(25.6 |
) |
|
Payment of lease liabilities |
|
(5.6 |
) |
|
|
(5.7 |
) |
|
|
(21.1 |
) |
|
|
(11.1 |
) |
|
Dividends paid to common shareholders |
|
(36.9 |
) |
|
|
(39.0 |
) |
|
|
(73.7 |
) |
|
|
(77.9 |
) |
|
Other - net |
|
(2.9 |
) |
|
|
2.9 |
|
|
|
4.3 |
|
|
|
8.8 |
|
|
Net cash flow of continuing operations (used in) provided
from financing activities |
|
(267.7 |
) |
|
|
(162.7 |
) |
|
|
(237.0 |
) |
|
|
871.8 |
|
|
Net cash flow of discontinued operations provided from
financing activities |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Effect of exchange rate changes on cash and cash
equivalents of continuing operations |
|
0.9 |
|
|
|
(0.4 |
) |
|
|
1.4 |
|
|
|
(0.4 |
) |
|
Effect of exchange rate changes on cash and cash
equivalents of discontinued operations |
|
- |
|
|
|
5.7 |
|
|
|
- |
|
|
|
1.9 |
|
|
Increase in cash and cash equivalents |
|
7.4 |
|
|
|
149.4 |
|
|
|
60.3 |
|
|
|
206.1 |
|
|
Cash and cash equivalents, beginning of
period |
|
471.0 |
|
|
|
454.2 |
|
|
|
418.1 |
|
|
|
531.5 |
|
|
Cash and cash equivalents of assets held for sale,
beginning of period |
|
- |
|
|
|
134.0 |
|
|
|
- |
|
|
|
- |
|
|
Reclassified to assets held for sale |
|
- |
|
|
|
(18.5 |
) |
|
|
- |
|
|
|
(18.5 |
) |
|
Cash and cash equivalents, end of period |
$ |
478.4 |
|
|
$ |
719.1 |
|
|
$ |
478.4 |
|
|
$ |
719.1 |
|
|
|
Operating Summary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mine |
Period |
Tonnes Ore Mined |
Ore Processed (Milled) |
Ore Processed (Heap Leach) |
Grade (Mill) |
Grade (Heap Leach) |
Recovery (a)(d) |
Gold Eq Production(b) |
Gold Eq Sales(b) |
Production cost of sales |
Production cost of
sales/oz(c) |
Cap Ex - sustaining(e) |
Total Cap Ex (e) |
DD&A |
|
|
|
('000 tonnes) |
('000 tonnes) |
('000 tonnes) |
(g/t) |
(g/t) |
(%) |
(ounces) |
(ounces) |
($ millions) |
($/ounce) |
($ millions) |
($ millions) |
($ millions) |
West Africa |
Tasiast |
Q2 2023 |
1,688 |
1,663 |
- |
3.25 |
- |
93 |
% |
157,844 |
152,564 |
$ |
99.5 |
$ |
652 |
$ |
9.1 |
$ |
81.9 |
$ |
58.6 |
Q1 2023 |
1,690 |
1,208 |
- |
3.49 |
- |
91 |
% |
131,045 |
128,479 |
$ |
88.4 |
$ |
688 |
$ |
14.6 |
$ |
64.6 |
$ |
46.2 |
Q4 2022 |
3,737 |
1,627 |
- |
3.21 |
- |
90 |
% |
143,002 |
147,019 |
$ |
96.2 |
$ |
654 |
$ |
38.3 |
$ |
90.3 |
$ |
48.7 |
Q3 2022 |
4,437 |
1,741 |
- |
2.72 |
- |
89 |
% |
132,754 |
128,014 |
$ |
94.8 |
$ |
741 |
$ |
3.6 |
$ |
33.4 |
$ |
58.0 |
Q2 2022 |
3,053 |
1,680 |
- |
2.51 |
- |
89 |
% |
129,140 |
114,064 |
$ |
93.3 |
$ |
818 |
$ |
6.7 |
$ |
24.3 |
$ |
56.4 |
Americas |
Paracatu |
Q2 2023 |
14,199 |
15,104 |
- |
0.42 |
- |
80 |
% |
164,243 |
163,889 |
$ |
135.2 |
$ |
825 |
$ |
39.7 |
$ |
39.7 |
$ |
49.8 |
Q1 2023 |
8,056 |
15,130 |
- |
0.37 |
- |
79 |
% |
123,334 |
128,344 |
$ |
118.0 |
$ |
919 |
$ |
27.8 |
$ |
27.8 |
$ |
40.4 |
Q4 2022 |
13,324 |
13,847 |
- |
0.50 |
- |
81 |
% |
180,809 |
183,190 |
$ |
130.3 |
$ |
711 |
$ |
43.9 |
$ |
43.9 |
$ |
52.7 |
Q3 2022 |
11,752 |
13,797 |
- |
0.45 |
- |
79 |
% |
159,113 |
152,616 |
$ |
131.1 |
$ |
859 |
$ |
33.6 |
$ |
33.6 |
$ |
47.2 |
Q2 2022 |
11,011 |
15,133 |
- |
0.35 |
- |
75 |
% |
129,423 |
133,472 |
$ |
129.6 |
$ |
971 |
$ |
31.2 |
$ |
31.2 |
$ |
46.0 |
La Coipa(f) |
Q2 2023 |
869 |
971 |
- |
1.62 |
- |
81 |
% |
66,744 |
67,378 |
$ |
43.6 |
$ |
647 |
$ |
19.9 |
$ |
23.3 |
$ |
48.3 |
Q1 2023 |
748 |
691 |
- |
1.68 |
- |
88 |
% |
53,596 |
61,780 |
$ |
44.9 |
$ |
727 |
$ |
1.6 |
$ |
25.4 |
$ |
36.4 |
Q4 2022 |
1,047 |
933 |
- |
1.47 |
- |
84 |
% |
67,683 |
68,135 |
$ |
39.4 |
$ |
578 |
$ |
2.6 |
$ |
46.0 |
$ |
25.6 |
Q3 2022 |
1,079 |
637 |
- |
1.19 |
- |
83 |
% |
33,955 |
24,681 |
$ |
12.1 |
$ |
490 |
$ |
2.9 |
$ |
34.7 |
$ |
- |
Q2 2022 |
550 |
321 |
- |
0.74 |
- |
69 |
% |
7,414 |
7,099 |
$ |
5.6 |
$ |
789 |
$ |
1.6 |
$ |
39.0 |
$ |
- |
Fort Knox |
Q2 2023 |
7,624 |
2,075 |
6,837 |
0.82 |
0.24 |
82 |
% |
69,438 |
69,206 |
$ |
79.3 |
$ |
1,146 |
$ |
52.1 |
$ |
58.2 |
$ |
22.1 |
Q1 2023 |
7,412 |
1,966 |
5,972 |
0.78 |
0.22 |
82 |
% |
65,387 |
65,404 |
$ |
77.6 |
$ |
1,186 |
$ |
38.6 |
$ |
39.1 |
$ |
18.6 |
Q4 2022 |
12,205 |
2,395 |
11,454 |
0.69 |
0.20 |
79 |
% |
83,739 |
87,061 |
$ |
102.1 |
$ |
1,173 |
$ |
34.4 |
$ |
39.1 |
$ |
40.9 |
Q3 2022 |
15,547 |
2,477 |
13,120 |
0.71 |
0.21 |
80 |
% |
75,522 |
74,221 |
$ |
88.6 |
$ |
1,194 |
$ |
30.5 |
$ |
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 |
$ |
12.1 |
$ |
13.1 |
$ |
26.1 |
Round Mountain |
Q2 2023 |
10,496 |
1,021 |
10,028 |
0.67 |
0.35 |
76 |
% |
57,446 |
57,412 |
$ |
85.5 |
$ |
1,489 |
$ |
10.5 |
$ |
10.5 |
$ |
33.5 |
Q1 2023 |
5,019 |
878 |
4,367 |
0.81 |
0.44 |
79 |
% |
58,832 |
58,226 |
$ |
96.5 |
$ |
1,657 |
$ |
7.4 |
$ |
7.4 |
$ |
34.6 |
Q4 2022 |
5,177 |
962 |
4,772 |
0.74 |
0.36 |
74 |
% |
61,929 |
67,484 |
$ |
95.1 |
$ |
1,409 |
$ |
41.1 |
$ |
41.1 |
$ |
19.1 |
Q3 2022 |
8,856 |
1,021 |
8,336 |
0.64 |
0.27 |
79 |
% |
62,417 |
61,757 |
$ |
87.0 |
$ |
1,409 |
$ |
24.7 |
$ |
24.7 |
$ |
17.6 |
Q2 2022 |
6,702 |
945 |
6,515 |
0.67 |
0.32 |
78 |
% |
56,709 |
51,455 |
$ |
74.8 |
$ |
1,454 |
$ |
20.5 |
$ |
20.6 |
$ |
11.7 |
Bald Mountain |
Q2 2023 |
4,142 |
- |
4,119 |
- |
0.42 |
nm |
39,321 |
42,181 |
$ |
54.5 |
$ |
1,292 |
$ |
16.5 |
$ |
31.4 |
$ |
25.6 |
Q1 2023 |
1,864 |
- |
1,857 |
- |
0.47 |
nm |
33,828 |
47,283 |
$ |
58.0 |
$ |
1,227 |
$ |
6.1 |
$ |
25.2 |
$ |
33.9 |
Q4 2022 |
3,002 |
- |
2,957 |
- |
0.37 |
nm |
58,521 |
66,847 |
$ |
62.8 |
$ |
939 |
$ |
17.2 |
$ |
37.4 |
$ |
63.4 |
Q3 2022 |
4,152 |
- |
4,152 |
- |
0.37 |
nm |
65,394 |
52,472 |
$ |
51.2 |
$ |
976 |
$ |
10.4 |
$ |
28.2 |
$ |
39.1 |
Q2 2022 |
4,945 |
- |
4,945 |
- |
0.60 |
nm |
54,108 |
54,472 |
$ |
54.5 |
$ |
1,001 |
$ |
5.0 |
$ |
16.2 |
$ |
38.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 and Round Mountain 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: Q2 2023: 81.88:1; Q1
2023: 83.82:1; Q4 2022: 81.88:1; Q3 2022: 89.91:1; Q2 2022:
82.77:1. |
(c) |
“Production cost of sales per equivalent ounce sold” is defined as
production cost of sales divided by total gold equivalent ounces
sold from continuing operations. |
|
|
|
|
(d) |
"nm" means not meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
|
(e) |
"Total Cap Ex" is as reported as “Additions to property, plant and
equipment” on the interim condensed consolidated statements of cash
flows. "Capital expenditures - sustaining" is a non-GAAP financial
measure. The definition and reconciliation of this non-GAAP
financial measure is included on page [x] of this news
release. |
(f) |
La Coipa silver grade and recovery were as follows: Q2 2023: 109.84
g/t, 56%; Q1 2023: 125.77 g/t, 70%; Q4 2022: 137.53 g/t, 68%; Q3
2022: 121.06 g/t, 61%; Q2 2022: 56.04 g/t, 43%. |
|
|
|
|
|
|
Reconciliation of non-GAAP financial measures and
ratios
The Company has included certain non-GAAP
financial measures and ratios in this document. These financial
measures and ratios are not defined under International Financial
Reporting Standards (IFRS) and should not be considered in
isolation. The Company believes that these financial measures and
ratios, together with financial measures and ratios determined in
accordance with IFRS, provide investors with an improved ability to
evaluate the underlying performance of the Company. The inclusion
of these financial measures and ratios is meant to provide
additional information and should not be used as a substitute for
performance measures 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. 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 (loss) from continuing operations for the periods
presented:
|
|
|
|
|
|
|
(unaudited, expressed in millions of U.S dollars, except per share
amounts) |
Three months
ended |
|
Six months ended |
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
Net earnings (loss) from continuing operations attributable to
common shareholders - as reported |
$ |
151.0 |
|
$ |
(9.3 |
) |
|
$ |
241.2 |
|
$ |
72.0 |
|
Adjusting items: |
|
|
|
|
|
|
Foreign exchange losses |
|
10.1 |
|
|
1.7 |
|
|
|
6.3 |
|
|
5.8 |
|
|
Foreign exchange (gains) losses on translation of tax basis and
foreign exchange on deferred income taxes within income tax
expense |
|
(18.5 |
) |
|
4.2 |
|
|
|
(31.7 |
) |
|
(11.5 |
) |
|
Taxes in respect of prior periods |
|
16.6 |
|
|
5.1 |
|
|
|
28.6 |
|
|
10.8 |
|
|
Reclamation expense |
|
- |
|
|
33.7 |
|
|
|
4.0 |
|
|
23.9 |
|
|
Other(a) |
|
11.6 |
|
|
1.0 |
|
|
|
10.4 |
|
|
4.5 |
|
|
Tax effects of the above adjustments |
|
(3.2 |
) |
|
1.0 |
|
|
|
(3.6 |
) |
|
0.7 |
|
|
|
|
16.6 |
|
|
46.7 |
|
|
|
14.0 |
|
|
34.2 |
|
Adjusted net earnings from continuing operations attributable to
common shareholders |
$ |
167.6 |
|
$ |
37.4 |
|
|
$ |
255.2 |
|
$ |
106.2 |
|
Weighted average number of common shares outstanding - Basic |
|
1,227.6 |
|
|
1,299.2 |
|
|
|
1,226.3 |
|
|
1,282.0 |
|
Adjusted net earnings from continuing operations per share |
$ |
0.14 |
|
$ |
0.03 |
|
|
$ |
0.21 |
|
$ |
0.08 |
|
Basic earnings (loss) from continuing operations per share
attributable to common shareholders - as reported |
$ |
0.12 |
|
$ |
(0.01 |
) |
|
$ |
0.20 |
|
$ |
0.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Other includes various impacts, such as one-time costs at sites,
and gains and losses on hedges and the sale of assets, 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:
|
|
|
|
|
|
|
(unaudited, expressed in millions of U.S dollars) |
Three months ended |
|
Six months ended |
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
Net cash flow of continuing operations provided from operating
activities - as reported |
$ |
528.6 |
|
$ |
257.1 |
|
|
$ |
787.6 |
|
$ |
355.0 |
|
|
|
|
|
|
|
|
Less: Additions to property, plant and equipment |
|
|
(281.9 |
) |
|
(149.4 |
) |
|
|
(503.1 |
) |
|
(250.1 |
) |
|
|
|
|
|
|
|
Free cash flow from continuing operations |
|
$ |
246.7 |
|
$ |
107.7 |
|
|
$ |
284.5 |
|
$ |
104.9 |
|
|
|
|
|
|
|
|
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 |
|
Six months ended |
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
Net cash flow of continuing operations provided from operating
activities - as reported |
$ |
528.6 |
|
$ |
257.1 |
|
|
$ |
787.6 |
|
$ |
355.0 |
|
|
|
|
|
|
|
|
Adjusting items: |
|
|
|
|
|
Working capital changes: |
|
|
|
Accounts receivable and other assets |
|
(42.2 |
) |
|
(14.3 |
) |
|
|
(87.6 |
) |
|
(62.6 |
) |
Inventories |
|
39.9 |
|
|
63.1 |
|
|
|
83.1 |
|
|
152.4 |
|
Accounts payable and other liabilities, including income taxes
paid |
|
(67.2 |
) |
|
(54.0 |
) |
|
|
8.8 |
|
|
56.2 |
|
Total working capital changes |
|
(69.5 |
) |
|
(5.2 |
) |
|
|
4.3 |
|
|
146.0 |
|
Adjusted operating cash flow from continuing operations |
$ |
459.1 |
|
$ |
251.9 |
|
|
$ |
791.9 |
|
$ |
501.0 |
|
|
|
|
|
|
|
|
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, except ounces
and costs per ounce) |
Three months ended |
|
Six months ended |
June 30, |
|
June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
Production cost of sales from continuing operations - as
reported |
$ |
497.9 |
|
$ |
450.8 |
|
|
$ |
981.8 |
|
$ |
813.9 |
|
Less: silver revenue from continuing operations(a) |
|
(53.3 |
) |
|
(9.0 |
) |
|
|
(108.2 |
) |
|
(13.4 |
) |
Production cost of sales from continuing operations net of silver
by-product revenue |
$ |
444.6 |
|
$ |
441.8 |
|
|
$ |
873.6 |
|
$ |
800.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold ounces sold from continuing operations |
|
|
525,921 |
|
|
434,086 |
|
|
|
987,617 |
|
|
805,421 |
|
Total gold equivalent ounces sold from continuing operations |
|
|
552,969 |
|
|
439,078 |
|
|
|
1,043,299 |
|
|
812,806 |
|
Production cost of sales from continuing operations per equivalent
ounce sold(b) |
$ |
900 |
|
$ |
1,027 |
|
|
$ |
941 |
|
$ |
1,001 |
|
Production cost of sales from continuing operations per ounce sold
on a by-product basis |
|
$ |
845 |
|
$ |
1,018 |
|
|
$ |
885 |
|
$ |
994 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See page 21 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,
i.e. a by-product. 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, including capitalized stripping, 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, except ounces
and costs per ounce) |
Three months
ended |
|
Six months ended |
June 30, |
|
June 30, |
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
Production cost of sales from continuing operations - as
reported |
$ |
497.9 |
|
$ |
450.8 |
|
|
$ |
981.8 |
|
$ |
813.9 |
|
Less: silver revenue from continuing operations(a) |
|
(53.3 |
) |
|
(9.0 |
) |
|
|
(108.2 |
) |
|
(13.4 |
) |
Production cost of sales from continuing operations net of silver
by-product revenue |
$ |
444.6 |
|
$ |
441.8 |
|
|
$ |
873.6 |
|
$ |
800.5 |
|
Adjusting items: |
|
|
|
|
|
General and administrative(d) |
|
32.0 |
|
|
30.0 |
|
|
|
56.4 |
|
|
60.2 |
|
Other operating expense - sustaining(e) |
|
5.0 |
|
|
6.2 |
|
|
|
11.5 |
|
|
11.8 |
|
Reclamation and remediation - sustaining(f) |
|
18.3 |
|
|
10.0 |
|
|
|
32.6 |
|
|
17.8 |
|
Exploration and business development - sustaining(g) |
|
9.5 |
|
|
8.6 |
|
|
|
16.1 |
|
|
15.5 |
|
Additions to property, plant and equipment - sustaining(h) |
|
148.6 |
|
|
77.6 |
|
|
|
245.1 |
|
|
118.7 |
|
Lease payments - sustaining(i) |
|
5.5 |
|
|
5.5 |
|
|
|
20.7 |
|
|
10.7 |
|
All-in Sustaining Cost on a by-product basis |
$ |
663.5 |
|
$ |
579.7 |
|
|
$ |
1,256.0 |
|
$ |
1,035.2 |
|
Adjusting items on an attributable(c) basis: |
|
|
|
|
|
Other operating expense - non-sustaining(e) |
|
10.0 |
|
|
8.9 |
|
|
|
18.7 |
|
|
21.1 |
|
Reclamation and remediation - non-sustaining(f) |
|
2.4 |
|
|
2.1 |
|
|
|
4.3 |
|
|
3.3 |
|
Exploration and business development - non-sustaining(g) |
|
39.7 |
|
|
31.1 |
|
|
|
67.3 |
|
|
47.6 |
|
Additions to property, plant and equipment - non-sustaining(h) |
|
123.7 |
|
|
70.9 |
|
|
|
239.8 |
|
|
129.6 |
|
Lease payments - non-sustaining(i) |
|
0.1 |
|
|
0.2 |
|
|
|
0.4 |
|
|
0.4 |
|
All-in Cost on a by-product basis - attributable(c) |
$ |
839.4 |
|
$ |
692.9 |
|
|
$ |
1,586.5 |
|
$ |
1,237.2 |
|
Gold ounces sold from continuing operations |
|
525,921 |
|
|
434,086 |
|
|
|
987,617 |
|
|
805,421 |
|
Production cost of sales from continuing operations per equivalent
ounce sold(b) |
$ |
900 |
|
$ |
1,027 |
|
|
$ |
941 |
|
$ |
1,001 |
|
All-in sustaining cost from continuing operations per ounce sold on
a by-product basis |
$ |
1,262 |
|
$ |
1,335 |
|
|
$ |
1,272 |
|
$ |
1,285 |
|
Attributable(c) all-in cost from continuing operations per ounce
sold on a by-product basis |
$ |
1,596 |
|
$ |
1,596 |
|
|
$ |
1,606 |
|
$ |
1,536 |
|
|
|
|
|
|
|
See page 21 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 production cost of sales
from continuing operations, as reported on the interim condensed
consolidated statements of operations, as follows:
|
|
|
|
|
|
|
(unaudited, expressed in millions of U.S. dollars, except ounces
and costs per ounce) |
Three months
ended |
|
Six months ended |
June 30, |
|
June 30, |
|
|
|
2023 |
|
2022 |
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
Production cost of sales from continuing operations - as
reported |
$ |
497.9 |
$ |
450.8 |
|
$ |
981.8 |
$ |
813.9 |
Adjusting items: |
|
|
|
|
|
|
General and
administrative(d) |
|
32.0 |
|
30.0 |
|
|
56.4 |
|
60.2 |
|
Other
operating expense - sustaining(e) |
|
5.0 |
|
6.2 |
|
|
11.5 |
|
11.8 |
|
Reclamation
and remediation - sustaining(f) |
|
18.3 |
|
10.0 |
|
|
32.6 |
|
17.8 |
|
Exploration
and business development - sustaining(g) |
|
9.5 |
|
8.6 |
|
|
16.1 |
|
15.5 |
|
Additions to
property, plant and equipment - sustaining(h) |
|
148.6 |
|
77.6 |
|
|
245.1 |
|
118.7 |
|
Lease
payments - sustaining(i) |
|
5.5 |
|
5.5 |
|
|
20.7 |
|
10.7 |
All-in Sustaining Cost |
$ |
716.8 |
$ |
588.7 |
|
$ |
1,364.2 |
$ |
1,048.6 |
Adjusting items on an attributable(c) basis: |
|
|
|
|
|
|
Other
operating expense - non-sustaining(e) |
|
10.0 |
|
8.9 |
|
|
18.7 |
|
21.1 |
|
Reclamation
and remediation - non-sustaining(f) |
|
2.4 |
|
2.1 |
|
|
4.3 |
|
3.3 |
|
Exploration
and business development - non-sustaining(g) |
|
39.7 |
|
31.1 |
|
|
67.3 |
|
47.6 |
|
Additions to
property, plant and equipment - non-sustaining(h) |
|
123.7 |
|
70.9 |
|
|
239.8 |
|
129.6 |
|
Lease
payments - non-sustaining(i) |
|
0.1 |
|
0.2 |
|
|
0.4 |
|
0.4 |
All-in Cost - attributable(c) |
$ |
892.7 |
$ |
701.9 |
|
$ |
1,694.7 |
$ |
1,250.6 |
Gold equivalent ounces sold from continuing operations |
|
552,969 |
|
439,078 |
|
|
1,043,299 |
|
812,806 |
Production cost of sales from continuing operations per equivalent
ounce sold(b) |
$ |
900 |
$ |
1,027 |
|
$ |
941 |
$ |
1,001 |
All-in sustaining cost from continuing operations per equivalent
ounce sold |
$ |
1,296 |
$ |
1,341 |
|
$ |
1,308 |
$ |
1,290 |
Attributable(c) all-in cost from continuing operations per
equivalent ounce sold |
$ |
1,614 |
$ |
1,599 |
|
$ |
1,624 |
$ |
1,539 |
|
|
|
|
|
|
|
See page 21 for details of the footnotes referenced within
the table above.
Capital expenditures from continuing
operations are classified as either sustaining capital
expenditures or non-sustaining capital expenditures, depending on
the nature of the expenditure. Sustaining capital expenditures
typically represent capital expenditures at existing operations
including capitalized exploration costs and capitalized stripping
unless related to major projects, 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
expenditures. Non-sustaining capital expenditures represent 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.
Management believes this to be a useful indicator of the purpose of
capital expenditures and this distinction is an input into the
calculation of all-in sustaining costs from continuing operations
per ounce and attributable all-in costs from continuing operations
per ounce. The categorization of sustaining capital expenditures
and non-sustaining capital expenditures is consistent with the
definitions under the WGC all-in cost standard. Sustaining capital
expenditures and non-sustaining capital expenditures are not
defined under IFRS, however, the sum of these two measures total to
additions to property, plant and equipment as disclosed under IFRS
on the interim condensed consolidated statements of cash flows.
The following table provides a reconciliation of
the classification of capital expenditures for the periods
presented:
(unaudited, expressed in millions of U.S dollars) |
|
|
|
|
|
|
Three months ended June 30, 2023: |
Tasiast (Mauritania) |
Paracatu (Brazil) |
La Coipa (Chile) |
Fort Knox (USA) |
Round Mountain (USA) |
Bald Mountain (USA) |
Manh Choh (USA)(a) |
Total USA |
|
Other |
Total |
Sustaining capital expenditures |
$ |
9.1 |
$ |
39.7 |
$ |
19.9 |
$ |
52.1 |
$ |
10.5 |
$ |
16.5 |
$ |
- |
$ |
79.1 |
|
$ |
0.8 |
$ |
148.6 |
Non-sustaining capital expenditures |
|
72.8 |
|
- |
|
3.4 |
|
6.1 |
|
- |
|
14.9 |
|
32.1 |
|
53.1 |
|
|
4.0 |
|
133.3 |
Additions to property, plant and equipment - per cash flow |
$ |
81.9 |
$ |
39.7 |
$ |
23.3 |
$ |
58.2 |
$ |
10.5 |
$ |
31.4 |
$ |
32.1 |
$ |
132.2 |
|
$ |
4.8 |
$ |
281.9 |
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, 2022: |
|
|
|
|
|
|
|
|
|
|
|
Sustaining capital expenditures |
$ |
6.8 |
$ |
31.2 |
$ |
1.6 |
$ |
12.1 |
$ |
20.5 |
$ |
5.1 |
$ |
- |
$ |
37.7 |
|
$ |
- |
$ |
77.3 |
Non-sustaining capital expenditures |
|
17.5 |
|
- |
|
37.4 |
|
1.0 |
|
0.1 |
|
11.1 |
|
3.2 |
|
15.4 |
|
|
1.8 |
|
72.1 |
Additions to property, plant and equipment - per cash flow |
$ |
24.3 |
$ |
31.2 |
$ |
39.0 |
$ |
13.1 |
$ |
20.6 |
$ |
16.2 |
$ |
3.2 |
$ |
53.1 |
|
$ |
1.8 |
$ |
149.4 |
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited, expressed in millions of U.S dollars) |
|
|
|
|
|
|
Three months ended June 30, 2023: |
Tasiast (Mauritania) |
Paracatu (Brazil) |
La Coipa (Chile) |
Fort Knox (USA) |
Round Mountain (USA) |
Bald Mountain (USA) |
Manh Choh (USA)(a) |
Total USA |
|
Other |
Total |
Sustaining capital expenditures |
$ |
23.7 |
$ |
67.5 |
$ |
21.5 |
$ |
90.7 |
$ |
17.9 |
$ |
22.6 |
$ |
- |
$ |
131.2 |
|
$ |
1.2 |
$ |
245.1 |
Non-sustaining capital expenditures |
|
122.8 |
|
- |
|
27.2 |
|
6.6 |
|
- |
|
34.0 |
|
60.8 |
|
101.4 |
|
|
6.6 |
|
258.0 |
Additions to property, plant and equipment - per cash flow |
$ |
146.5 |
$ |
67.5 |
$ |
48.7 |
$ |
97.3 |
$ |
17.9 |
$ |
56.6 |
$ |
60.8 |
$ |
232.6 |
|
$ |
7.8 |
$ |
503.1 |
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, 2022: |
|
|
|
|
|
|
|
|
|
|
|
Sustaining capital expenditures |
$ |
10.9 |
$ |
47.2 |
$ |
2.3 |
$ |
13.8 |
$ |
36.5 |
$ |
7.8 |
$ |
- |
$ |
58.1 |
|
|
$ |
0.2 |
$ |
118.7 |
Non-sustaining capital expenditures |
|
32.8 |
|
- |
|
72.5 |
|
2.2 |
|
0.1 |
|
14.2 |
|
6.1 |
|
22.6 |
|
|
|
3.5 |
|
131.4 |
Additions to property, plant and equipment - per cash flow |
$ |
43.7 |
$ |
47.2 |
$ |
74.8 |
$ |
16.0 |
$ |
36.6 |
$ |
22.0 |
$ |
6.1 |
$ |
80.7 |
|
$ |
3.7 |
$ |
250.1 |
(a) |
Represents
100% of capital expenditures, of which 70% is Kinross’ share. |
Endnotes
(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 are 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 and non-sustaining are as presented on page
30 of this MD&A. Non-sustaining capital expenditures included
in the calculation of attributable all-in-cost includes Kinross’
share of Manh Choh (70%) costs. |
(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. |
APPENDIX A
Recent LP Fault zone assay results
Hole ID |
|
From(m) |
To(m) |
Width(m) |
TrueWidth (m) |
Au(g/t) |
Target |
BR-699 |
|
689.45 |
709.40 |
19.95 |
13.97 |
1.23 |
Yauro |
BR-699 |
and |
715.00 |
722.30 |
7.30 |
4.96 |
0.77 |
|
BR-699 |
and |
753.50 |
757.50 |
4.00 |
3.68 |
0.45 |
|
BR-699 |
and |
1,360.00 |
1,363.10 |
3.10 |
2.36 |
1.10 |
|
BR-699 |
and |
1,404.45 |
1,407.45 |
3.00 |
2.52 |
0.97 |
|
BR-769A |
|
701.00 |
713.60 |
12.60 |
10.33 |
0.73 |
Yauro |
BR-769A |
and |
721.30 |
740.50 |
19.20 |
12.67 |
1.76 |
|
BR-769A |
including |
734.80 |
739.15 |
4.35 |
3.35 |
4.18 |
|
BR-769A |
and |
773.20 |
777.00 |
3.80 |
3.08 |
0.41 |
|
BR-774 |
No Significant Intersections |
Bruma |
BR-775 |
|
852.00 |
858.30 |
6.30 |
5.17 |
0.47 |
Yuma |
BR-775 |
and |
917.10 |
926.25 |
9.15 |
7.05 |
0.96 |
|
BR-776 |
|
783.65 |
796.50 |
12.85 |
11.18 |
0.56 |
Yuma |
BR-777 |
|
824.50 |
825.00 |
0.50 |
0.40 |
81.70 |
Yauro |
BR-777 |
and |
879.00 |
882.00 |
3.00 |
2.58 |
1.56 |
|
BR-777 |
and |
883.50 |
886.60 |
3.10 |
2.11 |
0.36 |
|
BR-777 |
and |
888.00 |
891.40 |
3.40 |
2.72 |
0.67 |
|
BR-784 |
|
850.50 |
864.90 |
14.40 |
11.23 |
0.45 |
Bruma |
BR-784 |
and |
884.05 |
892.00 |
7.95 |
5.72 |
0.87 |
|
BR-784 |
and |
934.35 |
938.10 |
3.75 |
2.44 |
0.96 |
|
BR-785 |
|
971.70 |
975.00 |
3.30 |
2.74 |
0.65 |
Bruma |
BR-785 |
and |
1,154.35 |
1,181.45 |
27.10 |
20.60 |
0.43 |
|
BR-787 |
|
991.05 |
1,031.90 |
40.85 |
33.09 |
1.29 |
Bruma |
BR-795 |
|
715.00 |
719.00 |
4.00 |
3.24 |
0.74 |
Yuma |
BR-795 |
and |
1,022.45 |
1,025.45 |
3.00 |
2.52 |
0.51 |
|
BR-796 |
|
1,048.75 |
1,056.00 |
7.25 |
6.60 |
0.53 |
Yuma |
BR-796 |
and |
1,072.00 |
1,078.75 |
6.75 |
4.66 |
0.46 |
|
BR-796 |
and |
1,106.00 |
1,111.95 |
5.95 |
4.64 |
5.71 |
|
BR-796 |
including |
1,109.35 |
1,110.65 |
1.30 |
0.96 |
23.87 |
|
BR-797 |
No Significant Intersections |
Yuma |
BR-798 |
|
1,205.30 |
1,211.50 |
6.20 |
4.53 |
0.56 |
Bruma |
BR-798 |
and |
1,217.00 |
1,220.90 |
3.90 |
3.28 |
0.42 |
|
BR-798 |
and |
1,237.00 |
1,254.90 |
17.90 |
15.93 |
0.53 |
|
BR-798 |
and |
1,256.40 |
1,259.40 |
3.00 |
2.31 |
0.32 |
|
BR-798 |
and |
1,275.25 |
1,288.80 |
13.55 |
9.89 |
0.99 |
|
BR-798 |
and |
1,295.50 |
1,319.30 |
23.80 |
16.18 |
0.60 |
|
BR-801 |
|
994.50 |
1,006.00 |
11.50 |
9.09 |
1.11 |
Yauro |
BR-801 |
and |
1,009.00 |
1,012.00 |
3.00 |
2.58 |
0.41 |
|
BR-802 |
No Significant Intersections |
Auro |
BR-803 |
|
672.00 |
676.50 |
4.50 |
3.83 |
0.39 |
Yauro |
BR-803 |
and |
741.00 |
744.00 |
3.00 |
2.28 |
1.08 |
|
BR-803 |
and |
882.00 |
894.85 |
12.85 |
8.35 |
0.41 |
|
BR-803 |
and |
1,092.00 |
1,140.00 |
48.00 |
43.68 |
0.42 |
|
BR-803 |
and |
1,281.00 |
1,286.00 |
5.00 |
3.45 |
0.51 |
|
BR-804 |
|
563.10 |
567.25 |
4.15 |
2.95 |
0.64 |
Yauro |
BR-804 |
and |
575.75 |
586.10 |
10.35 |
9.00 |
0.61 |
|
BR-804 |
and |
659.00 |
663.00 |
4.00 |
3.44 |
0.47 |
|
BR-804 |
and |
721.80 |
731.80 |
10.00 |
7.70 |
0.93 |
|
BR-804 |
and |
756.00 |
765.00 |
9.00 |
8.28 |
1.11 |
|
BR-804 |
and |
889.10 |
892.10 |
3.00 |
2.64 |
0.92 |
|
BR-804 |
and |
938.00 |
941.90 |
3.90 |
3.47 |
2.28 |
|
BR-804 |
and |
1,022.85 |
1,028.00 |
5.15 |
3.76 |
8.38 |
|
BR-804 |
including |
1,025.00 |
1,026.90 |
1.90 |
1.46 |
21.93 |
|
BR-804 |
and |
1,115.35 |
1,124.05 |
8.70 |
6.61 |
1.18 |
|
BR-805 |
|
543.70 |
549.55 |
5.85 |
4.45 |
0.53 |
Yauro |
BR-805 |
and |
556.80 |
560.90 |
4.10 |
3.32 |
0.50 |
|
BR-805 |
and |
718.80 |
722.40 |
3.60 |
3.13 |
1.10 |
|
BR-805 |
and |
792.35 |
834.50 |
42.15 |
36.25 |
4.52 |
|
BR-805 |
including |
826.00 |
834.50 |
8.50 |
6.72 |
19.31 |
|
BR-805 |
and |
923.30 |
926.85 |
3.55 |
2.80 |
0.57 |
|
BR-805 |
and |
941.00 |
949.30 |
8.30 |
6.14 |
0.54 |
|
BR-805 |
and |
961.60 |
970.00 |
8.40 |
7.06 |
0.51 |
|
BR-805 |
and |
993.90 |
1,005.00 |
11.10 |
8.88 |
2.35 |
|
BR-805 |
including |
993.90 |
994.70 |
0.80 |
0.64 |
26.40 |
|
BR-805 |
and |
1,015.00 |
1,020.00 |
5.00 |
4.40 |
0.92 |
|
BR-810 |
|
859.00 |
862.35 |
3.35 |
2.35 |
0.62 |
Auro |
BR-810 |
and |
870.40 |
898.00 |
27.60 |
24.56 |
0.50 |
|
BR-811 |
|
734.60 |
737.60 |
3.00 |
2.73 |
1.93 |
Auro |
BR-812 |
|
612.40 |
616.00 |
3.60 |
3.13 |
0.68 |
Yauro |
BR-812 |
and |
623.90 |
628.25 |
4.35 |
3.31 |
5.48 |
|
BR-812 |
including |
623.90 |
627.35 |
3.45 |
2.93 |
6.47 |
|
BR-812 |
and |
871.25 |
886.75 |
15.50 |
12.09 |
0.49 |
|
BR-812 |
and |
901.35 |
908.50 |
7.15 |
5.08 |
1.60 |
|
BR-820 |
|
828.00 |
837.00 |
9.00 |
8.28 |
0.55 |
Yauro |
BR-820 |
and |
843.00 |
855.00 |
12.00 |
9.72 |
0.72 |
|
BR-820 |
and |
879.00 |
890.00 |
11.00 |
8.25 |
0.69 |
|
BR-820 |
and |
1,099.35 |
1,110.00 |
10.65 |
8.63 |
0.53 |
|
BR-820 |
and |
1,125.25 |
1,128.25 |
3.00 |
2.49 |
0.36 |
|
BR-821 |
|
995.30 |
996.00 |
0.70 |
0.60 |
57.00 |
Yauro |
BR-821 |
and |
1,023.00 |
1,035.10 |
12.10 |
11.13 |
1.13 |
|
BR-821 |
and |
1,053.40 |
1,057.80 |
4.40 |
2.95 |
0.38 |
|
BR-821 |
and |
1,066.00 |
1,075.70 |
9.70 |
6.89 |
1.43 |
|
BR-821 |
including |
1,072.70 |
1,075.70 |
3.00 |
1.95 |
3.06 |
|
BR-821 |
and |
1,157.15 |
1,160.60 |
3.45 |
2.52 |
8.21 |
|
BR-821 |
including |
1,159.25 |
1,159.75 |
0.50 |
0.45 |
53.40 |
|
BR-821 |
and |
1,175.30 |
1,187.50 |
12.20 |
8.05 |
0.88 |
|
DL-143 |
No Significant Intersections |
Limb |
DL-147 |
|
716.60 |
720.55 |
3.95 |
3.24 |
3.08 |
Limb |
DL-147 |
including |
717.60 |
720.55 |
2.95 |
2.07 |
3.97 |
|
Results are preliminary in nature and are subject to on-going
QA/QC. Lengths are subject to rounding.
APPENDIX B
LP Fault zone long section
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/1b2333e6-16d6-4da3-a560-4782a8d21d94
Composites generated from drill intersections
received since the May 9, 2023, news release includes assays from
22 fully assayed and 1 partially assayed drill holes at the LP
Fault zone and 2 at the Limb zone. 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.
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) “Q2 2023 highlights from continuing
operations”, “Operational and development project highlights”, “CEO
commentary”, “Balance Sheet”, “Return of capital”, “Operating
results”, “Development project and exploration update”, “Company
Guidance”, and “Environment, Social and Governance (ESG) update” as
well as statements with respect to our guidance for production,
cost guidance, including production costs of sales, all-in
sustaining cost of sales, and capital expenditures; statements with
respect to our guidance for cash flow and free cash flow; the
declaration, payment and sustainability of the Company’s dividends
or share repurchases; identification of additional resources and
reserves; the Company’s liquidity; greenhouse gas reduction
initiatives and targets; the implementation and effectiveness of
the Company’s ESG or Climate Change strategy; the schedules and
budgets for the Company’s development projects; budgets for and
future prospects for exploration, development and operation at the
Company’s operations and projects, including the Great Bear
project, the Tasiast 24k project, Manh Choh and the Tasiast solar
project; the Company’s liquidity outlook, 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”, “focus”, “forecast”, “guidance”, “on
schedule”, “on track”, “opportunity” “outlook”, “plan”, “poised”,
“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, 2022, and the
Annual Information Form dated March 31, 2023 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 snowfall, 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 or snowfall, 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 of the Great Bear project (including the
consultation process with Indigenous groups), 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, 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 preliminary
economic assessments, 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) 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; (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 share repurchases and
dividend payments; (19) the impacts of detected pit wall
instability at Round Mountain and Bald Mountain being consistent
with the Company’s expectations; and (20) the Company’s estimates
regarding the timing of completion of the Tasiast 24k project.
Known and unknown factors could cause actual results to differ
materially from those projected in the forward-looking statements.
Such factors include, but are not limited to: the inaccuracy of any
of the foregoing assumptions; 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 and maintaining 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, 2022, and the “Risk
Factors” set forth in the Company’s Annual Information Form dated
March 31, 2023. 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 sold11.
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.
Specific to the Chilean peso, a 10% change in
the exchange rate would be expected to result in an approximate $50
impact on Chilean 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 $3 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 $4 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
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 17 to 21 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 six months ended June 30,
2023).8 “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 six months ended June 30, 2023.9 Attributable production
guidance includes Kinross’ share of Manh Choh (70%) production.10
Attributable capital expenditure guidance includes Kinross’ share
of Manh Choh (70%) capital expenditures.11 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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