Kinross reports 2019 first-quarter results Delivered strong quarterly performance and on track to meet production and cost guidance Paracatu and Tasiast achieved record quarterly production and significantly lower costs
Kinross reports 2019 first-quarter results
Delivered strong quarterly performance and on track to meet production and cost guidance
Paracatu and Tasiast achieved record quarterly production and significantly lower costs
TORONTO, May 07, 2019 -- Kinross Gold Corporation (TSX: K, NYSE: KGC) today announced its results for the first-quarter ended March 31, 2019.
(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.)
2019 first-quarter highlights:
Q1 2019 results 2019 guidance
(+/- 5%)
Gold equivalent production 1
(ounces) 606,031 2.5 million
Production cost of sales2
($ per Au eq. oz.) $682 $730
All-in sustaining cost2
($ per Au eq. oz.) $925 $995
Capital expenditures $264.8 million $1,050 million
• Company on track to meet 2019 annual guidance for production, production cost of sales per ounce, all-in sustaining cost per ounce, and capital
expenditures.
• Operating cash flow of $251.6 million and adjusted operating cash flow 2 of $230.8 million.
• Reported net earnings 3 of $64.7 million, or $0.05 per share, and adjusted net earnings 2,3 of $83.3 million, or $0.07 per share.
• Cash and cash equivalents of $406.9 million and total liquidity of approximately $1.8 billion at March 31, 2019, with no debt maturities until 2021.
Operations and organic development projects highlights:
• Paracatu delivered record quarterly production and its lowest costs since 2010 mainly due to improved grade control, mill efficiencies, high recoveries,
and lower power costs.
• Tasiast achieved record quarterly production and its lowest costs since 2011, as the mine continued its strong performance since the completion of the
Phase One project.
• The Round Mountain Phase W project is nearing completion, with Phase W ore now being placed on the newly completed heap leach pad.
• The Bald Mountain Vantage Complex project is well-advanced, with commissioning of processing facilities now commenced as scheduled. Ore is now
being placed on the new heap leach pad.
• The Fort Knox Gilmore project is on schedule to start stripping in Q3 2019, with initial ore expected in early 2020. Heap leach construction activities are
proceeding well.
• The completed Lobo-Marte project scoping study shows encouraging results for a potential return to long-term production in Chile, with Lobo-Marte
production commencing after the La Coipa Restart project's mine life, where a feasibility study is on schedule to be completed in Q3 2019.
• The Company expects to complete the evaluation of low-cost alternative approaches to increase throughput at Tasiast in the second half of 2019.
CEO commentary
J. Paul Rollinson, President and CEO, made the following comments in relation to 2019 first-quarter results:
“We had an excellent first quarter built on strong operational performance and disciplined cost management. We continue to maintain our financial strength and
solid liquidity and are once again well positioned to deliver on our annual production and cost guidance for the year.
“Our three largest operations – Paracatu, Tasiast and Kupol – all exceeded expectations. At Paracatu, improved grade control, mill efficiencies, high recoveries
and lower power costs resulted in record quarterly production and the lowest production costs since 2010. Tasiast set another production record in the quarter
and costs continued to decline. Kupol continued its consistent high performance and delivered yet another strong quarter.
“During the quarter we advanced work on our development pipeline. The Nevada projects at Round Mountain Phase W and Bald Mountain Vantage Complex are
nearing completion and entering their commissioning phases. The Fort Knox Gilmore project is on schedule and heap leach construction activities are ramping
up. We completed the scoping study for Lobo-Marte and the results highlight the potential for long-term production in Chile in conjunction with the La Coipa
Restart project. At Tasiast, we are continuing to evaluate low-cost alternative approaches to increase throughput, which we are targeting for completion in the
second half of 2019.”
Financial results
Summary of financial and operating results
Three months ended
March 31,
(in millions, except ounces, per share amounts, and per ounce amounts) 2019 2018
Operating Highlights
Total gold equivalent ounces(1)
Produced(3) 611,263 659,955
Sold(3) 603,057 674,661
Attributable gold equivalent ounces(1)
Produced(3) 606,031 653,937
Sold(3) 597,649 668,217
Financial Highlights
Metal sales $ 786.2 $ 897.2
Production cost of sales $ 411.7 $ 444.6
Depreciation, depletion and amortization $ 164.1 $ 193.1
Operating earnings $ 115.4 $ 177.9
Net earnings attributable to common shareholders $ 64.7 $ 106.1
Basic earnings per share attributable to common shareholders $ 0.05 $ 0.09
Diluted earnings per share attributable to common shareholders $ 0.05 $ 0.08
Adjusted net earnings attributable to common shareholders(2) $ 83.3 $ 125.2
Adjusted net earnings per share(2) $ 0.07 $ 0.10
Net cash flow provided from operating activities $ 251.6 $ 293.5
Adjusted operating cash flow(2) $ 230.8 $ 363.7
Capital expenditures $ 264.8 $ 246.9
Average realized gold price per ounce(2) $ 1,304 $ 1,330
Consolidated production cost of sales per equivalent ounce(3) sold(2) $ 683 $ 659
Attributable(1) production cost of sales per equivalent ounce(3) sold(2) $ 682 $ 658
Attributable(1) production cost of sales per ounce sold on a by-product basis (2) $ 668 $ 644
Attributable(1) all-in sustaining cost per ounce sold on a by-product basis (2) $ 917 $ 835
Attributable(1) all-in sustaining cost per equivalent ounce(3) sold(2) $ 925 $ 846
Attributable(1) all-in cost per ounce sold on a by-product basis (2) $ 1,239 $ 1,124
Attributable(1) all-in cost per equivalent ounce(3) sold(2) $ 1,240 $ 1,128
1. "Total" includes 100% of Chirano production. "Attributable" includes Kinross' share of Chirano (90%) production.
2. The definitions and reconciliation of these non-GAAP financial measures is included on pages 13 to 17 of this news release.
3. "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 2019 was 83.74:1 (first quarter of 2018 - 79.25:1)
The following operating and financial results are based on first quarter 2019 gold equivalent production. Production and cost measures are on an attributable
basis:
Production: Kinross produced 606,031 attributable Au eq. oz. in the first quarter of 2019, compared with 653,937 Au eq. oz. in the first quarter of 2018.
Production cost of sales : Production cost of sales per Au eq. oz. 2 was $682 for the first quarter of 2019, compared with $658 for the first quarter of 2018.
Production cost of sales per Au oz. on a by-product basis 2 was $668 in Q1 2019, compared with $644 in Q1 2018, based on Q1 2019 attributable gold sales of
584,427 ounces and attributable silver sales of 1,107,143 ounces.
All-in sustaining cost: All-in sustaining cost per Au eq. oz. sold 2 was $925 in Q1 2019, compared with $846 in Q1 2018. All-in sustaining cost per Au oz. sold
on a by-product basis2 was $917 in Q1 2019, compared with $835 in Q1 2018.
Revenue : Revenue from metal sales was $786.2 million in the first quarter of 2019, compared with $897.2 million during the same period in 2018, mainly due to
a decrease in gold equivalent ounces sold and a lower realized gold price.
Average realized gold price 4: The average realized gold price in Q1 2019 was $1,304 per ounce, compared with $1,330 per ounce in Q1 2018.
Margins: Kinross’ attributable margin per Au eq. oz. sold5 was $622 for the first quarter of 2019, compared with the Q1 2018 margin of $672 per Au eq. oz. sold.
Operating cash flow : Adjusted operating cash flow 2 was $230.8 million for the first quarter of 2019, compared with $363.7 million for Q1 2018, mainly as a
result of a decrease in margins due to a lower realized gold price.
Net operating cash flow was $251.6 million for the first quarter of 2019, compared with $293.5 million for Q1 2018.
Earnings: Adjusted net earnings 2,3 was $83.3 million, or $0.07 per share, for Q1 2019, compared with adjusted net earnings of $125.2 million, or $0.10 per
share, for Q1 2018.
Reported net earnings 3 was $64.7 million, or $0.05 per share, for Q1 2019, compared with earnings of $106.1 million, or $0.09 per share, in Q1 2018. The
decrease was mainly as a result of lower operating earnings, partially offset by a decrease in income tax expense.
Capital expenditures : Capital expenditures was $264.8 million for Q1 2019, compared with $246.9 million for the same period last year, mainly due to
increased spending at our U.S. projects offset by lower spending at Tasiast.
Operating results
Mine-by-mine summaries for 2019 first-quarter operating results may be found on pages eight and 12 of this news release. Highlights include the following:
Americas
Paracatu continued its strong performance, achieving record quarterly production and the lowest cost of sales per ounce sold since Q4 2010. Recoveries
remained strong during the quarter while improvements in grade control, higher mill efficiencies and increased mill throughput contributed to the record
production. Cost of sales per ounce sold decreased year-over-year due to lower operating waste mined, favourable foreign exchange movements, and lower
power costs. Cost of sales per ounce sold decreased quarter-over-quarter mainly due to lower maintenance costs, reduced contractor and tire costs, and lower
power costs.
At Round Mountain , production was lower compared with Q4 2018 mainly due to lower mill throughput, as the site mined harder ore during the quarter, and
fewer ounces produced from the heap leach pads. Lower mill grades also contributed to the lower production compared with Q1 2018. Cost of sales per ounce
sold was lower compared with both periods mainly due to a decrease in operating waste mined.
At Bald Mountain , production was largely in line compared with the previous quarter and was lower compared with Q1 2018 mainly due to the timing of ounces
recovered from the heap leach pads. Cost of sales per ounce sold was lower quarter-over-quarter mainly due to lower operating waste mined, and higher year-
over-year as a result of a decrease in gold produced from the heap leach, partially offset by lower operating waste mined.
At Fort Knox , production decreased as anticipated, with Q1 2019 performance reflecting the mining and reduced milling strategy at the mine. The lower
production versus the previous quarter and year was due to the combined effects of lower mill tonnages, the timing of heap leach recoveries, the continued
effects of the pit wall slide in Q1 2018, and geotechnical instability as a result of higher than average rainfall in the second half of 2018. The lower production
contributed to the higher cost of sales per ounce sold quarter-over-quarter and year-over year.
At Maricunga , gold production was better than expected, as rinsing of heap materials placed on the pads prior to the suspension of mining activities continued
during the quarter. Cost of sales per ounce sold was lower compared with Q4 2018 and Q1 2018 mainly due to lower processing costs.
Russia
At Kupol and Dvoinoye , production increased quarter-over-quarter and year-over-year mainly due to higher grades at Kupol. Cost of sales per ounce sold
increased compared with Q4 2018 largely due to higher operating waste mined and higher operating costs at Dvoinoye. Increased fuel costs also contributed to
higher cost of sales versus Q1 2018, which was partially offset by lower labour costs and favourable foreign exchange movements.
Development at the Dvoinoye Zone 1 deposit is proceeding on schedule and production is expected to commence in mid-2019.
West Africa
Tasiast achieved another record production quarter, and decreased cost of sales per ounce, as the site continues to benefit from the Phase One expansion.
Excellent mill throughput rates, which exceeded expectations, and higher mill grades and recoveries, contributed to the increased production and lower cost per
ounce. Decreases in contractor expense and maintenance supplies also contributed to the lower cost per ounce, which were at their lowest level since Q1
2011.
Chirano continued to perform well, with production mainly in line with Q4 2018. Production was lower versus Q1 2018 mainly due to an expected decrease in
grades. Cost of sales per ounce sold was higher quarter-over-quarter and year-over-year mainly due to higher operating waste mined, as the site re-started open
pit mining during the quarter.
Organic development projects and opportunities
Tasiast phased expansion
Tasiast continued its strong performance since the completion of the Phase One expansion. The mine achieved record quarterly production, and decreased cost
of sales per ounce, as the new SAG mill continued to outperform, with throughput during Q1 2019 averaging approximately 15,000 tonnes per day (tpd),
excluding the planned mill shutdown days for relining and inspection.
While the Phase Two expansion remains a viable option, Kinross is targeting the second half of 2019 to complete an evaluation of lower cost alternative
approaches to increase throughput and preserve, and potentially enhance, the overall value proposition. This includes taking into account the strong Phase One
performance and increasing throughput to 30,000 tpd. The evaluation also includes opportunities for an initial incremental step to increase throughput to above
20,000 tpd at a significantly lower capital cost through de-bottlenecking, continuous improvement and further optimization of the current processing circuit.
The Company is advancing the project financing for Tasiast, as due diligence activities and discussions regarding commercial terms continue to progress well.
Kinross is seeking to obtain a total of $300 million in financing from Export Development Canada, the International Financial Corporation, and two commercial
banks, and is targeting completion of the financing in the second half of 2019.
Round Mountain Phase W
The Round Mountain Phase W project is near completion, and continues to be on schedule and on budget. Construction of the new heap leach pad is now
complete, with Phase W ore currently being placed on the pads. Commissioning of the processing circuit has commenced ahead of schedule, with initial
solution being applied to the pads to prepare for completion of the vertical carbon-in-column (VCIC) plant, which is approximately 80% complete. Construction of
mine infrastructure, including the truck shop, warehouse, wash bay and fuel island, is now 60% complete.
Click here for video highlighting Phase W development: https://youtu.be/Qx8I3ZL9xyI
Bald Mountain Vantage Complex
The Bald Mountain Vantage Complex project is well-advanced, as the VCIC plant is approximately 70% complete, and the heap leach pad is approximately
90% complete, with ore being placed on completed portions of the pad. While unusually severe winter weather has challenged the project budget and schedule,
commissioning of the processing circuit commenced as scheduled at the end of Q1 2019 with solution now being applied on the heap to build solution grade.
The project cost forecast is now expected to be approximately $130 million, mainly due to weather challenges, higher than anticipated construction contract
rates, and issues with the supply of some of the fabricated components. Construction of support infrastructure, including the truck shop, warehouse and wash
bay, is 60% complete. An operations readiness task force has been established to ensure a smooth transition of the project to Operations.
Fort Knox Gilmore
The Fort Knox Gilmore project is progressing on schedule and on budget, with initial ore expected in early 2020. Procurement and contracting for 2019 heap
construction activities are proceeding well, with the majority of contracts issued and awarded, and contractors mobilizing to site. Stripping is on schedule to
commence in Q3 2019, with expansion of the dewatering system continuing on plan.
La Coipa Restart and Lobo-Marte
The Company continues to evaluate the potential for a return to long-term production in Chile, which includes the La Coipa Restart project followed by the Lobo
-Marte project, one of the highest grade deposits in the Maricunga district, and located approximately 80 kilometres southeast of La Coipa.
The scoping study for Lobo-Marte has been completed and contemplates production commencing after the La Coipa project's mine life, along with a heap leach
and SART (sulphidization, acidification, recycling and thickening) plant operation. Kinross has previously leveraged SART technology in the region with positive
results.
Preliminary estimates for Lobo-Marte include a mine life that could extend more than 10 years, with total life of mine production of approximately 4.1 million Au
oz. at a grade of 1.2 g/t. The initial estimate for capital is $750 million (+/- 20%), with an approximate three-year construction timeline after project approval. Lobo
-Marte is now progressing to a pre-feasibility study (PFS) with permitting efforts also underway. The PFS is expected to be completed in mid-2020.
Kinross is on schedule to complete the La Coipa Restart feasibility study in Q3 2019. The La Coipa feasibility study and the Lobo-Marte PFS are expected to
determine the degree to which resources such as personnel, water, energy and capital equipment can be shared and leveraged for synergies and efficiencies
between the two potential projects.
Balance sheet and financial flexibility
As of March 31, 2019, Kinross had cash and cash equivalents of $406.9 million, compared with $349.0 million at December 31, 2018.
The Company also had available credit of $1,417.2 million, for total liquidity of approximately $1.8 billion, and no debt maturities until 2021.
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.
Kinross expects to meet its production guidance of 2.5 million Au eq. oz. (+/- 5%) for the year. The Company also expects to be within its production cost of
sales guidance of $730 per Au eq. oz. (+/- 5%) and all-in sustaining cost guidance of $995 per Au eq. oz. (+/-5%) in 2019.
The Company is on track to meet its 2019 capital expenditure forecast of approximately $1,050 million (+/-5%).
Conference call details
In connection with the release, Kinross will hold a conference call and audio webcast on Wednesday, May 8, 2019 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 – (877) 201-0168; Conference ID: 3886121
Outside of Canada & US – +1 (647) 788-4901; Conference ID: 3886121
Replay (available up to 14 days after the call):
Canada & US toll-free – (800) 585-8367; Conference ID: 3886121
Outside of Canada & US – +1 (416) 621-4642; Conference ID: 3886121
You may also access the conference call on a listen-only basis via webcast at our website www.kinross.com. The audio webcast will be archived on
www.kinross.com.
Kinross’ Annual and Special Meeting of Shareholders will also be held on Wednesday, May 8, 2019 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 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’ 2019 first-quarter unaudited Financial Statements and Management’s Discussion and Analysis
report at www.kinross.com. Kinross’ 2019 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.
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).
Media Contact
Louie Diaz
Senior Director, Corporate Communications
phone: 416-369-6469
Investor Relations Contact
Tom Elliott
Senior Vice-President, Investor Relations and Corporate Development
phone: 416-365-3390
Review of operations
Three months ended March 31, Gold equivalent ounces
Produced Sold Production cost of
sales ($millions)
Production cost of
sales/equivalent ounce
sold
2019 2018 2019 2018 2019 2018 2019 2018
Fort Knox 37,613 79,928 37,937 79,611 $ 38.8 $ 42.2 $ 1,023 $ 530
Round Mountain 85,135 97,083 83,614 97,781 56.0 66.6 670 681
Bald Mountain 47,255 93,440 43,230 98,142 29.2 46.1 675 470
Kettle River - Buckhorn - - - 927 - - - -
Paracatu 146,776 128,200 146,397 128,279 94.9 115.9 648 903
Maricunga 10,716 22,166 7,624 22,354 4.8 15.5 630 693
Americas Total 327,495 420,817 318,802 427,094 223.7 286.3 702 670
Kupol 130,088 120,181 130,414 122,624 78.0 64.6 598 527
Russia Total 130,088 120,181 130,414 122,624 78.0 64.6 598 527
Tasiast 101,358 58,778 99,758 60,503 66.0 46.8 662 774
Chirano (100%) 52,322 60,179 54,083 64,440 44.0 46.9 814 728
West Africa Total 153,680 118,957 153,841 124,943 110.0 93.7 715 750
Operations Total 611,263 659,955 603,057 674,661 411.7 444.6 683 659
Less Chirano non-controlling
interest (10%) (5,232) (6,018) (5,408) (6,444) (4.4) (4.7)
Attributable Total 606,031 653,937 597,649 668,217 $ 407.3 $ 439.9 $ 682 $ 658
Consolidated balance sheets
(unaudited expressed in millions of United States dollars, except share amounts)
As at
March 31, December 31,
2019 2018
Assets
Current assets
Cash and cash equivalents $ 406.9 $ 349.0
Restricted cash 13.3 12.7
Accounts receivable and other assets 92.7 101.4
Current income tax recoverable 73.4 79.0
Inventories 1,004.2 1,052.0
Unrealized fair value of derivative assets 6.9 3.8
1,597.4 1,597.9
Non-current assets
Property, plant and equipment 5,656.2 5,519.1
Goodwill 158.8 162.7
Long-term investments 154.3 155.9
Investments in joint ventures 18.3 18.3
Unrealized fair value of derivative assets 2.0 0.8
Other long-term assets 581.9 564.1
Deferred tax assets 48.4 45.0
Total assets $ 8,217.3 $ 8,063.8
Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 384.4 $ 465.9
Current income tax payable 58.9 21.7
Current portion of provisions 63.3 72.6
Other current liabilities 22.6 52.2
529.2 612.4
Non-current liabilities
Long-term debt and credit facilities 1,870.6 1,735.0
Provisions 823.2 816.4
Long-term lease liabilities 41.7 -
Unrealized fair value of derivative liabilities 3.4 9.6
Other long-term liabilities 101.5 97.9
Deferred tax liabilities 236.8 265.2
Total liabilities 3,606.4 3,536.5
Equity
Common shareholders' equity
Common share capital $ 14,919.2 $ 14,913.4
Contributed surplus 234.6 239.8
Accumulated deficit (10,483.3) (10,548.0)
Accumulated other comprehensive income (loss) (80.1) (98.5)
Total common shareholders' equity 4,590.4 4,506.7
Non-controlling interest 20.5 20.6
Total equity 4,610.9 4,527.3
Total liabilities and equity $ 8,217.3 $ 8,063.8
Common shares
Authorized Unlimited Unlimited
Issued and outstanding 1,252,293,410 1,250,228,821
Consolidated statements of operations
(unaudited expressed in millions of United States dollars, except share and per share amounts)
Three months ended
March 31, March 31,
2019 2018
Revenue
Metal sales $ 786.2 $ 897.2
Cost of sales
Production cost of sales 411.7 444.6
Depreciation, depletion and amortization 164.1 193.1
Total cost of sales 575.8 637.7
Gross profit 210.4 259.5
Other operating expense 32.9 25.4
Exploration and business development 19.5 20.5
General and administrative 42.6 35.7
Operating earnings 115.4 177.9
Other income (expense) - net 2.7 5.9
Equity in losses of joint ventures - (0.1)
Finance income 2.1 3.4
Finance expense (27.5) (26.9)
Earnings before tax 92.7 160.2
Income tax expense - net (28.1) (54.0)
Net earnings $ 64.6 $ 106.2
Net earnings (loss) attributable to:
Non-controlling interest $ (0.1) $ 0.1
Common shareholders $ 64.7 $ 106.1
Earnings per share attributable to common shareholders
Basic $ 0.05 $ 0.09
Diluted $ 0.05 $ 0.08
Weighted average number of common shares outstanding
(millions)
Basic 1,250.6 1,247.5
Diluted 1,259.1 1,258.3
Consolidated statements of cash flows
(unaudited expressed in millions of United States dollars)
Three months ended
March 31, March 31,
2019 2018
Net inflow (outflow) of cash related to the following activities:
Operating:
Net earnings $ 64.6 $ 106.2
Adjustments to reconcile net earnings to net cash provided from
operating activities:
Depreciation, depletion and amortization 164.1 193.1
Equity in losses of joint ventures - 0.1
Share-based compensation expense 4.6 4.0
Finance expense 27.5 26.9
Deferred tax (recovery) expense (37.2) 11.4
Foreign exchange losses and other 7.2 22.0
Changes in operating assets and liabilities:
Accounts receivable and other assets 14.6 (2.4)
Inventories 37.4 (23.0)
Accounts payable and accrued liabilities (14.2) (23.2)
Cash flow provided from operating activities 268.6 315.1
Income taxes paid (17.0) (21.6)
Net cash flow provided from operating activities 251.6 293.5
Investing:
Additions to property, plant and equipment (264.8) (246.9)
Settlement of deferred payment obligation and acquisition (30.0) (35.1)
Net additions to long-term investments and other assets (6.4) (14.3)
Net proceeds from the sale of property, plant and equipment 0.9 3.0
Increase in restricted cash (0.6) (0.7)
Interest received and other 0.9 2.6
Net cash flow used in investing activities (300.0) (291.4)
Financing:
Net proceeds from issuance/drawdown of debt 160.0 -
Repayment of debt (25.0) -
Payment of finance lease liabilities (3.3) -
Interest paid (27.3) (30.0)
Other 0.2 0.4
Net cash flow provided from (used in) financing activities 104.6 (29.6)
Effect of exchange rate changes on cash and cash equivalents 1.7 (0.4)
Increase (decrease) in cash and cash equivalents 57.9 (27.9)
Cash and cash equivalents, beginning of period 349.0 1,025.8
Cash and cash equivalents, end of period $ 406.9 $ 997.9
Operating
Summary
Mine Period Ownership
Tonnes
Ore
Mined
(1)
Ore
Processed
(Milled) (1)
Ore
Processed
(Heap
Leach) (1)
Grade
(Mill)
Grade
(Heap
Leach)
Recovery
(2)
Gold Eq
Production
(5)
Gold Eq
Sales (5)
Production
cost of
sales
Production
cost of
sales/oz
Cap Ex
(7) DD&A
(%) ('000
tonnes)
('000
tonnes)
('000
tonnes) (g/t) (g/t) (%) (ounces) (ounces) ($ millions) ($/ounce) ($
millions)
($
millions)
Q1
2019 100 5,796 1,556 4,295 0.72 0.22 84% 37,613 37,937 $ 38.8 $ 1,023 $ 28.9 $ 18.0
Americas
Fort Knox
Q4
2018 100 5,645 2,856 2,927 0.44 0.19 83% 52,194 51,889 49.1 $ 946 30.5 21.9
Q3
2018 100 5,306 2,718 3,262 0.42 0.19 81% 51,984 52,197 53.0 $ 1,015 32.6 26.0
Q2
2018 100 4,620 3,106 4,279 0.44 0.18 80% 71,463 72,340 70.1 $ 969 16.8 38.8
Q1
2018 100 9,075 3,110 5,839 0.70 0.20 82% 79,928 79,611 42.2 $ 530 9.6 23.0
Round
Mountain
Q1
2019 100 3,904 845 3,557 1.31 0.38 86% 85,135 83,614 $ 56.0 $ 670 $ 64.2 $ 7.9
Q4
2018 100 4,386 987 4,172 1.38 0.43 83% 96,715 91,769 70.0 $ 763 68.0 9.6
Q3
2018 100 5,023 980 4,410 1.43 0.42 82% 94,153 96,496 69.0 $ 715 47.1 12.7
Q2
2018 100 4,721 853 4,361 1.44 0.37 86% 97,650 95,432 72.0 $ 754 43.6 13.9
Q1
2018 100 7,893 832 8,175 1.62 0.28 86% 97,083 97,781 66.6 $ 681 26.4 14.8
Bald
Mountain
(8)
Q1
2019 100 2,659 - 2,836 - 0.48 nm 47,255 43,230 $ 29.2 $ 675 $ 64.6 $ 16.2
Q4
2018 100 4,929 - 5,406 - 0.47 nm 47,211 68,288 46.9 $ 687 40.4 22.4
Q3
2018 100 7,106 - 5,806 - 0.38 nm 72,560 90,931 53.4 $ 587 44.2 29.3
Q2
2018 100 7,109 - 7,109 - 0.48 nm 71,435 60,730 27.7 $ 456 44.9 20.8
Q1
2018 100 5,333 - 5,333 - 0.38 nm 93,440 98,142 46.1 $ 470 20.4 27.2
Kettle
River-
Buckhorn
Q1
2019 100 - - - - - 0% - - $ - $ - $ - $ -
Q4
2018 100 - - - - - 0% - - - $ - - -
Q3
2018 100 - - - - - 0% - - - $ - - -
Q2
2018 100 - - - - - 0% - - - $ - - -
Q1
2018 100 - - - - - 0% - 927 - $ - - -
Paracatu
Q1
2019 100 12,393 14,283 - 0.38 - 80% 146,776 146,397 $ 94.9 $ 648 $ 16.5 $ 35.9
Q4
2018 100 11,680 13,479 - 0.44 - 81% 145,634 152,395 116.6 $ 765 33.3 41.7
Q3
2018 100 12,565 13,547 - 0.38 - 76% 126,515 125,700 97.6 $ 776 25.1 42.2
Q2
2018 100 11,677 14,074 - 0.37 - 75% 121,226 117,043 100.4 $ 858 23.7 30.8
Q1
2018 100 11,988 13,041 - 0.36 - 77% 128,200 128,279 115.9 $ 903 15.5 34.2
Maricunga
(8)
Q1
2019 100 - - - - - nm 10,716 7,624 $ 4.8 $ 630 $ - $ 0.4
Q4
2018 100 - - - - - nm 7,226 19,399 16.1 $ 830 - 0.6
Q3
2018 100 - - - - - nm 10,808 30,442 22.4 $ 736 - 1.1
Q2
2018 100 - - - - - nm 19,866 17,764 11.7 $ 659 - 0.8
Q1
2018 100 - - - - - nm 22,166 22,354 15.5 $ 693 - 1.5
Russia Kupol (3)(4)
(6)
Q1
2019 100 362 425 - 9.62 - 93% 130,088 130,414 $ 78.0 $ 598 $ 8.2 $ 27.4
Q4
2018 100 400 425 - 8.77 - 95% 123,478 124,408 68.7 $ 552 19.4 30.1
Q3
2018 100 412 439 - 8.69 - 95% 125,870 123,624 81.3 $ 658 22.0 32.0
Q2
2018 100 412 430 - 8.42 - 95% 120,418 124,179 73.6 $ 593 11.2 33.0
Q1
2018 100 412 427 - 8.58 - 95% 120,181 122,624 64.6 $ 527 10.8 38.4
Tasiast
Q1
2019 100 1,962 1,269 - 2.37 - 97% 101,358 99,758 $ 66.0 $ 662 $ 75.7 $ 31.0
Q4
2018 100 3,267 1,301 - 2.19 - 94% 91,548 83,780 69.5 $ 830 71.1 28.5
Q3
2018 100 2,187 947 924 1.72 0.42 91% 53,363 50,549 66.2 $ 1,310 98.1 29.1
Q2
2018 100 966 750 755 1.88 0.29 91% 47,276 48,409 54.8 $ 1,132
101.4 18.9
Q1
2018 100 1,786 736 279 2.26 0.36 93% 58,778 60,503 46.8 $ 774
157.8 19.0
Q1
2019 90 499 908 - 1.97 - 92% 52,322 54,083 $ 44.0 $ 814 $ 3.3 $ 25.4
West
Africa
Chirano -
100%
Q4
2018 90 527 840 - 2.08 - 92% 51,273 49,173 39.5 $ 803 5.7 28.3
Q3
2018 90 505 908 - 2.10 - 92% 56,675 53,915 41.7 $ 773 6.9 30.8
Q2
2018 90 458 873 - 2.23 - 92% 58,572 57,399 44.6 $ 777 5.0 31.4
Q1
2018 90 523 885 - 2.34 - 92% 60,179 64,440 46.9 $ 728 6.4 33.3
Chirano -
90%
Q1
2019 90 499 908 - 1.97 - 92% 47,090 48,675 $ 39.6 $ 814 $ 3.0 $ 22.9
Q4
2018 90 527 840 - 2.08 - 92% 46,146 44,255 35.5 $ 802 5.1 25.5
Q3
2018 90 505 908 - 2.10 - 92% 51,007 48,524 37.6 $ 775 6.2 27.7
Q2
2018 90 458 873 - 2.23 - 92% 52,715 51,659 40.1 $ 776 4.5 28.3
Q1
2018 90 523 885 - 2.34 - 92% 54,161 57,996 42.2 $ 728 5.8 30.0
(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 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.
(3) The Kupol segment includes the Kupol and Dvoinoye mines.
(4) Kupol silver grade and recovery were as follows: Q1 2019: 69.61 g/t, 82.1%; Q4 2018: 73.35 g/t, 83.5%; Q3 2018: 72.38 g/t, 85.5%; Q2 2018: 68.65 g/t,
84%; Q1 2018: 69.35 g/t, 81.0%
(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 2019: 83.74:1; Q4 2018: 84.42:1; Q3 2018: 80.80:1; Q2 2018: 79.00:1;
Q1 2018: 79.25:1
(6) Dvoinoye ore processed and grade were as follows: Q1 2019: 135,529, 7.46 g/t; Q4 2018: 104,495, 9.82 g/t; Q3 2018: 106,918, 10.03 g/t; Q2 2018: 121,739,
9.22 g/t; Q1 2018: 103,369, 10.13 g/t
(7) Capital expenditures are presented on a cash basis, consistent with the statement of cash flows.
(8) "nm" means not meaningful.
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
(in millions, except per share amounts) Three months ended
March 31,
2019 2018
Net earnings attributable to common shareholders - as reported $ 64.7 $ 106.1
Adjusting items:
Foreign exchange gains (2.1) (0.5)
Foreign exchange (gains) losses on translation of tax basis and foreign exchange on
deferred income taxes within income tax expense (1.2) 0.2
Impairment, net of reversals(a) - -
Taxes in respect of prior periods 5.7 20.1
Fort Knox pit wall slide related costs 6.5 -
Restructuring costs 9.2 -
Other 1.9 (0.5)
Tax effect of the above adjustments (1.4) (0.2)
18.6 19.1
Adjusted net earnings attributable to common shareholders $ 83.3 $ 125.2
Weighted average number of common shares outstanding - Basic 1,250.6 1,247.5
Adjusted net earnings per share $ 0.07 $ 0.10
The Company makes reference to a non-GAAP measure for adjusted operating cash flow. Adjusted operating cash flow is defined as cash flow from operations