Kinross reports 2020 first-quarter results Kinross in strong financial position with robust cash flow and total liquidity of $1.9 billion Tasiast delivers record production and throughput rates for the second consecutive quarter
Kinross reports 2020 first-quarter results
Kinross in strong financial position with robust cash flow and total liquidity of $1.9 billion
Tasiast delivers record production and throughput rates for the second consecutive quarter
TORONTO, May 05, 2020 -- Kinross Gold Corporation (TSX: K, NYSE: KGC) today announced its results for the first-quarter ended March 31, 2020.
(This news release contains forward-looking information about expected future events and financial and operating performance of the Company. We refer to
the risks and assumptions set out in our Cautionary Statement on Forward-Looking Information located on page 19 of this release. All dollar amounts are
expressed in U.S. dollars, unless otherwise noted.)
2020 Q1 highlights:
• Production1 of 567,327 attributable gold equivalent ounces (Au eq. oz.), and sales of 552,742 Au eq. oz.
• Reported net earnings 2 almost doubled to $122.7 million, or $0.10 per share, and adjusted net earnings 3 increased by 53% to $127.4 million, or
$0.10 per share, compared with Q1 2019.
• Operating cash flow of $299.6 million and adjusted operating cash flow 3 of $418.6 million, a 19% and 81% increase respectively compared with
Q1 2019.
• Production cost of sales 3 of $754 per Au eq. oz. and all-in sustaining cost 3 of $993 per Au eq. oz. sold, both of which are within the Company’s
original annual guidance range.
• Attributable margin per Au eq. oz. sold 4 increased 33% to $827 per Au eq. oz. compared with Q1 2019, while the average realized gold price
increased 21% to $1,581 per ounce compared with Q1 2019.
• Cash and cash equivalents of $1,138.6 million and total liquidity of $1.9 billion at March 31, 2020. The Company has no debt maturities until
September 2021.
• On March 2, 2020, Moody’s upgraded Kinross’ credit rating to investment grade. Kinross’ debt is now rated investment grade by each of the
agencies that cover it – Moody’s, S&P Global Ratings and Fitch Ratings.
• Three largest producing mines – Paracatu, Kupol and Tasiast – delivered 62% of total production and achieved an average cost of sales of $642 per Au
eq. oz., with average costs lower than the previous quarter.
• Tasiast, for the second consecutive quarter, achieved record quarterly production and a record average throughput rate of 16,100 tonnes per day (t/d),
as the mine continues to benefit from the Phase One expansion.
• On March 10, 2020, a new Paracatu technical report was filed confirming the benefits of an asset optimization program at the mine, which has
resulted in a 24% increase in life of mine production compared to the prior report.
COVID-19 response:
• During the first quarter, all Kinross mines remained in operation and were not materially impacted by COVID-19. However, operations may be
challenged over time given the future global impacts of a prolonged crisis.
• The Company has committed $5.3 million to support host governments and communities in their response to COVID-19, focusing on providing medical
supplies, food security and assistance to vulnerable groups.
• Kinross’ protocols and contingency plans, which the Company began implementing in late January, have continued to safeguard the health and safety
of employees, their families and local communities.
• With the support of host governments, business continuity plans have been prepared and implemented for each site to mitigate operational and supply
chain risks.
• On March 20, 2020, Kinross drew down $750 million from its $1.5 billion revolving credit facility as a precautionary measure to protect against
economic and business uncertainties related to the pandemic. The Company does not currently plan to deploy the funds given its strong financial
position.
• On April 1, 2020, the Company withdrew its full-year 2020 guidance as a precautionary measure given the pandemic’s significant global impacts,
despite no material impacts on operations to date.
CEO Commentary:
J. Paul Rollinson, President and CEO, made the following comments in relation to 2020 first-quarter results.
“During the quarter, we focused on protecting the health and well-being of our employees and communities against the spread of COVID-19 while maintaining
the continuity of our operations in a safe manner. As a result of our business continuity plans and precautionary protocols implemented across our global
portfolio, and with the support of our host governments, all our mines remained operational during the quarter and were not materially impacted by the
pandemic. While we prudently withdrew our 2020 guidance given the pandemic’s significant global impacts, we will continue to work safely on meeting our
2020 operational targets.
“We also took steps to further strengthen our financial position against the economic and business uncertainties caused by the global health crisis. The
Company generated strong free cash flow and increased earnings year-over-year, ending the quarter with excellent liquidity, low net debt, and with investment
grade credit ratings from all three major rating agencies. During the quarter, our margins increased by 33%, outpacing the 21% increase in average realized
gold price.
“Looking forward, we are confident that our commitment to health and safety, our risk mitigation plans, our financial and operational strengths, and our
positive relationships with our host governments put us in a strong position to effectively manage through this challenging time. We have built a strong
foundation, expect to continue generating strong cash flow, and offer an exciting future and a compelling value opportunity for our shareholders.”
Financial results
Summary of financial and operating results
Three months ended
March 31,
(unaudited, expressed in millions of U.S. dollars, except ounces, per share amounts, and per ounce amounts) 2020 2019
Operating Highlights
Total gold equivalent ounces(1)
Produced(3) 571,773 611,263
Sold(3) 556,676 603,057
Attributable gold equivalent ounces(1)
Produced(3) 567,327 606,031
Sold(3) 552,742 597,649
Financial Highlights
Metal sales $ 879.8 $ 786.2
Production cost of sales $ 421.3 $ 411.7
Depreciation, depletion and amortization $ 193.1 $ 164.1
Operating earnings $ 192.6 $ 115.4
Net earnings attributable to common shareholders $ 122.7 $ 64.7
Basic earnings per share attributable to common shareholders $ 0.10 $ 0.05
Diluted earnings per share attributable to common shareholders $ 0.10 $ 0.05
Adjusted net earnings attributable to common shareholders(2) $ 127.4 $ 83.3
Adjusted net earnings per share(2) $ 0.10 $ 0.07
Net cash flow provided from operating activities $ 299.6 $ 251.6
Adjusted operating cash flow(2) $ 418.6 $ 230.8
Capital expenditures(4) $ 191.4 $ 243.9
Average realized gold price per ounce(2) $ 1,581 $ 1,304
Consolidated production cost of sales per equivalent ounce(3) sold(2) $ 757 $ 683
Attributable(1) production cost of sales per equivalent ounce(3) sold(2) $ 754 $ 682
Attributable(1) production cost of sales per ounce sold on a by-product basis (2) $ 738 $ 668
Attributable(1) all-in sustaining cost per ounce sold on a by-product basis (2) $ 982 $ 917
Attributable(1) all-in sustaining cost per equivalent ounce(3) sold(2) $ 993 $ 925
Attributable(1) all-in cost per ounce sold on a by-product basis (2) $ 1,245 $ 1,239
Attributable(1) all-in cost per equivalent ounce(3) sold(2) $ 1,251 $ 1,240
(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 first quarter of 2020 was 93.63:1 (first quarter of 2019 - 83.74:1).
(4) “Capital expenditures” is as reported as “Additions to property, plant and equipment” on the interim condensed consolidated statement of cash flows and
excludes “Interest paid capitalized to property, plant and equipment”.
The following operating and financial results are based on 2020 first-quarter gold equivalent production. Production and cost measures are on an attributable
basis:
Production1: Kinross produced 567,327 attributable Au eq. oz. in Q1 2020, compared with 606,031 Au eq. oz. in Q1 2019. The decrease was mainly due to
lower production at Paracatu, Kupol and Chirano, and the end of production at Maricunga, partially offset by higher production at Fort Knox.
Production cost of sales3: Production cost of sales per Au eq. oz. was $754 for Q1 2020, compared with $682 for Q1 2019, which was partly due to cost
increases related to COVID-19 impacts. Production cost of sales per Au oz. on a by-product basis was $738 in Q1 2020, compared with $668 in Q1 2019,
based on Q1 2020 attributable gold sales of 542,043 ounces and attributable silver sales of 1,001,743 ounces.
All-in sustaining cost3: All-in sustaining cost per Au eq. oz. sold was $993 in Q1 2020, compared with $925 in Q1 2019. All-in sustaining cost per Au oz.
sold on a by-product basis was $982 in Q1 2020, compared with $917 in Q1 2019.
Revenue : Revenue from metal sales increased to $879.8 million in Q1 2020, compared with $786.2 million during the same period in 2019.
Average realized gold price 5: The average realized gold price in Q1 2020 increased 21% to $1,581 per ounce, compared with $1,304 per ounce in Q1
2019.
Margins: Kinross’ attributable margin per Au eq. oz. sold4 increased 33% to $827 per Au eq. oz. for Q1 2020, compared with the Q1 2019 margin of $622 per
Au eq. oz. sold.
Operating cash flow : Adjusted operating cash flow3 for Q1 2020 increased significantly by 81% to $418.6 million, compared with $230.8 million for Q1 2019.
Net operating cash flow was $299.6 million for Q1 2020, an increase of 19% compared with $251.6 million for Q1 2019.
Earnings: Adjusted net earnings 3 increased 53% to $127.4 million, or $0.10 per share, for Q1 2020, compared with adjusted net earnings of $83.3 million, or
$0.07 per share, for Q1 2019.
Reported net earnings2 almost doubled to $122.7 million, or $0.10 per share, for Q1 2020, compared with net earnings of $64.7 million, or $0.05 per share, in
Q1 2019. The increase was mainly due to higher margins, which outpaced the increase in average realized gold price, and lower other operating expense and
reduced overhead, partially offset by higher income tax expense.
Capital expenditures : Capital expenditures were $191.4 million for Q1 2020, compared with $243.9 million for the same period last year, primarily due to
decreased spending on development projects at Bald Mountain and Round Mountain, which both began production in Q3 2019.
Balance sheet and financial position
As of March 31, 2020, Kinross had cash and cash equivalents of $1,138.6 million, compared with $575.1 million at December 31, 2019. The increase was
primarily due to the drawdown of $750 million from the Company’s $1.5 billion revolving credit facility on March 20, 2020 and cash flow from operations during
the quarter. This was partially offset by the acquisition of the Chulbatkan development project and repayment of the amount drawn on the revolving credit
facility at December 31, 2019.
The Company drew down from its revolving credit facility as a precautionary measure to protect against economic and business uncertainties caused by the
COVID-19 pandemic and subsequent government actions. The Company does not currently plan to deploy the funds given its strong financial position.
The Company has additional available credit of $805.3 million as of March 31, 2020, and total liquidity of approximately $1.9 billion, with no scheduled debt
repayments until September 2021. The Company has total debt of approximately $2.5 billion, and net debt6 of approximately $1.3 billion.
Kinross also drew down $200 million from the $300 million Tasiast project financing facility in early April. The financing, which was signed on December 16,
2019, is an asset recourse loan with the IFC (a member of the World Bank Group), Export Development Canada, ING Bank and Société Générale.
On March 2, 2020, Moody’s Investors Service ("Moody's") announced that it upgraded Kinross’ credit rating to investment grade. Kinross now has investment
grade credit ratings from Moody’s, S&P Global Ratings and Fitch Ratings, all three rating agencies that rate the Company’s debt.
Operating results
All of Kinross’ mines remained in operation during Q1 2020 and were not materially impacted by COVID-19. However, over time, the Company’s mines may
be challenged with potential disruptions as they continue to operate given the future global impacts of a prolonged crisis.
As previously announced on April 1, 2020, numerous preventative actions have been implemented to safeguard employees and local communities, to help
prevent the spread of COVID-19, and to mitigate operational risk. A global platform has been established for sites to share best practices on pandemic
response. Each site is complying with COVID-19 related protocols and guidelines in their respective jurisdictions, including implementing detailed site
isolation plans to manage cases should they occur and comprehensive physical distancing measures.
For Kinross’ remote camp-based sites, rigorous screening, isolation and quarantine procedures for employees arriving at camp have been implemented.
Rotations and shift schedules have been adjusted to limit travel to and from sites.
With the support of host governments, business continuity plans have been prepared and put in place for each site to mitigate operational risk. Sustaining the
supply chain and maintaining access to refining capacity have also been key areas of focus for the Company. Kinross continues to work closely with critical
suppliers to minimize potential disruptions and has initiated a process to increase stocks of key consumables to at least three months on hand. Kupol, which
is in a unique situation due to its location and seasonality of the supply chain, has approximately 12 months of inventory on hand, including fuel. Kinross has
also ordered additional critical spares at its other operations, assessed potential disruptions and identified alternative sources of supply.
To help maintain scheduled and timely gold sales, Kinross has contingency plans in place to ensure sustained access to global refining capacity, including
actively managing metal shipments and securing alternative transportation channels.
Mine-by-mine summaries for 2020 first-quarter results can be found on pages eight and 12 of this news release. Operational highlights from Q1 2020 include
the following:
Americas
At Paracatu , production was lower compared with the previous quarter and year mainly due to a decrease in mill throughput as a result of temporary
downtime at the crusher, and temporary lower recoveries primarily related to anticipated variations in ore characteristics during the quarter. Cost of sales per
ounce sold was lower quarter-over-quarter mainly due to favourable foreign exchange rates and lower operating waste. Cost of sales per ounce sold was
higher year-over-year mainly due to lower mill throughput, partially offset by favourable foreign exchange rates.
On March 10, 2020, a new Paracatu technical report was filed confirming the benefits of an asset optimization program at the mine, which has resulted in a
24% increase in life of mine production compared to the prior report. Paracatu is expected to produce an average of approximately 540k oz. Au annually over
12 years from 2020 to 2031.
At Round Mountain , production decreased quarter-over-quarter mainly due to lower mill grades and fewer ounces recovered from the heap leach pads, while
production was largely in line year-over-year. Cost of sales per ounce sold was lower compared with Q4 2019 largely as a result of increased capital
development at Phase W during the quarter. Cost of sales per ounce sold was lower compared with Q1 2019 mainly due to the focus on capital stripping
during the quarter and lower milling supplies.
At Bald Mountain , production was lower compared with the previous quarter and year mainly due to fewer ounces recovered from the heap leach pads, while
the timing of ounces recovered from the Vantage Complex heap leach pads also contributed to lower production compared with Q4 2019. Cost of sales per
ounce sold was higher versus both comparable periods largely due to higher operating waste mined, higher labour and contractor costs, and impacts from
COVID-19.
At Fort Knox , production was mainly in line quarter-over-quarter and was higher compared with the previous year largely as a result of more ounces
recovered from the heap leach pad. Cost of sales per ounce sold was higher compared with the previous quarter and year mainly due to higher operating
waste mined and impacts from COVID-19, which affected mining rates. Higher maintenance and power costs also contributed to the increase in costs
compared with Q1 2019.
Russia
The Russia region performed as planned during the quarter, with production at Kupol and Dvoinoye decreasing slightly compared to Q4 2019 and Q1 2019
mainly due to anticipated lower grades. Cost of sales per ounce sold was largely in line with the previous quarter and increased compared with Q1 2019
mainly due to lower production.
West Africa
Tasiast continued its strong performance and delivered, for the second consecutive quarter, record quarterly production and throughput. Throughput averaged
16,100 t/d during the quarter, as the mine continued to ramp up capacity. Production was slightly higher quarter-over-quarter and year-over-year mainly due to
improved mill performance. Cost of sales per ounce sold increased compared with Q4 2019 mainly due to higher operating waste mined and impacts from
COVID-19, which affected mining rates. Cost of sales per ounce sold decreased compared with Q1 2019 primarily due to lower operating waste mined, and
reduced contractor and site overhead costs.
The Company issued a news release earlier today regarding a strike at Tasiast which can be found at www.kinross.com. There have been four short labour
actions at Tasiast since Kinross acquired the mine, the last being in 2016. The average length of these labour actions have been approximately nine days,
and none have had a material impact on the Company.
At Chirano, production was lower quarter-over-quarter and year-over-year mainly due to lower grades in the underground deposits. Cost of sales per ounce
sold was higher quarter-over-quarter mainly due to lower production. Higher operating waste mined also contributed to the increase in costs compared with
the same period last year, as the re-start of open pit mining only commenced in late in Q1 2019.
Development projects
Tasiast 24k
The Tasiast 24k project continues to progress well. While the project currently remains on schedule to increase throughput capacity to 21,000 t/d by the end
of 2021, and then to 24,000 t/d by mid-2023, timing could be challenged by constraints on the global movement of people and supplies caused by prolonged
COVID-19-related travel restrictions. The project team is studying potential longer-term impacts and mitigation measures. During the quarter, ongoing
debottlenecking work in the processing plant continued, along with critical path construction activities on the power plant.
Chulbatkan
At the Chulbatkan development project in Russia, approximately 23,500 metres of infill, step-out and metallurgical drilling have been completed as of the end
of Q1 2020, with encouraging initial results. The drilling program for the rest of the year will focus on updating the high-grade portion of the known resource
with the goal of defining and further extending the resource base at year end. The project currently has a large, near-surface estimated mineral resource, with
highly continuous mineralization that is open along strike and at depth.
Fort Knox Gilmore
The Fort Knox Gilmore project is progressing on schedule and on budget. Stripping continued during the quarter and all procurement was completed for
work planned for 2020, with all critical materials delivered to site. The new Barnes Creek heap leach is expected to be completed in Q4 2020, with
construction crews at site and now recommencing activities after the winter season.
La Coipa Restart and Lobo-Marte
Kinross commenced work on the La Coipa Restart project after receiving Board approval on February 12, 2020. In early April 2020, the project team
completed the transfer of the mine fleet from the Maricunga operation, which was recently placed on care and maintenance, to La Coipa. The project plan
includes refurbishing this mine fleet, along with the existing La Coipa process plant and camp, to mine the Phase 7 deposit. The ramp up of the project’s
workforce to start stripping is being challenged by limitations placed on people movement within Chile as part of the country’s COVID-19 response plan, and
as a result, first production is expected to be delayed by approximately three months to mid-2022.
The Lobo-Marte pre-feasibility study (PFS) is advancing well and is scheduled to be completed by early summer. The PFS is based on the concept of
commencing Lobo-Marte production after the conclusion of mining at Phase 7 and other potential opportunities at adjacent La Coipa deposits.
2020 Guidance
The following section of the news release represents forward-looking information and users are cautioned that actual results may vary. We refer to the risks
and assumptions contained in the Cautionary Statement on Forward-Looking Information on page 19 of this news release.
Although the COVID-19 pandemic did not materially impact Kinross’ operations during the first quarter, 2020 full-year guidance was withdrawn by the
Company on April 1, 2020. This prudent decision was due to the significant effect of the pandemic on the world economy, the implications of government-
mandated constraints on financial, commercial and business activities, and the potential for further business disruptions and global health impacts.
Favourable fuel prices and foreign exchange rates are expected to provide offsets to some of the incremental costs resulting from Kinross’ contingency
measures. The Company will continue to target the safe delivery of its operating plans, notwithstanding the potential impacts of the global crisis.
Q1 2020 conference call details
In connection with the release, Kinross will hold a conference call and audio webcast on Wednesday, May 6, 2020 at 7:45 a.m. ET followed by a question-
and-answer session. To access the call, please dial:
Canada & US toll-free – (877) 201-0168; Conference ID: 3084946
Outside of Canada & US – +1 (647) 788-4901; Conference ID: 3084946
Replay (available up to 14 days after the call):
Canada & US toll-free – (800) 585-8367; Conference ID: 3084946
Outside of Canada & US – +1 (416) 621-4642; Conference ID: 3084946
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’ 2020 first-quarter unaudited Financial Statements and Management’s Discussion and Analysis
report at www.kinross.com. Kinross’ 2020 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.
Virtual Annual and Special Meeting of Shareholders
Kinross’ Annual and Special Meeting of Shareholders will be held on Wednesday, May 6, 2020 at 10:00 a.m. ET.
In response to the ongoing public health impact of COVID-19, the Company has elected to hold the meeting via a live audio webcast. Kinross believes this is
a prudent approach that prioritizes the health and safety of its shareholders and employees, while still providing the same level of disclosure, transparency
and participation as previous annual shareholder meetings.
The virtual meeting will be available online at: http://www.virtualshareholdermeeting.com/KGC2020
The link to the virtual meeting will also be accessible at www.kinross.com and will be archived for later use.
Voting and participation instructions for eligible shareholders are provided in the Company’s Notice of Annual and Special Meeting of Shareholders and
Management Information Circular.
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
1) Unless otherwise stated, production figures in this news release are based on Kinross’ 90% share of Chirano production.
2) Net earnings figures in this release represent “net earnings attributable to common shareholders.”
3) These figures are non-GAAP financial measures and are defined and reconciled on pages 13 to 18 of this news release.
4) 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.”
5) 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.
6) Net debt is a non-GAAP financial measure defined as “Long-term debt and credit facilities” less “Cash and cash equivalents”.
7) Refers to all of the currencies in the countries where the Company has mining operations, fluctuating simultaneously by 10% in the same direction, either
appreciating or depreciating, taking into consideration the impact of hedging and the weighting of each currency within our consolidated cost structure.
Review of operations
Three months ended March 31,
(unaudited) Gold equivalent ounces
Produced Sold Production cost of sales
($millions)
Production cost of
sales/equivalent ounce
sold
2020 2019 2020 2019 2020 2019 2020 2019
Fort Knox 51,667 37,613 50,768 37,937 $ 64.6 $ 38.8 $ 1,272 $ 1,023
Round Mountain 84,465 85,135 85,715 83,614 56.1 56.0 654 670
Bald Mountain 42,087 47,255 42,376 43,230 35.7 29.2 842 675
Paracatu 124,367 146,776 121,197 146,397 87.5 94.9 722 648
Maricunga - 10,716 1,311 7,624 0.8 4.8 610 630
Americas Total 302,586 327,495 301,367 318,802 244.7 223.7 812 702
Kupol 120,885 130,088 122,024 130,414 76.9 78.0 630 598
Russia Total 120,885 130,088 122,024 130,414 76.9 78.0 630 598
Tasiast 103,837 101,358 93,950 99,758 51.9 66.0 552 662
Chirano (100%) 44,465 52,322 39,335 54,083 47.8 44.0 1,215 814
West Africa Total 148,302 153,680 133,285 153,841 99.7 110.0 748 715
Operations Total 571,773 611,263 556,676 603,057 421.3 411.7 757 683
Less Chirano non-controlling
interest (10%) (4,446) (5,232) (3,934) (5,408) (4.8) (4.4)
Attributable Total 567,327 606,031 552,742 597,649 $ 416.5 $ 407.3 $ 754 $ 682
Interim condensed consolidated balance sheets
(unaudited, expressed in millions of U.S. dollars, except share amounts)
As at
March 31, December 31,
2020 2019
Assets
Current assets
Cash and cash equivalents $ 1,138.6 $ 575.1
Restricted cash 13.4 15.2
Accounts receivable and other assets 89.5 137.4
Current income tax recoverable 144.8 43.2
Inventories 1,023.3 1,053.8
2,409.6 1,824.7
Non-current assets
Property, plant and equipment 6,632.2 6,340.0
Goodwill 158.8 158.8
Long-term investments 68.2 126.2
Investment in joint venture 18.4 18.4
Other long-term assets 539.4 572.7
Deferred tax assets - 35.2
Total assets $ 9,826.6 $ 9,076.0
Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 391.0 $ 469.3
Current income tax payable 32.7 68.0
Current portion of provisions 50.4 57.9
Other current liabilities 57.5 20.3
Deferred payment obligation 141.5 -
673.1 615.5
Non-current liabilities
Long-term debt and credit facilities 2,488.0 1,837.4
Provisions 841.0 838.6
Long-term lease liabilities 35.6 38.9
Unrealized fair value of derivative liabilities 22.8 0.8
Other long-term liabilities 92.2 107.7
Deferred tax liabilities 322.7 304.5
Total liabilities 4,475.4 3,743.4
Equity
Common shareholders' equity
Common share capital $ 14,941.5 $ 14,926.2
Contributed surplus 230.4 242.1
Accumulated deficit (9,706.7) (9,829.4)
Accumulated other comprehensive income (loss) (128.7) (20.4)
Total common shareholders' equity 5,336.5 5,318.5
Non-controlling interest 14.7 14.1
Total equity 5,351.2 5,332.6
Total liabilities and equity $ 9,826.6 $ 9,076.0
Common shares
Authorized Unlimited Unlimited
Issued and outstanding 1,257,220,950 1,253,765,724
Interim condensed consolidated statements of operations
(unaudited, expressed in millions of U.S. dollars, except share and per share amounts)
Three months ended
March 31, March 31,
2020 2019
Revenue
Metal sales $ 879.8 $ 786.2
Cost of sales
Production cost of sales 421.3 411.7
Depreciation, depletion and amortization 193.1 164.1
Total cost of sales 614.4 575.8
Gross profit 265.4 210.4
Other operating expense 21.9 32.9
Exploration and business development 19.1 19.5
General and administrative 31.8 42.6
Operating earnings 192.6 115.4
Other income (expense) - net (0.6) 2.7
Finance income 2.0 2.1
Finance expense (25.7) (27.5)
Earnings before tax 168.3 92.7
Income tax expense - net (45.0) (28.1)
Net earnings $ 123.3 $ 64.6
Net earnings (loss) attributable to:
Non-controlling interest $ 0.6 $ (0.1)
Common shareholders $ 122.7 $ 64.7
Earnings per share attributable to common shareholders
Basic $ 0.10 $ 0.05
Diluted $ 0.10 $ 0.05
Weighted average number of common shares outstanding (millions)
Basic 1,254.6 1,250.6
Diluted 1,265.3 1,259.1
Interim condensed consolidated statements of cash flows
(unaudited, expressed in millions of U.S. dollars)
Three months ended
March 31, March 31,
2020 2019
Net inflow (outflow) of cash related to the following activities:
Operating:
Net earnings $ 123.3 $ 64.6
Adjustments to reconcile net earnings to net cash provided from operating activities:
Depreciation, depletion and amortization 193.1 164.1
Share-based compensation expense 4.5 4.6
Finance expense 25.7 27.5
Deferred tax expense (recovery) 68.4 (37.2)
Foreign exchange losses and other 3.6 7.2
Changes in operating assets and liabilities:
Accounts receivable and other assets (78.6) 14.6
Inventories 7.7 37.4
Accounts payable and accrued liabilities 15.8 (14.2)
Cash flow provided from operating activities 363.5 268.6
Income taxes paid (63.9) (17.0)
Net cash flow provided from operating activities 299.6 251.6
Investing:
Additions to property, plant and equipment (191.4) (243.9)
Interest paid capitalized to property, plant and equipment (22.3) (20.9)
Acquisitions (128.3) (30.0)
Net additions to long-term investments and other assets (1.9) (6.4)
Net proceeds from the sale of property, plant and equipment 1.5 0.9
Decrease (increase) in restricted cash 1.8 (0.6)
Interest received and other - net 1.0 0.9
Net cash flow used in investing activities (339.6) (300.0)
Net cash flow of discontinued operations provided from investing activities
Financing:
Proceeds from drawdown of debt 750.0 160.0
Repayment of debt (100.0) (25.0)
Interest paid (25.6) (27.3)
Payment of lease liabilities (4.7) (3.3)
Other - net (6.6) 0.2
Net cash flow provided from financing activities 613.1 104.6
Effect of exchange rate changes on cash and cash equivalents (9.6) 1.7
Increase in cash and cash equivalents 563.5 57.9
Cash and cash equivalents, beginning of period 575.1 349.0
Cash and cash equivalents, end of period $ 1,138.6 $ 406.9
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)
Americas
Fort Knox
Q1
2020 100 6,795 1,859 5,694 0.60 0.23 80% 51,667 50,768 $ 64.6 $ 1,272 $ 19.1 $ 22.8
Q4
2019 100 7,648 2,615 5,498 0.43 0.20 81% 53,183 55,040 65.9 $ 1,197 37.1 25.0
Q3
2019 100 7,094 2,097 5,250 0.52 0.21 83% 54,027 51,606 58.3 $ 1,130 37.4 24.7
Q2
2019 100 4,829 1,811 3,440 0.59 0.20 81% 55,440 55,740 50.7 $ 910 34.9 22.6
Q1
2019 100 5,796 1,556 4,295 0.72 0.22 84% 37,613 37,937 38.8 $ 1,023 26.0 18.0
Round
Mountain
Q1
2020 100 3,700 954 3,594 0.83 0.43 83% 84,465 85,715 $ 56.1 $ 654 $ 41.8 $ 12.6
Q4
2019 100 7,408 882 7,140 1.00 0.36 82% 103,501 108,402 79.3 $ 732 62.7 12.6
Q3
2019 100 7,128 1,004 7,557 1.05 0.32 85% 82,195 81,617 57.5 $ 705 43.1 9.1
Q2
2019 100 4,074 909 3,910 1.17 0.33 86% 90,833 87,106 57.8 $ 664 58.7 10.2
Q1
2019 100 3,904 845 3,557 1.31 0.38 86% 85,135 83,614 56.0 $ 670 57.0 7.9
Bald
Mountain
(8)
Q1
2020 100 3,254 - 3,254 - 0.55 nm 42,087 42,376 $ 35.7 $ 842 $ 31.5 $ 26.7
Q4
2019 100 2,928 - 3,007 - 0.48 nm 66,147 65,381 49.8 $ 762 54.6 36.3
Q3
2019 100 6,494 - 6,494 - 0.41 nm 33,995 37,644 30.6 $ 813 38.9 14.8
Q2
2019 100 3,725 - 4,138 - 0.36 nm 40,564 31,547 27.0 $ 856 57.3 12.2
Q1
2019 100 2,659 - 2,836 - 0.48 nm 47,255 43,230 29.2 $ 675 60.4 16.2
Q1
2020 100 12,350 13,224 - 0.39 - 75% 124,367 121,197 $ 87.5 $ 722 $ 14.4 $ 37.7
Paracatu
Q4
2019 100 12,393 14,168 - 0.38 - 76% 140,224 140,430 111.1 $ 791 21.4 42.8
Q3
2019 100 12,442 14,731 - 0.38 - 78% 146,396 145,662 99.5 $ 683 36.8 39.5
Q2
2019 100 12,307 14,439 - 0.48 - 80% 186,167 186,520 106.8 $ 573 34.5 45.2
Q1
2019 100 12,393 14,283 - 0.38 - 80% 146,776 146,397 94.9 $ 648 15.0 35.9
Maricunga
(8)
Q1
2020 100 - - - - - nm - 1,311 $ 0.8 $ 610 $ - $ 0.3
Q4
2019 100 - - - - - nm 3,221 17,455 11.7 $ 670 - 0.4
Q3
2019 100 - - - - - nm 18,016 9,203 7.0 $ 761 - 0.4
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
Russia Kupol (3)(4)
(6)
Q1
2020 100 500 425 - 8.73 - 95% 120,885 122,024 $ 76.9 $ 630 $ 5.6 $ 34.4
Q4
2019 100 468 435 - 9.14 - 95% 132,009 135,083 83.3 $ 617 15.8 34.8
Q3
2019 100 338 431 - 9.65 - 95% 137,562 136,088 82.6 $ 607 7.6 32.2
Q2
2019 100 431 432 - 9.23 - 94% 127,684 124,873 70.2 $ 562 8.3 30.7
Q1
2019 100 362 425 - 9.62 - 93% 130,088 130,414 78.0 $ 598 7.6 27.4
West
Africa
Tasiast
Q1
2020 100 1,160 1,467 - 2.31 - 95% 103,837 93,950 $ 51.9 $ 552 $ 69.2 $ 40.3
Q4
2019 100 1,129 1,379 - 2.39 - 96% 102,973 101,940 50.4 $ 494 86.1 35.0
Q3
2019 100 1,010 1,297 - 2.37 - 97% 93,865 86,357 55.1 $ 638 68.2 32.0
Q2
2019 100 819 1,281 - 2.19 - 97% 92,901 94,748 58.9 $ 622 74.9 32.2
Q1
2019 100 1,962 1,269 - 2.37 - 97% 101,358 99,758 66.0 $ 662 71.6 31.0
Chirano -
100%
Q1
2020 90 690 873 - 1.73 - 88% 44,465 39,335 $ 47.8 $ 1,215 $ 5.1 $ 15.9
Q4
2019 90 737 844 - 2.00 - 91% 48,984 47,186 49.0 $ 1,038 8.0 21.4
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
Chirano -
90%
Q1
2020 90 690 873 - 1.73 - 88% 40,019 35,401 $ 43.0 $ 1,215 $ 4.7 $ 14.3
Q4
2019 90 737 844 - 2.00 - 91% 44,086 42,468 44.1 $ 1,038 7.2 19.3
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
(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 2020: 80.02 g/t, 84.1% Q4 2019: 65.63 g/t, 84.8%; Q3 2019: 67.44 g/t, 87.8%; Q2 2019: 75.29 g/t,
84.9%; Q1 2019: 69.61 g/t, 82.1%
(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 2020: 93.63:1, Q4 2019: 85.59:1; Q3 2019: 86.73:1; Q2 2019:
87.98:1; Q1 2019: 83.74:1.
(6) Dvoinoye ore processed and grade were as follows: Q1 2020: 117,502, 9.24 g/t; Q4 2019: 100,685, 9.89 g/t; Q3 2019: 113,497, 9.82 g/t; Q2 2019:
113,872, 9.24 g/t; Q1 2019: 135,529, 7.46 g/t.
(7) “Capital expenditures” is as reported as “Additions to property, plant and equipment” on the interim condensed consolidated statement of cash flows and
excludes “Interest paid capitalized to property, plant and equipment”.
(8) "nm" means not meaningful.
Reconciliation of non-GAAP financial measures