Kinross Gold Corp 6-K, filed Feb 11, 2021
Kinross Gold Corp (KGC)
About this 6-K
Kinross Gold Corp filed this 6-K on February 11, 2021.
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of February, 2021
Commission File Number: 001-13382
KINROSS GOLD CORPORATION
(Translation of registrant's name into English)
17th Floor, 25 York Street,
Toronto, Ontario M5J 2V5
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40F:
Form 20-F ¨ Form 40-F x
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):_____
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):_____
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No x
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2b:
Page 2
This Current Report on Form 6-K, dated Feb 10, 2021 is specifically incorporated by reference into Kinross Gold Corporation's Registration Statements on Form S-8 [Registration No. 333-217099, filed on April 3, 2017 and Registration Nos. 333-180824, 333-180823 and 333-180822, filed on April 19, 2012.]
This report on Form 6-K is being furnished for the sole purpose of providing copies of the three press releases dated February 10, 2021 in which Kinross Gold Corporation reported results for the fourth quarter and full-year ended December 31, 2020, provided an update on development projects and 2020 full-year exploration results, and declared a dividend.
INDEX
Table of Contents
SIGNATURES
EXHIBIT INDEX
Page 3
SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| KINROSS GOLD CORPORATION | |
| Signed: //Lucas Crosby// | |
| Vice President, Assistant General Counsel and Corporate Secretary |
February 10, 2021
Exhibit 99.1
 |
Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
For more information,
please
see Kinross’ 2020 Q4/year-end
Financial Statements and MD&A
at www.kinross.com
NEWS RELEASE
Kinross reports 2020 fourth-quarter and full-year results
Met guidance for ninth year in a row and delivered record free cash flow of more than $1 billion
Production expected to grow by 20% in 2023
Toronto, Ontario – February 10, 2021 – Kinross Gold Corporation (TSX: K, NYSE: KGC) (“Kinross” or the “Company”) today announced its results for the fourth quarter and year ended December 31, 2020.
(This news release contains forward-looking information about expected future events and financial and operating performance of the Company. We refer to the risks and assumptions set out in our Cautionary Statement on Forward-Looking Information located on page 25 of this release. All dollar amounts are expressed in U.S. dollars, unless otherwise noted.)
2020 full-year results and guidance:
2020 guidance (+/- 5%) |
2020 full-year results | 2021 guidance (+/- 5%) | |
Gold equivalent production1 (ounces) |
2.4 million | 2.4 million | 2.4 million |
Production cost of sales1, 2 ($ per Au eq. oz.) |
$720 | $723 | $790 |
All-in sustaining cost1, 2 ($ per Au eq. oz.) |
$970 | $987 | $1,025 |
| Capital expenditures | $900 million | $916 million | $900 million |
| · | Expect to increase production1 20% to 2.9 million Au eq. oz. in 2023 and produce1 an average of 2.5 million Au eq. oz. per year to 2029. |
2020 Q4 and full-year highlights:
| · | Production1,2 of 624,032 Au eq. oz. produced in Q4 2020 and 2,366,648 Au eq. oz. in 2020. |
| · | Production cost of sales1,2 of $682 per Au eq. oz. in Q4 2020 and $723 per Au eq. oz. in 2020. |
| · | All-in sustaining cost1,2 of $1,013 per Au eq. oz. sold in Q4 2020 and $987 per Au eq. oz. sold in 2020. |
| · | Attributable margins3 increased 61% to $1,193 per Au eq. oz. sold in Q4 2020, and 53% to $1,051 per Au eq. oz. sold for 2020, compared with Q4 2019 and 2019, respectively, with both increases outpacing the rise in average realized gold price2. |
| · | Adjusted operating cash flow2 increased to $527.6 million in Q4 2020 compared with Q4 2019, and increased 59% for 2020 to $1,912.7 million compared with 2019. Operating cash flow of $681.1 million in Q4 2020 and $1,957.6 million in 2020. |
| · | Free cash flow2 quarterly and full-year records of $382.8 million and $1,041.5 million, respectively. |
| · | Reported net earnings4 of $783.3 million, or $0.62 per share in Q4 2020, and $1,342.4 million, or $1.07 per share, in 2020. |
| · | Adjusted net earnings2 of $335.1 million, or $0.27 per share in Q4 2020, and $966.8 million, or $0.77 per share, in 2020. Adjusted net earnings more than doubled quarter-over-quarter and year-over-year. |
| · | Cash and cash equivalents of $1,210.9 million, and total liquidity of $2.8 billion at December 31, 2020. |
| · | Kinross’ Board of Directors declared a quarterly dividend of $0.03 per common share payable on March 18, 2021 to shareholders of record at the close of business on March 3, 2021. |
Operations highlights:
| · | Maintained operations throughout 2020 and delivered on original annual production, cost and capital expenditures guidance despite the impact of COVID-19 across the global portfolio. |
1 Unless otherwise stated, production, production cost of sales per Au eq. oz., and all-in-sustaining costs per Au eq. oz., in this news release are based on
Kinross’ 90% share of Chirano production and costs, and 70% share of Peak costs.
2 These figures are non-GAAP financial measures and are defined and reconciled on pages 18 to 24 of this news release.
3 Attributable margin per equivalent ounce sold is a non-GAAP financial measure defined as “average realized gold price per ounce” less “attributable production cost of sales per gold equivalent ounce sold.”
4 Net earnings figures in this release represent “net earnings from continuing operations attributable to common shareholders”.
p. 1 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
|
Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
| · | Three largest producing mines – Paracatu, Kupol and Tasiast – represented 62% of production and were the lowest cost mines in the portfolio in 2020 for the second year in a row. |
| · | Tasiast delivered record production and costs in 2020 for the second consecutive year, and is expected to increase throughput to 21,000 tonnes per day by year-end with the Tasiast 24k project. |
| · | Fort Knox Gilmore project completed on time and under budget, with newly-acquired “bolt-on” Peak project advancing well. |
Environment, Social, Governance (ESG):
| · | Successfully managing the risks associated with the COVID-19 pandemic by implementing rigorous safety measures across global portfolio and provided approximately $6 million towards host community efforts to combat COVID-19. |
| · | ESG performance ranked in the top quartile of peer group, as measured by Sustainalytics, MSCI, ISS, Vigeo, Refinitiv and S&P’s Dow Jones Sustainability Index. Kinross was also recognized as the top mining company in The Globe and Mail’s annual corporate governance ranking. |
| · | Improved climate change disclosures and benchmarked against the recommendations made by the Task Force on Climate-related Financial Disclosures (TCFD), and included Sustainability Accounting Standards Board (SASB) metrics in most recent Sustainability Report. |
| · | Kinross continued to generate significant economic benefits to host countries through taxes, support of local suppliers and employment, with approximately 98% of Kinross employees from its host countries. |
| · | Safety performance was in line with three-year averages, with safety rates among the lowest in the industry. This was overshadowed by the first mine-site fatality at Kinross since 2017. |
CEO Commentary:
J. Paul Rollinson, President and CEO, made the following comments in relation to 2020 fourth-quarter and year-end results:
“Kinross delivered an excellent year in 2020, generating record free cash flow of more than $1 billion from our diversified portfolio of mines. We met our original guidance for the ninth consecutive year despite the impacts of the global pandemic. Kinross managed COVID-19 risks by implementing rigorous measures to keep our employees safe, maintain business continuity and support local communities. I would like to thank our workforce around the world for meeting the challenges of the pandemic. Our ability to quickly adapt and safely execute our plans in a difficult environment speaks to the strong culture of operational excellence we have built at Kinross.
“Operationally, our three largest mines – Paracatu, Kupol and Tasiast – produced 62% of our total ounces and were the lowest cost mines in our portfolio in 2020. Tasiast was a standout performer and achieved record annual production and low costs for the second consecutive year. We also added 5.7 million ounces to our mineral reserve estimates after depletion as a result of successful exploration and mine optimization programs. Kinross made good progress at our projects, including Tasiast 24k and La Coipa, and added to our portfolio with the acquisition of the Chulbatkan and Peak projects. Construction at the Fort Knox Gilmore project was completed on time and under budget and we continued to advance Udinsk and Lobo-Marte.
“During the year, we continued to strengthen our investment grade balance sheet, more than doubled our adjusted net earnings to approximately $970 million, and increased our margins by 53% to $1,051 per ounce, which outpaced the increase in the average realized gold price. We also instituted a sustainable quarterly dividend to return capital to shareholders, which underscores the strength of our financial position.
“Kinross delivered on our ESG commitments in 2020, with our ESG performance ranked in the top quartile of our peer group, as measured by independent third-party organizations. We continued to generate significant economic benefits to our host countries through taxes, support of local suppliers and employment.
“Looking forward, we expect to continue our consistent performance in 2021 and have provided solid guidance for the year. We expect production to grow by 20% to 2.9 million ounces in 2023, and to produce an average of 2.5 million ounces annually to 2029, putting us in excellent position to continue generating value.”
p. 2 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
|
Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
Financial results
Summary of financial and operating results
| Three months ended | Years ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| (in millions of U.S. dollars, except ounces, per share amounts, and per ounce amounts) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Operating Highlights | ||||||||||||||||
| Total gold equivalent ounces(a) | ||||||||||||||||
| Produced(c) | 627,944 | 650,242 | 2,383,307 | 2,527,788 | ||||||||||||
| Sold(c) | 637,169 | 670,917 | 2,375,548 | 2,512,758 | ||||||||||||
| Attributable gold equivalent ounces(a) | ||||||||||||||||
| Produced(c) | 624,032 | 645,344 | 2,366,648 | 2,507,659 | ||||||||||||
| Sold(c) | 633,149 | 666,199 | 2,358,927 | 2,492,572 | ||||||||||||
| Financial Highlights | ||||||||||||||||
| Metal sales | $ | 1,195.1 | $ | 996.2 | $ | 4,213.4 | $ | 3,497.3 | ||||||||
| Production cost of sales | $ | 436.5 | $ | 500.5 | $ | 1,725.7 | $ | 1,778.9 | ||||||||
| Depreciation, depletion and amortization | $ | 234.0 | $ | 210.4 | $ | 842.3 | $ | 731.3 | ||||||||
| Reversals of impairment charges - net | $ | (602.6 | ) | $ | (361.8 | ) | $ | (650.9 | ) | $ | (361.8 | ) | ||||
| Operating earnings | $ | 992.3 | $ | 568.8 | $ | 1,899.4 | $ | 991.1 | ||||||||
| Net earnings attributable to common shareholders | $ | 783.3 | $ | 521.5 | $ | 1,342.4 | $ | 718.6 | ||||||||
| Basic earnings per share attributable to common shareholders | $ | 0.62 | $ | 0.41 | $ | 1.07 | $ | 0.57 | ||||||||
| Diluted earnings per share attributable to common shareholders | $ | 0.62 | $ | 0.41 | $ | 1.06 | $ | 0.57 | ||||||||
| Adjusted net earnings attributable to common shareholders(b) | $ | 335.1 | $ | 156.0 | $ | 966.8 | $ | 422.9 | ||||||||
| Adjusted net earnings per share(b) | $ | 0.27 | $ | 0.13 | $ | 0.77 | $ | 0.34 | ||||||||
| Net cash flow provided from operating activities | $ | 681.1 | $ | 408.6 | $ | 1,957.6 | $ | 1,224.9 | ||||||||
| Adjusted operating cash flow(b) | $ | 527.6 | $ | 387.6 | $ | 1,912.7 | $ | 1,201.5 | ||||||||
| Capital expenditures(d) | $ | 298.3 | $ | 297.9 | $ | 916.1 | $ | 1,060.2 | ||||||||
| Free cash flow(b) | $ | 382.8 | $ | 110.7 | $ | 1,041.5 | $ | 164.7 | ||||||||
| Average realized gold price per ounce(b) | $ | 1,875 | $ | 1,485 | $ | 1,774 | $ | 1,392 | ||||||||
| Consolidated production cost of sales per equivalent ounce(c) sold(b) | $ | 685 | $ | 746 | $ | 726 | $ | 708 | ||||||||
| Attributable(1) production cost of sales per equivalent ounce(c) sold(b) | $ | 682 | $ | 744 | $ | 723 | $ | 706 | ||||||||
| Attributable(a) production cost of sales per ounce sold on a by-product basis(b) | $ | 653 | $ | 728 | $ | 700 | $ | 691 | ||||||||
| Attributable(a) all-in sustaining cost per ounce sold on a by-product basis(b) | $ | 991 | $ | 1,041 | $ | 970 | $ | 974 | ||||||||
| Attributable(a) all-in sustaining cost per equivalent ounce(c) sold(b) | $ | 1,013 | $ | 1,050 | $ | 987 | $ | 983 | ||||||||
| Attributable(a) all-in cost per ounce sold on a by-product basis(b) | $ | 1,309 | $ | 1,337 | $ | 1,248 | $ | 1,282 | ||||||||
| Attributable(a) all-in cost per equivalent ounce(c) sold(b) | $ | 1,322 | $ | 1,340 | $ | 1,260 | $ | 1,284 | ||||||||
| (a) | "Total includes 100% of Chirano production. "Attributable" includes Kinross' share of Chirano (90%) production and costs and Peak (70%) costs. |
| (b) | The definition and reconciliation of these non-GAAP financial measures is included on pages 18 to 24 of this news release. |
| (c) | "Gold equivalent ounces" include silver ounces produced and sold converted to a gold equivalent based on a ratio of the average spot market prices for the commodities for each period. The ratio for 2020 was 86.32:1 (2019 - 85.99:1). The ratio for Q4 2020 was 77.02:1 (Q4 2019 – 85.59:1). |
| (d) | “Capital expenditures” is as reported as “Additions to property, plant and equipment” on the consolidated statements of cash flows and excludes “Interest paid capitalized to property, plant and equipment”. |
The following operating and financial results are based on fourth-quarter and year-end 2020 gold equivalent production. Production and cost measures are on an attributable basis:
Production1,2: Kinross produced 624,032 attributable Au eq. oz. in Q4 2020, compared with 645,344 Au eq. oz. in Q4 2019. The slight decrease was largely due to lower production at Bald Mountain, Round Mountain and Chirano, largely offset by increases at Tasiast and Paracatu.
Over the full year, Kinross produced 2,366,648 Au eq. oz., in line with the Company’s annual guidance, compared with full-year 2019 production of 2,507,659 Au eq. oz. The decrease was consistent with plan and was a result of lower production at Paracatu, Round Mountain and Chirano, partially offset by higher production at Fort Knox and Tasiast.
Average realized gold price2: The average realized gold price in Q4 2020 increased 26% to $1,875 per ounce, compared with $1,485 per ounce in Q4 2019.
p. 3 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
|
Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
The average realized gold price per ounce increased 27% to $1,774 for full-year 2020, compared with $1,392 per ounce for full-year 2019.
Revenue: During the fourth quarter, revenue increased 20% to $1,195.1 million, compared with $996.2 million during the same period in 2019.
Revenue for full-year 2020 increased 20% to $4,213.4 million, compared with $3,497.3 million for full-year 2019.
Production cost of sales1, 2: Production cost of sales per Au eq. oz. decreased to $682 for Q4 2020 compared with $744 for the same period in 2019, mainly as a result of lower costs at Paracatu, Fort Knox and Round Mountain, partially offset by higher costs at Tasiast and Chirano.
Production cost of sales per Au eq. oz. was $723 for full-year 2020, which was in line with guidance, compared with $706 per Au eq. oz. for full-year 2019. The increase was mainly due to higher costs at Chirano.
Production cost of sales per Au oz. on a by-product basis was $653 in Q4 2020 compared with $728 in Q4 2019, based on attributable gold sales of 618,221 ounces and attributable silver sales of 1,149,687 ounces.
Production cost of sales per Au eq. oz. on a by-product was $700 for full-year 2020, compared with $691 for full-year 2019, based on 2020 attributable gold sales of 2,307,735 ounces and attributable silver sales of 4,425,708 ounces.
Margins3: Kinross’ attributable margin per Au eq. oz. sold increased by 61% to $1,193 for Q4 2020, compared with the Q4 2019 margin of $741, which is significantly higher than the 26% quarterly year-over-year increase in average realized gold price.
Full-year 2020 margin per Au eq. oz. sold increased 53% to $1,051, compared with $686 for full-year 2019, outpacing the 27% year-over-year increase in average realized gold price.
All-in sustaining cost1, 2: All-in sustaining cost per Au eq. oz. sold decreased to $1,013 in Q4 2020, compared with $1,050 in Q4 2019. All-in sustaining cost per Au eq. oz. sold was $987 for full-year 2020, which is within the 2020 guidance range, compared with $983 for full-year 2019.
All-in sustaining cost per Au oz. sold on a by-product basis decreased to $991 in Q4 2020, compared with $1,041 in Q4 2019. All-in sustaining cost per Au oz. sold on a by-product basis was $970 for full-year 2020, in line with $974 in the previous year.
Operating cash flow: Adjusted operating cash flow2 for Q4 2020 increased by 36% to $527.6 million, compared with $387.6 million for Q4 2019.
Adjusted operating cash flow2 for the full year increased 59% to $1,912.7 million compared with $1,201.5 million the previous year, primarily due to an increase in margins.
Net operating cash flow increased 67% to $681.1 million for Q4 2020, compared with $408.6 million for Q4 2019. Net operating cash flow for full-year 2020 was $1,957.6 million, a 60% increase compared with $1,224.9 million for full-year 2019.
Free cash flow2: Free cash flow more than tripled to $382.8 million in Q4 2020, a quarterly record, compared with $110.7 million for Q4 2019.
Kinross delivered record free cash flow of $1,041.5 million for full-year 2020, which was significantly higher compared with $164.7 million the previous year.
Earnings: Adjusted net earnings2 more than doubled to $335.1 million, or $0.27 per share, for Q4 2020, compared with $156.0 million, or $0.13 per share, for Q4 2019.
p. 4 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
|
Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
Full-year 2020 adjusted net earnings2 more than doubled to $966.8 million, or $0.77 per share, compared with adjusted net earnings of $422.9 million, or $0.34 per share, for full-year 2019, mainly due to higher margins partially offset by an increase in depreciation, depletion and amortization and income tax expense.
Reported net earnings4 increased 50% to $783.3 million, or $0.62 per share, for Q4 2020, compared with $521.5 million, or $0.41 per share, for Q4 2020.
Reported net earnings4 in full-year 2020 increased 87% to $1,342.4 million, or $1.07 per share, compared with $718.6 million, or $0.57 per share, in 2019. The increase was primarily as a result of the increase in operating earnings, including impairment reversals, partially offset by the increase in income tax expense.
Included in reported net earnings in 2020 is a non-cash, after-tax impairment reversal of $612.8 million at Tasiast, Lobo-Marte and Chirano of $299.5 million, $180.4 million, and $132.9 million, respectively. The impairment reversals were related to property, plant and equipment mainly due to higher long-term gold price assumptions.
Capital expenditures: Capital expenditures were $298.3 million for Q4 2020, compared with $297.9 million for Q4 2019.
Capital expenditures for full-year 2020 were $916.1 million, within the Company’s annual guidance, and a $144.1 million decrease compared with $1,060.2 in 2019. The decrease was primarily as a result of reduced spending at Tasiast and the completion of the Bald Mountain Vantage Complex project and the construction of the Round Mountain Phase W project in 2019. These decreases were partially offset by additional mining equipment purchased at Paracatu.
Balance sheet
As of December 31, 2020, Kinross had cash and cash equivalents of $1,210.9 million, compared with $575.1 million at December 31, 2019. The increase was primarily due to strong cash flow and the $200 million drawdown on the Tasiast project financing. The increase in Kinross’ cash position was partially offset by the first 50% payment for the Chulbatkan acquisition5, payment for the 70% interest in the Peak development project, along with the $100 million in debt repayments on the revolving credit facility, and total interest and dividend payments.
The Company had additional available credit of $1,563.6 million as of December 31, 2020 and total liquidity of approximately $2.8 billion. Kinross had total debt of approximately $1.9 billion at year-end 2020, of which $500 million in senior notes are due in September 2021, which the Company intends to repay.
Kinross has further improved its debt metrics, including its net debt to EBITDA ratio, and continues to prioritize maintaining and strengthening its investment grade balance sheet.
Operating results
Mine-by-mine summaries for 2020 fourth-quarter and full-year operating results may be found on pages 13 and 17 of this news release. Highlights include the following:
Americas
Paracatu production for the full year decreased compared with the record production in the previous year mainly due to anticipated lower recoveries and throughput as result of the mine plan, partially offset by higher grades. Full-year cost of sales per ounce sold was largely in line with 2019. Paracatu finished the year with a strong fourth quarter, increasing production and lowering cost of sales per ounce sold compared with Q3 2020. The production increase in Q4 2020 was mostly due to higher mill grades, while cost of sales per ounce sold was lower mainly due to higher production and lower maintenance costs. Mine plan optimization work at Paracatu added 911 Au koz. to its mineral reserve estimates before depletion, extending mine life by one year to 2032.
5 The second 50% payment was made in January 2021, which the Company also paid in cash.
p. 5 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
At Round Mountain, full-year production was lower compared with 2019 mainly due to anticipated lower mill grades related to mine sequencing, while full-year cost of sales per ounce sold decreased primarily due to lower operating waste mined. In Q4 2020, production increased compared with the previous quarter mainly as a result of higher grades, mill recoveries and ounces recovered from the heap leach pads. Cost of sales per ounce sold increased quarter-over-quarter, which was mostly due to higher operating waste mined, which was anticipated as part of the mine sequencing and is expected to continue in 2021.
At Bald Mountain, full-year production increased slightly compared with 2019 mainly due to higher grades. Cost of sales per ounce sold increased year-over-year primarily as a result of higher operating waste mined. Bald Mountain finished the year well, with production largely in line quarter-over-quarter, while cost of sales per ounce sold decreased, mainly due to lower maintenance costs.
Fort Knox performed well in 2020, as full-year production increased year-over-year, mainly as a result of higher mill grades and mill throughput. Cost of sales per ounce sold for full-year 2020 was largely in line with the previous year. In Q4 2020, production and cost of sales per ounce sold were lower quarter-over-quarter mainly due to an anticipated decrease in mill grades and a re-sequencing in mining which prioritized capital stripping. Construction at the Gilmore project was completed on time and under budget, and first production from the new heap leach pad was achieved in January 2021.
Russia
The Russia region continued to perform well in 2020 while managing pandemic-related challenges as remote, camp-based operations. The combined full-year production at Kupol and Dvoinoye decreased slightly compared with full-year 2019, mainly as a result of anticipated lower grades. Full-year cost of sales per ounce sold was in line with the previous year. Production during Q4 2020 increased compared with the previous quarter, mainly due to higher grades. Cost of sales per ounce sold was higher versus Q3 2020 mainly as a result of an increase in mine cost per tonne at Dvoinoye, as the last tonnes were mined in November 2020. Although mining activities were completed at Dvoinoye as planned, stockpiles are expected to be processed at the Kupol mill over the next three years. Kupol’s brownfields exploration program once again added to the mine’s mineral reserve estimates and extended mine life by one year to 2025, with opportunities for further mine life extensions.
West Africa
In 2020, Tasiast delivered record high annual production and record low cost of sales per ounce sold for the second consecutive year. The mine performed well in 2020 despite the impacts of COVID-19 and the strike in Q2 2020, and finished the year with a strong fourth quarter. Full-year production increased compared with the previous year mainly due to higher mill throughput and grades, while full-year cost of sales per ounce sold decreased mainly as a result of higher production. Tasiast achieved record quarterly production in Q4 2020 primarily as a result of higher mill throughput. Tasiast also reduced cost of sales per ounce quarter-over-quarter mainly due to lower processing costs.
At Chirano, full-year production decreased compared with 2019 mainly due to lower grades, throughput and recoveries. Full-year cost of sales per ounce sold was higher mainly due to higher milling and maintenance costs. In Q4 2020, production was lower quarter-over-quarter mainly due to lower grades from the underground operations. Cost of sales per ounce sold decreased quarter-over-quarter primarily as a result of lower power and milling costs. The exploration program at Chirano continued to yield excellent results and added to the operation’s mineral reserve estimates, helping extend mine life by three years to 2025, with opportunities for further mine life extensions.
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 25 of this news release.
| p. 6 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
Production guidance1
In 2021, Kinross expects to produce 2.4 million Au eq. oz. (+/- 5%) from its operations, which is consistent with 2020 production. In 2022 and 2023, annual production is expected to increase to approximately 2.7 million Au eq. oz. and 2.9 million Au eq. oz., respectively.
|
Annual gold equivalent production guidance (+/- 5%) | |
| 2021 | 2.4 million oz. |
| 2022 | 2.7 million oz. |
| 2023 | 2.9 million oz. |
Kinross’ 2021 production forecast was impacted by the expected deferred production of approximately 100k Au eq. oz. at Tasiast from 2021 to 2022 due to lower mining rates as a result of COVID-19 impacts in 2020 and the strike in Q2 2020.
In 2021, production is expected to progressively increase quarter-over-quarter, largely driven by higher expected production in the second half of the year at Tasiast. The Company’s three largest mines – Paracatu, Kupol and Tasiast – are expected to account for approximately 60% of the total production in 2021 and are expected to be the lowest cost mines in the portfolio.
The expected production growth in 2022 and 2023 represents additional ounces enabled by planned life of mine extensions and projects resulting from the Company’s previous three-year major capital reinvestment phase, which established a low-risk and timely platform for growth in the current gold price environment. Kinross’ comprehensive continuous improvement programs, which have enhanced productivity and operational efficiencies, and its exploration strategy focused on promising prospects around existing operations, also contributed to the anticipated production increase.
Cost of sales guidance1
Production cost of sales is expected to be $790 per Au eq. oz. (+/- 5%) for 2021. The year-over-year increase is mainly due to higher operating waste mined as a result of planned mine sequencing, particularly at the U.S. mines and at Tasiast in the second half of the year. The delayed access to higher grade ore at Tasiast as a result of COVID-19 impacts and a decrease in low-cost ounces from Dvoinoye, which completed mining in November 2020 as planned, also affected 2021 cost of sales guidance. Cost of sales per ounce is expected to increase quarter-over-quarter during the year, largely driven by anticipated increases in operating waste mined.
Cost of sales per ounce sold is expected to decrease in 2022 and return to levels that are largely in line with 2020. The decrease is expected to be driven by lower-cost ounces from Tasiast and La Coipa in 2022 and higher total production.
The Company expects all-in sustaining cost to be $1,025 per ounce sold (+/- 5%) on both a gold equivalent and by-product basis for 2021. The increase is mainly driven by the expected higher cost of sales per ounce.
2021 by-product production and cost guidance
| Accounting basis |
2021 Guidance (+/- 5%) |
| Gold equivalent basis | |
| Production (Au eq. oz.)1,2 | 2.4 million |
| Average production cost of sales per Au eq. oz. 1,2 | $790 |
| All-in sustaining cost per Au eq. oz. 1,2 | $1,025 |
| p. 7 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
| By-product basis | |
| Gold ounces1 | 2.4 million |
| Silver ounces | 4.0 million |
| Average production cost of sales per Au oz. 1,2 | $770 |
2021 regional production and cost guidance1
| Region | Forecast 2021 production (Au eq. oz.) |
Percentage of total forecast production6 | Forecast 2021 production cost of sales (per Au eq. oz.)2 | |||
| Americas | 1.4 million (+/- 5%) | 58% | $800 (+/- 5%) | |||
| West Africa (attributable) | 520,000 (+/- 10%) | 22% | $870 (+/- 10%) | |||
| Russia | 480,000 (+/- 5%) | 20% | $650 (+/- 5%) | |||
| Total | 2.4 million (+/- 5%) | 100% | $790 (+/- 5%) |
Material assumptions used to forecast 2021 production cost of sales are as follows:
| · | a gold price of $1,500 per ounce; |
| · | a silver price of $20 per ounce; |
| · | an oil price of $55 per barrel; |
| · | foreign exchange rates of: |
| o | 5.0 Brazilian reais to the U.S. dollar; |
| o | 1.30 Canadian dollars to the U.S. dollar; |
| o | 70 Russian roubles to the U.S. dollar; |
| o | 725 Chilean pesos to the U.S. dollar; |
| o | 5.50 Ghanaian cedis to the U.S. dollar; |
| o | 35 Mauritanian ouguiyas to the U.S. dollar; and |
| o | 0.90 U.S. dollar to the Euro. |
Taking into account existing currency and oil hedges:
| · | a 10% change in foreign currency exchange rates would be expected to result in an approximate $14 impact on production cost of sales per ounce7; |
| · | specific to the Russian rouble, a 10% change in this exchange rate would be expected to result in an approximate $15 impact on Russian production cost of sales per ounce; |
| · | specific to the Brazilian real, a 10% change in this exchange rate would be expected to result in an approximate $25 impact on Brazilian production cost of sales per ounce; |
| · | a $10 per barrel change in the price of oil would be expected to result in an approximate $3 impact on production cost of sales per ounce; and |
| · | a $100 change in the price of gold would be expected to result in an approximate $5 impact on production cost of sales per ounce as a result of a change in royalties. |
Capital expenditures guidance
Total capital expenditures for 2021 are forecast to be approximately $900 million (+/- 5%) and are summarized in the table below.
6 The percentages are calculated based on the mid-point of regional 2020 forecast production.
7 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.
| p. 8 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
Kinross’ capital expenditures outlook for 2022 and 2023 are $800 million and $700 million, respectively, and is based on Kinross’ current baseline production guidance. However, as previously indicated, capital expenditures for 2022 and 2023 exclude additional opportunities in the Company’s pipeline and is therefore expected to increase to approximate 2021 levels if additional projects are approved, including Round Mountain Phase S, Peak, Lobo-Marte and other projects.8
Region |
Forecast 2021 sustaining capital (million) |
Forecast 2021 non-sustaining capital (million) |
Total forecast capital (+/- 5%) (million) | |||
| Americas | $270 | $295 | $565 | |||
| West Africa | $40 | $225 | $265 | |||
| Russia | $25 | $40 | $65 | |||
| Corporate | $5 | $0 | $5 |
| TOTAL | $340 | $560 | $900 |
2021 sustaining capital includes the following forecast spending estimates:
| · Mine development: | $70 million (Americas); $10 million (Russia); $10 million (West Africa) |
| · Mobile equipment: | $75 million (Americas); $10 million (Russia); $5 million (West Africa) |
| · Tailings facilities: | $40 million |
| · Mill facilities: | $25 million (Americas); $10 million (West Africa) |
| · Leach facilities: | $30 million (Americas) |
2021 non-sustaining capital includes the following forecast spending estimates:
| · | La Coipa Restart: | $180 million |
| · | Development and growth projects and studies: | $130 million |
| · | Tasiast West Branch stripping: | $125 million |
| · | Tasiast 24k project: | $75 million |
| · | Round Mountain Phase W stripping: | $30 million |
| · | Fort Knox Gilmore stripping: | $20 million |
Other 2021 guidance
The 2021 forecast for exploration is approximately $120 million, all of which is expected to be expensed. The increase compared with full-year 2020 will facilitate an enhanced program to follow-up on 2020’s exploration success and exploration projects acquired in 2020, such as the Kayenmyvaam and Kavralyanskaya projects near Kupol, Chulbatkan, and the Peak development project in Alaska.
The 2021 forecast for overhead (general and administrative and business development expenses) is approximately $155 million, which is largely in line with last year’s guidance. The Company has made cost improvements over recent years, with 2021 annual overhead guidance down $50 million over the past five years.
Other operating costs expected to be incurred in 2021 are approximately $150 million, which are principally due to $70 million in pandemic-related mitigation measures.
Based on an assumed gold price of $1,500 per ounce and other budget assumptions, tax expense is expected to be $140 million and taxes paid is expected to be $200 million. Adjusting the Brazilian real and Russian rouble to the respective exchange rates of 5.20 and 74 to the U.S. dollar in effect at December 31, 2020, tax expense would be expected to be $160 million. Tax expense is expected to increase by 26% of any profit resulting from higher gold
8 Kinross’ capital expenditures estimates for 2021 – 2023 includes preliminary capital estimates of approximately $330 million for the Udinsk project.
| p. 9 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
prices. Taxes paid is expected to increase by a range of $20 million to $26 million for every $100 increase in the realized gold price.
Depreciation, depletion and amortization is forecast to be approximately $390 (+/-5%) per Au eq. oz.
Interest paid is forecast to be approximately $110 million, which includes $55 million of capitalized interest.
Environment, Social, Governance highlights (ESG)
Kinross continued to deliver on its ESG commitments in 2020, with the Company’s performance attributable to its values, strong policies and governance systems. ESG is embedded in Kinross’ culture, strategy and operations, and directly contributes to its license to operate.
The Company’s ESG performance consistently ranks in the top quartile of its peer group, as measured by Sustainalytics, MSCI, ISS, Vigeo, Refinitiv and S&P’s Dow Jones Sustainability Index. Kinross was recognized through inclusion in the S&P Global Sustainability Yearbook 2021, marking the Company’s eighth consecutive year in the industry’s top 10 for ESG performance, and its “A” level rating by MSCI. As a World Gold Council member, Kinross played an active role in the development of the Responsible Gold Mining Principles and is making good progress on the process of conformance.
Managing the risks associated with the COVID-19 pandemic was a key area of focus in 2020, as the Company implemented rigorous safety measures across its global portfolio to safeguard its workforce. Kinross provided approximately $6 million in the communities where the Company operates towards efforts to combat COVID-19 impacts, including support for health services, food security and bolstering local economies. By ensuring operational continuity, Kinross also maintained the economic benefits that its operations provide to host countries and communities during a challenging time.
Despite the impact of COVID-19, Kinross’ overall 2020 safety performance was in line with its three-year averages, with injury frequency rates among the lowest in the industry. This was overshadowed by a mine site fatality at Round Mountain, the first for the Company since 2017. Immediately following the incident Kinross held a global Safety Stand-down to reflect, reiterate the importance of safety, identify tangible actions to continually improve processes, and share insights and best practices across its global portfolio.
Kinross’ strong record of environmental performance was illustrated in World Wildlife Fund (WWF) Russia’s environmental transparency rating of mining and metals companies, ranking first in three of the past four years, including the top ranking in 2020. In Alaska, Kinross’ successful reclamation of the True North mine, the first large metal mine to be returned to the State and opened for public access, was publicly endorsed by the Alaska Department of Natural Resources and continues a long and successful track record of responsible reclamation by the Company.
Kinross continued to improve its disclosure on climate, including benchmarking against the recommendations made by the Task Force on Climate-related Financial Disclosures (TCFD). In 2020, the Company conducted a climate risk and opportunity assessment across all sites, including scenario analysis of projected climate change.
Social engagement was strong despite the limitations imposed by COVID-19 restrictions, with approximately 105,000 stakeholder interactions conducted during 2020. Kinross continued to provide significant economic benefits through taxes, support of local suppliers and employment, with more than 98% of Kinross employees from its host countries. The Company’s community investments supported over 938,000 beneficiaries during the year. Kinross also advanced its inclusion and diversity goals in 2020, with 33% female representation on the Board, and a commitment to Canada’s BlackNorth Initiative and its anti-racism pledge.
In the area of corporate governance, Kinross maintained its strong performance. The Company’s Board of Directors succession program has brought in seven new directors since 2015 and enabled effective succession planning. The Company was also recognized as the top mining company in The Globe and Mail’s annual corporate governance ranking.
| p. 10 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
For more information on Kinross’ sustainability performance, see the Company’s 2019 Sustainability Report, published in August 2020. The Report follows the Global Reporting Initiative (GRI) framework, fulfills Kinross’ commitment as a participant in the UN Global Compact and, for the first time, included indicators and metrics from the SASB (Sustainability Accounting Standards Board) Metals and Mining Standard.
Board update
Mr. John A. Brough, who had been a Kinross Board member since 1994 and was the Chair of the Board’s Audit and Risk Committee for many years, retired effective December 31, 2020. Kinross’ management and Board would like to thank Mr. Brough for his long and distinguished directorship on the Board and his many significant contributions to the Company.
As previously disclosed, Mr. Glenn A. Ives has assumed the role of Chair of the Audit and Risk Committee.
Conference call details
In connection with this news release, Kinross will hold a conference call and audio webcast on Thursday, February 11, 2021 at 8 a.m. ET to discuss the results, followed by a question-and-answer session. To access the call, please dial:
Canada & US toll-free – +1 (833) 968-2237; Passcode: 9694745
Outside of Canada & US – +1 (825) 312-2059; Passcode: 9694745
Replay (available up to 14 days after the call):
Canada & US toll-free – +1 (800) 585-8367; Passcode: 9694745
Outside of Canada & US – +1 (416) 621-4642; Passcode: 9694745
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 our website at www.kinross.com.
This release should be read in conjunction with Kinross’ 2020 year-end Financial Statements and Management’s Discussion and Analysis report at www.kinross.com. Kinross’ 2020 year-end Financial Statements and Management’s Discussion and Analysis have been filed with Canadian securities regulators (available at www.sedar.com) and furnished with the U.S. Securities and Exchange Commission (available at www.sec.gov). Kinross shareholders may obtain a copy of the financial statements free of charge upon request to the Company.
| p. 11 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
About Kinross Gold Corporation
Kinross is a Canadian-based senior gold mining company with mines and projects in the United States, Brazil, Russia, Mauritania, Chile and Ghana. Our focus is on delivering value based on the core principles of operational excellence, balance sheet strength, disciplined growth and responsible mining. Kinross maintains listings on the Toronto Stock Exchange (symbol:K) and the New York Stock Exchange (symbol:KGC).
Media Contact
Louie Diaz
Vice-President, Corporate Communications
phone: 416-369-6469
louie.diaz@kinross.com
Investor Relations Contact
Tom Elliott
Senior Vice-President, Investor Relations
phone: 416-365-3390
tom.elliott@kinross.com
| p. 12 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
Review of operations
| Three months ended December 31, | Gold equivalent ounces | ||||||||||
| Produced | Sold | Production cost of sales ($millions) |
Production cost of sales/equivalent ounce sold | ||||||||
| 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||
| Fort Knox | 57,523 | 53,183 | 57,849 | 55,040 | $ 51.1 | $ 65.9 | $ 883 | $ 1,197 | |||
| Round Mountain | 89,422 | 103,501 | 89,709 | 108,402 | 62.2 | 79.3 | 693 | 732 | |||
| Bald Mountain | 51,487 | 66,147 | 57,087 | 65,381 | 45.4 | 49.8 | 795 | 762 | |||
| Paracatu | 148,218 | 140,224 | 150,881 | 140,430 | 91.2 | 111.1 | 604 | 791 | |||
| Maricunga | 414 | 3,221 | 2,035 | 17,455 | 1.1 | 11.7 | 541 | 670 | |||
| Americas Total | 347,064 | 366,276 | 357,561 | 386,708 | 251.0 | 317.8 | 702 | 822 | |||
| Kupol | 130,731 | 132,009 | 131,541 | 135,083 | 79.1 | 83.3 | 601 | 617 | |||
| Russia Total | 130,731 | 132,009 | 131,541 | 135,083 | 79.1 | 83.3 | 601 | 617 | |||
| Tasiast | 111,028 | 102,973 | 107,865 | 101,940 | 60.8 | 50.4 | 564 | 494 | |||
| Chirano (100%) | 39,121 | 48,984 | 40,202 | 47,186 | 45.6 | 49.0 | 1,134 | 1,038 | |||
| West Africa Total | 150,149 | 151,957 | 148,067 | 149,126 | 106.4 | 99.4 | 719 | 667 | |||
| Operations Total | 627,944 | 650,242 | 637,169 | 670,917 | 436.5 | 500.5 | 685 | 746 | |||
| Less Chirano non-controlling interest (10%) |
(3,912) | (4,898) | (4,020) | (4,718) | (4.6) | (4.9) | |||||
| Attributable Total | 624,032 | 645,344 | 633,149 | 666,199 | $ 431.9 | $ 495.6 | $ 682 | $ 744 | |||
| Years ended December 31, | Gold equivalent ounces | ||||||||||
| Produced | Sold | Production cost of sales ($millions) |
Production cost of sales/equivalent ounce sold | ||||||||
| 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||
| Fort Knox | 237,925 | 200,263 | 238,349 | 200,323 | $ 251.3 | $ 213.7 | $ 1,054 | $ 1,067 | |||
| Round Mountain | 324,277 | 361,664 | 319,228 | 360,739 | 219.6 | 250.6 | 688 | 695 | |||
| Bald Mountain | 191,282 | 187,961 | 186,549 | 177,802 | 155.9 | 136.6 | 836 | 768 | |||
| Paracatu | 542,435 | 619,563 | 541,506 | 619,009 | 358.9 | 412.3 | 663 | 666 | |||
| Maricunga | 3,546 | 38,601 | 8,947 | 43,756 | 3.7 | 31.5 | 414 | 720 | |||
| Americas Total | 1,299,465 | 1,408,052 | 1,294,579 | 1,401,629 | 989.4 | 1,044.7 | 764 | 745 | |||
| Kupol | 510,743 | 527,343 | 510,973 | 526,458 | 304.5 | 314.1 | 596 | 597 | |||
| Russia Total | 510,743 | 527,343 | 510,973 | 526,458 | 304.5 | 314.1 | 596 | 597 | |||
| Tasiast | 406,509 | 391,097 | 403,789 | 382,803 | 235.7 | 230.4 | 584 | 602 | |||
| Chirano (100%) | 166,590 | 201,296 | 166,207 | 201,868 | 196.1 | 189.7 | 1,180 | 940 | |||
| West Africa Total | 573,099 | 592,393 | 569,996 | 584,671 | 431.8 | 420.1 | 758 | 719 | |||
| Operations Total | 2,383,307 | 2,527,788 | 2,375,548 | 2,512,758 | 1,725.7 | 1,778.9 | 726 | 708 | |||
| Less Chirano non-controlling interest (10%) |
(16,659) | (20,129) | (16,621) | (20,186) | (19.6) | (19.0) | |||||
| Attributable Total | 2,366,648 | 2,507,659 | 2,358,927 | 2,492,572 | $ 1,706.1 | $ 1,759.9 | $ 723 | $ 706 | |||
p. 13 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
Consolidated balance sheets
| (expressed in millions of U.S. dollars, except share amounts) | ||||
| As at | ||||
| December 31, | December 31, | |||
| 2020 | 2019 | |||
| Assets | ||||
| Current assets | ||||
| Cash and cash equivalents | $ 1,210.9 | $ 575.1 | ||
| Restricted cash | 13.7 | 15.2 | ||
| Accounts receivable and other assets | 122.3 | 137.4 | ||
| Current income tax recoverable | 29.9 | 43.2 | ||
| Inventories | 1,072.9 | 1,053.8 | ||
| 2,449.7 | 1,824.7 | |||
| Non-current assets | ||||
| Property, plant and equipment | 7,653.5 | 6,340.0 | ||
| Goodwill | 158.8 | 158.8 | ||
| Long-term investments | 113.0 | 126.2 | ||
| Investment in joint venture | 18.3 | 18.4 | ||
| Other long-term assets | 537.2 | 572.7 | ||
| Deferred tax assets | 2.7 | 35.2 | ||
| Total assets | $ 10,933.2 | $ 9,076.0 | ||
| Liabilities | ||||
| Current liabilities | ||||
| Accounts payable and accrued liabilities | $ 479.2 | $ 469.3 | ||
| Current income tax payable | 114.5 | 68.0 | ||
| Current portion of long-term debt and credit facilities | 499.7 | - | ||
| Current portion of provisions | 63.8 | 57.9 | ||
| Other current liabilities | 49.7 | 20.3 | ||
| Deferred payment obligation | 141.5 | - | ||
| 1,348.4 | 615.5 | |||
| Non-current liabilities | ||||
| Long-term debt and credit facilities | 1,424.2 | 1,837.4 | ||
| Provisions | 861.1 | 838.6 | ||
| Long-term lease liabilities | 46.3 | 38.9 | ||
| Other long-term liabilities | 102.4 | 108.5 | ||
| Deferred tax liabilities | 487.8 | 304.5 | ||
| Total liabilities | $ 4,270.2 | $ 3,743.4 | ||
| Equity | ||||
| Common shareholders' equity | ||||
| Common share capital | $ 4,473.7 | $ 14,926.2 | ||
| Contributed surplus | 10,709.0 | 242.1 | ||
| Accumulated deficit | (8,562.5) | (9,829.4) | ||
| Accumulated other comprehensive income (loss) | (23.7) | (20.4) | ||
| Total common shareholders' equity | 6,596.5 | 5,318.5 | ||
| Non-controlling interests | 66.5 | 14.1 | ||
| Total equity | 6,663.0 | 5,332.6 | ||
| Total liabilities and equity | $ 10,933.2 | $ 9,076.0 | ||
| Common shares | ||||
| Authorized | Unlimited | Unlimited | ||
| Issued and outstanding | 1,258,320,461 | 1,253,765,724 | ||
p. 14 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
Consolidated statements of operations
| (expressed in millions of U.S. dollars, except share and per share amounts) | ||||
| Years ended | ||||
| December 31, | December 31, | |||
| 2020 | 2019 | |||
| Revenue | ||||
| Metal sales | $ 4,213.4 | $ 3,497.3 | ||
| Cost of sales | ||||
| Production cost of sales | 1,725.7 | 1,778.9 | ||
| Depreciation, depletion and amortization | 842.3 | 731.3 | ||
| Reversals of impairment charges - net | (650.9) | (361.8) | ||
| Total cost of sales | 1,917.1 | 2,148.4 | ||
| Gross profit | 2,296.3 | 1,348.9 | ||
| Other operating expense | 186.5 | 108.5 | ||
| Exploration and business development | 92.5 | 113.5 | ||
| General and administrative | 117.9 | 135.8 | ||
| Operating earnings | 1,899.4 | 991.1 | ||
| Other income - net | 7.4 | 72.7 | ||
| Finance income | 4.3 | 7.9 | ||
| Finance expense | (112.6) | (107.9) | ||
| Earnings before tax | 1,798.5 | 963.8 | ||
| Income tax expense - net | (439.8) | (246.7) | ||
| Net earnings | $ 1,358.7 | $ 717.1 | ||
| Net earnings (loss) attributable to: | ||||
| Non-controlling interests | $ 16.3 | $ (1.5) | ||
| Common shareholders | $ 1,342.4 | $ 718.6 | ||
| Earnings per share attributable to common shareholders | ||||
| Basic | $ 1.07 | $ 0.57 | ||
| Diluted | $ 1.06 | $ 0.57 | ||
| Weighted average number of common shares outstanding (millions) |
||||
| Basic | 1,257.2 | 1,252.3 | ||
| Diluted | 1,268.0 | 1,262.3 | ||
p. 15 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
Consolidated statements of cash flows
| (expressed in millions of U.S. dollars) | ||||||||
| Years ended | ||||||||
| December 31, | December 31, | |||||||
| 2020 | 2019 | |||||||
| Net inflow (outflow) of cash related to the following activities: | ||||||||
| Operating: | ||||||||
| Net earnings | $ | 1,358.7 | $ | 717.1 | ||||
| Adjustments to reconcile net earnings to net cash provided from operating activities: | ||||||||
| Depreciation, depletion and amortization | 842.3 | 731.3 | ||||||
| Reversals of impairment charges - net | (650.9 | ) | (361.8 | ) | ||||
| Share-based compensation expense | 13.7 | 14.3 | ||||||
| Finance expense | 112.6 | 107.9 | ||||||
| Deferred tax expense | 217.9 | 41.1 | ||||||
| Foreign exchange losses (gains) and other | 11.8 | (53.2 | ) | |||||
| Reclamation expense (recovery) | 6.6 | (11.9 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable and other assets | (120.9 | ) | (64.5 | ) | ||||
| Inventories | (6.8 | ) | 53.8 | |||||
| Accounts payable and accrued liabilities | 279.0 | 165.9 | ||||||
| Cash flow provided from operating activities | 2,064.0 | 1,340.0 | ||||||
| Income taxes paid | (106.4 | ) | (115.1 | ) | ||||
| Net cash flow provided from operating activities | 1,957.6 | 1,224.9 | ||||||
| Investing: | ||||||||
| Additions to property, plant and equipment | (916.1 | ) | (1,060.2 | ) | ||||
| Interest paid capitalized to property, plant and equipment | (47.9 | ) | (45.0 | ) | ||||
| Acquisitions | (267.0 | ) | (30.0 | ) | ||||
| Net (additions to) proceeds from the sale of long-term investments and other assets | (5.9 | ) | 71.6 | |||||
| Net proceeds from the sale of property, plant and equipment | 8.4 | 31.9 | ||||||
| Increase in restricted cash - net | (23.5 | ) | (2.5 | ) | ||||
| Interest received and other - net | 2.9 | 7.6 | ||||||
| Net cash flow used in investing activities | (1,249.1 | ) | (1,026.6 | ) | ||||
| Financing: | ||||||||
| Proceeds from drawdown of debt | 950.0 | 300.0 | ||||||
| Repayment of debt | (850.0 | ) | (200.0 | ) | ||||
| Interest paid | (63.1 | ) | (55.6 | ) | ||||
| Payment of lease liabilities | (20.7 | ) | (14.3 | ) | ||||
| Dividends paid to common shareholders | (75.5 | ) | - | |||||
| Dividends paid to non-controlling interest | (6.0 | ) | (5.0 | ) | ||||
| Other - net | (2.4 | ) | - | |||||
| Net cash flow (used in) provided from financing activities | (67.7 | ) | 25.1 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (5.0 | ) | 2.7 | |||||
| Increase in cash and cash equivalents | 635.8 | 226.1 | ||||||
| Cash and cash equivalents, beginning of period | 575.1 | 349.0 | ||||||
| Cash and cash equivalents, end of period | $ | 1,210.9 | $ | 575.1 | ||||
p. 16 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com | ||
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
| Operating Summary | |||||||||||||||
| Mine | Period | Ownership | Tonnes
Ore Mined (a) |
Ore
Processed (Milled) (a) |
Ore
Processed (Heap Leach) (a) |
Grade (Mill) |
Grade (Heap Leach) |
Recovery
(b)(h) |
Gold
Eq Production (e) |
Gold
Eq Sales (e) |
Production cost of sales |
Production cost of sales/oz |
Cap Ex (g) | DD&A | |
| (%) | ('000 tonnes) | ('000 tonnes) | ('000 tonnes) | (g/t) | (g/t) | (%) | (ounces) | (ounces) | ($ millions) | ($/ounce) | ($ millions) | ($ millions) | |||
| Americas | Fort Knox | Q4 2020 | 100 | 8,456 | 2,583 | 7,021 | 0.61 | 0.20 | 80% | 57,523 | 57,849 | $ 51.1 | $ 883 | $ 46.0 | $ 23.2 |
| Q3 2020 | 100 | 7,202 | 2,664 | 5,497 | 0.67 | 0.19 | 83% | 72,705 | 73,267 | $ 69.5 | $ 949 | $ 39.7 | $ 27.9 | ||
| Q2 2020 | 100 | 6,116 | 2,048 | 4,783 | 0.73 | 0.23 | 83% | 56,031 | 56,465 | 66.1 | $ 1,171 | 33.9 | 23.3 | ||
| Q1 2020 | 100 | 6,795 | 1,859 | 5,694 | 0.60 | 0.23 | 80% | 51,667 | 50,768 | 64.6 | $ 1,272 | 19.1 | 22.8 | ||
| Q4 2019 | 100 | 7,648 | 2,615 | 5,498 | 0.43 | 0.20 | 81% | 53,183 | 55,040 | 65.9 | $ 1,197 | 37.1 | 25.0 | ||
| Round Mountain | Q4 2020 | 100 | 6,542 | 988 | 6,315 | 0.92 | 0.50 | 83% | 89,422 | 89,709 | $ 62.2 | $ 693 | $ 41.2 | $ 15.2 | |
| Q3 2020 | 100 | 6,085 | 972 | 5,884 | 0.79 | 0.39 | 83% | 76,039 | 72,717 | $ 49.7 | $ 683 | $ 39.2 | $ 11.6 | ||
| Q2 2020 | 100 | 4,431 | 911 | 4,357 | 0.80 | 0.36 | 84% | 74,351 | 71,087 | 51.6 | $ 726 | 36.9 | 10.2 | ||
| Q1 2020 | 100 | 3,700 | 954 | 3,594 | 0.83 | 0.43 | 83% | 84,465 | 85,715 | 56.1 | $ 654 | 41.8 | 12.6 | ||
| Q4 2019 | 100 | 7,408 | 882 | 7,140 | 1.00 | 0.36 | 82% | 103,501 | 108,402 | 79.3 | $ 732 | 62.7 | 12.6 | ||
| Bald Mountain | Q4 2020 | 100 | 6,076 | - | 6,076 | - | 0.42 | nm | 51,487 | 57,087 | $ 45.4 | $ 795 | $ 19.3 | $ 44.3 | |
| Q3 2020 | 100 | 4,922 | - | 4,922 | - | 0.56 | nm | 49,339 | 37,492 | $ 32.1 | $ 856 | $ 23.4 | $ 27.1 | ||
| Q2 2020 | 100 | 4,051 | - | 4,051 | - | 0.53 | nm | 48,368 | 49,594 | 42.7 | $ 861 | 29.6 | 30.2 | ||
| Q1 2020 | 100 | 3,254 | - | 3,254 | - | 0.55 | nm | 42,087 | 42,376 | 35.7 | $ 842 | 31.5 | 26.7 | ||
| Q4 2019 | 100 | 2,928 | - | 3,007 | - | 0.48 | nm | 66,147 | 65,381 | 49.8 | $ 762 | 54.6 | 36.3 | ||
| Paracatu | Q4 2020 | 100 | 12,611 | 12,655 | - | 0.51 | - | 77% | 148,218 | 150,881 | $ 91.2 | $ 604 | $ 61.6 | $ 58.2 | |
| Q3 2020 | 100 | 12,468 | 13,673 | - | 0.38 | - | 74% | 131,000 | 128,782 | $ 96.6 | $ 750 | $ 27.2 | $ 42.4 | ||
| Q2 2020 | 100 | 15,223 | 14,703 | - | 0.40 | - | 74% | 138,851 | 140,646 | 83.6 | $ 594 | 49.1 | 45.2 | ||
| Q1 2020 | 100 | 12,350 | 13,224 | - | 0.39 | - | 75% | 124,367 | 121,197 | 87.5 | $ 722 | 14.4 | 37.7 | ||
| Q4 2019 | 100 | 12,393 | 14,168 | - | 0.38 | - | 76% | 140,224 | 140,430 | 111.1 | $ 791 | 21.4 | 42.8 | ||
| Maricunga | Q4 2020 | 100 | - | - | - | - | - | nm | 414 | 2,035 | $ 1.1 | $ 541 | $ - | $ 0.1 | |
| Q3 2020 | 100 | - | - | - | - | - | nm | 3,132 | 4,442 | $ 1.0 | $ 225 | $ - | $ 0.2 | ||
| Q2 2020 | 100 | - | - | - | - | - | nm | - | 1,159 | 0.8 | $ 690 | - | 0.3 | ||
| Q1 2020 | 100 | - | - | - | - | - | nm | - | 1,311 | 0.8 | $ 610 | - | 0.3 | ||
| Q4 2019 | 100 | - | - | - | - | - | nm | 3,221 | 17,455 | 11.7 | $ 670 | - | 0.4 | ||
| Russia | Kupol (c)(d)(f) | Q4 2020 | 100 | 293 | 432 | - | 9.24 | - | 95% | 130,731 | 131,541 | $ 79.1 | $ 601 | $ 15.1 | $ 31.0 |
| Q3 2020 | 100 | 365 | 430 | - | 8.99 | - | 95% | 128,144 | 126,637 | $ 69.2 | $ 546 | $ 6.1 | $ 27.0 | ||
| Q2 2020 | 100 | 386 | 416 | - | 9.73 | - | 95% | 130,983 | 130,771 | 79.3 | $ 606 | 5.9 | 31.1 | ||
| Q1 2020 | 100 | 500 | 425 | - | 8.73 | - | 95% | 120,885 | 122,024 | 76.9 | $ 630 | 5.6 | 34.4 | ||
| Q4 2019 | 100 | 468 | 435 | - | 9.14 | - | 95% | 132,009 | 135,083 | 83.3 | $ 617 | 15.8 | 34.8 | ||
| West Africa | Tasiast | Q4 2020 | 100 | 1,206 | 1,470 | - | 2.48 | - | 94% | 111,028 | 107,865 | $ 60.8 | $ 564 | $ 65.0 | $ 46.5 |
| Q3 2020 | 100 | 1,338 | 1,244 | - | 2.78 | - | 94% | 103,065 | 103,295 | $ 65.2 | $ 631 | $ 50.0 | $ 50.2 | ||
| Q2 2020 | 100 | 1,134 | 1,168 | - | 2.40 | 94% | 88,579 | 98,679 | 57.8 | $ 586 | 40.6 | 54.8 | |||
| Q1 2020 | 100 | 1,160 | 1,467 | - | 2.31 | - | 95% | 103,837 | 93,950 | 51.9 | $ 552 | 69.2 | 40.3 | ||
| Q4 2019 | 100 | 1,129 | 1,379 | - | 2.39 | - | 96% | 102,973 | 101,940 | 50.4 | $ 494 | 86.1 | 35.0 | ||
| Chirano - 100% | Q4 2020 | 100 | 915 | 801 | - | 1.75 | - | 88% | 39,121 | 40,202 | $ 45.6 | $ 1,134 | $ 11.3 | $ 13.1 | |
| Q3 2020 | 100 | 768 | 815 | - | 1.87 | - | 88% | 44,320 | 46,586 | $ 56.1 | $ 1,204 | $ 5.0 | $ 16.1 | ||
| Q2 2020 | 100 | 679 | 785 | - | 1.85 | - | 88% | 38,683 | 40,084 | 46.6 | $ 1,163 | 5.8 | 13.1 | ||
| Q1 2020 | 100 | 690 | 873 | - | 1.73 | - | 88% | 44,465 | 39,335 | 47.8 | $ 1,215 | 5.1 | 15.9 | ||
| Q4 2019 | 100 | 737 | 844 | - | 2.00 | - | 91% | 48,984 | 47,186 | 49.0 | $ 1,038 | 8.0 | 21.4 | ||
| Chirano - 90% | Q4 2020 | 90 | 915 | 801 | - | 1.75 | - | 88% | 35,209 | 36,182 | $ 41.0 | $ 1,134 | $ 10.2 | $ 11.8 | |
| Q3 2020 | 90 | 768 | 815 | - | 1.87 | - | 88% | 39,888 | 41,927 | $ 50.5 | $ 1,204 | $ 4.5 | $ 14.5 | ||
| Q2 2020 | 90 | 679 | 785 | - | 1.85 | - | 88% | 34,815 | 36,076 | 41.9 | $ 1,163 | 5.2 | 11.8 | ||
| Q1 2020 | 90 | 690 | 873 | - | 1.73 | - | 88% | 40,019 | 35,401 | 43.0 | $ 1,215 | 4.7 | 14.3 | ||
| Q4 2019 | 90 | 737 | 844 | - | 2.00 | - | 91% | 44,086 | 42,468 | 44.1 | $ 1,038 | 7.2 | 19.3 | ||
| (a) | Tonnes of ore mined and processed represent 100% Kinross for all periods presented. |
| (b) | Due to the nature of heap leach operations, recovery rates at Maricunga and Bald Mountain cannot be accurately measured on a quarterly basis. Recovery rates at Fort Knox, Round Mountain and Tasiast represent mill recovery only. |
| (c) | The Kupol segment includes the Kupol and Dvoinoye mines. |
| (d) | Kupol silver grade and recovery were as follows: Q4 2020: 65.05 g/t, 84%; Q3 2020: 74.19 g/t, 88%; Q2 2020: 70.36 g/t, 86% Q1 2020: 80.02 g/t, 84% Q4 2019: 65.63 g/t, 85%. |
| (e) | Gold equivalent ounces include silver ounces produced and sold converted to a gold equivalent based on the ratio of the average spot market prices for the commodities for each period. The ratios for the quarters presented are as follows: Q4 2020: 77.02:1, Q3 2020: 78.68:1; Q2 2020: 104.49:1, Q1 2020: 93.34:1, Q4 2019: 85.59:1. |
| (f) | Dvoinoye ore processed and grade were as follows: Q4 2020: 115,998, 9.25 g/t; Q3 2020: 115,054, 9.44 g/t; Q2 2020: 113,472, 9.55 g/t; Q1 2020: 117,502, 9.24 g/t; Q4 2019: 100,685, 9.89 g/t. |
| (g) | "Capital expenditures" is as reported as “Additions to property, plant and equipment” on the consolidated statement of cash flows and excludes “Interest paid capitalized to property, plant and equipment”. |
| (h) | "nm" means not meaningful. |
p. 17 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com | ||
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
Reconciliation of non-GAAP financial measures
The Company has included certain non-GAAP financial measures in this document. These measures are not defined under International Financial Reporting Standards (IFRS) and should not be considered in isolation. The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. The inclusion of these measures is meant to provide additional information and should not be used as a substitute for performance measures prepared in accordance with IFRS. These measures are not necessarily standard and therefore may not be comparable to other issuers.
Adjusted net earnings attributable to common shareholders and adjusted net earnings per share are non-GAAP measures which determine the performance of the Company, excluding certain impacts which the Company believes are not reflective of the Company’s underlying performance for the reporting period, such as the impact of foreign exchange gains and losses, reassessment of prior year taxes and/or taxes otherwise not related to the current period, impairment charges (reversals), gains and losses and other one-time costs related to acquisitions, dispositions and other transactions, and non-hedge derivative gains and losses. Although some of the items are recurring, the Company believes that they are not reflective of the underlying operating performance of its current business and are not necessarily indicative of future operating results. Management believes that these measures, which are used internally to assess performance and in planning and forecasting future operating results, provide investors with the ability to better evaluate underlying performance, particularly since the excluded items are typically not included in public guidance. However, adjusted net earnings and adjusted net earnings per share measures are not necessarily indicative of net earnings and earnings per share measures as determined under IFRS.
The following table provides a reconciliation of net earnings to adjusted net earnings for the periods presented:
|
Adjusted Net Earnings | |||||
| (expressed in millions of U.S dollars, except per share amounts) |
Three months ended | Years ended | ||||
| December 31, | December 31, | |||||
| 2020 | 2019 | 2020 | 2019 | |||
| Net earnings attributable to common shareholders - as reported | $ 783.3 | $ 521.5 | $ 1,342.4 | $ 718.6 | ||
| Adjusting items: | ||||||
| Foreign exchange losses (gains) | 8.2 | 6.0 | 7.3 | (0.6) | ||
| Foreign exchange losses (gains) on translation of tax basis and foreign exchange on deferred income taxes within income tax expense |
4.6 | (12.3) | 101.2 | 1.6 | ||
| Taxes in respect of prior periods | 39.7 | (0.1) | 51.3 | 33.3 | ||
| Reclamation and remediation expenses (recoveries) | 6.6 | (11.9) | 6.6 | (11.9) | ||
| Reversals of impairment charges - net(a) | (602.6) | (361.8) | (650.9) | (361.8) | ||
| COVID-19 and Tasiast strike costs(b) | 23.3 | - | 72.4 | - | ||
| U.S. CARES Act net benefit | - | - | (25.4) | - | ||
| Gain on disposition of royalty portfolio | - | (72.7) | - | (72.7) | ||
| Fort Knox pit wall slide related costs | - | 8.0 | - | 25.1 | ||
| Restructuring costs | - | - | - | 12.2 | ||
| Other | 3.1 | 2.7 | 0.2 | 7.6 | ||
| Tax effect of the above adjustments | 68.9 | 76.6 | 61.7 | 71.5 | ||
| (448.2) | (365.5) | (375.6) | (295.7) | |||
| Adjusted net earnings attributable to common shareholders | $ 335.1 | $ 156.0 | $ 966.8 | $ 422.9 | ||
| Weighted average number of common shares outstanding - Basic | 1,258.3 | 1,253.5 | 1,257.2 | 1,252.3 | ||
| Adjusted net earnings per share | $ 0.27 | $ 0.13 | $ 0.77 | $ 0.34 | ||
| (a) | During the year ended December 31, 2020, the Company recorded non-cash reversals of impairment charges of $689.0 million related to property, plant and equipment at Tasiast, Chirano and Lobo-Marte. The tax impacts on the impairment reversals at Chirano and Lobo-Marte were expenses of $71.6 million and $4.6 million, respectively. In addition, the Company recorded impairment charges of $38.1 million related to certain supplies inventories. During the year ended December 31, 2019, the Company recorded non-cash reversals of impairment charges of $361.8 million related to property, plant and equipment at Paracatu and Tasiast. The tax impact on the impairment reversal at Paracatu was an expense of $68.2 million. There were no tax impacts on the impairment reversals at Tasiast in 2020 and 2019. |
| (b) | During the year ended December 31, 2020, $64.1 million (fourth quarter of 2020 - $23.3 million) of COVID-19 related labour, health & safety, donations and other support program costs, as well as $8.3 million of Tasiast strike costs, were incurred. |
p. 18 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
Free cash flow is a non-GAAP measure and is defined as net cash flow provided from operating activities less capital expenditures. The Company believes that that this measure, which is used internally to evaluate the Company’s underlying cash generation performance and the ability to repay creditors and return cash to shareholders, provides investors with the ability to better evaluate the Company’s underlying performance. However, the free cash flow measure is not necessarily indicative of operating earnings or net cash flow from operations as determined under IFRS.
The following table provides a reconciliation of free cash flow for the periods presented:
Free Cash Flow | ||||||
| (expressed in millions of U.S dollars) | Three months ended | Years ended | ||||
| December 31, | December 31, | |||||
| 2020 | 2019 | 2020 | 2019 | |||
| Net cash flow provided from operating activities - as reported | $ 681.1 | $ 408.6 | $ 1,957.6 | $ 1,224.9 | ||
| Less: Additions to property, plant and equipment | (298.3) | (297.9) | (916.1) | (1,060.2) | ||
| Free cash flow | $ 382.8 | $ 110.7 | $ 1,041.5 | $ 164.7 | ||
Adjusted operating cash flow is a non-GAAP measure and is defined as cash flow from operations excluding certain impacts which the Company believes are not reflective of the Company’s regular operating cash flow and excluding changes in working capital. Working capital can be volatile due to numerous factors, including the timing of tax payments, and in the case of Kupol, a build-up of inventory due to transportation logistics. The Company uses adjusted operating cash flow internally as a measure of the underlying operating cash flow performance and future operating cash flow-generating capability of the Company. However, the adjusted operating cash flow measure is not necessarily indicative of net cash flow from operations as determined under IFRS.
The following table provides a reconciliation of adjusted operating cash flow for the periods presented:
Adjusted Operating Cash Flow | ||||||
| (expressed in millions of U.S dollars) | Three months ended | Years ended | ||||
| December 31, | December 31, | |||||
| 2020 | 2019 | 2020 | 2019 | |||
| Net cash flow provided from operating activities - as reported | $ 681.1 | $ 408.6 | $ 1,957.6 | $ 1,224.9 | ||
| Adjusting items: | ||||||
| Tax payments in respect of prior years | - | - | - | 16.7 | ||
| Working capital changes: | ||||||
| Accounts receivable and other assets | (47.7) | (37.4) | 120.9 | 64.5 | ||
| Inventories | 33.1 | (44.3) | 6.8 | (53.8) | ||
| Accounts payable and other liabilities, including income taxes paid | (138.9) | 60.7 | (172.6) | (50.8) | ||
| (153.5) | (21.0) | (44.9) | (23.4) | |||
| Adjusted operating cash flow | $ 527.6 | $ 387.6 | $ 1,912.7 | $ 1,201.5 | ||
p. 19 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
Consolidated production cost of sales per gold equivalent ounce sold is a non-GAAP measure and is defined as production cost of sales as reported on the consolidated statement of operations divided by the total number of gold equivalent ounces sold. This measure converts the Company’s non-gold production into gold equivalent ounces and credits it to total production.
Attributable production cost of sales per gold equivalent ounce sold is a non-GAAP measure and is defined as attributable production cost of sales divided by the attributable number of gold equivalent ounces sold. This measure converts the Company’s non-gold production into gold equivalent ounces and credits it to total production.
Management uses these measures to monitor and evaluate the performance of its operating properties.
The following table presents a reconciliation of consolidated and attributable production cost of sales per equivalent ounce sold for the periods presented:
Consolidated and Attributable Production Cost of Sales | ||||||
| (expressed in millions of U.S. dollars, except ounces and production cost of sales per equivalent ounce) |
Three months ended | Years ended | ||||
| December 31, | December 31, | |||||
| 2020 | 2019 | 2020 | 2019 | |||
| Production cost of sales - as reported | $ 436.5 | $ 500.5 | $ 1,725.7 | $ 1,778.9 | ||
| Less: portion attributable to Chirano non-controlling interest(a) | (4.6) | (4.9) | (19.6) | (19.0) | ||
| Attributable(b) production cost of sales | $ 431.9 | $ 495.6 | $ 1,706.1 | $ 1,759.9 | ||
| Gold equivalent ounces sold | 637,169 | 670,917 | 2,375,548 | 2,512,758 | ||
| Less: portion attributable to Chirano non-controlling interest(j) | (4,020) | (4,718) | (16,621) | (20,186) | ||
| Attributable(b) gold equivalent ounces sold | 633,149 | 666,199 | 2,358,927 | 2,492,572 | ||
| Consolidated production cost of sales per equivalent ounce sold | $ 685 | $ 746 | $ 726 | $ 708 | ||
| Attributable(b) production cost of sales per equivalent ounce sold | $ 682 | $ 744 | $ 723 | $ 706 | ||
See page 24 of this news release for details of the footnotes referenced within the table above.
p. 20 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
Attributable production cost of sales per ounce sold on a by-product basis is a non-GAAP measure which calculates the Company’s non-gold production as a credit against its per ounce production costs, rather than converting its non-gold production into gold equivalent ounces and crediting it to total production, as is the case in co-product accounting. Management believes that this measure provides investors with the ability to better evaluate Kinross’ production cost of sales per ounce on a comparable basis with other major gold producers who routinely calculate their cost of sales per ounce using by-product accounting rather than co-product accounting.
The following table provides a reconciliation of attributable production cost of sales per ounce sold on a by-product basis for the periods presented:
| Attributable
Production Cost of Sales Per Ounce Sold on a By-Product Basis | ||||||||||||||||
| (expressed in millions of U.S. dollars, | Three months ended | Years ended | ||||||||||||||
| except ounces and production cost of sales per ounce) | December 31, | December 31, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Production cost of sales - as reported | $ | 436.5 | $ | 500.5 | $ | 1,725.7 | $ | 1,778.9 | ||||||||
| Less: portion attributable to Chirano non-controlling interest(a) | (4.6 | ) | (4.9 | ) | (19.6 | ) | (19.0 | ) | ||||||||
| Less: attributable(b) silver revenue(c) | (28.3 | ) | (20.4 | ) | (91.0 | ) | (75.1 | ) | ||||||||
| Attributable(b) production cost of sales net of silver by-product revenue | $ | 403.6 | $ | 475.2 | $ | 1,615.1 | $ | 1,684.8 | ||||||||
| Gold ounces sold | 622,235 | 657,179 | 2,324,324 | 2,458,839 | ||||||||||||
| Less: portion attributable to Chirano non-controlling interest(j) | (4,014 | ) | (4,717 | ) | (16,589 | ) | (20,161 | ) | ||||||||
| Attributable(b) gold ounces sold | 618,221 | 652,462 | 2,307,735 | 2,438,678 | ||||||||||||
| Attributable(b) production cost of sales per ounce sold on a by-product basis | $ | 653 | $ | 728 | $ | 700 | $ | 691 | ||||||||
See page 24 of this news release for details of the footnotes referenced within the table above.
In November 2018, the World Gold Council (“WGC”) published updates to its guidelines for reporting all-in sustaining costs and all-in costs to address how the costs associated with leases, after a company’s adoption of IFRS 16, should be treated. The WGC is a market development organization for the gold industry and is an association whose membership comprises leading gold mining companies including Kinross. Although the WGC is not a mining industry regulatory organization, it worked closely with its member companies to develop these non-GAAP measures. Adoption of the all-in sustaining cost and all-in cost metrics is voluntary and not necessarily standard, and therefore, these measures presented by the Company may not be comparable to similar measures presented by other issuers. The Company believes that the all-in sustaining cost and all-in cost measures complement existing measures reported by Kinross.
All-in sustaining cost includes both operating and capital costs required to sustain gold production on an ongoing basis. The value of silver sold is deducted from the total production cost of sales as it is considered residual production. Sustaining operating costs represent expenditures incurred at current operations that are considered necessary to maintain current production. Sustaining capital represents capital expenditures at existing operations comprising mine development costs and ongoing replacement of mine equipment and other capital facilities, and does not include capital expenditures for major growth projects or enhancement capital for significant infrastructure improvements at existing operations.
All-in cost is comprised of all-in sustaining cost as well as operating expenditures incurred at locations with no current operation, or costs related to other non-sustaining activities, and capital expenditures for major growth projects or enhancement capital for significant infrastructure improvements at existing operations.
p. 21 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
Attributable all-in sustaining cost and all-in cost per ounce sold on a by-product basis are calculated by adjusting total production cost of sales, as reported on the consolidated statement of operations, as follows:
| Attributable All-In Sustaining Cost and All-In Cost Per Ounce Sold on a By-Product Basis | ||||||||||||||||
| (expressed in millions of U.S. dollars, | Three months ended | Years ended | ||||||||||||||
| except ounces and costs per ounce) | December 31, | December 31, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Production cost of sales - as reported | $ | 436.5 | $ | 500.5 | $ | 1,725.7 | $ | 1,778.9 | ||||||||
| Less: portion attributable to Chirano non-controlling interest(a) | (4.6 | ) | (4.9 | ) | (19.6 | ) | (19.0 | ) | ||||||||
| Less: attributable(b) silver revenue(c) | (28.3 | ) | (20.4 | ) | (91.0 | ) | (75.1 | ) | ||||||||
| Attributable(b) production cost of sales net of silver by-product revenue | $ | 403.6 | $ | 475.2 | $ | 1,615.1 | $ | 1,684.8 | ||||||||
| Adjusting items on an attributable(b) basis: | ||||||||||||||||
| General and administrative(d) | 36.1 | 31.3 | 117.9 | 123.6 | ||||||||||||
| Other operating expense - sustaining(e) | 0.8 | 8.3 | 9.6 | 24.7 | ||||||||||||
| Reclamation and remediation - sustaining(f) | 16.0 | 13.0 | 54.0 | 48.2 | ||||||||||||
| Exploration and business development - sustaining(g) | 13.2 | 15.4 | 48.3 | 66.0 | ||||||||||||
| Additions to property, plant and equipment - sustaining(h) | 136.2 | 132.7 | 373.5 | 415.1 | ||||||||||||
| Lease payments - sustaining(i) | 7.1 | 3.5 | 19.7 | 12.7 | ||||||||||||
| All-in Sustaining Cost on a by-product basis - attributable(b) | $ | 612.9 | $ | 679.4 | $ | 2,238.1 | $ | 2,375.1 | ||||||||
| Other operating expense - non-sustaining(e) | 17.1 | 16.3 | 56.0 | 57.0 | ||||||||||||
| Reclamation and remediation - non-sustaining(f) | 1.3 | 1.7 | 5.0 | 6.9 | ||||||||||||
| Exploration - non-sustaining(g) | 17.4 | 14.5 | 43.3 | 46.7 | ||||||||||||
| Additions to property, plant and equipment - non-sustaining(h) | 160.1 | 159.8 | 536.9 | 637.9 | ||||||||||||
| Lease payments - non-sustaining(i) | 0.1 | 0.4 | 1.0 | 1.6 | ||||||||||||
| All-in Cost on a by-product basis - attributable(b) | $ | 809.0 | $ | 872.1 | $ | 2,880.3 | $ | 3,125.2 | ||||||||
| Gold ounces sold | 622,235 | 657,179 | 2,324,324 | 2,458,839 | ||||||||||||
| Less: portion attributable to Chirano non-controlling interest(j) | (4,014 | ) | (4,717 | ) | (16,589 | ) | (20,161 | ) | ||||||||
| Attributable(b) gold ounces sold | 618,221 | 652,462 | 2,307,735 | 2,438,678 | ||||||||||||
| Attributable(b) all-in sustaining cost per ounce sold on a by-product basis | $ | 991 | $ | 1,041 | $ | 970 | $ | 974 | ||||||||
| Attributable(b) all-in cost per ounce sold on a by-product basis | $ | 1,309 | $ | 1,337 | $ | 1,248 | $ | 1,282 | ||||||||
See page 24 of this news release for details of the footnotes referenced within the table above.
p. 22 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
The Company also assesses its all-in sustaining cost and all-in cost on a gold equivalent ounce basis. Under these non-GAAP measures, the Company’s production of silver is converted into gold equivalent ounces and credited to total production.
Attributable all-in sustaining cost and all-in cost per equivalent ounce sold are calculated by adjusting total production cost of sales, as reported on the consolidated statement of operations, as follows:
| Attributable All-In Sustaining Cost and All-In Cost Per Equivalent Ounce Sold | ||||||||||||||||
| (expressed in millions of U.S. dollars, | Three months ended | Years ended | ||||||||||||||
| except ounces and costs per equivalent ounce) | December 31, | December 31, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Production cost of sales - as reported | $ | 436.5 | $ | 500.5 | $ | 1,725.7 | $ | 1,778.9 | ||||||||
| Less: portion attributable to Chirano non-controlling interest(a) | (4.6 | ) | (4.9 | ) | (19.6 | ) | (19.0 | ) | ||||||||
| Attributable(b) production cost of sales | $ | 431.9 | $ | 495.6 | $ | 1,706.1 | $ | 1,759.9 | ||||||||
| Adjusting items on an attributable(b) basis: | ||||||||||||||||
| General and administrative(d) | 36.1 | 31.3 | 117.9 | 123.6 | ||||||||||||
| Other operating expense - sustaining(e) | 0.8 | 8.3 | 9.6 | 24.7 | ||||||||||||
| Reclamation and remediation - sustaining(f) | 16.0 | 13.0 | 54.0 | 48.2 | ||||||||||||
| Exploration and business development - sustaining(g) | 13.2 | 15.4 | 48.3 | 66.0 | ||||||||||||
| Additions to property, plant and equipment - sustaining(h) | 136.2 | 132.7 | 373.5 | 415.1 | ||||||||||||
| Lease payments - sustaining(i) | 7.1 | 3.5 | 19.7 | 12.7 | ||||||||||||
| All-in Sustaining Cost - attributable(b) | $ | 641.2 | $ | 699.8 | $ | 2,329.1 | $ | 2,450.2 | ||||||||
| Other operating expense - non-sustaining(e) | 17.1 | 16.3 | 56.0 | 57.0 | ||||||||||||
| Reclamation and remediation - non-sustaining(f) | 1.3 | 1.7 | 5.0 | 6.9 | ||||||||||||
| Exploration - non-sustaining(g) | 17.4 | 14.5 | 43.3 | 46.7 | ||||||||||||
| Additions to property, plant and equipment - non-sustaining(h) | 160.1 | 159.8 | 536.9 | 637.9 | ||||||||||||
| Lease payments - non-sustaining(i) | 0.1 | 0.4 | 1.0 | 1.6 | ||||||||||||
| All-in Cost - attributable(b) | $ | 837.3 | $ | 892.5 | $ | 2,971.3 | $ | 3,200.3 | ||||||||
| Gold equivalent ounces sold | 637,169 | 670,917 | 2,375,548 | 2,512,758 | ||||||||||||
| Less: portion attributable to Chirano non-controlling interest(j) | (4,020 | ) | (4,718 | ) | (16,621 | ) | (20,186 | ) | ||||||||
| Attributable(b) gold equivalent ounces sold | 633,149 | 666,199 | 2,358,927 | 2,492,572 | ||||||||||||
| Attributable(b) all-in sustaining cost per equivalent ounce sold | $ | 1,013 | $ | 1,050 | $ | 987 | $ | 983 | ||||||||
| Attributable(b) all-in cost per equivalent ounce sold | $ | 1,322 | $ | 1,340 | $ | 1,260 | $ | 1,284 | ||||||||
p. 23 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
| (a) | The portion attributable to Chirano non-controlling interest represents the non-controlling interest (10%) in the production cost of sales for the Chirano mine. | |
| (b) | “Attributable” includes Kinross' share of Chirano (90%) and Peak (70%) production and costs. | |
| (c) | “Attributable silver revenues” represents the attributable portion of metal sales realized from the production of the secondary or by-product metal (i.e. silver). Revenue from the sale of silver, which is produced as a by-product of the process used to produce gold, effectively reduces the cost of gold production. | |
| (d) | “General and administrative” expenses is as reported on the consolidated statement of operations, net of certain restructuring expenses. General and administrative expenses are considered sustaining costs as they are required to be absorbed on a continuing basis for the effective operation and governance of the Company. | |
| (e) | “Other operating expense – sustaining” is calculated as “Other operating expense” as reported on the consolidated statement of operations, less other operating and reclamation and remediation expenses related to non-sustaining activities as well as other items not reflective of the underlying operating performance of our business. Other operating expenses are classified as either sustaining or non-sustaining based on the type and location of the expenditure incurred. The majority of other operating expenses that are incurred at existing operations are considered costs necessary to sustain operations, and are therefore classified as sustaining. Other operating expenses incurred at locations where there is no current operation or related to other non-sustaining activities are classified as non-sustaining. | |
| (f) | “Reclamation and remediation - sustaining” is calculated as current period accretion related to reclamation and remediation obligations plus current period amortization of the corresponding reclamation and remediation assets, and is intended to reflect the periodic cost of reclamation and remediation for currently operating mines. Reclamation and remediation costs for development projects or closed mines are excluded from this amount and classified as non-sustaining. | |
| (g) | “Exploration and business development – sustaining” is calculated as “Exploration and business development” expenses as reported on the consolidated statement of operations, less non-sustaining exploration expenses. Exploration expenses are classified as either sustaining or non-sustaining based on a determination of the type and location of the exploration expenditure. Exploration expenditures within the footprint of operating mines are considered costs required to sustain current operations and so are included in sustaining costs. Exploration expenditures focused on new ore bodies near existing mines (i.e. brownfield), new exploration projects (i.e. greenfield) or for other generative exploration activity not linked to existing mining operations are classified as non-sustaining. Business development expenses are considered sustaining costs as they are required for general operations. | |
| (h) | “Additions to property, plant and equipment – sustaining” represents the majority of capital expenditures at existing operations including capitalized exploration costs, periodic capitalized stripping and underground mine development costs, ongoing replacement of mine equipment and other capital facilities and other capital expenditures and is calculated as total additions to property, plant and equipment (as reported on the consolidated statements of cash flows), less capitalized interest and non-sustaining capital. Non-sustaining capital represents capital expenditures for major projects, including major capital stripping projects at existing operations that are expected to materially benefit the operation, as well as enhancement capital for significant infrastructure improvements at existing operations. Non-sustaining capital expenditures during the year ended December 31, 2020, primarily related to major projects at Tasiast, Fort Knox and Round Mountain. Non-sustaining capital expenditures during the year ended December 31, 2019, primarily related to major projects at Tasiast, Round Mountain, Bald Mountain and Fort Knox. | |
| (i) | “Lease payments – sustaining” represents the majority of lease payments as reported on the consolidated statements of cash flows and is made up of the principal and financing components of such cash payments, less non-sustaining lease payments. Lease payments for development projects or closed mines are classified as non-sustaining. | |
| (j) | “Portion attributable to Chirano non-controlling interest” represents the non-controlling interest (10%) in the ounces sold from the Chirano mine. | |
| (k) | “Average realized gold price per ounce” is a non-GAAP financial measure and is defined as gold metal sales divided by the total number of gold ounces sold. This measure is intended to enable Management to better understand the price realized in each reporting period. The realized price measure does not have any standardized definition under IFRS and should not be considered a substitute for measure of performance prepared in accordance with IFRS. |
p. 24 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
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) “2020 full year results and 2021 guidance”, “CEO Commentary”, “Financial results” and “Company Guidance” as well as statements with respect to our guidance for production, production costs of sales, cash flow, free cash flow, all-in sustaining cost of sales, and capital expenditures; the declaration, payment and sustainability of the Company’s dividends; optimization of mine plans; identification of additional resources and reserves; the schedules and budgets for the Company’s development projects; mine life and any potential extensions; the Company’s capital reinvestment program and continuous improvement initiatives and project performance or outperformance, as well as references to other possible events, the future price of gold and silver, the timing and amount of estimated future production, costs of production, operating costs; capital expenditures, costs and timing of the development of projects and new deposits, estimates and the realization of such estimates (such as mineral or gold reserves and resources or mine life), success of exploration, development and mining, currency fluctuations, capital requirements, project studies, government regulation permit applications and conversions, restarting suspended or disrupted operations; environmental risks and proceedings; and resolution of pending litigation. The words “anticipate”, “continue”, “estimates”, “expects”, “forecast”, “guidance”, “intends”, “outlook”, “progress”, “potential”, “prioritize”, 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, 2020, and the Annual Information Form dated March 30, 2020 as well as: (1) there being no significant disruptions affecting the operations of the Company, whether due to extreme weather events (including, without limitation, excessive or lack of rainfall, in particular, the potential for further production curtailments at Paracatu resulting from insufficient rainfall and the operational challenges at Fort Knox and Bald Mountain resulting from excessive rainfall, which can impact costs and/or production) and other or related natural disasters, labour disruptions (including but not limited to strikes or workforce reductions), supply disruptions, power disruptions, damage to equipment, pit wall slides (in particular that the effects of the pit wall slides at Fort Knox and Round Mountain are consistent with the Company’s expectations) or otherwise; (2) permitting, development, operations and production from the Company’s operations and development projects being consistent with Kinross’ current expectations including, without limitation: the maintenance of existing permits and approvals and the timely receipt of all permits and authorizations necessary for the operation of Tasiast, and the development and operation of the 24k Project; operation of the SAG mill at Tasiast; land acquisitions and permitting for the construction and operation of the new tailings facility, water and power supply and continued operation of the tailings reprocessing facility at Paracatu; the Lobo-Marte project; commencement of production at the La Coipa project; approval of an enhanced mine plan at Fort Knox; in each case in a manner consistent with the Company’s expectations; and the successful completion of exploration consistent with the Company’s expectations at the Company’s projects; (3) political and legal developments in any jurisdiction in which the Company operates being consistent with its current expectations including, without limitation, the impact of any political tensions and uncertainty in the Russian Federation or any related sanctions and any other similar restrictions or penalties imposed, or actions taken, by any government, including but not limited to amendments to the mining laws, and potential power rationing and tailings facility regulations in Brazil, potential amendments to water laws and/or other water use restrictions and regulatory actions in Chile, new dam safety regulations, potential amendments to minerals and mining laws and energy levies laws, the enforcement of labour laws in Ghana, new regulations relating to work permits, potential amendments to customs and mining laws (including but not limited to amendments to the VAT) and the potential application of revisions to the tax code in Mauritania, the European Union’s General Data Protection Regulation or similar legislation in other jurisdictions and potential amendments to and enforcement of tax laws in Russia, Ghana and Mauritania (including, but not limited to, the interpretation, implementation, application and enforcement of any such laws and amendments thereto), and the impact of any trade tariffs being consistent with Kinross’ current expectations; (4) the completion of studies, including optimization studies, improvement studies; scoping studies and pre-feasibility and feasibility studies, on the timelines currently expected and the results of those studies being consistent with Kinross’ current expectations, including the completion of the Lobo-Marte and Peak feasibility studies and Udinsk pre-feasibility study; (5) the exchange rate between the Canadian dollar, Brazilian real, Chilean peso, Russian rouble, Mauritanian ouguiya, Ghanaian cedi and the U.S. dollar being approximately consistent with current levels; (6) certain price assumptions for gold and silver; (7) prices for diesel, natural gas, fuel oil, electricity and other key supplies being approximately consistent with the Company’s expectations; (8) production and cost of sales forecasts for the Company meeting expectations; (9) the accuracy of: the current mineral reserve and mineral resource estimates of the Company including the accuracy and reliability of the pre-acquisition mineral resource estimates of the Peak project and Kinross’ analysis thereof being consistent with expectations (including but not limited to ore tonnage and ore grade estimates), future mineral resource and mineral reserve estimates being consistent with preliminary work undertaken by the Company, mine plans for the Company’s current and future mining operations, and the Company’s internal models; (10) labour and materials costs increasing on a basis consistent with Kinross’ current expectations; (11) the terms and conditions of the legal and fiscal stability agreements for the Tasiast and Chirano operations being interpreted and applied in a manner consistent with their intent and Kinross’ expectations and without material amendment or formal dispute (including without limitation the application of tax, customs and duties exemptions and royalties); (12) goodwill and/or asset impairment potential; (13) the regulatory and legislative regime regarding mining, electricity production and transmission (including rules related to power tariffs) in Brazil being consistent with Kinross’ current expectations; (14) access to capital markets, including but not limited to maintaining our current credit ratings consistent with the Company’s current expectations; (15) that the Brazilian power plants will operate in a manner consistent with our expectations; (16) that drawdown of remaining funds under the Tasiast project financing will proceed in a manner consistent with our current expectations; (17) potential direct or indirect operational impacts resulting from infectious diseases or pandemics such as the ongoing COVID-19 pandemic; (18) the effectiveness of preventative actions and contingency plans put in place by the Company to respond to the COVID-19 pandemic, including, but not limited to, social distancing, a travel restrictions, business continuity plans, and efforts to mitigate supply chain disruptions; (19) changes in national and local government legislation or other government actions, particularly in response to the COVID-19 outbreak; (20) litigation, regulatory proceedings and audits, and the potential ramifications thereof, being concluded in a manner consistent with the Corporation’s expectations (including without limitation the audit of mining companies in Ghana which includes the Corporation’s Ghanaian subsidiaries, litigation in Chile relating to the alleged damage of wetlands and the scope of any remediation plan or other environmental obligations arising therefrom, the ongoing litigation with the Russian tax authorities regarding dividend withholding tax and the ongoing Sunnyside litigation regarding potential liability under the U.S. Comprehensive Environmental Response, Compensation, and Liability Act); (21) that the Company will enter into definitive documentation with the Government of Mauritania substantially in accordance with the terms and conditions of the term sheet, on a basis consistent with our expectations and that the parties will perform their respective obligations thereunder on the timelines agreed; (22) that the exploitation permit for Tasiast Sud will be issued under the terms and on timelines consistent with our expectations; (23) that the benefits of the contemplated arrangements related to the agreement in principle will result in increased stability at the Company’s operations in Mauritania; and (24) the Company’s financial results, cash flows and future prospects being consistent with Company expectations in amounts sufficient to permit sustained dividend payments. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: the inaccuracy of any of the foregoing assumption, sanctions (any other similar restrictions or
p. 25 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
| Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
penalties) now or subsequently imposed, other actions taken, by, against, in respect of or otherwise impacting any jurisdiction in which the Company is domiciled or operates (including but not limited to the Russian Federation, Canada, the European Union and the United States), or any government or citizens of, persons or companies domiciled in, or the Company’s business, operations or other activities in, any such jurisdiction; reductions in the ability of the Company to transport and refine doré; fluctuations in the currency markets; fluctuations in the spot and forward price of gold or certain other commodities (such as fuel and electricity); changes in the discount rates applied to calculate the present value of net future cash flows based on country-specific real weighted average cost of capital; changes in the market valuations of peer group gold producers and the Company, and the resulting impact on market price to net asset value multiples; changes in various market variables, such as interest rates, foreign exchange rates, gold or silver prices and lease rates, or global fuel prices, that could impact the mark-to-market value of outstanding derivative instruments and ongoing payments/receipts under any financial obligations; risks arising from holding derivative instruments (such as credit risk, market liquidity risk and mark-to-market risk); changes in national and local government legislation, taxation (including but not limited to income tax, advance income tax, stamp tax, withholding tax, capital tax, tariffs, value-added or sales tax, capital outflow tax, capital gains tax, windfall or windfall profits tax, production royalties, excise tax, customs/import or export taxes/duties, asset taxes, asset transfer tax, property use or other real estate tax, together with any related fine, penalty, surcharge, or interest imposed in connection with such taxes), controls, policies and regulations; the security of personnel and assets; political or economic developments in Canada, the United States, Chile, Brazil, Russia, Mauritania, Ghana, or other countries in which Kinross does business or may carry on business; business opportunities that may be presented to, or pursued by, us; our ability to successfully integrate acquisitions and complete divestitures; operating or technical difficulties in connection with mining, development or refining activities; employee relations; litigation or other claims against, or regulatory investigations and/or any enforcement actions, administrative orders or sanctions in respect of the Company (and/or its directors, officers, or employees) including, but not limited to, securities class action litigation in Canada and/or the United States, environmental litigation or regulatory proceedings or any investigations, enforcement actions and/or sanctions under any applicable anti-corruption, international sanctions and/or anti-money laundering laws and regulations in Canada, the United States or any other applicable jurisdiction; the speculative nature of gold exploration and development including, but not limited to, the risks of obtaining necessary licenses and permits; diminishing quantities or grades of reserves; adverse changes in our credit ratings; and contests over title to properties, particularly title to undeveloped properties. In addition, there are risks and hazards associated with the business of gold exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance, or the inability to obtain insurance, to cover these risks). Many of these uncertainties and contingencies can directly or indirectly affect, and could cause, Kinross’ actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Kinross, including but not limited to resulting in an impairment charge on goodwill and/or assets. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management’s expectations and plans relating to the future. All of the forward-looking statements made in this news release are qualified by this cautionary statement and those made in our other filings with the securities regulators of Canada and the United States including, but not limited to, the cautionary statements made in the “Risk Analysis” section of our MD&A for the year ended December 31, 2020 and the Annual Information Form dated March 30, 2020. These factors are not intended to represent a complete list of the factors that could affect Kinross. Kinross disclaims any intention or obligation to update or revise any forward-looking statements or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law.
Key Sensitivities
Approximately 70%-80% of the Company's costs are denominated in U.S. dollars.
A 10% change in foreign currency exchange rates would be expected to result in an approximate $14 impact on production cost of sales per ounce7.
Specific to the Russian rouble, a 10% change in the exchange rate would be expected to result in an approximate $15 impact on Russian production cost of sales per ounce.
Specific to the Brazilian real, a 10% change in the exchange rate would be expected to result in an approximate $25 impact on Brazilian production cost of sales per ounce.
A $10 per barrel change in the price of oil would be expected to result in an approximate $3 impact on production cost of sales per ounce.
A $100 change in the price of gold would be expected to result in an approximate $5 impact on production cost of sales per ounce as a result of a change in royalties.
Other information
Where we say "we", "us", "our", the "Company", or "Kinross" in this news release, we mean Kinross Gold Corporation and/or one or more or all of its subsidiaries, as may be applicable.
The technical information about the Company’s mineral properties contained in this news release has been prepared under the supervision of Mr. John Sims who is a “qualified person” within the meaning of National Instrument 43-101.Mr. Sims was an officer of Kinross until December 31, 2020. Mr. Sims remains the Company’s qualified person as an external consultant.
Source: Kinross Gold Corporation
p. 26 Kinross reports 2020 fourth-quarter and full-year results | www.kinross.com |
Exhibit 99.2
 |
Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
For more information,
please see Kinross’
2020 year-end
Financial Statements, MD&A
and results news release
at www.kinross.com
NEWS RELEASE
Kinross provides update on development projects and full-year 2020 exploration results
Mineral reserves increase 5.7 million gold oz., or 23% year-over-year, to 30 million gold oz.
Kupol and Paracatu extend mine life by one year and Chirano by three years
Toronto, Ontario – February 10, 2021 – Kinross Gold Corporation (TSX:K; NYSE:KGC) (“Kinross” or the “Company”) today provided updates on its development projects, exploration program and its estimated mineral reserves and resources.
(This news release contains forward-looking information about expected financial and operating performance of the Company. All mineral reserves and mineral resources, as well as mine life disclosures, are estimates. All dollar amounts are expressed in U.S. dollars, unless otherwise noted)
Development projects:
| · | Tasiast 24k: Project advancing on schedule and on budget with Tasiast expected to increase throughput to 21,000 t/d by year-end 2021 and to 24,000 t/d by mid-2023. |
| · | Udinsk: Drilling and study work are progressing well. The pre-feasibility study has now commenced and is expected to be completed in Q4 2021; added 259 Au koz. to estimated measured and indicated resources and 94 Au koz. to inferred resources. |
| · | La Coipa Restart: Pre-stripping started on schedule in early January 2021 and first production remains on-track for mid-2022; added 103 Au koz. and 3,266 Ag koz. to mineral reserve estimates as a result of mine plan optimization. |
| · | Lobo-Marte: Feasibility study is on-track for completion in Q4 2021. |
| · | Fort Knox Gilmore: First gold ounces were produced from the new heap leach pad in January 2021 and construction was completed on schedule and under budget. |
| · | Peak: Commenced drilling program and studies for permitting after acquiring 70% of synergistic, Fort Knox “bolt-on” project in September 2020. |
Exploration and Mineral Reserves and Resources1 update:
| · | Kinross added 5.7 million Au oz. to proven and probable mineral reserves in 2020, a 23% year-over-year increase, to 30.0 million Au oz. mainly due to net additions of 6.4 million Au oz. at Lobo-Marte, 446 Au koz. at Chirano and 103 Au koz. at La Coipa, while maintaining a $1,200 per ounce gold price assumption. |
| · | Due to successful exploration and mine optimization programs, Kupol and Paracatu extended mine life by one year to 2025 and 2032 respectively, and Chirano extended mine life by three years to 2025, with further opportunities for additional mine life extensions. |
| · | In 2021, Kinross expects to ramp up its global exploration program with a focus in Russia and Chirano, and will continue to prioritize opportunities within the footprint of existing mines in its global portfolio for mineral resource and reserve additions. |
CEO commentary
J. Paul Rollinson, President and CEO, made the following comments in relation to Kinross’ development projects:
“In 2020, we made excellent progress advancing our high-quality and diversified project pipeline and added 5.7 million gold ounces to our mineral reserve estimates after depletion. We extended mine life at Chirano by three years, and by one year at Kupol and Paracatu, and we continue to focus on opportunities for further mine life extensions. Our successful track record in project development, mine plan optimization and exploration underpins our robust production profile, which is expected to grow by 20% over the next three years.
“The Tasiast 24k and La Coipa projects, which are currently under construction, remain on schedule and are proceeding well. First gold was produced from the Fort Knox Gilmore project’s new heap leach pad, while study and development work at Lobo-Marte, Udinsk and Peak advanced well. We are looking forward to significant project milestones in 2021 and are ramping up our exploration efforts as we continue to strengthen our global portfolio.”
1 See also Kinross’ Annual Mineral Reserve and Mineral Resource Statement, estimated as at December 31, 2020, and explanatory notes starting at page 17.
| p. 1 Kinross provides update on development projects and full-year 2020 exploration results |
|
Kinross Gold Corporation 25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
Development projects
Tasiast 24k project
The Tasiast 24k project remains on budget and on schedule with Tasiast expected to increase throughput capacity to 21,000 t/d by the end of 2021, and then to 24,000 t/d by mid-2023. The project is now approximately 60% complete, with mechanical work on the processing plant and construction of the power plant both proceeding well.
Chulbatkan - Udinsk project
In 2020, drilling at the Chulbatkan license was focused within the Udinsk resource pit – the first project the Company expects to develop on the Chulbatkan license – with a total of more than 60,000 metres of infill drilling completed. The drilling program supported advancement of the Udinsk pre-feasibility study (PFS) and confirmed the layout of the Udinsk deposit within the larger Chulbatkan area. As a result of 2020 optimization and engineering work using a $1,600 per ounce gold price, approximately 259 Au koz. were added to measured and indicated resources and 94 Au koz. to inferred resources in 2020.
The Udinsk PFS commenced in partnership with a global EPCM firm with in-country experience and is expected to be completed in Q4 2021. The PFS will focus on an initial three-stage crush heap leach process flow and potential early works related to infrastructure, with the goal of fast-tracking construction. Kinross is targeting a declaration of mineral reserves at year-end following the expected completion of the PFS. The Company is also studying the viability of a power line connecting the project into the regional grid. First production at Udinsk is anticipated to occur in 2025.
On the larger Chulbatkan license, surface exploration activities such as soil geochemical sampling, induced polarization and magnetic and gravity geophysical surveys were carried out during 2020. These programs resulted in encouraging results which confirmed known targets and led to the discovery of new target areas, with new anomalies identified near the Udinsk resource pit to the northeast and southwest. As a result, the 2021 drilling program will prioritize the soil and geophysics anomalies as part of the first phase of the drilling program and is planned to be subsequently drilled for strike and depth extensions.
Kinross also acquired the land package surrounding the Chulbatkan license in 2020, which increased the total Chulbatkan license area from 120 km2 to approximately 450 km2 (see page 13, Appendix A: Figure 1 for Chulbatkan map). The Company is planning to commence greenfields exploration activities in 2021 in these new areas.
La Coipa Restart and Lobo-Marte
The La Coipa Restart project is progressing well, with pre-stripping starting in early January 2021 as scheduled, and first production remaining on-track for mid-2022. Camp refurbishments were completed in December 2020 and fleet refurbishments are more than half complete. The mobilization of the project management team and of the first major contractors for plant refurbishments have started on schedule.
Kinross added approximately 103 Au koz. and 3,266 Ag koz. in estimated mineral reserves at La Coipa primarily as a result of optimization of the Phase 7 mine plan. The Company also added approximately 206 Au koz. and 1,702 Ag koz. in estimated measured and indicated resources, mainly as a result of the change in gold price assumption for resources. Kinross continues to study opportunities to incorporate adjacent deposits with existing mineral reserves and resources into the La Coipa mine plan and potentially extend mine life.
At the Lobo-Marte project, the feasibility study continues to advance on schedule and is expected to be completed in Q4 2021. The Company is targeting production at Lobo-Marte to commence in 2027 following permitting and after the completion of mining at La Coipa, with construction potentially starting in 2025. Kinross continues to believe that Lobo-Marte has the potential to be a long-life, cornerstone asset with attractive costs.
| p. 2 Kinross provides update on development projects and full-year 2020 exploration results |
|
Kinross Gold Corporation 25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
Alaska projects
At the Fort Knox Gilmore project, the first gold ounces from the new Barnes Creek heap leach pad were poured in January 2021. Infrastructure and processing facilities for the project were completed on schedule and under budget, and the project was fully transferred to the Operations team.
Kinross made good progress advancing the Peak project after acquiring a 70% interest at the end of September 2020. A metallurgical and geotechnical drilling program has commenced, along with engineering and environmental studies for permitting. A close working relationship has also been established with the local Upper Tanana Athabascan Village of Tetlin. A scoping study is expected to be completed in Q2 2021 and a feasibility study is expected to be completed by the end of 2022, with a target for first production in 2024.
2020 Mineral Reserves and Mineral Resources update
(See also the Company’s detailed Annual Mineral Reserve and Mineral Resource Statement estimated as at December 31, 2020 and explanatory notes starting at page 17.)
In preparing the Company’s 2020 year-end mineral reserve and mineral resource estimates as of December 31, 2020, Kinross has maintained its gold price assumption of $1,200 per ounce for mineral reserves.
Given the sustained strong performance of the gold price over the past several years, and to better represent the strong potential of Kinross’ portfolio of drilled mineral inventories, Kinross has increased its gold price assumption for mineral resources to $1,600 per ounce2 from $1,400 per ounce. This change in gold price assumption is expected to have additional impacts on mineral resource estimates going forward as Kinross starts to tailor more of its pit shell plans to a $1,600 per ounce price assumption by conducting further exploration drilling, engineering and mine plan optimization studies across its global portfolio.
Kinross continues to prioritize quality high-margin, low-cost ounces in its portfolio, and maintained its fully-loaded costing methodology.
| Kinross Gold Mineral Reserve and Mineral Resource estimates1,3 | ||||||
|
2019 (Au koz) |
Acquisitions (Au koz) |
Depletion (Au koz) |
Exploration (Au koz) |
Engineering (Au koz) |
2020 (Au koz) | |
| Proven and Probable Reserves | 24,327 | - | (3,059) | 706 | 8,011 | 29,988 |
| Measured and Indicated Resources | 35,508 | 846 | (39) | 1,905 | (5,785) | 32,438 |
| Inferred Resources | 5,866 | 81 | (54) | 1,080 | 2,006 | 8,980 |
Proven and Probable Mineral Reserves
Kinross’ total proven and probable gold reserve estimate increased by 23% to 30.0 million Au oz. at year-end 2020 compared with 24.3 million Au oz. at year-end 2019. The significant net year-over-year increase of 5.7 million Au oz. after depletion was mainly due to additions in Chile at the Lobo-Marte and La Coipa projects, and at Chirano,
2 The mineral resource estimates for the Gil deposit at Fort Knox and Peak project assume a $1,400 per ounce gold price, with Peak’s estimates based on the 2018 preliminary economic assessment. Gil includes 533 Au koz. in estimated measured and indicated resources and 63 Au koz. in estimated inferred resources. Peak includes 846 Au koz. in estimated measured and indicated resources and 81 Au koz. in estimated inferred resources (Kinross’ 70% share).
3 Rounding of values to the 000s may result in apparent discrepancies.
| p. 3 Kinross provides update on development projects and full-year 2020 exploration results |
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Kinross Gold Corporation 25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
which extended mine life by three years to 2025. Additions to estimated mineral reserves at Kupol and Paracatu largely offset depletion and extended mine life by one year at both mines. Highlights of the Company’s net estimated mineral reserve additions include:
| · | 6.4 million Au oz. addition at Lobo-Marte after the project PFS was completed in July 2020 |
| · | 446 Au koz. net addition at Chirano after depletion as a result of exploration and mine plan optimization success, extending mine life to 2025 |
| · | 103 Au koz. addition at La Coipa mainly due to optimization of the mine plan |
At Kupol, an addition of 345 Au koz. to mineral reserves was mainly the result of exploration success, which largely offset depletion and extended mine life by one year to 2025. At Paracatu, an addition of 911 Au koz. to mineral reserves before depletion was a result of mine plan optimization and additional engineering that extended mine life one year to 2032 at the long-life, cornerstone asset.
Kinross’ total proven and probable silver reserve estimate increased to 59.2 million Ag oz. at year-end 2020, compared with 55.7 million Ag oz. at year-end 2019. The increase was mainly due to a 3.3 million Ag oz. reserve addition at La Coipa. Kupol also added 4.0 million Ag oz. during the year, more than offsetting depletion of 3.4 million Ag oz. Silver price assumption for estimated reserves remained at $17 per ounce.
Measured and Indicated Mineral Resources
Kinross’ total estimated measured and indicated gold resources at year-end 2020 were 32.4 million Au oz. compared with 35.5 million Au oz. at year-end 2019. The decrease was mainly due to conversions of mineral resources to mineral reserves at Lobo-Marte and Paracatu, partly offset by the addition of the Peak project.
The Company’s change in gold price assumption to $1,600 per ounce from $1,400 per ounce in estimating its mineral resources, along with optimized resource pits, contributed to year-over-year increases at Maricunga, Round Mountain, Fort Knox, La Coipa and Chulbatkan. The acquisition of Peak also contributed to indicated resource additions.
Kinross’ total estimated measured and indicated silver resources increased by 4.3 million Ag oz. to 39.2 million Ag oz. at year-end 2020, mainly as a result of the acquisition of the Peak project, and additions at La Coipa. Silver price assumption for estimated resources remained at $20 per ounce.
Inferred Mineral Resources
Kinross’ total estimated inferred gold resources at year-end 2020 increased 53% to 9.0 million Au oz. from 5.9 million Au oz. at year-end 2019. The 3.1 million Au oz. net increase was primarily due to the change in the gold price assumption and exploration success, which resulted in increases at Maricunga, Round Mountain, Fort Knox, Paracatu, Chulbatkan and the Curlew Basin exploration project at Kettle River. Engineering changes at Paracatu, Maricunga, Fort Knox and Chulbatkan also contributed to the overall increase in estimated inferred resources.
Exploration update
The Company’s exploration efforts continued to focus within the footprint of existing mines during 2020, with a total of more than 135,000 metres of drilling completed for brownfields projects. While the coronavirus pandemic affected surface drilling at Kupol, underground drilling was not impacted and returned strong results. Drilling programs at Chirano and at the Company’s Americas sites were not materially impacted by COVID-19. Highlights of the 2020 brownfields exploration program include significant results at Kupol and Chirano, which contributed to the extension of mine life for one year to 2025 at Kupol, and three years to 2025 at Chirano, with opportunities for further mine life extensions at both operations.
Exploration efforts and engineering optimization added a total of approximately 8.7 million Au oz. in estimated mineral reserves before depletion in 2020.
| · | Kupol-Dvoinoye: A total of 409 Au koz. were added to estimated mineral reserves which largely offset depletion. Drilling, which tested targets at depth, and at the South and North extensions of the Kupol main vein |
| p. 4 Kinross provides update on development projects and full-year 2020 exploration results |
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Kinross Gold Corporation 25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
system, yielded positive results. Drill intercepts continue to confirm high-grade, narrow-vein mineralization extending northwards and at depth below the Kupol mine workings (see page 13, Appendix A: Figure 2 for Kupol long section). As a result of continued exploration success at Kupol and engineering optimization work at Dvoinoye, scheduled mill production at Kupol has been extended by another year to 2025, with further opportunities for additional extensions.
The regional exploration program planned around the Kupol and Dvoinoye KSP (Kupol Synergy Zone of Influence project) areas was impacted by COVID-19 during the year. The majority of the KSP program, which is targeting the 130 km radius around Kupol based on an economic trucking distance to the mill, was deferred to 2021 (see page 13, Appendix A: Figure 3 for KSP map).
| · | Chirano: Near-mine exploration activities, which included 52,600 metres of drilling in 2020, continued to focus on resource conversion and mine life extension. Exploration and engineering success added 660 Au koz. to its mineral reserve estimates before depletion, which resulted in a three-year mine life extension to 2025, with opportunities for further extensions (see page 13, Appendix A: Figure 4 for long section of Chirano). |
For 2021, the exploration budget (brownfields and greenfields) was increased to $120 million compared with $90 million in 2020. The increase is largely due to programs that will follow up on 2020’s exploration success and the acquisition of advanced exploration properties such as the 1,214 km2 Kayenmyvaam license in Russia, which is largely within the KSP, and the Peak development project in Alaska.
| · | Kupol-Dvoinoye: Kinross expects to spend up to $24 million in 2021 to explore targets within the KSP, including the promising Kayenmyvaam license and the Kavralyanskaya license, which the Company received permits to explore in 2020. These targets, together with deferred work on numerous prospective tenements in the KSP, will continue to be a focus for 2021 (see page 13, Appendix A: Figure 3 for KSP map). |
| · | Kupol Minex: During 2020, near-mine exploration activities identified the southern extension of the Vtoriy target and the main Kupol strike. Surface drilling intersected high grades from both Vtoriy and the Kupol trend, which could potentially be a significant extension off the Kupol strike that is untested to the south. The Company is expected to continue studying the North Extension of the Kupol vein system beyond the Northeast Extension into Zone 42, where drilling continued to intercept narrow, high-grade veins (see page 13, Appendix A: Figure 2 for Kupol long section). |
| · | Chirano: The Company is increasing exploration spending at Chirano to $12 million in 2021 to drill depth extensions at Obra, Akwaaba, Suraw and Tano. The budget includes the construction of an exploration decline to drill the northerly plunge extensions of the Obra high grade shoot from underground. In addition to the underground drilling program, plans include continuing to explore for open pit mining material near the Mamnao open pit operation. The Company is targeting conversion of a significant portion of estimated mineral resources to mineral reserves in 2021 and 2022 from Obra, Akwaaba, Suraw, Tano and Mamnao (see page 13, Appendix A: Figure 4 for long section of Chirano). |
| · | Bald Mountain: Kinross expects to spend $6.5 million at Bald Mountain in 2021 with an increased focus on drill testing targets identified in 2020 to explore for both intrusive-related and sediment-hosted type deposits that can be potentially converted to mineral resources in subsequent years. Near-mine targets in the North area of Bald Mountain – such as Duke, Galaxy, Bida and Royale – are expected to be explored during 2021. |
| · | Round Mountain: A large portion of the $6 million budget allocated for Round Mountain in 2021 is expected to focus on drilling the Phase X deposit. One part of the program plans to continue defining the narrow structurally controlled high-grade vein at the upper portions of Phase X that was identified in 2020. In addition, drilling is expected to test along-strike and down-dip extents of the mineralized structures with the goal of delineating high-grade material for potential underground mining. |
| · | Fort Knox: Kinross is budgeting $5.5 million at Fort Knox, with the goal of converting mineral resources to mineral reserves at Gil-Sourdough and to continue to explore the western extension of Gilmore. The Company also expects to explore the newly-acquired Peak property to advance drill targets near the vicinity of the expected Peak pit area. |
| p. 5 Kinross provides update on development projects and full-year 2020 exploration results |
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Kinross Gold Corporation 25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
A more detailed summary of the 2020 highlights is presented below. Additional details may be found in the Appendices.
“Appendix A” provides illustrations, captions, and accompanying explanatory notes, and “Appendix B” provides complete drilling results and drill hole location data corresponding to the values below.
Appendix A: Refer to page 13 of this news release.
Appendix B: Full drill results https://www.kinross.com/exploration-drill-results-Appendix-B-Q4-YE-2020
Kupol - Dvoinoye
The Kupol Minex exploration program, along with Dvoinoye exploration, successfully added 409 Au koz. to estimated mineral reserves in 2020, largely replacing depletion for the second consecutive year and adding one year of mine life at Kupol to 2025. This addition is the largest at Kupol since 2014, with major portions delineated from the Kupol Deeps and the North Extension of the Kupol main vein. Additions were also realized from Zone 37 West, Moroshka South and Providence.
Six underground and two surface drill rigs continue to operate at Kupol with the goal of delineating inferred resources and upgrading mineral resources to reserves. Significant results received from late 2020 drilling have delineated substantial mineralization that was previously unrecognized at the southern extension of the Kupol ore body, which the Company expects to continue exploring in 2021 from both surface and underground (see page 13, Appendix A: Figure 2 for Kupol long section).
The 2020 regional exploration program within the KSP area was impacted by the COVID-19 pandemic, and most of the exploration planned in 2020 was deferred to 2021. Notwithstanding this impact, a total of 33,200 metres of drilling was completed during 2020, with activities also focused on preparations for 2021, including the logistical coordination of remote camps for both the Kavralyanskaya and Kayenmyvaam project areas. These two areas are expected to be the priority for the KSP exploration drilling program this year, with the initial exploration program at Kayenmyvaam expected to focus on target generation from geochemical and geophysical mapping activities (see page 13, Appendix A: Figure 3 for KSP map).
Kupol Mining Licence and Kupol West Property significant down-hole drill intercepts
| Hole ID | From | To | Interval (m) |
Au (g/t) |
Ag (g/t) |
| KP20-1613 | 90.6 | 91 | 0.4 | 1,000.0 | 2,000.0 |
| KP20-1613 | 89.6 | 90.6 | 1.0 | 290.9 | 2,000.0 |
| KP20-1620 | 131.6 | 132.6 | 1.0 | 30.8 | 366.3 |
| KP20-1621 | 140.7 | 141.1 | 0.4 | 30.3 | 175.6 |
| KP20-1620 | 134.2 | 134.9 | 0.7 | 16.9 | 419.8 |
| KP20-1621 | 144.1 | 145.1 | 1.0 | 10.4 | 51.2 |
| KP20-1620 | 132.6 | 133.2 | 0.6 | 12.1 | 157.1 |
For full drill results and explanatory notes, see Appendix B.
| Kupol Mineral Reserve and Mineral Resource estimates – GOLD1,3 | ||||
2019 (Au koz) |
Depletion (Au koz) |
Exploration
& (Au koz) |
2020 (Au koz) | |
| Proven and Probable Reserves | 1,353 | (383) | 345 | 1,314 |
| Measured and Indicated Resources | 496 | - | 5 | 500 |
| Inferred Resources | 489 | - | (217) | 272 |
p. 6 Kinross provides update on development projects and full-year 2020 exploration results
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Kinross Gold Corporation 25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
| Dvoinoye Mineral Reserve and Mineral Resource estimates – GOLD1,3 | ||||
2019 (Au koz) |
Depletion (Au koz) |
Exploration
& (Au koz) |
2020 (Au koz) | |
| Proven
and Probable Reserves |
336 | (178) | 64 | 223 |
| Measured
and Indicated Resources |
15 | - | 4 | 20 |
| Inferred Resources | 43 | - | 3 | 45 |
Chirano
The 2020 near-mine exploration activities at Chirano continued to focus on resource conversions and mine life extension (see page 13, Appendix A: Figure 3 for long section of Chirano). A total of 52,500 metres of drilling was completed in 2020 resulting in a net reserve increase of 446 Au koz. after depletion and a three-year mine life extension to 2025. In addition, the Company is targeting a significant portion of estimated mineral resources for potential conversion to mineral reserves in 2021 and 2022 from Obra, Akwaaba, Suraw, Tano and Mamnao.
In 2020, drilling at Obra continued to demonstrate the potential for underground mining and the continuity of a high-grade shoot that was first encountered in 2019. As a result of these encouraging results, Kinross plans to construct an exploration decline in 2021 in order to drill the northerly plunge extensions of the high-grade shoot from underground.
The 2020 Akwaaba drilling program focused on testing the potential of further resource extensions beneath the current base of mineral reserves and probe up-plunge to test for continuity in the Akwaaba upper hanging wall shoot. Results confirmed and added to mineral reserves four mining levels in areas 100 metres below the 2019 mineral reserve depth, with mineralized extensions to the south within favourable lithologies.
A new near-surface mineralized structure was also identified to the immediate west and parallel to the Mamnao pit over a strike length of approximately 350 metres. The drilling and mapping has demonstrated near oxide surface potential with indications for future expansions of multiple sub-parallel structures and possible mineral reserve additions.
| Chirano Mineral Reserve and Mineral Resource estimates1,3 | ||||
2019 (Au koz) |
Depletion (Au koz) |
Exploration
& (Au koz) |
2020 (Au koz) | |
| Proven
and Probable Reserves |
528 | (215) | 660 | 974 |
| Measured
and Indicated Resources |
924 | (7) | (288) | 628 |
| Inferred Resources | 443 | - | (67) | 376 |
p. 7 Kinross provides update on development projects and full-year 2020 exploration results
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Kinross Gold Corporation 25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
Chirano significant down-hole drill intercepts
| Hole ID | From | To | Interval (m) |
True Width (m) |
Au (g/t) |
| CHRC2844D | 528.0 | 566.5 | 38.5 | 31.5 | 3.2 |
| including | 543.5 | 566.5 | 23.0 | 18.8 | 4.5 |
| CHRC2911D | 442.0 | 503.7 | 61.7 | 42.5 | 1.9 |
| including | 463.6 | 471.0 | 7.5 | 5.2 | 4.1 |
| CHRC2913D | 407.4 | 449.6 | 42.2 | 34.0 | 2.8 |
| including | 411.4 | 438.0 | 26.7 | 21.5 | 3.3 |
| CHRC2886D | 631.6 | 642.9 | 11.3 | 10.0 | 9.8 |
| including | 631.6 | 637.0 | 5.4 | 4.8 | 15.6 |
| CHRC2927D | 550.8 | 587.0 | 36.3 | 27.5 | 2.8 |
| including | 557.9 | 561.0 | 3.1 | 2.2 | 9.6 |
| CHDD2929UG | 203.8 | 216.9 | 13.1 | 9.50 | 7.6 |
For full drill results and explanatory notes, see Appendix B.
Bald Mountain
Exploration activities focused on near-mine and generative targets in 2020 and a total of approximately 19,700 metres of drilling was completed. At year-end, approximately 50% of depleted reserves were replaced through exploration and engineering optimization work. Drilling focused in the North area where encouraging drill results were received in the area between Duke and Duke South, (17.9 metres @ 1.4 g/t Au). At Bida, thick sections of mineralized rock were intersected in four holes to the east of the resource (82 metres @ 0.4g/t Au).
Generative exploration drill-tested 14 target areas along with fieldwork on an additional five targets to define future drilling. Encouraging results at Wino (57 metres @ 0.31 g/t Au and 27 metres @ 0.34 g/t Au) were received in zones of intrusive-related mineralization in the southern portion of the Numbers deposit in the North area. At West Mooney, drilling intercepted gold-bearing silicified breccia hosted in volcanic rocks. The program for 2021 plans to continue exploring these generative targets in the North area.
Bald Mountain significant down-hole drill intercepts
| Hole ID | From | To | Interval (m) |
Au (g/t) |
| RB20-002 | 169.2 | 182.9 | 13.7 | 5.4 |
| WR20-013 | 21.3 | 48.8 | 27.4 | 2.1 |
| WP20-020 | 83.8 | 109.7 | 25.9 | 1.9 |
| B20-008 | 91.4 | 167.6 | 76.2 | 0.6 |
| WP20-021 | 56.4 | 94.5 | 38.1 | 1.1 |
| BD20-009 | 128.0 | 210.6 | 82.6 | 0.4 |
| B20-010 | 184.4 | 253.0 | 68.6 | 0.4 |
| B20-007 | 114.3 | 181.4 | 67.1 | 0.4 |
| GXD20-002 | 83.1 | 106.7 | 23.6 | 1.2 |
| RBD19-019 | 111.0 | 132.4 | 21.5 | 1.2 |
For full drill results and explanatory notes, see Appendix B.
p. 8 Kinross provides update on development projects and full-year 2020 exploration results
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Kinross Gold Corporation 25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
| Bald Mountain Mineral Reserve and Mineral Resource estimates1,3 | ||||
2019 (Au koz) |
Depletion (Au koz) |
Exploration
& (Au koz) |
2020 (Au koz) | |
| Proven
and Probable Reserves |
1,277 | (269) | 135 | 1,143 |
| Measured
and Indicated Resources |
3,862 | (20) | (251) | 3,592 |
| Inferred Resources | 808 | (2) | (112) | 695 |
Fort Knox
Exploration efforts at Fort Knox focused on the satellite Gil-Sourdough deposit, located 13 kilometres east of Fort Knox, with continued drilling in the western and eastern resource areas of the Fort Knox mine. Generative exploration carried out in 2020 tested targets within the northeast of the Fort Knox land area. A total of approximately 8,500 metres of drilling was completed in 2020.
Along the Northwest Bulge area, drilling was designed to delineate granite contact and to test for continuity of the Dandelion ore-shears. Drilling, pit optimization and the increase in the resource gold price assumption added 563 Au koz. to Kinross’ estimated measured and indicated mineral resources and a net increase of 283 Au koz. to its estimated inferred mineral resource, with a large portion attributed to the increase in gold price assumption used in the evaluation.
At Gil-Sourdough, the 2020 program sought to convert and upgrade inferred resources to reserves within the scoping-level pit design, and to focus on the conversion of mineral resources to mineral reserves in the West North Gil extension zone. Resource estimation using the new drill data is expected to be completed during the first half of 2021.
In 2021, exploration will focus on extending the Gil-Sourdough deposit, and assessing targets in the northeast of the district and beyond.
Fort Knox significant down-hole drill intercepts
| Hole ID | From | To | Interval (m) |
Au (g/t) |
| FFC20-1805 | 121.9 | 125.0 | 3.0 | 23.1 |
| GC20-760 | 21.3 | 29.1 | 7.8 | 7.1 |
| including | 25.9 | 27.4 | 1.5 | 12.5 |
| including | 27.4 | 29.1 | 1.7 | 18.5 |
| GR20-779 | 57.9 | 67.1 | 9.1 | 3.5 |
| including | 64.0 | 67.1 | 3.0 | 6.7 |
| GR20-797 | 15.2 | 24.4 | 9.1 | 3.3 |
| including | 15.2 | 16.8 | 1.5 | 8.9 |
For full drill results and explanatory notes, see Appendix B.
p. 9 Kinross provides update on development projects and full-year 2020 exploration results
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Kinross Gold Corporation 25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
| Fort Knox Mineral Reserve and Mineral Resource estimates1,3 | ||||
2019 (Au koz) |
Depletion (Au koz) |
Exploration
& (Au koz) |
2020 (Au koz) | |
| Proven and Probable Reserves | 2,801 | (321) | (10) | 2,471 |
| Measured and Indicated Resources | 2,026 | - | 563 | 2,589 |
| Inferred Resources | 774 | (47) | 330 | 1,057 |
Curlew Basin Exploration Project (Kettle River)
The Curlew Basin Exploration (CBX) Project, which is located approximately 35 kilometres north of the Kettle River mill, continued to advance a three-year, multi-stage program to explore high-margin ounces for the potential future development on an existing mineral resource. The CBX Project involves dewatering, rehab, and exploration drift development for 15,000 metres of underground drilling with the goal of discovering new zones of mineralization, extend known mineralization, and provide critical infill on an existing mineral resource.
In 2020, approximately 5,100 metres were drilled over eight target areas in the Curlew district. Underground drilling led to the discovery of the Galaxie Vein (2.3 metres @ 5.87g/t Au) and surface drilling provided high-grade vein extensions at the Marlin target (0.4 metres @ 38 g/t Au, 1.0 metres @ 11.27g/t Au). The K2 deep vein structure was extended along strike by approximately 300 metres and a 50-metre dip extension. Drilling and preliminary engineering work added 292 Au koz. to the Company’s estimated inferred resources in 2020.
Curlew Basin Project significant down-hole drill intercepts
| Hole ID | From | To | Interval (m) |
True
Width (m) |
Au (g/t) |
| 1047 | 234.8 | 242.4 | 7.6 | 2.5 | 5.9 |
| including | 238.0 | 239.0 | 1.0 | 0.3 | 13.3 |
| 1047 | 264.6 | 272.1 | 7.6 | 2.8 | 6.0 |
| including | 266.2 | 267.2 | 1.0 | 0.4 | 32.5 |
| 1048 | 16.6 | 22.3 | 5.7 | 4.1 | 3.8 |
| 1048 | 31.0 | 34.4 | 3.4 | 2.8 | 5.1 |
| including | 33.3 | 33.8 | 0.5 | 0.5 | 15.9 |
| 1051 | 267.4 | 271.1 | 3.7 | 3.1 | 5.4 |
| 1052 | 145.9 | 146.8 | 0.9 | 0.5 | 17.6 |
| 1052 | 226.7 | 227.4 | 0.6 | 0.3 | 38.0 |
For full drill results and explanatory notes, see Appendix B.
| Kettle River Mineral Resource Estimates1,3 | ||||
2019 (Au koz) |
Depletion (Au koz) |
Exploration
& (Au koz) |
2020 (Au koz) | |
| Measured
and Indicated Resources |
162 | - | 74 | 236 |
| Inferred Resources | 85 | - | 292 | 378 |
p. 10 Kinross provides update on development projects and full-year 2020 exploration results
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Kinross Gold Corporation
25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
Round Mountain
A total of 11,500 metres of drilling was completed over four target areas – Phase X, the northeast end of the pit, Atlas (south Caldera rim), and Gold Hill – during 2020. Phase X drilling confirmed the continuity of mineralized structures. Most of the mineral resource additions in 2020 were the result of an increase in the gold price assumption used in the engineering optimization.
In 2021, the exploration program will be focused on testing extensions at Phase X and beyond, with the goal of optimizing a potential pit shell design. The program is also expected to continue exploration drilling at Gold Hill and exploring other near-mine targets, and conducting regional exploration work.
Round Mountain significant down-hole drill intercepts
| Hole ID | From | To |
Interval (m) |
Au (g/t) |
| D-1106 | 474.0 | 562.4 | 88.4 | 3.2 |
| including | 474.0 | 499.9 | 25.9 | 4.9 |
| D-1106 | 509.0 | 512.1 | 3.0 | 9.6 |
| D-1106 | 539.5 | 547.1 | 7.6 | 6.6 |
| D-1102 | 131.1 | 144.8 | 13.7 | 0.5 |
| and | 208.8 | 265.2 | 56.4 | 1.9 |
| including | 211.8 | 213.4 | 1.5 | 26.7 |
| D-1108 | 562.4 | 563.0 | 0.6 | 151.0 |
| D-1107 | 373.4 | 426.7 | 53.3 | 1.5 |
| and | 623.3 | 643.1 | 19.8 | 4.5 |
For full drill results and explanatory notes, see Appendix B.
| Round Mountain Mineral Reserve and Mineral Resource estimates1,3 | ||||
|
2019 (Au koz) |
Depletion (Au koz) |
Exploration & Engineering (Au koz) |
2020 (Au koz) | |
| Proven and Probable Reserves | 2,421 | (288) | 112 | 2,245 |
| Measured and Indicated Resources | 2,834 | - | 900 | 3,734 |
| Inferred Resources | 1,072 | (5) | 496 | 1,563 |
Greenfields exploration update
In 2020, Kinross greenfields exploration program focused on targets in Nevada, the Abitibi region in Quebec and Ontario, Manitoba, areas of Eastern Russia, and northern Finland’s greenstone belts. Approximately 35,000 metres of drilling was completed on 12 greenfields projects, the majority of which are in North America.
In North America, Kinross explored projects in both joint venture (JV) and 100%-owned Kinross claims. Kinross and its JV partners undertook geochemical sampling, ground and airborne geophysical surveys and drilling programs. At several projects, exploration work identified indications of mineralization and generated prospective targets, with first and second phase drilling programs completed in 2020. The Company and its JV partners have also identified new opportunities in Nevada, Ontario, Manitoba, Far East Russia and Finland, and are reviewing potential drilling programs at these projects for 2021.
p. 11 Kinross provides update on development projects and full-year 2020 exploration results
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Kinross Gold Corporation
25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
In Canada, exploration focused on properties which are under JV agreements and where Kinross is the operator, including, the Van Horne property in Ontario and the Laguna, Laguna North, and Berry Creek properties in Manitoba. Exploration work is expected to continue in 2021 after encouraging results in 2020.
Kinross’ greenfields exploration strategy continues to focus on strategic investments and partnerships with high-quality junior exploration companies to pursue high-margin deposits and opportunities. Kinross also focuses on fostering relationships with management teams that have a successful track record of discovery and maintaining a solid pipeline of quality targets that demonstrate scope and scale for significant discovery.
Conference call details
In connection with this news release, Kinross will hold a conference call and audio webcast on Thursday, February 11, 2021 at 8 a.m. ET to discuss the results, followed by a question-and-answer session. To access the call, please dial:
Canada & US toll-free – +1 (833) 968-2237; Passcode: 9694745
Outside of Canada & US – +1 (825) 312-2059; Passcode: 9694745
Replay (available up to 14 days after the call):
Canada & US toll-free – +1 (800) 585-8367; Passcode: 9694745
Outside of Canada & US – +1 (416) 621-4642; Passcode: 9694745
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 our website at www.kinross.com.
This release should be read in conjunction with Kinross’ 2020 year-end Financial Statements and Management’s Discussion and Analysis report at www.kinross.com. Kinross’ 2020 year-end Financial Statements and Management’s Discussion and Analysis have been filed with Canadian securities regulators (available at www.sedar.com) and furnished with the U.S. Securities and Exchange Commission (available at www.sec.gov). Kinross shareholders may obtain a copy of the financial statements free of charge upon request to the Company.
About Kinross Gold Corporation
Kinross is a Canadian-based senior gold mining company with mines and projects in the United States, Brazil, Russia, Mauritania, Chile and Ghana. Our focus is on delivering value based on the core principles of operational excellence, balance sheet strength, disciplined growth and responsible mining. Kinross maintains listings on the Toronto Stock Exchange (symbol:K) and the New York Stock Exchange (symbol:KGC).
Media Contact
Louie Diaz
Vice-President, Corporate Communications
phone: 416-369-6469
louie.diaz@kinross.com
Investor Relations Contact
Tom Elliott
Senior Vice-President, Investor Relations
phone: 416-365-3390
tom.elliott@kinross.com
p. 12 Kinross provides update on development projects and full-year 2020 exploration results
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Kinross Gold Corporation
25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
APPENDIX A
Refer to Appendix B for detailed drill results, available at: https://www.kinross.com/exploration-drill-results-Appendix-B-Q4-YE-2020
Chulbatkan - Udinsk
Figure 1. Map of Udinsk development project, the first project Kinross expects to develop on the larger Chulbatkan license. The inner blue outline was the original license area prior to Kinross’ acquisition of the larger surrounding area, which is outlined by the outer blue line. The total Chulbatkan license now totals 450 km2.
Kupol
p. 13 Kinross provides update on development projects and full-year 2020 exploration results
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Kinross Gold Corporation
25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
Figure 2. Long section of Kupol shows known mineralization and minex growth since 2016.
p. 14 Kinross provides update on development projects and full-year 2020 exploration results
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Kinross Gold Corporation
25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
Kupol-Dvoinoye KSP
Figure 3. Map of KSP program area, which is targeting the 130 km radius around Kupol based on an economic trucking distance to the mill. Exploration on the promising Kayenmyvaam and the Kavralyanskaya licenses will be a focus in 2021.
p. 15 Kinross provides update on development projects and full-year 2020 exploration results
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Kinross Gold Corporation
25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
Chirano
Figure 4. Chirano exploration growth from 2015 to 2020, with areas of significant growth outlined. A total of 52,500 metres of drilling was completed in 2020 resulting in a net reserve increase of 446 Au koz. after depletion and a three-year mine life extension to 2025. In addition, the Company is targeting a significant portion of estimated mineral resources for potential conversion to mineral reserves in 2021 and 2022 from Obra, Akwaaba, Suraw, Tano and Mamnao.
p. 16 Kinross provides update on development projects and full-year 2020 exploration results
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Kinross Gold Corporation
25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
2020 Annual Mineral Reserve and Resource Statement
Proven and Probable Mineral Reserves
| MINERAL RESERVE AND MINERAL RESOURCE STATEMENT | GOLD | |||||||||||
| PROVEN AND PROBABLE MINERAL RESERVES (1,2,3,4,5,6) | ||||||||||||
| Kinross Gold Corporation's Share at December 31, 2020 | ||||||||||||
| Property | Location | Kinross | Proven | Probable | Proven and Probable | |||||||
| Interest | Tonnes | Grade | Ounces | Tonnes | Grade | Ounces | Tonnes | Grade | Ounces | |||
| (%) | (kt) | (g/t) | (koz) | (kt) | (g/t) | (koz) | (kt) | (g/t) | (koz) | |||
| NORTH AMERICA | ||||||||||||
| Bald Mountain | USA | 100.0% | - | - | - | 58,647 | 0.6 | 1,143 | 58,647 | 0.6 | 1,143 | |
| Fort Knox | USA | 100.0% | 36,440 | 0.4 | 425 | 193,575 | 0.3 | 2,046 | 230,015 | 0.3 | 2,471 | |
| Round Mountain | 7 | USA | 100.0% | 4,979 | 0.5 | 81 | 84,189 | 0.8 | 2,164 | 89,168 | 0.8 | 2,245 |
| SUBTOTAL | 41,419 | 0.4 | 506 | 336,411 | 0.5 | 5,353 | 377,830 | 0.5 | 5,859 | |||
| SOUTH AMERICA | ||||||||||||
| La Coipa | 8 | Chile | 100.0% | 370 | 0.5 | 5 | 16,969 | 1.6 | 866 | 17,339 | 1.6 | 871 |
| Lobo-Marte | Chile | 100.0% | - | - | - | 146,771 | 1.4 | 6,394 | 146,771 | 1.4 | 6,394 | |
| Paracatu | Brazil | 100.0% | 519,250 | 0.4 | 7,221 | 72,309 | 0.3 | 802 | 591,559 | 0.4 | 8,023 | |
| SUBTOTAL | 519,620 | 0.4 | 7,226 | 236,049 | 1.1 | 8,062 | 755,669 | 0.6 | 15,288 | |||
| AFRICA | ||||||||||||
| Chirano | Ghana | 90.0% | 5,775 | 1.7 | 314 | 9,926 | 2.1 | 660 | 15,701 | 1.9 | 974 | |
| Tasiast | Mauritania | 100.0% | 44,810 | 1.2 | 1,797 | 66,664 | 2.1 | 4,533 | 111,474 | 1.8 | 6,330 | |
| SUBTOTAL | 50,585 | 1.3 | 2,111 | 76,590 | 2.1 | 5,193 | 127,175 | 1.8 | 7,304 | |||
| RUSSIA | ||||||||||||
| Dvoinoye | Russia | 100.0% | 1,275 | 4.1 | 167 | 149 | 11.7 | 56 | 1,424 | 4.9 | 223 | |
| Kupol | Russia | 100.0% | 794 | 10.1 | 257 | 4,938 | 6.7 | 1,057 | 5,732 | 7.1 | 1,314 | |
| SUBTOTAL | 2,069 | 6.4 | 424 | 5,087 | 6.8 | 1,113 | 7,156 | 6.7 | 1,537 | |||
| TOTAL GOLD | 613,693 | 0.5 | 10,267 | 654,137 | 0.9 | 19,721 | 1,267,830 | 0.7 | 29,988 | |||
| MINERAL RESERVE AND MINERAL RESOURCE STATEMENT | SILVER | |||||||||||
| PROVEN AND PROBABLE MINERAL RESERVES (1,2,3,4,5,6) | ||||||||||||
| Kinross Gold Corporation's Share at December 31, 2020 | ||||||||||||
| Property | Location | Kinross | Proven | Probable | Proven and Probable | |||||||
| Interest | Tonnes | Grade | Ounces | Tonnes | Grade | Ounces | Tonnes | Grade | Ounces | |||
| (%) | (kt) | (g/t) | (koz) | (kt) | (g/t) | (koz) | (kt) | (g/t) | (koz) | |||
| NORTH AMERICA | ||||||||||||
| Round Mountain | 7 | USA | 100.0% | - | - | - | 6,945 | 6.3 | 1,414 | 6,945 | 6.3 | 1,414 |
| SUBTOTAL | - | - | - | 6,945 | 6.3 | 1,414 | 6,945 | 6.3 | 1,414 | |||
| SOUTH AMERICA | ||||||||||||
| La Coipa | 8 | Chile | 100.0% | 370 | 56.7 | 675 | 16,969 | 73.7 | 40,196 | 17,339 | 73.3 | 40,871 |
| SUBTOTAL | 370 | 56.7 | 675 | 16,969 | 73.7 | 40,196 | 17,339 | 73.3 | 40,871 | |||
| RUSSIA | ||||||||||||
| Dvoinoye | Russia | 100.0% | 1,275 | 8.1 | 332 | 149 | 33.4 | 160 | 1,424 | 10.8 | 492 | |
| Kupol | Russia | 100.0% | 794 | 101.5 | 2,590 | 4,938 | 87.1 | 13,835 | 5,732 | 89.1 | 16,425 | |
| SUBTOTAL | 2,069 | 43.9 | 2,922 | 5,087 | 85.6 | 13,995 | 7,156 | 73.5 | 16,917 | |||
| TOTAL SILVER | 2,439 | 45.9 | 3,597 | 29,001 | 59.6 | 55,605 | 31,440 | 58.6 | 59,202 | |||
See page 20 of this news release for details of the footnotes referenced within the table above.
p. 17 Kinross provides update on development projects and full-year 2020 exploration results
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Kinross Gold Corporation
25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
Measured and Indicated Mineral Resources
| MINERAL RESERVE AND MINERAL RESOURCE STATEMENT | GOLD | |||||||||||
| MEASURED AND INDICATED MINERAL RESOURCES (EXCLUDES PROVEN AND PROBABLE MINERAL RESERVES) (2,3,4,5,6,9,10,11) | ||||||||||||
| Kinross Gold Corporation's Share at December 31, 2020 | ||||||||||||
| Property | Location | Kinross | Measured | Indicated | Measured and Indicated | |||||||
| Interest | Tonnes | Grade | Ounces | Tonnes | Grade | Ounces | Tonnes | Grade | Ounces | |||
| (%) | (kt) | (g/t) | (koz) | (kt) | (g/t) | (koz) | (kt) | (g/t) | (koz) | |||
| NORTH AMERICA | ||||||||||||
| Bald Mountain | USA | 100.0% | 9,150 | 0.8 | 233 | 197,315 | 0.5 | 3,359 | 206,465 | 0.5 | 3,592 | |
| Fort Knox | USA | 100.0% | 13,496 | 0.2 | 103 | 253,524 | 0.3 | 2,486 | 267,020 | 0.3 | 2,589 | |
| Kettle River | USA | 100.0% | - | - | - | 1,133 | 6.5 | 236 | 1,133 | 6.5 | 236 | |
| Peak Gold | 12 | USA | 70.0% | 331 | 6.4 | 68 | 6,110 | 4.0 | 778 | 6,441 | 4.1 | 846 |
| Round Mountain | 7 | USA | 100.0% | - | - | - | 173,376 | 0.7 | 3,734 | 173,376 | 0.7 | 3,734 |
| SUBTOTAL | 22,977 | 0.5 | 404 | 631,458 | 0.5 | 10,593 | 654,435 | 0.5 | 10,997 | |||
| SOUTH AMERICA | ||||||||||||
| La Coipa | 8 | Chile | 100.0% | 4,030 | 1.8 | 235 | 18,205 | 1.6 | 926 | 22,235 | 1.6 | 1,161 |
| Lobo-Marte | Chile | 100.0% | - | - | - | 98,925 | 0.7 | 2,167 | 98,925 | 0.7 | 2,167 | |
| Maricunga | Chile | 100.0% | 35,555 | 0.8 | 905 | 312,171 | 0.6 | 6,166 | 347,726 | 0.6 | 7,071 | |
| Paracatu | Brazil | 100.0% | 138,606 | 0.3 | 1,225 | 170,464 | 0.3 | 1,749 | 309,070 | 0.3 | 2,974 | |
| SUBTOTAL | 178,191 | 0.4 | 2,365 | 599,765 | 0.6 | 11,008 | 777,956 | 0.5 | 13,373 | |||
| AFRICA | ||||||||||||
| Chirano | Ghana | 90.0% | 4,667 | 1.8 | 269 | 7,171 | 1.6 | 359 | 11,838 | 1.7 | 628 | |
| Tasiast | Mauritania | 100.0% | 4,826 | 0.7 | 109 | 70,445 | 1.2 | 2,644 | 75,271 | 1.1 | 2,753 | |
| SUBTOTAL | 9,493 | 1.2 | 378 | 77,616 | 1.2 | 3,003 | 87,109 | 1.2 | 3,381 | |||
| RUSSIA | ||||||||||||
| Chulbatkan | 13 | Russia | 100.0% | - | - | - | 105,708 | 1.2 | 4,167 | 105,708 | 1.2 | 4,167 |
| Dvoinoye | Russia | 100.0% | 3 | 5.9 | 1 | 57 | 10.4 | 19 | 60 | 10.1 | 20 | |
| Kupol | Russia | 100.0% | 279 | 11.4 | 102 | 1,575 | 7.9 | 398 | 1,854 | 8.4 | 500 | |
| SUBTOTAL | 282 | 11.4 | 103 | 107,340 | 1.3 | 4,584 | 107,622 | 1.4 | 4,687 | |||
| TOTAL GOLD | 210,943 | 0.5 | 3,250 | 1,416,179 | 0.6 | 29,188 | 1,627,122 | 0.6 | 32,438 | |||
| MINERAL RESERVE AND MINERAL RESOURCE STATEMENT | SILVER | |||||||||||
| MEASURED AND INDICATED MINERAL RESOURCES (EXCLUDES PROVEN AND PROBABLE MINERAL RESERVES) (2,3,4,5,6,9,10,11) | ||||||||||||
| Kinross Gold Corporation's Share at December 31, 2020 | ||||||||||||
| Property | Location | Kinross | Measured | Indicated | Measured and Indicated | |||||||
| Interest | Tonnes | Grade | Ounces | Tonnes | Grade | Ounces | Tonnes | Grade | Ounces | |||
| (%) | (kt) | (g/t) | (koz) | (kt) | (g/t) | (koz) | (kt) | (g/t) | (koz) | |||
| NORTH AMERICA | ||||||||||||
| Peak Gold | 12 | USA | 70.0% | 331 | 16.7 | 178 | 6,110 | 14.1 | 2,762 | 6,441 | 14.2 | 2,940 |
| Round Mountain | 7 | USA | 100.0% | - | - | - | 4,707 | 8.3 | 1,254 | 4,707 | 8.3 | 1,254 |
| SUBTOTAL | 331 | 16.7 | 178 | 10,817 | 11.5 | 4,016 | 11,148 | 11.7 | 4,194 | |||
| SOUTH AMERICA | ||||||||||||
| La Coipa | 8 | Chile | 100.0% | 4,030 | 29.9 | 3,880 | 18,205 | 42.4 | 24,824 | 22,235 | 40.2 | 28,704 |
| SUBTOTAL | 4,030 | 29.9 | 3,880 | 18,205 | 42.4 | 24,824 | 22,235 | 40.2 | 28,704 | |||
| RUSSIA | ||||||||||||
| Dvoinoye | Russia | 100.0% | 3 | 6.1 | 1 | 57 | 21.2 | 39 | 60 | 20.3 | 40 | |
| Kupol | Russia | 100.0% | 279 | 139.9 | 1,255 | 1,575 | 97.9 | 4,959 | 1,854 | 104.2 | 6,214 | |
| SUBTOTAL | 282 | 138.3 | 1,256 | 1,632 | 95.2 | 4,998 | 1,914 | 101.6 | 6,254 | |||
| TOTAL SILVER | 4,643 | 35.6 | 5,314 | 30,654 | 34.3 | 33,838 | 35,297 | 34.5 | 39,152 | |||
See page 20 of this news release for details of the footnotes referenced within the table above.
p. 18 Kinross provides update on development projects and full-year 2020 exploration results
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Kinross Gold Corporation
25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
Inferred Mineral Resources
| MINERAL RESERVE AND MINERAL RESOURCE STATEMENT | GOLD | |||||
| INFERRED MINERAL RESOURCES (2,3,4,5,6,9,10,11) | ||||||
| Kinross Gold Corporation's Share at December 31, 2020 | ||||||
| Property | Location | Kinross | Inferred | |||
| Interest | Tonnes | Grade | Ounces | |||
| (%) | (kt) | (g/t) | (koz) | |||
| NORTH AMERICA | ||||||
| Bald Mountain | USA | 100.0% | 47,776 | 0.5 | 695 | |
| Fort Knox | USA | 100.0% | 128,115 | 0.3 | 1,057 | |
| Kettle River | USA | 100.0% | 1,816 | 6.5 | 378 | |
| Peak Gold | 12 | USA | 70.0% | 941 | 2.7 | 81 |
| Round Mountain | 7 | USA | 100.0% | 96,437 | 0.5 | 1,563 |
| SUBTOTAL | 275,085 | 0.4 | 3,774 | |||
| SOUTH AMERICA | ||||||
| La Coipa | 8 | Chile | 100.0% | 2,668 | 1.3 | 108 |
| Lobo-Marte | Chile | 100.0% | 13,974 | 0.6 | 269 | |
| Maricunga | Chile | 100.0% | 153,276 | 0.6 | 2,782 | |
| Paracatu | Brazil | 100.0% | 91,262 | 0.3 | 914 | |
| SUBTOTAL | 261,180 | 0.5 | 4,073 | |||
| AFRICA | ||||||
| Chirano | Ghana | 90.0% | 5,695 | 2.1 | 376 | |
| Tasiast | Mauritania | 100.0% | 4,392 | 1.9 | 267 | |
| SUBTOTAL | 10,087 | 2.0 | 643 | |||
| RUSSIA | ||||||
| Chulbatkan | 13 | Russia | 100.0% | 6,022 | 0.9 | 173 |
| Dvoinoye | Russia | 100.0% | 58 | 24.1 | 45 | |
| Kupol | Russia | 100.0% | 1,052 | 8.0 | 272 | |
| SUBTOTAL | 7,132 | 2.1 | 490 | |||
| TOTAL GOLD | 553,484 | 0.5 | 8,980 | |||
| MINERAL RESERVE AND MINERAL RESOURCE STATEMENT | SILVER | |||||
| INFERRED MINERAL RESOURCES (2,3,4,5,6,9,10,11) | ||||||
| Kinross Gold Corporation's Share at December 31, 2020 | ||||||
| Property | Location | Kinross | Inferred | |||
| Interest | Tonnes | Grade | Ounces | |||
| (%) | (kt) | (g/t) | (koz) | |||
| NORTH AMERICA | ||||||
| Peak Gold | 12 | USA | 70.0% | 941 | 16.1 | 486 |
| Round Mountain | 7 | USA | 100.0% | 490 | 3.6 | 57 |
| SUBTOTAL | 1,431 | 11.8 | 543 | |||
| SOUTH AMERICA | ||||||
| La Coipa | 8 | Chile | 100.0% | 2,668 | 35.4 | 3,036 |
| SUBTOTAL | 2,668 | 35.4 | 3,036 | |||
| RUSSIA | ||||||
| Dvoinoye | Russia | 100.0% | 58 | 22.7 | 43 | |
| Kupol | Russia | 100.0% | 1,052 | 148.4 | 5,020 | |
| SUBTOTAL | 1,110 | 141.8 | 5,063 | |||
| TOTAL SILVER | 5,209 | 51.6 | 8,642 | |||
See page 20 of this news release for details of the footnotes referenced within the table above.
p. 19 Kinross provides update on development projects and full-year 2020 exploration results
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Kinross Gold Corporation
25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
Mineral Reserve and Mineral Resource Statement Notes
(1) Unless otherwise noted, the Company’s mineral reserves are estimated using appropriate cut-off grades based on an assumed gold price of $1,200 per ounce and a silver price of $17.00 per ounce. Mineral reserves are estimated using appropriate process recoveries, operating costs and mine plans that are unique to each property and include estimated allowances for dilution and mining recovery. Mineral reserve estimates are reported in contained units based on Kinross’ interest and are estimated based on the following foreign exchange rates:
Russian Rouble to United States Dollars: 60.00
Chilean Peso to United States Dollars: 725.00
Brazilian Real to United States Dollars: 3.75
Ghanaian Cedi to United States Dollars: 5.50
Mauritanian Ouguiya to United States Dollars: 35.00
(2) The Company’s mineral reserve and mineral resource estimates as at December 31, 2020 are classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) “CIM Definition Standards - For Mineral Resources and Mineral Reserves" adopted by the CIM Council (as amended, the “CIM Definition Standards”) in accordance with the requirements of National Instrument 43-101 “Standards of Disclosure for Mineral Projects" (“NI 43-101”). Mineral reserve and mineral resource estimates reflect the Company's reasonable expectation that all necessary permits and approvals will be obtained and maintained.
(3) Cautionary note to U.S. Investors concerning estimates of mineral reserves and mineral resources. These estimates have been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of United States’ securities laws. The terms “mineral reserve”, “proven mineral reserve”, “probable mineral reserve”, “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are Canadian mining terms as defined in accordance with NI 43-101 and the CIM Definition Standards. These definitions differ materially from the definitions in the United States Securities and Exchange Commission (“SEC”) SEC Industry Guide 7 under the United States Securities Act of 1933, as amended. Under SEC Industry Guide 7, a “final” or “bankable” feasibility study is required to report mineral reserves, the three-year historical average price is used in any mineral reserve or cash flow analysis to designate mineral reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority. In addition, the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in NI 43-101 and recognized by Canadian securities laws but are not defined terms under SEC Industry Guide 7. U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be upgraded to SEC Industry Guide 7 mineral reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an “inferred mineral resource” will ever by upgraded to a higher category. Under Canadian securities laws, estimates of “inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies, except in rare cases. U.S. investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable.
The SEC has adopted amendments to its disclosure rules to modernize the mineral property disclosure requirements for issuers whose securities are registered with the SEC under the Securities Exchange Act of 1934 (“Exchange Act”). These amendments became effective February 25, 2019 (the “SEC Modernization Rules”) and, commencing for registrants with their first fiscal year beginning on or after January 1, 2021, the SEC Modernization Rules replace the historical property disclosure requirements included in SEC Industry Guide 7. As a foreign private issuer that files its annual report on Form 40-F with the SEC pursuant to the multi-jurisdictional disclosure system, the Company is not required to provide disclosure on its mineral properties under the SEC Modernization Rules and will continue to provide disclosure under NI 43-101 and the CIM Definition Standards. If the Company ceases to be a foreign private issuer or loses its eligibility to file its annual report on Form 40-F pursuant to the multi-jurisdictional disclosure system, then the Company will be subject to the SEC Modernization Rules which differ from the requirements of NI43-101 and the CIM Definition Standards. The SEC Modernization Rules include the adoption of terms describing mineral reserves and mineral resources that are “substantially similar” to the corresponding terms under the CIM Definition Standards. As a result of the adoption of the SEC Modernization Rules, the SEC now recognizes estimates of “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources”. In addition, the SEC has amended its definitions of “proven mineral reserves” and “probable mineral reserves” to be “substantially similar” to the corresponding CIM Definitions. U.S. investors are cautioned that while the above terms are “substantially similar” to CIM Definitions, there are differences in the definitions under the SEC Modernization Rules and the CIM Definition Standards. Accordingly, there is no assurance any mineral reserves or mineral resources that the Company may report as “proven mineral reserves”, “probable mineral reserves”, “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources” under NI 43-101 would be the same had the Company prepared the mineral reserve or mineral resource estimates under the standards adopted under the SEC Modernization Rules. U.S. investors are also cautioned that while the SEC recognizes “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources” under the Modernization Rules, investors should not assume that any part or all of the mineralization in these categories will ever be converted into a higher category of mineral resources or into mineral reserves. Mineralization described using these terms has a greater amount of uncertainty as to its existence and feasibility than mineralization that has been characterized as reserves. Accordingly, investors are cautioned not to assume that any measured mineral resources, indicated mineral resources, or inferred mineral resources that the Company reports are or will be economically or legally mineable. Further, “inferred mineral resources” have a greater amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Therefore, U.S. investors are also cautioned not to assume that all or any part of the “inferred mineral resources” exist. Under Canadian securities laws, estimates of “inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies, except in rare cases.
For the above reasons, the mineral reserve and mineral resource estimates and related information in this AIF may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.
(4) The Company's mineral resource and mineral reserve estimates were prepared under the supervision of and verified by Mr. John Sims, who is a qualified person as defined by NI 43-101. Mr. Sims was an officer of Kinross until December 31, 2020. Mr. Sims remains the Company’s qualified person as an outside consultant.
p. 20 Kinross provides update on development projects and full-year 2020 exploration results
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Kinross Gold Corporation
25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
(5) The Company’s normal data verification procedures have been used in collecting, compiling, interpreting and processing the data used to estimate mineral reserves and mineral resources. Independent data verification has not been performed.
(6) Rounding of values to the 000s may result in apparent discrepancies.
(7) Round Mountain refers to the Round Mountain project, which includes the Round Mountain deposit and the Gold Hill deposit. The Round Mountain deposit does not contain silver and all silver resources at Round Mountain are contained exclusively within the Gold Hill deposit. Disclosure of gold mineral reserves and mineral resources reflect both the Round Mountain deposit and the Gold Hill deposit. Disclosure of silver mineral reserves and mineral resources reflect only Gold Hill deposit.
(8) Includes mineral resources and mineral reserves from the Puren deposit in which the Company holds a 65% interest; as well as mineral resources from the Catalina deposit, in which the Company holds a 75% interest.
(9) Mineral resources are exclusive of mineral reserves.
(10) Unless otherwise noted, the Company’s mineral resources are estimated using appropriate cut-off grades based on a gold price of $1,600 per ounce and a silver price of $20.00 per ounce. Foreign exchange rates for estimating mineral resources were the same as for mineral reserves. The mineral resource estimates for the Gil deposit at Fort Knox assume a $1,400 per ounce gold price. The mineral resource estimates for Peak Gold assume a $1,400 per ounce gold price and are based on the 2018 preliminary economic assessment.
(11) Mineral resources that are not mineral reserves do not have to demonstrate economic viability. Mineral resources are subject to infill drilling, permitting, mine planning, mining dilution and recovery losses, among other things, to be converted into mineral reserves. Due to the uncertainty associated with inferred mineral resources, it cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to indicated or measured mineral resources, including as a result of continued exploration.
(12) Peak Gold was acquired by Kinross effective September 30, 2020.
(13) Chulbatkan was acquired by Kinross effective January 16, 2020.
p. 21 Kinross provides update on development projects and full-year 2020 exploration results
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Kinross Gold Corporation
25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
Mineral Reserve and Mineral Resource Definitions
A ‘Mineral Resource’ is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.
An ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
An ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral Reserve.
A ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation. A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proven Mineral Reserve or to a Probable Mineral Reserve.
A ‘Mineral Reserve’ is the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre-Feasibility or Feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified. The reference point at which Mineral Reserves are defined, usually the point where the ore is delivered to the processing plant, must be stated. It is important that, in all situations where the reference point is different, such as for a saleable product, a clarifying statement is included to ensure that the reader is fully informed as to what is being reported. The public disclosure of a Mineral Reserve must be demonstrated by a Pre-Feasibility Study or Feasibility Study.
A ‘Probable Mineral Reserve’ is the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a Probable Mineral Reserve is lower than that applying to a Proven Mineral Reserve.
A ‘Proven Mineral Reserve’ is the economically mineable part of a Measured Mineral Resource. A Proven Mineral Reserve implies a high degree of confidence in the Modifying Factors.
p. 22 Kinross provides update on development projects and full-year 2020 exploration results
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Kinross Gold Corporation
25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
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) “Development Projects”, “CEO Commentary”, “Exploration and Mineral Reserves and Resources update” and “2020 Mineral Reserves and Resources update”, “Exploration update” as well as statements with respect to our guidance for production, production costs of sales, all-in sustaining cost and capital expenditures; the schedules and budgets for the Company’s development projects; mine life; and continuous improvement initiatives, 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, 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, mine life extensions, government regulation permit applications and conversions, restarting suspended or disrupted operations; environmental risks and proceedings; and resolution of pending litigation. The words “anticipated”, “estimates”, “expects”, “explore”, “forecast”, “focus”, “forward”, “goal”, “on budget”, “on schedule”, “on target”, “on track”, “opportunity”, “plan”, “potential”, “prioritize”, “schedule”, “target”, “upside” 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, 2020, and the Annual Information Form dated March 30, 2020 as well as: (1) there being no significant disruptions affecting the operations of the Company, whether due to extreme weather events (including, without limitation, excessive or lack of rainfall, in particular, the potential for further production curtailments at Paracatu resulting from insufficient rainfall and the operational challenges at Fort Knox and Bald Mountain resulting from excessive rainfall, which can impact costs and/or production) and other or related natural disasters, labour disruptions (including but not limited to strikes or workforce reductions), supply disruptions, power disruptions, damage to equipment, pit wall slides (in particular that the effects of the pit wall slides at Fort Knox and Round Mountain are consistent with the Company’s expectations) or otherwise; (2) permitting, development, operations and production from the Company’s operations and development projects being consistent with Kinross’ current expectations including, without limitation: the maintenance of existing permits and approvals and the timely receipt of all permits and authorizations necessary for the operation of Tasiast, and the development and operation of the 24k Project; operation of the SAG mill at Tasiast; land acquisitions and permitting for the construction and operation of the new tailings facility, water and power supply and continued operation of the tailings reprocessing facility at Paracatu; the Lobo-Marte project; commencement of production at the La Coipa project; approval of an enhanced mine plan at Fort Knox; in each case in a manner consistent with the Company’s expectations; and the successful completion of exploration consistent with the Company’s expectations at the Company’s projects, including Kupol and Chirano; (3) political and legal developments in any jurisdiction in which the Company operates being consistent with its current expectations including, without limitation, the impact of any political tensions and uncertainty in the Russian Federation or any related sanctions and any other similar restrictions or penalties imposed, or actions taken, by any government, including but not limited to amendments to the mining laws, and potential power rationing and tailings facility regulations in Brazil, potential amendments to water laws and/or other water use restrictions and regulatory actions in Chile, new dam safety regulations, and potential amendments to minerals and mining laws and energy levies laws, and the enforcement of labour laws in Ghana, new regulations relating to work permits, potential amendments to customs and mining laws (including but not limited to amendments to the VAT) and the potential application of revisions to the tax code in Mauritania, the European Union’s General Data Protection Regulation or similar legislation in other jurisdictions and potential amendments to and enforcement of tax laws in Russia, Ghana and Mauritania (including, but not limited to, the interpretation, implementation, application and enforcement of any such laws and amendments thereto), and the impact of any trade tariffs being consistent with Kinross’ current expectations; (4) the completion of studies, including optimization studies, improvement studies; scoping studies and pre-feasibility and feasibility studies, on the timelines currently expected and the results of those studies being consistent with Kinross’ current expectations, including the completion of the Lobo-Marte and Peak feasibility studies and Udinsk pre-feasibility study; (5) the exchange rate between the Canadian dollar, Brazilian real, Chilean peso, Russian rouble, Mauritanian ouguiya, Ghanaian cedi and the U.S. dollar being approximately consistent with current levels; (6) certain price assumptions for gold and silver; (7) prices for diesel, natural gas, fuel oil, electricity and other key supplies being approximately consistent with the Company’s expectations; (8) production and cost of sales forecasts for the Company meeting expectations; (9) the accuracy of: the current mineral reserve and mineral resource estimates of the Company including the accuracy and reliability of the pre-acquisition mineral resource estimates of the Peak project and Kinross’ analysis thereof being consistent with expectations (including but not limited to ore tonnage and ore grade estimates), future mineral resource and mineral reserve estimates being consistent with preliminary work undertaken by the Company, mine plans for the Company’s current and future mining operations, and the Company’s internal models; (10) labour and materials costs increasing on a basis consistent with Kinross’ current expectations; (11) the terms and conditions of the legal and fiscal stability agreements for the Tasiast and Chirano operations being interpreted and applied in a manner consistent with their intent and Kinross’ expectations and without material amendment or formal dispute (including without limitation the application of tax, customs and duties exemptions and royalties); (12) goodwill and/or asset impairment potential; (13) the regulatory and legislative regime regarding mining, electricity production and transmission (including rules related to power tariffs) in Brazil being consistent with Kinross’ current expectations; (14) access to capital markets, including but not limited to maintaining our current credit ratings consistent with the Company’s current expectations; (15) that the Brazilian power plants will operate in a manner consistent with our expectations; (16) that drawdown of remaining funds under the Tasiast project financing will proceed in a manner consistent with our current expectations; (17) potential direct or indirect operational impacts resulting from infectious diseases or pandemics such as the ongoing COVID-19 pandemic; (18) the effectiveness of preventative actions and contingency plans put in place by the Company to respond to the COVID-19 pandemic, including, but not limited to, social distancing, travel restrictions, business continuity plans, and efforts to mitigate supply chain disruptions; (19) changes in national and local government legislation or other government actions, particularly in response to the COVID-19 outbreak; (20) litigation, regulatory proceedings and audits, and the potential ramifications thereof, being concluded in a manner consistent with the Corporation’s expectations (including without limitation the ongoing industry-wide audit of mining companies in Ghana which includes the Corporation’s Ghanaian subsidiaries, litigation in Chile relating to the alleged damage of wetlands and the scope of any remediation plan or other environmental obligations arising therefrom ,the ongoing litigation with the Russian tax authorities regarding dividend withholding tax and the ongoing Sunnyside litigation regarding potential liability under the
p. 23 Kinross provides update on development projects and full-year 2020 exploration results
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Kinross Gold Corporation
25 York Street 17th Floor Toronto, ON, Canada M5J 2V5 |
U.S. Comprehensive Environmental Response, Compensation, and Liability Act); (21) that the Company will enter into definitive documentation with the Government of Mauritania substantially in accordance with the terms and conditions of the term sheet, on a basis consistent with our expectations and that the parties will perform their respective obligations thereunder on the timelines agreed; (22) that the exploitation permit for Tasiast Sud will be issued on timelines consistent with our expectations; (23) that the benefits of the contemplated arrangements related to the agreement in principle will result in increased stability at the Company’s operations in Mauritania; and (24) the Company’s financial results, cash flows and future prospects being consistent with Company expectations in amounts sufficient to permit sustained dividend payments. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: the inaccuracy of any of the foregoing assumption, sanctions (any other similar restrictions or penalties) now or subsequently imposed, other actions taken, by, against, in respect of or otherwise impacting any jurisdiction in which the Company is domiciled or operates (including but not limited to the Russian Federation, Canada, the European Union and the United States), or any government or citizens of, persons or companies domiciled in, or the Company’s business, operations or other activities in, any such jurisdiction; reductions in the ability of the Company to transport and refine doré; fluctuations in the currency markets; fluctuations in the spot and forward price of gold or certain other commodities (such as fuel and electricity); changes in the discount rates applied to calculate the present value of net future cash flows based on country-specific real weighted average cost of capital; changes in the market valuations of peer group gold producers and the Company, and the resulting impact on market price to net asset value multiples; changes in various market variables, such as interest rates, foreign exchange rates, gold or silver prices and lease rates, or global fuel prices, that could impact the mark-to-market value of outstanding derivative instruments and ongoing payments/receipts under any financial obligations; risks arising from holding derivative instruments (such as credit risk, market liquidity risk and mark-to-market risk); changes in national and local government legislation, taxation (including but not limited to income tax, advance income tax, stamp tax, withholding tax, capital tax, tariffs, value-added or sales tax, capital outflow tax, capital gains tax, windfall or windfall profits tax, production royalties, excise tax, customs/import or export taxes/duties, asset taxes, asset transfer tax, property use or other real estate tax, together with any related fine, penalty, surcharge, or interest imposed in connection with such taxes), controls, policies and regulations; the security of personnel and assets; political or economic developments in Canada, the United States, Chile, Brazil, Russia, Mauritania, Ghana, or other countries in which Kinross does business or may carry on business; business opportunities that may be presented to, or pursued by, us; our ability to successfully integrate acquisitions and complete divestitures; operating or technical difficulties in connection with mining or, development or refining activities; employee relations; litigation or other claims against, or regulatory investigations and/or any enforcement actions, administrative orders or sanctions in respect of the Company (and/or its directors, officers, or employees) including, but not limited to, securities class action litigation in Canada and/or the United States, environmental litigation or regulatory proceedings or any investigations, enforcement actions and/or sanctions under any applicable anti-corruption, international sanctions and/or anti-money laundering laws and regulations in Canada, the United States or any other applicable jurisdiction; the speculative nature of gold exploration and development including, but not limited to, the risks of obtaining necessary licenses and permits; diminishing quantities or grades of reserves; adverse changes in our credit ratings; and contests over title to properties, particularly title to undeveloped properties. In addition, there are risks and hazards associated with the business of gold exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance, or the inability to obtain insurance, to cover these risks). Many of these uncertainties and contingencies can directly or indirectly affect, and could cause, Kinross’ actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Kinross, including but not limited to resulting in an impairment charge on goodwill and/or assets. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management’s expectations and plans relating to the future. All of the forward-looking statements made in this news release are qualified by this cautionary statement and those made in our other filings with the securities regulators of Canada and the United States including, but not limited to, the cautionary statements made in the “Risk Analysis” section of our MD&A for the year ended December 31, 2020 and the Annual Information Form dated March 30, 2020. These factors are not intended to represent a complete list of the factors that could affect Kinross. Kinross disclaims any intention or obligation to update or revise any forward-looking statements or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law.
Other information
Where we say "we", "us", "our", the "Company", or "Kinross" in this presentation, 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 presentation has been prepared under the supervision of Mr. John Sims, who is a “qualified person” within the meaning of National Instrument 43-101. Mr. Sims was an officer of Kinross until December 31, 2020. Mr. Sims remains the Company’s qualified person as an external consultant.
Source: Kinross Gold Corporation
p. 24 Kinross provides update on development projects and full-year 2020 exploration results
Exhibit 99.3
 | Kinross Gold Corporation
25 York Street, 17th Floor Toronto, ON Canada M5J 2V5 |
NEWS RELEASE
Kinross declares quarterly dividend
Toronto, Ontario, February 10, 2021 – Kinross Gold Corporation (TSX:K; NYSE:KGC) (the “Company”) today announced that the Company’s Board of Directors has declared a dividend of US$0.03 per common share for the fourth quarter of 2020.
The dividend is payable on March 18, 2021 to shareholders of record as of the close of business on March 3, 2021. This dividend qualifies as an “eligible dividend” for Canadian income tax purposes while dividends paid to shareholders outside Canada (non-resident investors) will be subject to Canadian non-resident withholding taxes.
About Kinross Gold Corporation
Kinross is a Canadian-based senior gold mining company with mines and projects in the United States, Brazil, Russia, Mauritania, Chile and Ghana. Our focus is on delivering value based on the core principles of operational excellence, balance sheet strength, disciplined growth and responsible mining. Kinross maintains listings on the Toronto Stock Exchange (symbol:K) and the New York Stock Exchange (symbol:KGC).
Media Contact
Louie Diaz
Vice-President, Corporate Communications
phone: 416-369-6469
louie.diaz@kinross.com
Investor Relations Contact
Tom Elliott
Senior Vice-President, Investor Relations
phone: 416-365-3390
tom.elliott@kinross.com
Source: Kinross Gold Corporation
www.kinross.com