For more information, please see Kinross’ 2016 first quarter Financial Statements and MD&A
For more information, please see Kinross’ 2016 first quarter Financial Statements and MD&A at www.kinross.com NEWS RELEASE
Kinross reports 2016 first quarter results
Production higher and cost of sales per ounce lower year-over-year On track to meet 2016 production and cost guidance
Toronto, Ontario – May 10, 2016 – Kinross Gold Corporation (TSX: K, NYSE: KGC) today announced its results for the first quarter ended March 31, 2016.
(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 18 of this release. All dollar amounts are expressed in U.S. dollars, unless otherwise noted.)
2016 first quarter highlights:
- Production1: 687,463 gold equivalent ounces (Au eq. oz.), compared with 629,360 Au eq. oz. in Q1 2015.
Revenue: $782.6 million, compared with $781.4 million in Q1 2015.
- Production cost of sales2: $694 per Au eq. oz., compared with $709 in Q1 2015.
- All-in sustaining cost2: $963 per Au eq. oz. sold, compared with $964 in Q1 2015. All-in sustaining cost per gold ounce (Au oz.) sold on a by-product basis was $957 in Q1 2016, compared with $957 in Q1 2015.
- Adjusted operating cash flow2: $202.6 million, or $0.17 per share, compared with $214.8 million, or $0.19 per share, in Q1 2015.
- Adjusted net earnings2,3: $1.4 million, or $0.00 per share, compared with adjusted net earnings of $15.3 million, or $0.01 per share, in Q1 2015.
- Reported net loss3: $13.9 million, or $0.01 per share, compared with a loss of $6.7 million, or $0.01 per share, in Q1 2015.
Outlook: Kinross expects to be within its 2016 forecast guidance for production (2.7 - 2.9 million Au eq. oz.), production cost of sales ($675 - $735 per Au eq. oz.) and all-in sustaining cost ($890 - $990 per Au eq. oz.). Capital expenditures guidance was increased to $755 million to reflect the additional $160 million expected to be spent on the Tasiast Phase One expansion.
- Tasiast Phase One expansion: Kinross is proceeding with the Tasiast Phase One expansion, which is expected to nearly double production and reduce production cost of sales per ounce by half, at a manageable capital cost.
Nevada asset acquisition: Kinross closed the acquisition of Bald Mountain and 50% of Round Mountain on January 11, 2016 for $610 million, to be reduced by $22 million as a result of a working capital adjustment finalized subsequent to March 31, 2016.
Development projects: The Bald Mountain exploration program is progressing well and the Russia development projects – Moroshka near Kupol and September Northeast near Dvoinoye – are advancing as planned.
- Equity financing: The Company completed a public equity offering on March 18, 2016 for net proceeds of $275.7 million to further strengthen the Company’s balance sheet.
CEO Commentary
J. Paul Rollinson, President and CEO, made the following comments in relation to 2016 first quarter results:
“Kinross is off to a strong start to the year, generating solid free cash flow as our portfolio of mines continued to deliver consistent operational results in the first quarter. All-in sustaining cost is trending lower, production is higher compared with the previous quarter and year, and we are once again on track to meet our annual guidance at each of our regions and company-wide.
“We also significantly clarified our path to the future on two major fronts. At Tasiast, we are moving ahead with the Phase One expansion, which is expected to nearly double production, while reducing cost of sales significantly, at a manageable capital cost. At the same time, we completed a pre-feasibility study for a potential Phase Two expansion that would transform the operation into our largest mine, with one of the lowest costs. With the acquisition of our Nevada-based assets now complete, we are more confident in Bald Mountain’s clear upside potential and expect to convert a substantial
1Unless otherwise stated, production figures in this news release are based on Kinross’ 90% share of Chirano production.
2These figures are non-GAAP financial measures and are defined and reconciled on pages 13 to 17 of this news release.
3Net earnings/loss figures in this release represent “net earnings (loss) attributable to common shareholders”.
p. 1 Kinross reports 2016 first-quarter results www.kinross.com “We have strongly underlined our value proposition as a large, pure gold producer. We are well levered to the gold price and have an outstanding operating record, a strong balance sheet, and attractive low-risk development projects.”
Financial results Summary of financial and operating results
| Three months ended March 31, (in millions, except ounces, per share amounts, and per ounce amounts) 2016 2015 | |
| Operating Highlights Total gold equivalent ounces(a) Produced(c) Sold(c) Attributable gold equivalent ounces(a) Produced(c) Sold(c) Financial Highlights Metal sales Production cost of sales Depreciation, depletion and amortization Operating earnings Net loss attributable to common shareholders Basic loss per share attributable to common shareholders Diluted loss per share attributable to common shareholders Adjusted net earnings attributable to common shareholders(b) Adjusted net earnings per share(b) Net cash flow provided from operating activities Adjusted operating cash flow (b) Adjusted operating cash flow per share(b) Average realized gold price per ounce Consolidated production cost of sales per equivalent ounce(c) sold(b) Attributable(a) production cost of sales per equivalent ounce(c) sold(b) Attributable(a) production cost of sales per ounce sold on a by-product basis (b) Attributable(a) all-in sustaining cost per ounce sold on a by-product basis(b) Attributable(a) all-in sustaining cost per equivalent ounce(c) sold(b) Attributable(a) all-in cost per ounce sold on a by-product basis(b) Attributable(a) all-in cost per equivalent ounce(c) sold(b) | 691,910 636,128 664,165 641,752 687,463 629,360 659,397 634,565 $ 7 82.6 $ 7 81.4 $ 4 62.3 $ 4 54.6 $ 2 07.8 $ 2 06.2 $ 2 3.6 $ 4 2.5 $ (13.9) $ (6.7) $ (0.01) $ (0.01) $ (0.01) $ (0.01) $ 1 .4 $ 1 5.3 $ 0 .00 $ 0 .01 $ 2 14.5 $ 2 50.1 $ 2 02.6 $ 2 14.8 $ 0 .17 $ 0 .19 $ 1 ,179 $ 1 ,218 $ 6 96 $ 7 08 $ 6 94 $ 7 09 $ 6 82 $ 6 96 $ 9 57 $ 9 57 $ 9 63 $ 9 64 $ 1 ,023 $ 1 ,050 $ 1 ,026 $ 1 ,054 |
(a) "Total" includes 100% of Chirano production. "Attributable" includes Kinross' share of Chirano (90%) production.
(b) The definition and reconciliation of these non-GAAP financial measures is included on page 13 to 17 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 the first quarter of 2016 was 79.64:1, compared with 72.91:1 for the first quarter of 2015.
The following operating and financial results are based on first-quarter 2016 gold equivalent production. Production and cost measures are on an attributable basis:
Production: Kinross produced 687,463 attributable Au eq. oz. in Q1 2016, a 9% increase compared with Q1 2015, due mainly to the acquisition of Bald Mountain and 50% of Round Mountain the Company did not already own.
Production cost of sales: Production cost of sales per Au eq. oz.2 decreased to $694 for Q1 2016, compared with $709 for the first quarter of 2015, mainly as a result of lower fuel costs, favourable foreign exchange rates and an increase in attributable Au eq. oz. sold.
Production cost of sales per Au oz. on a by-product basis2 decreased to $682 in Q1 2016, compared with $696 in
p. 2 Kinross reports 2016 first-quarter results www.kinross.com Q1 2015, based on Q1 2016 attributable gold sales of 642,733 ounces and attributable silver sales of 1,327,243 ounces.
All-in sustaining cost: All-in sustaining cost per Au eq. oz. sold2 decreased to $963 in Q1 2016, compared with $964 in Q1 2015. All-in sustaining cost per Au oz. sold on a by-product basis2 was $957 in Q1 2016, compared with $957 in Q1 2015.
Average realized gold price: The average realized gold price in Q1 2016 declined to $1,179 per ounce, compared with $1,218 per ounce in Q1 2015.
Revenue: Revenue from metal sales was $782.6 million in Q1 2016, compared with $781.4 million during the same period in 2015, primarily due to an increase in gold equivalent ounces sold offset by a lower average realized gold price.
Margins: Kinross’ attributable margin per Au eq. oz. sold4 was $485 per Au eq. oz. for Q1 2016, compared with a Q1 2015 margin of $509 per Au eq. oz.
Operating cash flow: Adjusted operating cash flow2 was $202.6 million, or $0.17 per share, for Q1 2016, compared with $214.8 million, or $0.19 per share, for Q1 2015.
Earnings/loss: Adjusted net earnings2,3 were $1.4 million, or $0.00 per share, for Q1 2016, compared with adjusted net earnings of $15.3 million, or $0.01 per share, for Q1 2015.
Reported net loss3 was $13.9 million, or $0.01 per share, for Q1 2016, compared with reported net loss of $6.7 million, or $0.01 per share, for Q1 2015, mainly due to a lower average gold price.
Capital expenditures: Capital expenditures decreased to $139.5 million for Q1 2016, compared with $149.5 million for the same period last year, primarily due to lower spending at Fort Knox.
Operating results
Mine-by-mine summaries for 2016 first-quarter operating results may be found on pages eight and 12 of this news release. Highlights include the following:
Americas
The region’s first quarter performance was strong, with higher production and lower cost of sales compared with the prior quarter and year-over-year. At Fort Knox, production was in line with Q4 2015 and increased compared with Q1 2015 as mild weather conditions had a positive seasonal impact on mining operations and the heap leach. Cost of sales per ounce increased compared with Q1 2015 mainly due to increased reagent usage and more labour needed as a result of placing more tonnes on the heap leach pads. Kettle River-Buckhorn performed well as it nears the end of its mine life, with production increasing quarter-over-quarter mainly due to more tonnes processed through the mill, and year-over-year mainly due to higher grades. Cost of sales per ounce decreased compared with Q1 2015 largely due to a decrease in contractor and fuel costs. Kettle River-Buckhorn now expects to continue mining until the end of the year, as test drilling in perimeter holes around the site has uncovered more ounces.
With the completion of the Nevada acquisition on January 11, 2016, Bald Mountain and the 50% of Round Mountain Kinross did not previously own were integrated into the Company’s portfolio. At Round Mountain, production increased mainly as a result of the acquisition of the remaining 50% and higher mill grades. Cost of sales per ounce decreased compared with Q1 2015 largely due to higher grades and increased recovery. At Bald Mountain, exploration continued as planned, and further work has begun to realize the site’s full potential. Production was lower than expected mainly due to a higher than anticipated level of stripping from the adopted mine plan, harsh winter conditions during the quarter and the replenishment of ADR plant inventory. The Company expects site
4Attributable margin per equivalent ounce sold is a non-GAAP measure defined as “average realized gold price per ounce” less “attributable production cost of sales per gold equivalent ounce sold.”
p. 3 Kinross reports 2016 first-quarter results www.kinross.com performance to improve in the second half of the year. After the planned stripping campaign is completed this year, the Company expects the site to substantially increase production, and reduce costs in 2017.
Paracatu’s production decreased compared with Q1 2015 mainly due to lower mill throughput and recoveries, but increased compared with the previous quarter due to a partial curtailment of milling activities in Q4 2015 as a result of reduced rainfall in the area. Paracatu’s Santo Antonio tailing reprocessing initiative is now on track, producing approximately 13,400 Au eq. oz. in the quarter. To reduce water usage, tailings are now being hauled for reprocessing, rather than hydro-pumping. Cost of sales decreased compared with Q4 2015 and Q1 2015 primarily due to increased exposure to favourable foreign exchange rates in 2016. At Maricunga, production was slightly higher quarter-over-quarter and year-over-year mainly due to an increase in ore processed on the heap leach pads. Cost of sales per ounce decreased compared with Q1 2015 mainly due to favourable exchange rates.
Russia
Kupol and Dvoinoye continued with consistent and strong performance in the first quarter, increasing production and decreasing the cost of sales per ounce compared with Q4 2015 and Q1 2015. The production increase was mainly the result of mining a higher grade zone during the quarter. Approximately 93,300 Au eq. oz. were produced from processing Dvoinoye ore in Q1 2016. Cost of sales per ounce was at its lowest level in more than four years. The decrease, compared with Q4 2015 and Q1 2015, was mainly a result of favourable foreign exchange rates and higher grades.
West Africa
At Tasiast, production was lower compared with Q4 2015 and Q1 2015 as a result of mine sequencing and lower grades. Cost of sales per ounce was lower year-over-year mainly as a result of a decrease in fuel and labour costs and less reagent consumption. The site’s throughput rate continues to benefit from improvements made to fragmentation of blasted ore from the pit and its crushing and grinding circuits. During the quarter, throughput averaged more than 8,000 tonnes per day (tpd), compared with an average of 7,500 tpd in Q4 2015.
In the context of ongoing collective agreement negotiations, on May 10, 2016, the union at Tasiast served notice of intention to strike with effect on May 24, 2016. The notice is not unexpected and regional management remains available to meet with the union.
At Chirano, production was lower compared with Q4 2015 and Q1 2015 as the site continued to transition from mining the Akwaaba deposit to the Paboase deposit, which resulted in fewer tonnes mined and lower grades. Cost of sales per ounce increased compared with Q1 2015 mainly as a result of higher power costs and lower ounces produced. The Company expects performance to improve in the third quarter.
Organic development projects
The Tasiast Phase One expansion is progressing well, with work commencing this month. Engineering and procurement is 55% complete, major earthworks are scheduled to begin in June and the start of the project’s first substantial construction activity is planned for August. The project remains on track, with full production expected by the end of Q1 2018.
The Bald Mountain exploration program, which is focused on targets in the footprint of active mining areas, is progressing well. The new exploration team has two rigs on site, and has drilled approximately 9,000 metres since the close of the acquisition, mostly in the Saga, Top and Redbird pits in the 100% Kinross-owned North area. Results are encouraging as the team continues to develop a better geological understanding of the property. The Company remains confident in the upside potential at this prospective property, and expects to convert a substantial
process to expand exploration and mining activities is expected to be completed in mid-2016.
Kinross’ Russian development projects continue to advance as planned. At the Moroshka project, located approximately four kilometres east of Kupol, construction of an ore haulage road is now underway and is expected to be completed in June. The Company expects to commence mining in 2018 to process ore in the Kupol mill. At
p. 4 Kinross reports 2016 first-quarter results www.kinross.com September Northeast, located approximately 15 km northwest of Dvoinoye, a haulage road to the site has been completed and a camp facility constructed. Site preparation is expected to be completed by the fourth quarter with mining on track to commence in late 2017.
At the La Coipa Phase 7 project, Kinross continues to advance permitting efforts, including recently obtaining approval for an exploration DIA (Declaration of Impact to Environment) permit. Exploration drilling is planned for several targets in 2016, including Catalina, which is located less than one kilometre southeast of the Phase 7 deposit.
Maricunga update
In setting its strategic business priorities, Kinross has been assessing the Maricunga mine plan in the context of disciplined capital allocation and a focus on quality ounces over quantity. After taking into consideration Maricunga’s cost position and future capital needs, as well as other capital priorities in its global portfolio, Kinross is contemplating a potential suspension of mining activities by the end of October, subject to regulatory processes. Should the Company proceed with this suspension, heap leach rinsing is expected to continue at Maricunga for approximately three years. Total production expected from the heap during the three years of rinsing is expected to be approximately 100,000 Au eq. oz.
The Company will continue to review the operation’s mine plan, evaluate its estimated mineral reserve and mineral resource base and explore further permitting needs.
The Maricunga mine produced 212,155 gold equivalent ounces during 2015 at production cost of sales of $1,010 per equivalent ounce. At December 31, 2015, the Maricunga mine had estimated proven and probable mineral reserves of 1.042 million ounces, estimated measured and indicated mineral resources of 4.275 million ounces and estimated inferred mineral resources of 1.053 million ounces. The mineral reserve estimates were prepared using a $1,200 per ounce gold price, and the mineral resource estimates were prepared using a $1,400 per ounce gold price5.
As previously announced on March 18, 2016, the Company received notification from Chile’s environmental regulatory authority (SMA) of a resolution commencing a legal process that will seek the closure of Maricunga’s water pumping wells. Kinross vigorously opposes the resolution and has filed an administrative appeal with the SMA on the basis that a complete stoppage of water use would be both legally and technically flawed and would have serious environmental, health and safety consequences. The appeal process may impact the timing of any proposed future suspension.
On May 2, 2016, the SMA imposed a 15-day water curtailment order. In response, the Maricunga mine has temporarily suspended mining and crushing activities for the duration of the order. This temporary suspension is not expected to impact the Company’s regional production and cost guidance.
Balance sheet
As of March 31, 2016, Kinross had cash and cash equivalents of $750.4 million, a decrease of $293.5 million since December 31, 2015, mainly as a result of the $610.0 million acquisition of the Bald Mountain mine and the remaining 50% interest in the Round Mountain mine, partially offset by net proceeds of $275.7 million from the equity issuance and cash flow generated in the first quarter. The Company also had available credit of $1,506.0 million as of March 31, 2016 for total liquidity of approximately $2.3 billion.
The Company expects that its existing liquidity sources will be sufficient to fund the Tasiast Phase One expansion and the repayment of $250 million in senior notes due in September. Kinross has no other debt maturities until 2019.
5 For more information see Kinross’ Annual Mineral Reserve and Resource Statement for the year-end December 31, 2015 in its Annual Information Form dated March 30, 2016, available under the Company’s profile at www.sedar.com or on the Company’s website www.kinross.com.
p. 5 Kinross reports 2016 first-quarter results www.kinross.com
Equity financing
During the first quarter, Kinross completed a public offering, issuing 95,910,000 common shares of Kinross, including 12,510,000 common shares issued to the underwriters on the exercise of their over-allotment option. The transaction was completed on March 18, 2016 and the Company received net proceeds of $275.7 million from the offering.
Outlook
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 18 of this news release.
As previously announced on February 10, 2016, Kinross expects to produce approximately 2.7 - 2.9 million Au eq. oz. for the year and expects to be within its regional production guidance ranges.
The Company expects to be within its regional production cost of sales guidance ranges, its company-wide production cost of sales guidance range of $675 - $735 per Au eq. oz., and its all-in sustaining cost guidance range of $890 - $990 per Au eq. oz. sold in 2016. The Company also expects to meet its revised 2016 capital expenditure forecast of approximately $755 million.
Conference call details
In connection with the release, Kinross will hold a conference call and audio webcast on Wednesday, May 11, 2016 at 7:45 a.m. ET to discuss the results, followed by a question-and-answer session. To access the call, please dial:
Canada & US toll-free – 1-800-319-4610 Outside of Canada & US – 1-604-638-5340
Replay (available up to 14 days after the call):
Canada & US toll-free – 1-800-319-6413; Passcode – 00432 followed by #.
Outside of Canada & US – 1-604-638-9010; Passcode – 00432 followed by #.
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.
Kinross’ Annual Shareholders Meeting will be held on Wednesday, May 11, 2016 at 10:00 a.m. ET at the Glenn Gould Studio, 250 Front Street West, Toronto, Ontario, Canada. A live audio webcast (listen-only mode) of the Annual Meeting will be available at www.kinross.com and will also be archived for later access.
This news release should be read in conjunction with Kinross’ 2016 first-quarter unaudited Financial Statements and Management’s Discussion and Analysis report at www.kinross.com. Kinross’ 2016 first-quarter unaudited Financial Statements and Management’s Discussion and Analysis have been filed with Canadian securities regulators (available at www.sedar.com) and furnished to 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. 6 Kinross reports 2016 first-quarter results www.kinross.com
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 Director, Corporate Communications phone: 416-369-6469 [email protected]
Investor Relations Contact
Tom Elliott Senior Vice-President, Investor Relations and Corporate Development phone: 416-365-3390 [email protected]
p. 7 Kinross reports 2016 first-quarter results www.kinross.com
Review of operations
Gold equivalent ounces Three months ended March 31, Production cost of Production cost of Produced Sold
sales ($millions) sales/equivalent ounce sold 2016 2015 2016 2015 2016 2015 2016 2015
Fort Knox 87,800 82,673 87,889 82,003 $ 62.2 $ 55.1 $ 708 $
| Round Mountain | 92,926 | 40,262 | 90,474 | 40,447 | 65.0 | 36.0 | 718 | 890 |
| Bald Mountain | 20,422 | - | 11,197 | - | 13.1 | - | 1,170 | - |
| Kettle River - Buckhorn | 28,312 | 24,265 | 28,264 | 24,167 | 22.2 | 24.3 | 785 | 1,006 |
| Paracatu | 119,376 | 124,685 | 117,090 | 124,929 | 79.9 | 93.9 | 682 | 752 |
| Maricunga | 59,076 | 56,822 | 57,490 | 54,376 | 47.3 | 56.0 | 823 | 1,030 |
| Americas Total | 407,912 | 328,707 | 392,404 | 325,922 | 289.7 | 265.3 | 738 | 814 |
| Kupol | 192,450 | 185,729 | 175,691 | 192,167 | 78.2 | 91.5 | 445 | 476 |
| Russia Total | 192,450 | 185,729 | 175,691 | 192,167 | 78.2 | 91.5 | 445 | 476 |
| Tasiast | 47,078 | 54,009 | 48,391 | 51,790 | 47.2 | 51.9 | 975 | 1,002 |
| Chirano (100%) | 44,470 | 67,683 | 47,679 | 71,873 | 47.2 | 45.9 | 990 | 639 |
| West Africa Total | 91,548 | 121,692 | 96,070 | 123,663 | 94.4 | 97.8 | 983 | 791 |
| Operations Total | 691,910 | 636,128 | 664,165 | 641,752 | 462.3 | 454.6 | 696 | 708 |
Less Chirano non-controlling (4,447) (6,768) (4,768) (7,187) (4.7) (4.6)
interest (10%)
Attributable Total 687,463 629,360 659,397 634,565 $ 457.6 $ 450.0 $ 694 $
p. 8 Kinross reports 2016 first-quarter results www.kinross.com
Consolidated balance sheets
(unaudited expressed in millions of United States dollars, except share amounts)
As at March 31 December 31, 2016 2015
Assets
Current assets
| Cash and cash equivalents | $ 7 50.4 |
|---|---|
| Restricted cash Accounts receivable and other assets Current income tax recoverable Inventories Unrealized fair value of derivative assets | 10.9 107.5 125.9 1,165.6 11.5 |
| 2,171.8 | |
| Non-current assets Property, plant and equipment Goodw ill Long-term investments Investments in associate and joint venture Other long-term assets Deferred tax assets Total assets Liabilities Current liabilities Accounts payable and accrued liabilities Current income tax payable Current portion of long-term debt | 5,057.2 162.7 109.6 157.9 393.7 80.0 |
| $ 8 ,132.9 | |
| $ 3 51.5 18.3 249.7 | |
| Current portion of provisions | 51.0 |
| Current portion of unrealized fair value of derivative liabilities Non-current liabilities Long-term debt | 3.7 |
| 674.2 | |
| 1,732.5 | |
| Provisions | 848.5 |
| Other long-term liabilities Deferred tax liabilities Total liabilities Equity Common shareholders' equity Common share capital Contributed surplus Accumulated deficit Accumulated other comprehensive income (loss) | 168.9 474.0 |
| 3,898.1 | |
| $ 1 4,889.5 231.2 (10,936.0) 7.6 | |
| Total common shareholders' equity | 4,192.3 |
| Non-controlling interest Total equity | 42.5 |
| 4,234.8 | |
| $ 8 ,132.9 |
$ 1,043.9 10.5 108.2 123.3 1,005.2 1.0
2,292.1
4,593.7 162.7 83.1 157.1 370.2 76.5 $ 7,735.4
$ 379.6 6.4 249.5 50.3 16.0 701.8
1,731.9 720.8 148.7 499.0 3,802.2
$ 14,603.5 239.2 (10,922.1)
(31.3)
3,889.3 43.9 3,933.2 $ 7,735.4
Common shares
Authorized Unlimited Unlimited Issued and outstanding 1,244,137,896 1,146,540,188
p. 9 Kinross reports 2016 first-quarter results www.kinross.com
Consolidated statements of operations
(unaudited expressed in millions of United States dollars, except per share and share amounts)
| Three months ended March 31, March 31, 2016 2015 | |||
|---|---|---|---|
| 2016 | 2015 | ||
| Revenue Metal sales $ 7 82.6 $ 7 81.4 Cost of sales Production cost of sales 462.3 454.6 Depreciation, depletion and amortization 207.8 206.2 Total cost of sales 670.1 660.8 Gross profit 112.5 120.6 Other operating expense 33.9 16.3 Exploration and business development 16.7 22.8 General and administrative 38.3 39.0 Operating earnings 23.6 42.5 Other income (expense) - net 8.1 (1.9) Equity in earnings (losses) of associate and joint venture 0.2 (1.0) Finance income 1.6 2.2 Finance expense (33.2) (24.0) Earnings before tax 0.3 17.8 Income tax expense - net (15.6) (25.3) Net loss $ (15.3) $ (7.5) Net loss attributable to: Non-controlling interest $ (1.4) $ (0.8) Common shareholders $ (13.9) $ (6.7) Loss per share attributable to common shareholders Basic $ (0.01) $ (0.01) Diluted $ (0.01) $ (0.01) Weighted average number of common shares outstanding (millions) Basic 1,173.6 1,145.1 Diluted 1,173.6 1,145.1 | |||
| Revenue | |||
| Metal sales Cost of sales Production cost of sales Depreciation, depletion and amortization | $ 7 82.6 462.3 207.8 | ||
| Total cost of sales Gross profit | 670.1 | ||
| 112.5 | |||
| Other operating expense Exploration and business development General and administrative Operating earnings Other income (expense) - net Equity in earnings (losses) of associate and joint venture Finance income | 33.9 16.7 38.3 | ||
| 23.6 | |||
| 8.1 0.2 1.6 | |||
| Finance expense Earnings before tax Income tax expense - net Net loss Net loss attributable to: Non-controlling interest Common shareholders Loss per share attributable to common shareholders Basic Diluted | (33.2) | ||
| 0.3 (15.6) | |||
| $ (15.3) | |||
| $ (1.4) | |||
| $ (13.9) | |||
| $ (0.01) $ (0.01) | |||
| Weighted average number of common shares outstanding (millions) | |||
| Basic Diluted | 1,173.6 1,173.6 | 1,145.1 1,145.1 |
p. 10 Kinross reports 2016 first-quarter results www.kinross.com
Consolidated statements of cash flows
(unaudited expressed in millions of United States dollars)
| 2016 | |
| Net inflow (outflow) of cash related to the following activities: | |
| Operating: | |
| Net loss Adjustments to reconcile net earnings (loss) to net cash provided from operating activities: Depreciation, depletion and amortization Equity in (earnings) losses of associate and joint venture Non-hedge derivative (gains) losses - net Share-based compensation expense | $ (15.3) 207.8 (0.2) (5.5) 3.8 |
| Finance expense | 33.2 |
| Deferred tax recovery Foreign exchange losses and other Changes in operating assets and liabilities: Accounts receivable and other assets Inventories Accounts payable and accrued liabilities | (31.9) 10.7 (0.2) 37.1 15.1 |
| Cash flow provided from operating activities Income taxes paid Net cash flow provided from operating activities | 254.6 |
| (40.1) | |
| 214.5 | |
| Investing: Additions to property, plant and equipment Business acquisitions | (139.5) (610.0) |
| Net additions to long-term investments and other assets | (11.1) |
| Net proceeds from the sale of property, plant and equipment Decrease (increase) in restricted cash Interest received and other Net cash flow used in investing activities Financing: Proceeds from issuance of equity Proceeds from issuance of debt Repayment of debt Interest paid | 4.4 (0.4) 0.6 |
| (756.0) | |
| 275.7 - - (29.6) | |
| Net cash flow provided from (used in) financing activities | 246.1 |
| Effect of exchange rate changes on cash and cash equivalents Increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period | 1.9 |
| (293.5) 1,043.9 | |
| $ 750.4 |
p. 11 Kinross reports 2016 first-quarter results www.kinross.com
| Operating Summary | Ore T o nnes Ore P ro cessed Grade Ore M ined P ro cessed (H eap Grade (H eap P erio d Ownership ( 1 ) (M illed) ( 1 ) Leach) ( 1 ) (M ill) Leach) (%) ('000 tonnes) ('000 tonnes) ('000 tonnes) (g/t) (g/t) Q1 2016 100 6,786 3,246 7,495 0.66 0.26 Q4 2015 100 4,454 3,407 6,712 0.66 0.26 Q3 2015 100 5,950 3,328 6,697 0.86 0.27 Q2 2015 100 6,543 3,345 8,255 0.87 0.28 Q1 2015 100 5,814 3,366 3,554 0.64 0.29 Q1 2016 100 ( 8 ) 4,018 869 3,617 1.17 0.44 Q4 2015 50 6,392 898 3,724 0.86 0.42 Q3 2015 50 6,962 924 4,546 0.91 0.47 Q2 2015 50 5,286 748 4,372 1.08 0.40 Q1 2015 50 7,494 146 6,726 0.65 0.40 Q1 2016 100 1,766 - 1,766 - 0.62 Q1 2016 100 86 107 - 7.23 - Q4 2015 100 84 90 - 9.67 - Q3 2015 100 97 106 - 6.93 - Q2 2015 100 95 130 - 8.58 - Q1 2015 100 93 111 - 6.02 - Q1 2016 100 11,825 11,439 - 0.44 - | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Russia Americas | M ine F o rt Kno x R o und M o untain B ald M o untain ( 8 ) Kettle R iver- B uckho rn P aracatu | R eco very ( 2 ) (%) 81% 82% 83% 84% 82% 83% 77% 81% 75% 67% nm 92% 92% 92% 93% 91% 73% | Go ld Eq P ro ductio n ( 5 ) (ounces) 87,800 87,561 115,258 116,061 82,673 92,926 51,034 58,074 48,448 40,262 20,422 28,312 19,301 24,222 29,580 24,265 119,376 | Go ld Eq Sales ( 5 ) (ounces) 87,889 87,426 118,978 113,697 82,003 90,474 52,882 54,559 47,893 40,447 11,197 28,264 19,601 24,284 29,524 24,167 117,090 | P ro ductio n co st o f sales ($ millions) $ 62.2 62.6 66.2 68.9 55.1 $ 65.0 37.0 37.5 36.4 36.0 $ 13.1 $ 22.2 14.6 19.3 23.4 2 4.3 $ 79.9 | P ro ductio n co st o f sales / o z ($/ounce) $ 708 716 556 606 672 $ 718 700 687 760 890 $ 1,170 $ 785 745 795 793 1,006 $ 682 | C ap Ex ( 7 ) ($ millions) $ 18.0 35.3 37.4 26.7 41.4 $ 16.3 14.2 12.3 10.8 11.2 $ 1.7 $ - - - - 0.6 $ 10.7 | D D &A ($ millions) $ 23.5 31.7 36.8 37.2 24.6 $ 27.2 11.0 12.9 12.0 9.0 $ 5.5 $ 1.4 2.0 2.6 3.3 4.1 $ 35.4 | |||||||
| Q4 2015 Q3 2015 Q2 2015 Q1 2015 | 100 100 100 100 | 10,730 13,969 | 9,738 12,322 | - - | 0.51 0.43 | - - | 76% 76% | 113,547 129,064 | 117,796 134,838 | 8 9.2 1 00.7 | 757 747 | 30.1 36.9 | 34.9 38.4 | ||
| 11,435 11,616 | 11,392 11,825 | - - | 0.41 0.43 | - - | 72% 77% | 110,366 124,685 | 107,169 124,929 | 9 0.5 93.9 | 844 752 | 29.4 16.3 | 36.4 37.8 | ||||
| M aricunga ( 8 ) Kupo l ( 3 ) ( 4 ) ( 6 ) | Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q1 2016 | 100 100 100 100 100 100 | 3,947 3,870 3,476 2,220 2,695 494 | - - - - - 416 | 4,254 4,099 3,822 1,957 2,912 - | - - - - - 13.92 | 0.69 0.78 0.74 0.81 0.69 - | nm nm nm nm nm 95% | 59,076 54,948 52,672 47,713 56,822 192,450 | 57,490 56,440 52,282 50,957 54,376 175,691 | $ 47.3 52.6 52.5 55.0 56.0 $ 78.2 | $ 823 932 1,004 1,079 1,030 $ 445 | $ 0.8 4.7 5.2 7.1 7.5 $ 27.8 | $ 10.8 8.2 7.3 6.4 5.4 $ 52.9 | |
| Q4 2015 Q3 2015 Q2 2015 Q1 2015 | 100 100 100 100 | 449 468 516 464 | 429 410 423 418 | - - - - | 13.81 13.65 13.43 13.20 | - - - - | 96% 96% 95% 95% | 191,308 190,366 191,160 185,729 | 195,465 217,031 159,950 192,167 | 9 1.3 1 01.7 7 8.3 91.5 | 467 469 490 476 | 9.0 21.4 10.0 15.5 | 73.8 77.3 56.3 63.9 | ||
| West Africa | T asiast C hirano - 100% C hirano - 90% | Q1 2016 | 100 | 1,891 | 777 | 1,187 | 1.51 | 0.41 | 91% | 47,078 | 48,391 | $ 47.2 | $ 975 | $ 49.9 | $ 22.7 |
| Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 Q1 2016 Q4 2015 Q3 2015 Q2 2015 Q1 2015 | 100 100 100 100 90 90 90 90 90 90 90 90 90 90 | 1,318 1,259 1,609 1,009 453 559 873 875 739 453 559 873 875 739 | 689 618 605 630 847 853 917 823 899 847 853 917 823 899 | 587 364 521 66 - - - - - - - - - - | 2.27 2.21 2.21 2.00 1.77 2.32 2.36 2.73 2.62 1.77 2.32 2.36 2.73 2.62 | 0.55 0.48 0.56 0.97 - - - - - - - - - - | 89% 92% 92% 89% 91% 91% 91% 92% 89% 91% 91% 91% 92% 89% | 53,706 53,440 57,890 54,009 44,470 58,123 63,981 66,311 67,683 40,023 52,311 57,583 59,680 60,915 | 52,146 57,163 54,941 51,790 47,679 56,284 62,792 69,017 71,873 42,911 50,655 56,513 62,115 64,686 | 49.9 60.4 58.4 51.9 $ 47.2 42.2 44.0 47.6 45.9 $ 42.5 38.0 39.6 4 2.8 41.3 | 957 1,057 1,063 1,002 $ 990 750 701 690 639 $ 990 750 701 689 638 | 49.6 44.1 31.1 36.4 $ 11.7 11.6 6.7 4.9 7.3 $ 10.5 10.4 6.0 4.4 6.6 | 26.5 19.5 18.7 16.2 $ 25.7 44.1 42.7 44.6 43.6 $ 23.1 39.7 38.4 40.1 39.2 |
(1) Tonnes of ore mined and processed represent 100% Kinross for all periods presented.
(2) Due to the nature of heap leach operations, recovery rates at M aricunga and Bald M ountain cannot be accurately measured on a quarterly basis. Recovery rates at Fort Knox, Round M ountain and Tasiast represent mill recovery only.
(3) The Kupol segment includes the Kupol and Dvoinoye mines.
(4) Kupol silver grade and recovery were as follows: Q1 (2016) 104.19 g/t, 88%; Q4 (2015) 100.58 g/t, 87%; Q3 (2015) 100.55 g/t, 88%; Q2 (2015) 106.19 g/t, 87%; Q1 (2015) 95.64 g/t, 85.3%.
(5) Gold equivalent ounces include silver ounces produced and sold converted to a gold equivalent based on the ratio of the average spot market prices for the commodities for each period. The ratios for the quarters presented are as follows: Q1 2016:
79.64:1; Q4 2015: 74.78:1; Q3 2015: 75.40:1, Q2 2015: 72.75:1, Q1 2015: 72.91:1.
(6) Dvoinoye ore processed and grade were as follows: Q1 (2016) 129,675 tonnes, 22.69 g/t; Q4 (2015) 122,987 tonnes, 22.91 g/t; Q3 (2015) 111,806 tonnes, 24.52 g/t; Q2 (2015) 104,465 tonnes, 26.43 g/t; Q1 (2015) 93,000 tonnes, 27.40 g/t.
(7) Capital expenditures are presented on a cash basis, consistent with the statement of cash flows.
(8) On January 11, 2016, Kinross completed the acquisition of 100% of the Bald M ountain gold mine and the remaining 50% interest in the Round M ountain gold mine.
p. 12 Kinross reports 2016 first-quarter results www.kinross.com