K.TO · 2018-02-14 12:00:00

Kinross reports 2017 fourth-quarter and full-year results Achieves sixth straight year of strong results and meeting production and cost guidance Bald Mountain doubles production and Tasiast lowers cost of sales per ounce about 30% year-over-year

Financials

Kinross reports 2017 fourth-quarter and full-year results

Achieves sixth straight year of strong results and meeting production and cost guidance

Bald Mountain doubles production and Tasiast lowers cost of sales per ounce about 30% year-over-year

TORONTO, Feb. 14, 2018 -- Kinross Gold Corporation (TSX:K) (NYSE:KGC) today announced its results for the fourth-quarter and year-end December 31, 2017.

(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 pages 20 and 21 of this release. All dollar amounts are

expressed in U.S. dollars, unless otherwise noted.)

2017 fourth-quarter highlights:

• Production1: 652,710 gold equivalent ounces (Au eq. oz.), compared with 746,291 Au eq. oz. in Q4 2016.

• Revenue: $810.3 million, compared with $902.8 million in Q4 2016.

• Production cost of sales2: $653 per Au eq. oz., compared with $712 in Q4 2016.

• All-in sustaining cost2: $1,019 per Au eq. oz. sold, compared with $1,012 in Q4 2016. All-in sustaining cost per gold ounce (Au oz.) sold on a by-product

basis was $1,013 in Q4 2017, compared with $1,010 in Q4 2016.

• Operating cash flow: $366.4 million, compared with $302.6 million in Q4 2016.

• Adjusted operating cash flow 2: $364.2 million, compared with $211.6 million in Q4 2016.

• Reported net earnings/loss 3: reported net earnings3 of $217.6 million, or $0.17 per share, compared with a net loss of $116.5 million, or $0.09 per share,

in Q4 2016.

• Adjusted net earnings/loss2,3: adjusted net earnings2,3 of $16.3 million, or $0.01 per share, compared with an adjusted net loss of $50.9 million, or $0.04

per share, in Q4 2016.

2017 full-year highlights:

• Production1: 2,673,533 Au eq. oz., compared with 2,789,150 Au eq. oz. for full-year 2016.

• Revenue: $3,303.0 million, compared with $3,472.0 million for full-year 2016.

• Production cost of sales2: $669 per Au eq. oz., compared with $712 for full-year 2016.

• All-in sustaining cost2: $954 per Au eq. oz. sold, compared with $984 for full-year 2016. All-in sustaining cost per Au oz. sold on a by-product basis was

$946 for full-year 2017, compared with $975 per Au oz. sold for full-year 2016.

• Operating cash flow: $951.6 million, compared with $1,099.2 million for full-year 2016.

• Adjusted operating cash flow 2: $1,166.7 million, compared with $926.7 million for full-year 2016.

• Reported net earnings/loss 3: earnings of $445.4 million, or $0.36 per share, compared with a reported net loss of $104.0 million, or $0.08 per share, for

full-year 2016.

• Adjusted net earnings 2,3: earnings of $178.7 million, or $0.14 per share, compared with earnings of $93.0 million, or $0.08 per share, for full-year 2016.

• Capital expenditures: $897.6 million, compared with $633.8 million for full-year 2016.

• Balance sheet: The Company ended the year with cash and cash equivalents of $1,025.8 million, total liquidity of $2,589.6 million, and no debt maturities

until 2021.

2018 outlook:

• 2018 Outlook: Kinross expects to produce 2.5 million Au eq. oz. (+/- 5%) at a production cost of sales per Au eq. oz. of $730 (+/- 5%). All-in sustaining

cost is forecast to be $975 per ounce sold on both a gold equivalent and by-product basis (+/- 5%). Total capital expenditures are forecast to be

approximately $1,075 million (+/- 5%), which includes sustaining capital of $355 million, and non-sustaining capital of approximately $680 million to

advance development projects.

CEO Commentary

J. Paul Rollinson, President and CEO, made the following comments in relation to 2017 fourth-quarter and year-end results:

“For the sixth consecutive year, Kinross delivered excellent operational results and met its full-year guidance for production and costs. We generated more than

$950 million in operating cash flow, while adjusted net earnings almost doubled year-over-year to approximately $180 million. Our portfolio of mines performed

well, notably Bald Mountain, which more than doubled its production in 2017 and Tasiast, which reduced cost of sales per ounce by approximately 30% year-over-

year.

“We are forecasting another year of solid production of approximately 2.5 million gold equivalent ounces, and we expect to be at or slightly above this level of

production over the next three years. All-in sustaining cost for 2018 is expected to be at approximately the same level as 2017. Our liquidity remains strong at

approximately $2.6 billion even as we proceed through this period of investment in our organic projects. With a robust balance sheet, we are well positioned to

invest in our future growth.

“Our development projects continue to progress on time and on budget, with Tasiast Phase One expected to commence full commercial production by the end of

June. We also expect to achieve a number of significant project milestones in 2018, including: ramping up of construction at Tasiast Phase Two; advancing

construction of the Round Mountain Phase W and Bald Mountain Vantage projects in Nevada; commencing mining of high-grade ore at Moroshka in Russia;

completing the Fort Knox Gilmore feasibility study; completing the pre-feasibility study at Tasiast Sud and; receiving the remaining sectoral permits for the La

Coipa Restart project.”

Financial results

Summary of financial and operating results

Three months ended Years ended

December 31, December 31,

(in millions, except ounces, per share amounts, and per ounce amounts) 2017 2016 2017 2016

Operating Highlights

Total gold equivalent ounces(a)

Produced(c) 659,339 752,501 2,698,136 2,810,345

Sold(c) 634,762 743,427 2,621,875 2,778,902

Attributable gold equivalent ounces(a)

Produced(c) 652,710 746,291 2,673,533 2,789,150

Sold(c) 628,565 738,087 2,596,754 2,758,306

Financial Highlights

Metal sales $ 810.3 $ 902.8 $ 3,303.0 $ 3,472.0

Production cost of sales $ 414.5 $ 529.4 $ 1,757.4 $ 1,983.8

Depreciation, depletion and amortization $ 190.3 $ 237.8 $ 819.4 $ 855.0

Impairment, net of reversals $ 21.5 $ - $ 21.5 $ 139.6

Operating earnings (loss) $ 102.9 $ (35.6) $ 336.5 $ 46.3

Net earnings (loss) attributable to common shareholders $ 217.6 $ (116.5) $ 445.4 $ (104.0)

Basic earnings (loss) per share attributable to common shareholders $ 0.17 $ (0.09) $ 0.36 $ (0.08)

Diluted earnings (loss) per share attributable to common shareholders $ 0.17 $ (0.09) $ 0.35 $ (0.08)

Adjusted net earnings (loss) attributable to common shareholders (b) $ 16.3 $ (50.9) $ 178.7 $ 93.0

Adjusted net earnings (loss) per share(b) $ 0.01 $ (0.04) $ 0.14 $ 0.08

Net cash flow provided from operating activities $ 366.4 $ 302.6 $ 951.6 $ 1,099.2

Adjusted operating cash flow(b) $ 364.2 $ 211.6 $ 1,166.7 $ 926.7

Average realized gold price per ounce(d) $ 1,276 $ 1,217 $ 1,260 $ 1,249

Consolidated production cost of sales per equivalent ounce(c) sold(b) $ 653 $ 712 $ 670 $ 714

Attributable(a) production cost of sales per equivalent ounce(c) sold(b) $ 653 $ 712 $ 669 $ 712

Attributable(a) production cost of sales per ounce sold on a by-product basis (b) $ 637 $ 701 $ 653 $ 696

Attributable(a) all-in sustaining cost per ounce sold on a by-product basis (b) $ 1,013 $ 1,010 $ 946 $ 975

Attributable(a) all-in sustaining cost per equivalent ounce(c) sold(b) $ 1,019 $ 1,012 $ 954 $ 984

Attributable(a) all-in cost per ounce sold on a by-product basis (b) $ 1,308 $ 1,192 $ 1,164 $ 1,073

Attributable(a) all-in cost per equivalent ounce(c) sold(b) $ 1,308 $ 1,189 $ 1,166 $ 1,079

(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 15 to 19 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 fourth quarter of 2017 was 76.22:1, compared with 70.88:1 for the fourth quarter of 2016 and for year to date

2017 was 73.72:1, compared with 72.95:1 for 2016.

(d) The definition of this non-GAAP financial measure is included on page 19 of this news release.

The following operating and financial results are based on fourth quarter and year-end 2017 gold equivalent production. Production and cost measures are on an

attributable basis:

Production: Kinross produced 652,710 attributable Au eq. oz. in the fourth quarter of 2017, a decrease compared with 746,291 in the fourth quarter of 2016,

mainly due to lower production at Kupol and Paracatu, partially offset by higher production at Bald Mountain.

Kinross produced 2,673,533 attributable Au eq. oz. for full-year 2017, which was at the high end of the Company’s 2017 guidance range. This compares with

production of 2,789,150 Au eq. oz. for full-year 2016. The year-over-year decrease was primarily due to lower production at Kupol, the suspension of mining

activities at Maricunga and the temporary curtailment of mining activities at Paracatu, partially offset by increased production at Round Mountain, Tasiast, and

Bald Mountain, which more than doubled its annual production.

Production cost of sales: Production cost of sales per Au eq. oz. 2 decreased to $653 for the fourth quarter of 2017, compared with $712 for the fourth quarter of

2016, largely due to a lower cost of sales per ounce at Bald Mountain, Tasiast, and Fort Knox. Production cost of sales per Au oz. on a by-product basis 2 was

$637 in Q4 2017, compared with $701 in Q4 2016, based on Q4 2017 attributable gold sales of 613,281 ounces and attributable silver sales of 1,164,929 ounces.

Production cost of sales per Au eq. oz. decreased to $669 for full-year 2017, which was at the low end of the Company’s 2017 guidance range. This compares

with production cost of sales of $712 per Au eq. oz. for full-year 2016. The full-year decrease was mainly due to continuous improvement efforts and lower cost of

sales per ounce at Bald Mountain, Tasiast, Chirano, Fort Knox and Round Mountain. Production cost of sales per Au oz. on a by-product basis was $653 for full-

year 2017, compared with $696 for full-year 2016, based on 2017 full-year attributable 1 gold sales of 2,528,108 ounces and attributable silver sales of 5,053,845

ounces.

All-in sustaining cost: All-in sustaining cost per Au eq. oz. sold 2 increased to $1,019 in Q4 2017, compared with $1,012 in Q4 2016. All-in sustaining cost per

Au oz. sold on a by-product basis 2 increased to $1,013 in Q4 2017, compared with $1,010 in Q4 2016.

All-in sustaining cost per Au eq. oz. sold decreased to $954 for full-year 2017, which was at the low end of the Company’s 2017 guidance range, compared with

$984 for full-year 2016. The decrease was mainly a result of lower production cost of sales per ounce. All-in sustaining cost per Au oz. sold on a by-product basis

was $946 for full-year 2017, compared with $975 for full-year 2016.

Revenue : Revenue from metal sales was $810.3 million in the fourth quarter of 2017, compared with $902.8 million during the same period in 2016, due to a

decrease in gold equivalent ounces sold, partially offset by an increase in average realized gold price.

Revenue was $3,303.0 million for full-year 2017, compared with $3,472.0 million for full-year 2016. This 5% decrease was due to less gold equivalent ounces sold,

slightly offset by an increase in average realized gold prices.

Average realized gold price 4: The average realized gold price in Q4 2017 increased to $1,276 per ounce, compared with $1,217 per ounce in Q4 2016.

The average realized gold price per ounce increased to $1,260 for full-year 2017, compared with $1,249 per ounce for full-year 2016. The Company’s average

realized gold price for full-year 2017 was slightly higher than the average 2017 London PM Fix of $1,257 per ounce.

Margins: Kinross’ attributable margin per Au eq. oz. sold5 was $623 per Au eq. oz. for the fourth quarter of 2017, compared with the Q4 2016 margin of $505 per

Au eq. oz. Full-year 2017 margin per Au eq. oz. was $591, compared with $537 for full-year 2016.

Operating cash flow : Adjusted operating cash flow 2 was $364.2 million for the fourth quarter of 2017, compared with $211.6 million for Q4 2016. Adjusted

operating cash flow for full-year 2017 was $1,166.7 million, compared with $926.7 million for full-year 2016.

Net operating cash flow was $366.4 million for the fourth quarter of 2017, compared with $302.6 million for Q4 2016. Net operating cash flow for full-year 2017 was

$951.6 million, compared with $1,099.2 million for full-year 2016.

Earnings/loss: Adjusted net earnings 2,3 was $16.3 million, or $0.01 per share, for Q4 2017, compared with an adjusted net loss of $50.9 million, or $0.04 per

share, for Q4 2016. Full-year 2017 adjusted net earnings was $178.7 million, or $0.14 per share, compared with adjusted net earnings of $93.0 million, or $0.08

per share, for full-year 2016.

Reported net earnings3 was $217.6 million, or $0.17 per share, for Q4 2017, compared with a loss of $116.5 million, or $0.09 per share, in Q4 2016. Full-year

2017 reported net earnings was $445.4 million, or $0.36 per share, compared with a loss of $104.0 million, or $0.08 per share, for full-year 2016. The increase in

full-year reported earnings was primarily due to lower production cost of sales, a net after-tax, non-cash impairment reversal of $62.1 million and net gains realized

with the sale of the Cerro Casale and Quebrada Seca exploration properties and the DeLamar reclamation property.

Capital expenditures : Capital expenditures increased to $313.3 million for Q4 2017, compared with $226.5 million for the same period last year, mainly due to

increased spending at Tasiast, Bald Mountain and Round Mountain.

Capital expenditures for full-year 2017 were $897.6 million, compared with $633.8 million for 2016, primarily due to increased spending at Tasiast, Bald Mountain

and Fort Knox, offset by lower spending at Kupol. Capital expenditures were in line with the Company’s guidance of $900 million (+/- 5%).

Balance sheet

As of December 31, 2017, Kinross had cash and cash equivalents of $1,025.8 million, compared with $827.0 million at December 31, 2016. The 24% increase

was mainly a result of strong operating results and the receipt of net proceeds related to the sale of Cerro Casale and Quebrada Seca, partially offset by capital

expenditures.

The Company has available credit of $1,563.8 million as of year-end 2017, for total liquidity of $2,589.6 million.

Effective December 5, 2017, the Company entered into an amendment to increase the amount of its letter of credit guarantee facility with Export Development

Canada from $250.0 million to $300.0 million.

Kinross has no scheduled debt repayments until 2021, and with its strong balance sheet and excellent liquidity, the Company is well-positioned to fund its

pipeline of organic development projects.

Operating results

Mine-by-mine summaries for 2017 fourth-quarter and full-year operating results may be found on pages 10 and 14 of this news release. Highlights include the

following:

Americas

The Americas region, which represented 61% of Kinross’ 2017 production, performed well and was at the high end of its regional production guidance range for the

year, with Bald Mountain more than doubling annual production compared with 2016. The region also came in at the low end of its cost of sales per ounce

regional guidance range.

At Fort Knox , production decreased year-over-year and quarter-over-quarter mainly due to fewer tonnes placed on the heap leach pad, partially offset by an

increase in mill grade. Cost of sales per ounce at Fort Knox was lower year-over-year mainly due to a decrease in operating waste mined and labour costs.

At Round Mountain , 2017 production was higher compared with 2016 mainly due to strong mill grades, which were the highest since 2003. The mine’s

production decreased quarter-over-quarter largely due to fewer tonnes produced from the heap leach pads. Round Mountain’s full-year cost of sales per ounce was

lower year-over-year mainly due to higher grades and lower labour costs. Quarterly cost of sales per ounce was higher compared with Q3 2017 mainly due to

lower production and higher contractor and maintenance costs.

Bald Mountain performed well in 2017, more than doubling production compared with the previous year due to higher grades and more tonnes placed on the

heap leach pads. As expected, production was higher in the fourth quarter compared with Q3 2017 due to the timing of ore placed on the pads. Bald Mountain

lowered its full-year cost of sales per ounce by almost half compared with 2016, and achieved its lowest cost quarter since the mine was acquired by Kinross.

These reductions were mainly due to the substantial increase in gold ounces sold, productivity improvements and cost-reduction initiatives.

Kettle River-Buckhorn outperformed in 2017, producing more ounces than expected as it extended mine life until the third quarter. Full-year cost of sales per

ounce decreased year-over-year mainly due to higher grades, as well as the completion of mining activities in Q3 2017. Exploration activities in the region are

continuing.

At Paracatu , annual production decreased compared with 2016 mainly due to the temporary curtailment of mining and Plant 2 operations in the second half of

the year as a result of lower than average rainfall in the area. The lower production resulted in an increase in the full-year cost of sales per ounce. Fourth quarter

production increased compared with Q3 2017 as mining and processing activities resumed in early November after the curtailment. The increase in production

largely contributed to the decrease in cost of sales per ounce in Q4 2017 compared with Q3 2017.

Maricunga delivered strong results during the year, as production from the rinsing of heap materials placed on the pads prior to the suspension of mining

activities was better than expected. Cost of sales per ounce for the full year was lower than 2016 due to the suspension of mining activities.

Russia

The region performed well for the year, coming in at the high end of its production guidance range and at the low end of its cost of sales per ounce guidance

range.

The combined full-year production at Kupol and Dvoinoye was lower compared with 2016 mainly as a result of lower production at Dvoinoye and the anticipated

lower grades at both operations. Production during the quarter was consistent with Q3 2017 results.

Full-year cost of sales per ounce was higher compared with 2016 mainly as a result of higher operating waste and lower grades. Cost of sales per ounce in Q4

2017 was slightly lower compared with Q3 2017 mainly due to lower operating waste mined.

West Africa

The region delivered strong results in 2017, achieving both its annual production and cost of sales per ounce guidance for the year.

Tasiast performed well in 2017, increasing production by 39% compared with the previous year while at the same time achieving excellent progress advancing the

Phase One expansion project. The increase in full-year production versus 2016 was mainly as a result of higher mill grades, operating efficiencies that increased

mill throughput, and the impact of the temporary suspension of mining in 2016. Production in Q4 2017 was slightly lower compared with the previous quarter

mainly due to lower mill grades, although mill grades for the full year were the highest since Kinross acquired Tasiast in 2010. Full-year cost of sales per ounce at

Tasiast was 29% lower compared with the previous year mainly as a result of the higher grades and lower operating waste mined. Cost of sales per ounce in Q4

2017 was higher versus Q3 2017 mainly due to higher diesel costs.

Chirano’s full-year production was higher compared with 2016 mainly due to higher grades, but was consistent quarter-over-quarter. For the full year, Chirano’s

cost of sales per ounce deceased versus 2016 mainly due to higher grades and lower energy costs. Fourth quarter cost of sales per ounce decreased primarily

due to lower operating waste mined and maintenance costs compared with Q3 2017.

Non-cash impairment reversal

The Company completed its annual assessment of the carrying value of its cash generating units (CGU) for the year-ended December 31, 2017, and as a result,

recorded a net, after-tax, non-cash impairment reversal of $62.1 million. The impairment reversal was entirely related to property, plant and equipment and

included impairment reversals at Tasiast and Fort Knox of $142.9 million and $86.2 million, respectively, partially offset by an impairment charge at Paracatu of

$167.0 million. The impairment reversals were mainly a result of an increase in the short-term and long-term future gold price assumptions used for impairment

testing, as well as the Tasiast Phase Two project progressing as planned and additions to Fort Knox’s mineral reserve estimates. The impairment charge at

Paracatu was mainly a result of changes in the fiscal regime in Brazil that were considered in the cash flow analysis used to assess its recoverable amount.

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 20 and 21 of this news release.

In 2018, Kinross expects to produce 2.5 million Au eq. oz. (+/- 5%) from its operations, and expects to be at or slightly above the same level of production over

the next three years.

The forecast decrease compared with full-year 2017 production is mainly a result of mine sequencing at several operations, including anticipated lower grades at

Kupol and Dvoinoye, the closure of Kettle River-Buckhorn and the suspension of mining at Maricunga, partially offset by an expected production increase in the

West Africa region.

The production guidance has taken into consideration the potential for a temporary curtailment of mill operations at Paracatu due to the possibility of seasonal

rainfall shortages in the area. Production is expected to be higher in the second half of 2018 than the first half mainly as a result of expected production from the

Tasiast Phase One expansion.

Production cost of sales per Au eq. oz. is expected to be $730 per Au eq. oz. (+/- 5%) for 2018. The expected increase for 2018 compared with full-year 2017

production cost of sales per ounce is mainly as a result of mine sequencing, with anticipated lower grades at Dvoinoye and Round Mountain and an expected

increase in operating waste mined at Fort Knox and Tasiast. Kinross expects production cost of sales per Au eq. oz to decline slightly in 2019 and 2020 as lower

cost production comes online.

The Company has forecast an all-in sustaining cost of $975 (+/- 5%) per ounce sold on both a gold equivalent and by-product basis for 2018, which is largely in

line with full-year 2017 all-in sustaining cost per ounce.

The table below summarizes the 2018 forecast for production and average production cost of sales on a gold equivalent and a by-product accounting basis:

Accounting basis 2018 Outlook

(+/- 5%)

Gold equivalent basis

Production (Au eq. oz.) 2.5 million

Average production cost of sales per Au eq. oz. $730

All-in sustaining cost per Au eq. oz. $975

By-product basis

Gold ounces 2.4 million

Silver ounces 4.5 million

Average production cost of sales per Au oz. $720

The following table provides a summary of the 2018 production and production cost of sales forecast by region:

Region

Forecast 2018

production

(+/- 5%) (Au eq. oz.)

Percentage of total

forecast production6

Forecast 2018 production

cost of sales

(+/- 5%) (per Au eq. oz.)

Americas 1.51 million 60% $750

West Africa (attributable)* 500,000 20% $795

Russia 490,000 20% $620

Total 2.5 million 100% $730

*Based on Kinross’ 90% share of Chirano

Material assumptions used to forecast 2018 production cost of sales are as follows:

• a gold price of $1,200 per ounce,

• a silver price of $16 per ounce,

• an oil price of $55 per barrel,

• foreign exchange rates of:

◦ 3.25 Brazilian reais to the U.S. dollar,

◦ 1.25 Canadian dollars to the U.S. dollar,

◦ 60 Russian roubles to the U.S. dollar,

◦ 650 Chilean pesos to the U.S. dollar,

◦ 4.00 Ghanaian cedi to the U.S. dollar,

◦ 33 Mauritanian ouguiya to the U.S. dollar, and

◦ 1.10 U.S. dollars 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 $17 impact on production cost of sales per ounce;

• specific to the Russian rouble, a 10% change in the exchange rate would be expected to result in an approximate $19 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 $38 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 $4 impact on production cost of sales per ounce as a result of a change

in royalties.

Total capital expenditures for 2018 are forecast to be approximately $1,075 million (+/- 5%), which includes capitalized interest of approximately $40 million, and

are summarized in the table below:

Region

Forecast 2018

sustaining capital

(million)

Forecast 2018

non-sustaining capital

(million)

Total forecast capital

(+/- 5%) (million)

Americas $280 $285 $565

West Africa $40 $375 $415

Russia $30 $20 $50

Corporate $5 $0 $5

Total $355 $680 $1,035

Capitalized interest $40

TOTAL $1,075

Sustaining capital includes the following forecast spending estimates:

• Mine development: $85 million (Americas); $15 million (Russia)

• Mobile equipment: $50 million (Americas); $10 million (West Africa); $10 million (Russia)

• Tailings facilities: $50 million (Americas); $5 million (West Africa)

• Leach facilities: $20 million (Americas)

• Mill facilities: $20 million (Americas); $10 million (West Africa)

Non-sustaining capital includes the following forecast spending estimates:

• Tasiast Project: $240 million

• Round Mountain Phase W: $185 million

• Tasiast West Branch stripping: $130 million

• Bald Mountain Vantage Complex: $90 million

• Development projects and other: $35 million

The 2018 forecast for exploration is approximately $75 million, none of which is expected to be capitalized, with 2018 overhead (general and administrative and

business development expenses) forecast to be approximately $165 million, both of which are consistent with last year’s guidance.

Other operating costs expected to be incurred in 2018 are approximately $100 million, which includes approximately $50 million of care and maintenance costs in

Chile.

Based on our assumed gold price and other inputs, net income tax expense is expected to be $35 million and taxes paid are expected to be $70 million, with the

expense increasing at 15% of any profit resulting from higher gold prices and taxes paid increasing at a lower rate of 7% as a result of the realization of the U.S.

alternative minimum tax credit.

Depreciation, depletion and amortization is forecast to be approximately $300 per Au eq. oz.

Conference call details

In connection with the release, Kinross will hold a conference call and audio webcast on Thursday, February 15, 2018 at 9 a.m. ET to discuss the results,

followed by a question-and-answer session. To access the call, please dial:

Canada & US toll-free – (866) 393-4306; Conference ID: 9094608

Outside of Canada & US – +1 (734) 385-2616; Conference ID: 9094608

Replay (available up to 14 days after the call):

Canada & US toll-free – (855) 859-2056; Conference ID: 9094608

Outside of Canada & US – +1 (404) 537-3406; Conference ID: 9094608

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’ 2017 year-end Financial Statements and Management’s Discussion and Analysis report at

www.kinross.com. Kinross’ 2017 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. Kinross

maintains listings on the Toronto Stock Exchange (symbol:K) and the New York Stock Exchange (symbol:KGC).

_______________________________

1 Unless otherwise stated, production figures in this news release are based on Kinross’ 90% share of Chirano production.

2 These figures are non-GAAP financial measures and are defined and reconciled on pages 15 to 20 of this news release.

3 Net earnings/loss figures in this release represent “net earnings (loss) from continuing operations attributable to common shareholders”.

4 Average realized gold price is a non-GAAP financial measure and is defined as gold metal sales divided by the total number of gold ounces sold. .

5 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.”

6The percentages are calculated based on the mid-point of regional 2018 forecast production.

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

2017 2016 2017 2016 2017 2016 2017 2016

Fort Knox 95,182 114,427 94,724 115,101 $ 58.7 $ 82.8 $ 620 $ 719

Round Mountain 98,249 99,310 104,198 107,313 81.6 86.6 783 807

Bald Mountain 105,080 44,343 99,363 34,585 47.0 44.5 473 1,287

Kettle River - Buckhorn 3,906 30,690 3,949 30,862 0.4 15.5 101 502

Paracatu 66,023 124,975 62,843 127,576 59.8 101.5 952 796

Maricunga 19,039 32,899 11,201 33,360 6.9 17.8 616 534

Americas Total 387,479 446,644 376,278 448,797 254.4 348.7 676 777

Kupol 145,301 180,023 141,518 179,912 73.8 80.8 521 449

Russia Total 145,301 180,023 141,518 179,912 73.8 80.8 521 449

Tasiast 60,274 63,728 54,993 61,318 43.0 58.7 782 957

Chirano (100%) 66,285 62,106 61,973 53,400 43.3 41.2 699 772

West Africa Total 126,559 125,834 116,966 114,718 86.3 99.9 738 871

Operations Total 659,339 752,501 634,762 743,427 414.5 529.4 653 712

Less Chirano non-controlling

interest (10%) (6,629) (6,210) (6,197) (5,340) (4.3) (4.1)

Attributable Total 652,710 746,291 628,565 738,087 $ 410.2 $ 525.3 $ 653 $ 712

Years ended December 31, Gold equivalent ounces

Produced Sold

Production cost of

sales ($millions)

Production cost of

sales/equivalent ounce sold

2017 2016 2017 2016 2017 2016 2017 2016

Fort Knox 381,115 409,844 381,779 408,059 $ 239.9 $ 302.2 $ 628 $ 741

Round Mountain 436,932 378,264 438,051 377,910 302.5 292.0 691 773

Bald Mountain 282,715 130,144 262,916 111,464 168.9 131.7 642 1,182

Kettle River - Buckhorn 76,570 112,274 77,087 112,038 36.8 73.0 477 652

Paracatu 359,959 483,014 356,251 482,827 310.2 346.4 871 717

Maricunga 91,127 175,532 41,316 175,670 19.9 145.2 482 827

Americas Total 1,628,418 1,689,072 1,557,400 1,667,968 1,078.2 1,290.5 692 774

Kupol 580,451 734,143 577,007 736,001 300.9 324.3 521 441

Russia Total 580,451 734,143 577,007 736,001 300.9 324.3 521 441

Tasiast 243,240 175,176 236,256 168,969 178.2 179.3 754 1,061

Chirano (100%) 246,027 211,954 251,212 205,964 200.1 189.7 797 921

West Africa Total 489,267 387,130 487,468 374,933 378.3 369.0 776 984

Operations Total 2,698,136 2,810,345 2,621,875 2,778,902 1,757.4 1,983.8 670 714

Less Chirano non-controlling

interest (10%) (24,603) (21,195) (25,121) (20,596) (20.0) (19.0)

Attributable Total 2,673,533 2,789,150 2,596,754 2,758,306 $ 1,737.4 $ 1,964.8 $ 669 $ 712

Consolidated balance sheets

(expressed in millions of United States dollars, except share amounts)

As at

December 31, December 31,

2017 2016

Assets

Current assets

Cash and cash equivalents $ 1,025.8 $ 827.0

Restricted cash 12.1 11.6

Accounts receivable and other assets 91.3 127.3

Current income tax recoverable 43.9 111.9

Inventories 1,094.3 986.8

Unrealized fair value of derivative assets 17.0 16.1

2,284.4 2,080.7

Non-current assets

Property, plant and equipment 4,887.2 4,917.6

Goodwill 162.7 162.7

Long-term investments 188.0 142.9

Investments in associate and joint ventures 23.7 163.6

Unrealized fair value of derivative assets 3.9 6.0

Other long-term assets 574.0 411.3

Deferred tax assets 33.3 94.5

Total assets $ 8,157.2 $ 7,979.3

Liabilities

Current liabilities

Accounts payable and accrued liabilities $ 482.6 $ 464.8

Current income tax payable 35.1 72.6

Current portion of provisions 66.5 93.2

Current portion of unrealized fair value of derivative liabilities 1.1 7.1

585.3 637.7

Non-current liabilities

Long-term debt 1,732.6 1,733.2

Provisions 830.5 861.2

Other long-term liabilities 134.0 172.2

Deferred tax liabilities 255.6 390.7

Total liabilities 3,538.0 3,795.0

Equity

Common shareholders' equity

Common share capital $ 14,902.5 $ 14,894.2

Contributed surplus 240.7 238.3

Accumulated deficit (10,580.7) (11,026.1)

Accumulated other comprehensive income 21.1 39.1

Total common shareholders' equity 4,583.6 4,145.5

Non-controlling interest 35.6 38.8

Total equity 4,619.2 4,184.3

Total liabilities and equity $ 8,157.2 $ 7,979.3

Common shares

Authorized Unlimited Unlimited

Issued and outstanding 1,247,003,940 1,245,049,712

Consolidated statements of operations

(expressed in millions of United States dollars, except share and per share amounts)

Years ended

December 31, December 31,

2017 2016

Revenue

Metal sales $ 3,303.0 $ 3,472.0

Cost of sales

Production cost of sales 1,757.4 1,983.8

Depreciation, depletion and amortization 819.4 855.0

Impairment, net of reversals 21.5 139.6

Total cost of sales 2,598.3 2,978.4

Gross profit 704.7 493.6

Other operating expense 129.6 209.3

Exploration and business development 106.0 94.3

General and administrative 132.6 143.7

Operating earnings 336.5 46.3

Other income (expense) - net 188.1 22.5

Equity in losses of associate and joint ventures (1.3) (1.2)

Finance income 13.5 7.5

Finance expense (117.8) (134.6)

Earnings (loss) before tax 419.0 (59.5)

Income tax recovery (expense) - net 23.2 (49.6)

Net earnings (loss) $ 442.2 $ (109.1)

Net earnings (loss) attributable to:

Non-controlling interest $ (3.2) $ (5.1)

Common shareholders $ 445.4 $ (104.0)

Earnings (loss) per share attributable to common shareholders

Basic $ 0.36 $ (0.08)

Diluted $ 0.35 $ (0.08)

Weighted average number of common shares outstanding (millions)

Basic 1,246.6 1,227.0

Diluted 1,257.0 1,227.0

Consolidated statements of cash flows

(expressed in millions of United States dollars)

Years ended,

December 31, December 31,

2017 2016

Net inflow (outflow) of cash related to the following activities:

Operating:

Net earnings (loss) $ 442.2 $ (109.1)

Adjustments to reconcile net earnings (loss) to net cash provided from

operating activities:

Depreciation, depletion and amortization 819.4 855.0

Gain on disposition of associate and other interests - net (55.2) -

Impairment, net of reversals (75.5) 139.6

Equity in losses of associate and joint ventures 1.3 1.2

Share-based compensation expense 13.6 13.5

Finance expense 117.8 134.6

Deferred tax recovery (76.4) (149.7)

Foreign exchange losses (gains) and other (31.9) 14.4

Reclamation expense 11.4 27.2

Changes in operating assets and liabilities:

Accounts receivable and other assets 108.6 (21.2)

Inventories (86.7) 79.5

Accounts payable and accrued liabilities (48.5) 239.9

Cash flow provided from operating activities 1,140.1 1,224.9

Income taxes paid (188.5) (125.7)

Net cash flow provided from operating activities 951.6 1,099.2

Investing:

Additions to property, plant and equipment (897.6) (633.8)

Business acquisition - (588.0)

Net additions to long-term investments and other assets (73.8) (59.8)

Net proceeds from the sale of property, plant and equipment 8.5 9.1

Net proceeds from disposition of associate and other interests 269.6 -

Increase in restricted cash (0.5) (1.1)

Interest received and other 6.6 3.5

Net cash flow used in investing activities (687.2) (1,270.1)

Financing:

Issuance of common shares on exercise of options 0.8 2.8

Proceeds from issuance of equity - 275.7

Proceeds from issuance of debt 494.7 175.0

Repayment of debt (500.0) (425.0)

Interest paid (62.9) (73.5)

Other (1.6) (3.3)

Net cash flow used in financing activities (69.0) (48.3)

Effect of exchange rate changes on cash and cash equivalents 3.4 2.3

Increase (decrease) in cash and cash equivalents 198.8 (216.9)

Cash and cash equivalents, beginning of period 827.0 1,043.9

Cash and cash equivalents, end of period $ 1,025.8 $ 827.0

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