Kinross reports 2019 third-quarter results On track to meet production guidance and lower end of cost of sales guidance Construction and commissioning of Nevada projects completed Largest producing mines – Paracatu, Kupol and Tasiast – continue to achieve lowest costs in portfolio
Kinross reports 2019 third-quarter results
On track to meet production guidance and lower end of cost of sales guidance
Construction and commissioning of Nevada projects completed
Largest producing mines – Paracatu, Kupol and Tasiast – continue to achieve lowest costs in portfolio
TORONTO, Nov. 06, 2019 -- Kinross Gold Corporation (TSX: K, NYSE: KGC) today announced its results for the third-quarter ended September 30, 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 19 of this release. All dollar amounts are
expressed in U.S. dollars, unless otherwise noted.)
2019 third-quarter highlights:
Q3 2019 results First nine months
2019 results 2019 guidance
Gold equivalent production 1
(ounces) 608,033 1,862,315 2.5 million (+/- 5%)
Production cost of sales2
($ per Au eq. oz.) $735 $692 $730 (+/- 5%)
All-in sustaining cost2
($ per Au eq. oz.) $1,028 $958 $995 (+/- 5%)
Capital expenditures $265.5 million $807.0 million $1,050 million (+/- 5%)
• Kinross remains on track to meet 2019 annual guidance for production, cost of sales per ounce, all-in sustaining cost per ounce and capital
expenditures. The Company is tracking towards the lower end of its 2019 production cost of sales guidance and the higher end of its capital expenditure
guidance.
• Operating cash flow of $231.7 million, an 82% increase over Q3 2018, with adjusted operating cash flow 2 more than doubling to $295.4 million
compared with Q3 2018.
• Reported net earnings 3 of $60.9 million, or $0.05 per share, and adjusted net earnings 2,3 of $104.0 million, or $0.08 per share.
• Cash and cash equivalents of $358.0 million and total liquidity of approximately $1.8 billion at September 30, 2019, with no debt maturities until
2021.
Operations and organic development projects highlights:
• Kinross’ three largest producing mines – Paracatu , Kupol and Tasiast – which accounted for 62% of total company production, achieved the lowest
costs in the portfolio for Q3 and the first nine months of 2019.
• The Company approved the value-enhancing Tasiast 24k project and announced the acquisition of the high-quality Chulbatkan development project
during the quarter.
-- Tasiast 24k project work has commenced, with detailed engineering now 65% complete.
-- The Chulbatkan acquisition is progressing as anticipated and is on track to close early next year.
• Construction and commissioning of the Round Mountain Phase W and Bald Mountain Vantage Complex projects have been completed. Both
projects have been handed over to their respective Operations teams.
• The Fort Knox Gilmore project is proceeding on schedule and on budget, with initial stripping commencing during the quarter.
CEO Commentary
J. Paul Rollinson, President and CEO, made the following comments in relation to 2019 third-quarter results:
“Our portfolio of mines continued to perform well during the third quarter, delivering higher production, lower costs and more than doubling adjusted operating
cash flow compared with the same period last year. Paracatu, Kupol and Tasiast, our largest producing mines, once again achieved our lowest costs. We
remain on track to meet our annual production guidance, and given strong results year-to-date, are tracking towards the low end of our cost of sales guidance.
“During the quarter, we announced we were proceeding with the Tasiast 24k project and the acquisition of the Chulbatkan project, two exciting opportunities
that are expected to add significant value to our Company. Tasiast 24k is expected to generate strong free cash flow, attractive returns and further unlock the
mine’s substantial value, while Chulbatkan adds a high-quality asset with upside potential to our project pipeline.
“In our Americas region, we are making excellent progress in advancing our projects. We completed the construction and commissioning of both our Nevada
projects, started stripping at the Fort Knox Gilmore project and are targeting completion of the La Coipa feasibility study in February.”
Financial results
Summary of financial and operating results
Three months ended Nine months ended
September 30, September 30,
(in millions, except ounces, per share amounts, and per ounce amounts) 2019 2018 2019 2018
Operating Highlights
Total gold equivalent ounces(1)
Produced(3) 612,697 591,928 1,877,546 1,859,789
Sold(3) 597,635 623,854 1,841,841 1,891,811
Attributable gold equivalent ounces(1)
Produced(3) 608,033 586,260 1,862,315 1,842,246
Sold(3) 592,689 618,463 1,826,373 1,874,236
Financial Highlights
Metal sales $ 877.1$ 753.9 $ 2,501.1$ 2,426.1
Production cost of sales $ 440.6$ 484.6 $ 1,278.4$ 1,384.1
Depreciation, depletion and amortization $ 176.9$ 204.7 $ 520.9$ 588.1
Operating earnings (loss) $ 162.6$ (48.8) $ 422.3$ 175.4
Net earnings (loss) attributable to common shareholders $ 60.9$ (104.4) $ 197.1$ 4.1
Basic earnings (loss) per share attributable to common shareholders $ 0.05$ (0.08) $ 0.16$ 0.00
Diluted earnings (loss) per share attributable to common shareholders $ 0.05$ (0.08) $ 0.16$ 0.00
Adjusted net earnings (loss) attributable to common shareholders (2) $ 104.0$ (48.4) $ 266.9$ 114.6
Adjusted net earnings (loss) per share(2) $ 0.08$ (0.04) $ 0.21$ 0.09
Net cash flow provided from operating activities $ 231.7$ 127.2 $ 816.3$ 605.2
Adjusted operating cash flow(2) $ 295.4$ 143.2 $ 813.9$ 738.4
Capital expenditures $ 265.5$ 276.4 $ 807.0$ 770.4
Average realized gold price per ounce(2) $ 1,467$ 1,209 $ 1,358$ 1,283
Consolidated production cost of sales per equivalent ounce(3) sold(2) $ 737$ 777 $ 694$ 732
Attributable(1) production cost of sales per equivalent ounce(3) sold(2) $ 735$ 777 $ 692$ 731
Attributable(1) production cost of sales per ounce sold on a by-product basis (2) $ 716$ 768 $ 677$ 719
Attributable(1) all-in sustaining cost per ounce sold on a by-product basis (2) $ 1,016$ 1,046 $ 949$ 960
Attributable(1) all-in sustaining cost per equivalent ounce(3) sold(2) $ 1,028$ 1,049 $ 958$ 967
Attributable(1) all-in cost per ounce sold on a by-product basis (2) $ 1,305$ 1,360 $ 1,261$ 1,270
Attributable(1) all-in cost per equivalent ounce(3) sold(2) $ 1,309$ 1,356 $ 1,264$ 1,270
(1) "Total" includes 100% of Chirano production. "Attributable" includes Kinross' share of Chirano (90%) production.
(2) The definition and reconciliation of these non-GAAP financial measures is included on pages 13 to 18 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 third quarter of 2019 was 86.73:1 (third quarter of 2018 - 80.80:1). The ratio for the
first nine months of 2019 was 86.13:1 (first nine months of 2018 - 79.65:1).
The following operating and financial results are based on third-quarter 2019 gold equivalent production. Production and cost measures are on an attributable
basis:
Production: Kinross produced 608,033 attributable Au eq. oz. in Q3 2019, compared with 586,260 Au eq. oz. in Q3 2018.
Production cost of sales : Production cost of sales per Au eq. oz. 2 decreased to $735 in Q3 2019, compared with $777 for Q3 2018, mainly due to lower
costs at Paracatu, Tasiast and Kupol. Production cost of sales per Au oz. on a by-product basis 2 was $716 in Q3 2019, compared with $768 in Q3 2018,
based on Q3 2019 attributable gold sales of 577,691 ounces and attributable silver sales of 1,300,693 ounces.
All-in sustaining cost: All-in sustaining cost per Au eq. oz. sold 2 was $1,028 in Q3 2019, compared with $1,049 in Q3 2018. All-in sustaining cost per Au oz.
sold on a by-product basis 2 was $1,016 in Q3 2019, compared with $1,046 in Q3 2018.
Revenue : Revenue from metal sales increased to $877.1 million in Q3 2019, compared with $753.9 million during the same period in 2018, due to a higher
average realized gold price.
Average realized gold price 4: The average realized gold price in Q3 2019 was $1,467 per ounce, a 21% increase compared with $1,209 per ounce in Q3
2018.
Margins: Kinross’ attributable margin per Au eq. oz. sold 5 increased by 69% to $732 for Q3 2019, compared with the Q3 2018 margin of $432 per Au eq. oz.
sold, due to an increase in average realized gold price and lower cost of sales per ounce.
Operating cash flow : Adjusted operating cash flow 2 in Q3 2019 more than doubled to $295.4 million, compared with $143.2 million for Q3 2018, primarily due
to the increase in margins.
Net operating cash flow was $231.7 million for Q3 2019, an 82% increase compared with $127.2 million for Q3 2018.
Earnings/loss: Adjusted net earnings 2,3 increased to $104.0 million, or $0.08 per share, for Q3 2019, compared with adjusted net loss 2,3 of $48.4 million, or
$0.04 per share, for Q3 2018.
Reported net earnings 3 increased to $60.9 million, or $0.05 per share, for Q3 2019, compared with a net loss 3 of $104.4 million, or $0.08 per share, in Q3
2018. The increase was primarily a result of higher operating earnings, largely due to an increase in margins and a decrease in depreciation, depletion and
amortization, partially offset by an increase in income tax expense.
Capital expenditures : Capital expenditures was $265.5 million for Q3 2019, compared with $276.4 million for the same period last year, mainly due to
decreased spending at Tasiast and Kupol, partially offset by increases at Paracatu and Fort Knox.
Operating results
Mine-by-mine summaries for Q3 2019 operating results may be found on pages eight and 12 of this news release. Highlights include the following:
Americas
Paracatu continued to perform well during the quarter, with production and cost of sales per ounce sold both improving compared with the same period in
2018. The mine continues to benefit from the more efficient operation of the mill, and improved throughput and recovery. Production decreased and cost of
sales per ounce sold increased compared with last quarter’s record results mainly due to the expected decrease in grade.
At Round Mountain , production was lower compared with the previous quarter and year mainly due to the timing of ounces recovered from the heap leach
pads and lower mill grades. Production is expected to improve in Q4 2019 as recoveries from the pads are expected to increase. Cost of sales per ounce sold
was largely in line year-over-year and was higher quarter-over-quarter mainly due to higher processing costs and less ounces recovered from the heap leach
pads.
At Bald Mountain , production was lower compared with the previous quarter and year mainly due to the slower than expected ramp up at the Vantage
Complex. Fewer ounces were recovered from the heap leach pads, including from the recently completed Vantage Complex pad, which also contributed to the
lower production. Cost of sales per ounce sold decreased quarter-over-quarter mostly due to timing of ounces recovered from the heap leach pads, and
increased year-over-year mainly due to fewer ounces recovered from the pads. Production is expected to increase in Q4 2019, with costs expected to
decrease, as the Vantage Complex project continues to ramp up.
At Fort Knox, production was largely in line with the previous quarter, and was higher compared with the same period in 2018 mainly due to an increase in
ounces recovered from the heap leach pads and higher mill grades, partially offset by a planned decrease in mill throughput. Cost of sales per ounce sold
increased compared with Q2 2019 and Q3 2018 mainly due to a larger proportion of production from the heap leach pads, a planned mill liner replacement
during the quarter and higher maintenance costs.
At Maricunga , the rinsing of heap materials placed on the pads prior to the suspension of mining activities and the timing of ounces recovered from the pads
resulted in better than expected production during the quarter. Cost of sales per ounce sold decreased compared with the previous quarter mainly due to lower
processing costs. Final Maricunga production is expected in Q4 2019, as the mine transitions to care and maintenance. For tax planning purposes, the sale of
residual gold ounces are expected to continue after the closure of the mine.
Russia
Kupol and Dvoinoye continued to achieve strong results with production increasing quarter-over-quarter and year-over-year mainly due to higher grades. Cost
of sales per ounce sold increased compared with the previous quarter mainly due to the timing of ore processed through the mill, and was lower compared with
Q3 2018 primarily as a result of higher grades.
West Africa
Tasiast’s strong performance continued during the third quarter, with production increasing slightly compared with the previous quarter mainly due to the
planned mining of higher grade ore. Cost of sales per ounce sold was higher quarter-over-quarter primarily due to increased maintenance costs. Production and
cost of sales per ounce sold both improved significantly year-over-year as a result of the benefits realized from the Phase One expansion, which was
completed in the third quarter of 2018.
At Chirano, lower mill throughput was the main contributor to the decrease in production compared with Q2 2019 and Q3 2018. Cost of sales per ounce sold
was higher quarter-over-quarter and year-over-year mainly due to an increase in operating waste mined associated with the return to open pit mining.
Organic development projects and opportunities
Tasiast 24k
On September 15, 2019, Kinross announced it was proceeding with the Tasiast 24k project to incrementally increase throughput capacity at the mine to
24,000 tonnes per day (t/d).
Initial work has commenced at the project, including mobilization of construction teams to begin work on additional onsite power generation and water supply.
Detailed engineering is 65% complete and several contracts and work packages have been awarded. Stripping has ramped up, as the project is expected to
increase throughput to 21,000 t/d by the end of 2021, and then to 24,000 t/d by mid-2023. In October 2019 the Company also finalized a new three-year
collective labour agreement with unionized employees at Tasiast.
The Company remains on schedule to complete the $300 million project financing for Tasiast from the International Finance Corporation (IFC), Export
Development Canada (EDC), and two commercial banks before year end. While the financing remains subject to completion of documentation and all lenders
obtaining final approvals, a key step was completed in October 2019 with the IFC obtaining Board approval.
Round Mountain Phase W
Construction and commissioning of the Round Mountain Phase W project have been completed, with the project now fully transferred to the Operations team.
Stripping and dewatering activities continue to progress well and are expected to continue until late 2020.
Bald Mountain Vantage Complex
Construction and commissioning of the Bald Mountain Vantage Complex project have been completed, with the project now fully transferred to the Operations
team. Weather-related issues impacted project timing and ramp up of production, as the heap leach pad was only fully completed in September 2019.
Fort Knox Gilmore
The Fort Knox Gilmore project is progressing on schedule and on budget, with heap leach construction approximately 50% complete and dewatering activities
planned for 2019 now completed. Heap leach construction and dewatering will re-commence in the spring of 2020. Stripping for the initial project pushback
commenced in the third quarter and is expected to continue throughout 2020, with initial Gilmore ore expected to be encountered later this year, ahead of
schedule. Approximately 5% of Gilmore ore is expected to be stacked on the existing Walter Creek pad in early 2020, and 95% of Gilmore ore is expected to
be stacked on the new Barnes Creek heap leach pad, with stacking scheduled to begin in late 2020.
La Coipa Restart and Lobo-Marte
The La Coipa Restart project feasibility study is now scheduled to be completed early next year, with study results expected to be released in February 2020.
The timing of the completion of the feasibility study is not expected to have an impact on the overall project timeline. The Lobo-Marte project pre-feasibility
study is progressing and is on schedule to be completed in mid-2020. Both studies are evaluating the potential for a return to long-term production in Chile
based on the concept of commencing Lobo-Marte production following the end of La Coipa’s mine life.
Chulbatkan
On July 31, 2019, the Company announced the acquisition of the high-quality Chulbatkan development project located in the Chukotka region of Russia. The
acquisition is progressing as anticipated and is on track to close early next year. On October 18, 2019, the Company was pleased to receive a timely anti-
monopoly approval from the Russian regulators.
Balance sheet and financial flexibility
As of September 30, 2019, Kinross had cash and cash equivalents of $358.0 million, compared with $349.0 million at December 31, 2018.
The Company also had available credit of $1,452.2 million, for total liquidity of approximately $1.8 billion, and no debt maturities until September 2021.
On October 11, 2019, Moody’s revised its outlook for Kinross to positive from stable and reaffirmed its Ba1 rating.
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 19 of this news release.
Kinross is on track to meet its production guidance of 2.5 million Au eq. oz. (+/- 5%) and all-in sustaining cost guidance of $995 per Au eq. oz. (+/-5%) for
2019.
The Company is tracking towards the lower end of its 2019 production cost of sales guidance of $730 per Au eq. oz. (+/- 5%) and the higher end of its capital
expenditure guidance of $1,050 million (+/-5%).
The Company now expects its income tax expense to be in the range of $175 - $195 million on an adjusted basis. The change in forecasted tax expense from
the previous guidance is primarily a result of stronger gold prices and production mix.
Board update
The Board of Directors of Kinross has appointed Ms. Elizabeth McGregor, CPA, CA as a Director. Ms. McGregor has almost 20 years of financial experience
and over 10 years of experience in the mining sector. She was most recently the Executive Vice-President and Chief Financial Officer of Tahoe Resources Inc.
and was previously at Goldcorp and KPMG earlier in her career. Ms. McGregor has a wide variety of executive financial experience, including debt financing,
stakeholder management, board reporting, and corporate, mine site and project management experience. She has a B.A. (Hons) from Queen’s University and
is a Canadian Chartered Professional Accountant.
Conference call details
In connection with the release, Kinross will hold a conference call and audio webcast on Thursday, November 7, 2019 at 8:00 a.m. ET. to discuss the results,
followed by a question-and-answer session. To access the call, please dial:
Canada & US toll-free – (877) 201-0168; Conference ID: 9089414
Outside of Canada & US – +1 (647) 788-4901; Conference ID: 9089414
Replay (available up to 14 days after the call):
Canada & US toll-free – (800) 585-8367; Conference ID: 9089414
Outside of Canada & US – +1 (416) 621-4642; Conference ID: 9089414
You may also access the conference call on a listen-only basis via webcast at our website www.kinross.com. The audio webcast will be archived on
www.kinross.com.
This news release should be read in conjunction with Kinross’ 2019 third-quarter unaudited Financial Statements and Management’s Discussion and Analysis
report at www.kinross.com. Kinross’ 2019 third-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 September 30, 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 54,027 51,984 51,606 52,197 $ 58.3 $ 53.0 $ 1,130 $ 1,015
Round Mountain 82,195 94,153 81,617 96,496 57.5 69.0 705 715
Bald Mountain 33,995 72,560 37,644 90,931 30.6 53.4 813 587
Kettle River - Buckhorn - - - - - - - -
Paracatu 146,396 126,515 145,662 125,700 99.5 97.6 683 776
Maricunga 18,016 10,808 9,203 30,442 7.0 22.4 761 736
Americas Total 334,629 356,020 325,732 395,766 252.9 295.4 776 746
Kupol 137,562 125,870 136,088 123,624 82.6 81.3 607 658
Russia Total 137,562 125,870 136,088 123,624 82.6 81.3 607 658
Tasiast 93,865 53,363 86,357 50,549 55.1 66.2 638 1,310
Chirano (100%) 46,641 56,675 49,458 53,915 50.0 41.7 1,011 773
West Africa Total 140,506 110,038 135,815 104,464 105.1 107.9 774 1,033
Operations Total 612,697 591,928 597,635 623,854 440.6 484.6 737 777
Less Chirano non-controlling interest (10%) (4,664) (5,668) (4,946) (5,391) (5.0) (4.2)
Attributable Total 608,033 586,260 592,689 618,463 $ 435.6 $ 480.4 $ 735 $ 777
Nine months ended September 30, 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 147,080 203,375 145,283 204,148 $ 147.8 $ 165.3 $ 1,017 $ 810
Round Mountain 258,163 288,886 252,337 289,709 171.3 207.6 679 717
Bald Mountain 121,814 237,435 112,421 249,803 86.8 127.2 772 509
Kettle River - Buckhorn - - - 927 - - - -
Paracatu 479,339 375,941 478,579 371,022 301.2 313.9 629 846
Maricunga 35,380 52,840 26,301 70,560 19.8 49.6 753 703
Americas Total 1,041,776 1,158,477 1,014,921 1,186,169 726.9 863.6 716 728
Kupol 395,334 366,469 391,375 370,427 230.8 219.5 590 593
Russia Total 395,334 366,469 391,375 370,427 230.8 219.5 590 593
Tasiast 288,124 159,417 280,863 159,461 180.0 167.8 641 1,052
Chirano (100%) 152,312 175,426 154,682 175,754 140.7 133.2 910 758
West Africa Total 440,436 334,843 435,545 335,215 320.7 301.0 736 898
Operations Total 1,877,546 1,859,789 1,841,841 1,891,811 1,278.4 1,384.1 694 732
Less Chirano non-controlling interest (10%) (15,231) (17,543) (15,468) (17,575) (14.1) (13.3)
Attributable Total 1,862,315 1,842,246 1,826,373 1,874,236 $ 1,264.3 $ 1,370.8 $ 692 $ 731
Interim condensed consolidated balance sheets
(unaudited expressed in millions of United States dollars, except share amounts)
As at
September 30, December 31,
2019 2018
Assets
Current assets
Cash and cash equivalents $ 358.0 $ 349.0
Restricted cash 12.9 12.7
Accounts receivable and other assets 174.4 101.4
Current income tax recoverable 40.0 79.0
Inventories 1,033.6 1,052.0
Unrealized fair value of derivative assets 5.7 3.8
1,624.6 1,597.9
Non-current assets
Property, plant and equipment 5,852.7 5,519.1
Goodwill 158.8 162.7
Long-term investments 181.1 155.9
Investments in joint ventures 18.3 18.3
Unrealized fair value of derivative assets 0.5 0.8
Other long-term assets 577.1 564.1
Deferred tax assets 30.9 45.0
Total assets $ 8,444.0 $ 8,063.8
Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 466.2 $ 465.9
Current income tax payable 74.1 21.7
Current portion of provisions 38.6 72.6
Other current liabilities 19.8 52.2
598.7 612.4
Non-current liabilities
Long-term debt and credit facilities 1,836.8 1,735.0
Provisions 837.7 816.4
Long-term lease liabilities 37.2 -
Unrealized fair value of derivative liabilities 4.3 9.6
Other long-term liabilities 102.0 97.9
Deferred tax liabilities 241.5 265.2
Total liabilities 3,658.2 3,536.5
Equity
Common shareholders' equity
Common share capital $ 14,925.0 $ 14,913.4
Contributed surplus 239.1 239.8
Accumulated deficit (10,350.9) (10,548.0)
Accumulated other comprehensive income (loss) (47.4) (98.5)
Total common shareholders' equity 4,765.8 4,506.7
Non-controlling interest 20.0 20.6
Total equity 4,785.8 4,527.3
Total liabilities and equity $ 8,444.0 $ 8,063.8
Common shares
Authorized Unlimited Unlimited
Issued and outstanding 1,253,516,770 1,250,228,821
Interim condensed consolidated statements of operations
(unaudited expressed in millions of United States dollars, except share and per share amounts)
Three months ended Nine months ended
September 30, September 30, September 30, September 30,
2019 2018 2019 2018
Revenue
Metal sales $ 877.1 $ 753.9 $ 2,501.1 $ 2,426.1
Cost of sales
Production cost of sales 440.6 484.6 1,278.4 1,384.1
Depreciation, depletion and amortization 176.9 204.7 520.9 588.1
Total cost of sales 617.5 689.3 1,799.3 1,972.2
Gross profit 259.6 64.6 701.8 453.9
Other operating expense 29.1 46.7 91.5 101.5
Exploration and business development 35.6 32.5 83.5 76.8
General and administrative 32.3 34.2 104.5 100.2
Operating earnings (loss) 162.6 (48.8) 422.3 175.4
Other income (expense) - net 5.2 (2.6) 5.3 5.1
Equity in (losses) earnings of joint ventures - (0.2) 0.1 (0.4)
Finance income 2.3 2.5 6.3 9.1
Finance expense (23.8) (22.1) (77.4) (73.7)
Earnings (loss) before tax 146.3 (71.2) 356.6 115.5
Income tax expense - net (85.5) (34.1) (160.1) (112.5)
Net earnings (loss) $ 60.8 $ (105.3) $ 196.5 $ 3.0
Net earnings (loss) attributable to:
Non-controlling interest $ (0.1) $ (0.9) $ (0.6) $ (1.1)
Common shareholders $ 60.9 $ (104.4) $ 197.1 $ 4.1
Earnings (loss) per share attributable to common shareholders
Basic $ 0.05 $ (0.08) $ 0.16 $ 0.00
Diluted $ 0.05 $ (0.08) $ 0.16 $ 0.00
Weighted average number of common shares outstanding (millions)
Basic 1,252.8 1,250.2 1,251.9 1,249.2
Diluted 1,263.9 1,250.2 1,261.7 1,258.7
Interim condensed consolidated statements of cash flows
(unaudited expressed in millions of United States dollars)
Three months ended Nine months ended
September
30, September
30, September
30, September
30,
2019 2018 2019 2018
Net inflow (outflow) of cash related to the following activities:
Operating:
Net earnings (loss) $ 60.8 $ (105.3) $ 196.5 $ 3.0
Adjustments to reconcile net earnings (loss) to net cash provided from operating
activities:
Depreciation, depletion and amortization 176.9 204.7 520.9 588.1
Equity in losses (earnings) of joint ventures - 0.2 (0.1) 0.4
Share-based compensation expense 3.3 3.7 10.9 11.2
Finance expense 23.8 22.1 77.4 73.7
Deferred tax expense (recovery) 15.3 7.8 (16.1) 35.1
Foreign exchange (gains) losses and other (1.4) 10.0 7.7 26.9
Changes in operating assets and liabilities:
Accounts receivable and other assets (76.2) (74.0) - (101.9) (118.1)
Inventories (40.5) 15.9 9.5 14.1
Accounts payable and accrued liabilities 131.6 65.0 174.0 49.0
Cash flow provided from operating activities 293.6 150.1 878.8 683.4
Income taxes paid (61.9) (22.9) (62.5) (78.2)
Net cash flow provided from operating activities 231.7 127.2 816.3 605.2
Investing:
Additions to property, plant and equipment (265.5) (276.4) (807.0) (770.4)
Acquisitions - (253.7) (30.0) (288.8)
Net additions to long-term investments and other assets (0.6) (6.0) (12.9) (36.2)
Net proceeds from the sale of property, plant and equipment 0.8 0.8 2.9 4.8
Decrease (increase) in restricted cash 0.6 (0.3) (0.2) (0.4)
Interest received and other 1.1 1.5 3.2 6.5
Net cash flow used in investing activities (263.6) (534.1) (844.0) (1,084.5)
Financing:
Net proceeds from issuance/drawdown of debt 40.0 80.0 300.0 80.0
Repayment of debt (95.0) (80.0) (200.0) (80.0)
Payment of lease liabilities (3.2) - (10.4) -
Interest paid (26.6) (27.8) (55.0) (57.8)
Dividend paid to non-controlling interest - (13.0) - (13.0)
Other 1.0 (1.8) 0.8 (1.4)
Net cash flow (used in) provided from financing activities (83.8) (42.6) 35.4 (72.2)
Effect of exchange rate changes on cash and cash equivalents (1.7) 0.9 1.3 (4.2)
(Decrease) increase in cash and cash equivalents (117.4) (448.6) 9.0 (555.7)
Cash and cash equivalents, beginning of period 475.4 918.7 349.0 1,025.8
Cash and cash equivalents, end of period $ 358.0 $ 470.1 $ 358.0 $ 470.1
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)
Americas
Fort Knox
Q3
2019 100 7,094 2,097 5,250 0.52 0.21 83 % 54,027 51,606 $ 58.3 $ 1,130 $ 40.9 $ 24.7
Q2
2019 100 4,829 1,811 3,440 0.59 0.20 81 % 55,440 55,740 50.7 $ 910 35.0 22.6
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
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
Round
Mountain
Q3
2019 100 7,128 1,004 7,557 1.05 0.32 85 % 82,195 81,617 $ 57.5 $ 705 $ 48.3 $ 9.1
Q2
2019 100 4,074 909 3,910 1.17 0.33 86 % 90,833 87,106 57.8 $ 664 58.9 10.2
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
Bald
Mountain
(8)
Q3
2019 100 6,494 - 6,494 - 0.41 nm 33,995 37,644 $ 30.6 $ 813 $ 44.0 $ 14.8
Q2
2019 100 3,725 - 4,138 - 0.36 nm 40,564 31,547 27.0 $ 856 57.5 12.2
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
Paracatu
Q3
2019 100 12,442 14,731 - 0.38 - 78 % 146,396 145,662 $ 99.5 $ 683 $ 39.0 $ 39.5
Q2
2019 100 12,307 14,439 - 0.48 - 80 % 186,167 186,520 106.8 $ 573 34.6 45.2
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
Q3
2019 100 - - - - - nm 18,016 9,203 $ 7.0 $ 761 $ - $ 0.4
Maricunga
(8)
Q2
2019 100 - - - - - nm 6,648 9,474 8.0 $ 844 - 0.5
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
Russia Kupol (3)(4)
(6)
Q3
2019 100 338 431 - 9.65 - 95 % 137,562 136,088 $ 82.6 $ 607 $ 7.8 $ 32.2
Q2
2019 100 431 432 - 9.23 - 94 % 127,684 124,873 70.2 $ 562 8.2 30.7
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
West
Africa
Tasiast
Q3
2019 100 1,010 1,297 - 2.37 - 97 % 93,865 86,357 $ 55.1 $ 638 $ 74.3 $ 32.0
Q2
2019 100 819 1,281 - 2.19 - 97 % 92,901 94,748 58.9 $ 622 75.2 32.2
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
Chirano -
100%
Q3
2019 90 714 801 - 2.02 - 92 % 46,641 49,458 $ 50.0 $ 1,011 $ 4.8 $ 22.0
Q2
2019 90 619 904 - 1.95 - 92 % 53,349 51,141 46.7 $ 913 2.7 23.8
Q1
2019 90 499 908 - 1.97 - 92 % 52,322 54,083 44.0 $ 814 3.3 25.4
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
Chirano -
90%
Q3
2019 90 714 801 - 2.02 - 92 % 41,977 44,512 $ 45.0 $ 1,011 $ 4.3 $ 19.8
Q2
2019 90 619 904 - 1.95 - 92 % 48,014 46,027 42.0 $ 913 2.4 21.4
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
(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: Q3 2019: 67.44 g/t, 87.8%; Q2 2019: 75.29 g/t, 84.9%; Q1 2019: 69.61 g/t, 82.1%; Q4 2018: 73.35 g/t,
83.5%; Q3 2018: 72.38 g/t, 85.5%.
(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: Q3 2019: 86.73:1; Q2 2019: 87.98:1; Q1 2019: 83.74:1; Q4 2018:
84.42:1; Q3 2018: 80.80:1.
(6) Dvoinoye ore processed and grade were as follows: Q3 2019: 113,497, 9.82 g/t; Q2 2019: 113,872, 9.24 g/t; Q1 2019: 135,529, 7.46 g/t; Q4 2018:
104,495, 9.82 g/t; Q3 2018: 106,918, 10.03 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