Kinross reports strong 2020 third-quarter results Significant increase in earnings and cash flow Company on track to meet annual guidance for ninth consecutive year
Kinross reports strong 2020 third-quarter results
Significant increase in earnings and cash flow
Company on track to meet annual guidance for ninth consecutive year
TORONTO, Nov. 04, 2020 -- Kinross Gold Corporation (TSX: K, NYSE: KGC) today announced its results for the third quarter ended September 30, 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 18 of this release. All dollar amounts are
expressed in U.S. dollars, unless otherwise noted.)
2020 third-quarter highlights:
Q3 2020 results First nine months
2020 results
2020 guidance
(+/- 5%)
Gold equivalent production 1
(ounces) 603,312 1,742,616 2.4 million
Production cost of sales 1,2
($ per Au eq. oz.) $737 $738 $720
All-in sustaining cost1,2
($ per Au eq. oz.) $958 $978 $970
Capital expenditures $212.1 million $617.8 million $900 million
• Kinross remains on track to meet its original 2020 guidance for production, cost of sales per ounce, all-in sustaining cost per ounce and capital
expenditures for the ninth consecutive year, despite impacts from the COVID-19 pandemic.
• Production1, 2 of 603,312 attributable gold equivalent ounces (Au eq. oz.), and sales of 588,559 Au eq. oz.
• Production cost of sales1,2 of $737 per Au eq. oz. and all-in sustaining cost1,2 of $958 per Au eq. oz. sold, both of which are within the Company’s
2020 guidance range.
• Attributable margin per Au eq. oz. sold 3 increased 60% to $1,171 per Au eq. oz. compared with Q3 2019, significantly outpacing the year-over-year
30% increase in the average realized gold price4.
• Operating cash flow more than doubled to $544.1 million, and adjusted operating cash flow 2 increased by 86% to $549.6 million, compared with
Q3 2019.
• Reported net earnings 5 nearly quadrupled to $240.7 million, or $0.19 per share, and adjusted net earnings 2 nearly tripled to $310.2 million, or
$0.25 per share, compared with Q3 2019.
• Cash and cash equivalents of $933.5 million and total liquidity of $2.5 billion at September 30, 2020. The Company also further improved its debt
metrics, including its net debt to EBITDA ratio.
• Kinross’ Board of Directors declared a quarterly dividend of $0.03 per common share payable on December 10, 2020 to shareholders of record at
the close of business on November 25, 2020. The Company also declared a dividend on September 17, 2020 and announced plans to pay a regular
quarterly dividend.
• In August 2020, Kinross released its biennial Sustainability Report, highlighting the Company’s strong environmental, social and governance (ESG)
record.
• On September 17, 2020, the Company announced a growing three-year production profile, with production expected to increase 20% to 2.9 million Au
eq. oz. in 2023.
• On September 30, 2020, Kinross acquired 70% of the Peak project in Alaska. As the project operator, the Company expects to process Peak ore at
its Fort Knox mill, benefitting both the project and mine.
• On October 20, 2020, Kinross provided a long-term production outlook, with expected average annual production of 2.5 million Au eq. oz. out to 2029.
CEO commentary:
J. Paul Rollinson, President and CEO, made the following comments in relation to 2020 third-quarter results:
“Kinross delivered another strong quarter, generating robust free cash flow and a significant increase in earnings. Our mines continued to perform well as our
global teams have effectively managed the operational challenges caused by the COVID-19 pandemic. As a result, we are well on track to meet our annual
guidance for production and costs for the ninth consecutive year.
“Year-over-year, our margins grew by 60% to $1,171 per gold ounce sold, which substantially outpaced the 30% increase in the average realized gold price.
We also continued to strengthen our investment grade balance sheet and ended the quarter with approximately $935 million in cash and total liquidity of $2.5
billion.
“In September, we were pleased to announce an expected 20% increase in production over the next three years to 2.9 million gold equivalent ounces, along
with plans for a quarterly dividend to return capital to our shareholders. We also provided a long-term production outlook which forecasts Kinross producing an
average of 2.5 million gold equivalent ounces annually through to 2029.
“Our robust financial position, diverse operating portfolio, attractive project pipeline and successful track record of exploration and project development
provides a strong foundation from which to continue building value well into the future.”
Financial results
Summary of financial and operating results
Three months ended Nine months ended
September 30, September 30,
(unaudited, expressed in millions of U.S. dollars, except ounces, per share amounts, and per ounce amounts) 2020 2019 2020 2019
Operating Highlights
Total gold equivalent ounces(a)
Produced(c) 607,744 612,697 1,755,363 1,877,546
Sold(c) 593,218 597,635 1,738,379 1,841,841
Attributable gold equivalent ounces(a)
Produced(c) 603,312 608,033 1,742,616 1,862,315
Sold(c) 588,559 592,689 1,725,778 1,826,373
Financial Highlights
Metal sales $ 1,131.3 $ 877.1$ 3,018.3$ 2,501.1
Production cost of sales $ 439.4 $ 440.6$ 1,289.2$ 1,278.4
Depreciation, depletion and amortization $ 204.8 $ 176.9$ 608.3$ 520.9
Reversal of impairment charge $ - $ -$ 48.3$ -
Operating earnings $ 393.4 $ 162.6$ 907.1$ 422.3
Net earnings attributable to common shareholders $ 240.7 $ 60.9$ 559.1$ 197.1
Basic earnings per share attributable to common shareholders $ 0.19 $ 0.05$ 0.44$ 0.16
Diluted earnings per share attributable to common shareholders $ 0.19 $ 0.05$ 0.44$ 0.16
Adjusted net earnings attributable to common shareholders(b) $ 310.2 $ 104.0$ 631.7$ 266.9
Adjusted net earnings per share(b) $ 0.25 $ 0.08$ 0.50$ 0.21
Net cash flow provided from operating activities $ 544.1 $ 231.7$ 1,276.5$ 816.3
Adjusted operating cash flow(b) $ 549.6 $ 295.4$ 1,385.1$ 813.9
Capital expenditures(d) $ 212.1 $ 242.6$ 617.8$ 762.3
Average realized gold price per ounce(b) $ 1,908 $ 1,467$ 1,736$ 1,358
Consolidated production cost of sales per equivalent ounce(c) sold(b) $ 741 $ 737$ 742$ 694
Attributable(a) production cost of sales per equivalent ounce(c) sold(b) $ 737 $ 735$ 738$ 692
Attributable(a) production cost of sales per ounce sold on a by-product basis (b) $ 707 $ 716$ 717$ 677
Attributable(a) all-in sustaining cost per ounce sold on a by-product basis (b) $ 934 $ 1,016$ 962$ 949
Attributable(a) all-in sustaining cost per equivalent ounce(c) sold(b) $ 958 $ 1,028$ 978$ 958
Attributable(a) all-in cost per ounce sold on a by-product basis (b) $ 1,226 $ 1,305$ 1,226$ 1,261
Attributable(a) all-in cost per equivalent ounce(c) sold(b) $ 1,243 $ 1,309$ 1,237$ 1,264
(a) “Total” includes 100% of Chirano production. "Attributable" includes Kinross' share of Chirano (90%) and Peak (70%) production and costs.
(b) The definition and reconciliation of these non-GAAP financial measures is included on pages 13 to 17 of this news release.
(c) “Gold equivalent ounces” include silver ounces produced and sold converted to a gold equivalent based on a ratio of the average spot market prices for
the commodities for each period. The ratio for the third quarter of 2020 was 78.68:1 (third quarter of 2019 – 86.73:1). The ratio for the first nine months of
2020 was 90.15:1 (first nine months of 2019 – 86.13:1).
(d) “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 third-quarter gold equivalent production. Production and cost measures are on an attributable
basis:
Production1: Kinross produced 603,312 attributable Au eq. oz. in Q3 2020, compared with 608,033 Au eq. oz. in Q3 2019. The slight decrease was largely
due to lower production at Paracatu, Maricunga and Kupol, largely offset by increases at Fort Knox and Bald Mountain.
Average realized gold price 3: The average realized gold price in Q3 2020 increased 30% to $1,908 per ounce, compared with $1,467 per ounce in Q3
2019.
Revenue : Revenue from metal sales increased by 29% to $1,131.3 million in Q3 2020, compared with $877.1 million during the same period in 2019.
Production cost of sales1, 2: Production cost of sales per Au eq. oz. was $737 for Q3 2020 and was in line with $735 for Q3 2019. Production cost of sales
per Au oz. on a by-product basis decreased to $707 in Q3 2020, compared with $716 in Q3 2019, based on Q3 2020 attributable gold sales of 573,173
ounces and attributable silver sales of 1,210,707 ounces.
Margins: Kinross’ attributable margin per Au eq. oz. sold 3 increased by 60% to $1,171 for Q3 2020, compared with the Q3 2019 margin of $732, and
significantly outpacing the year-over-year 30% increase in average realized gold price.
All-in sustaining cost1, 2: All-in sustaining cost per Au eq. oz. sold decreased to $958 in Q3 2020, compared with $1,028 in Q3 2019. All-in sustaining cost
per Au oz. sold on a by-product basis decreased to $934 in Q3 2020, compared with $1,016 in Q3 2019. The decrease in all-in sustaining cost was primarily
a result of lower capital expenditures.
Operating cash flow : Adjusted operating cash flow 2 for Q3 2020 increased by 86% to $549.6 million, compared with $295.4 million for Q3 2019, primarily
due to the increase in margins.
Net operating cash flow increased by 135% to $544.1 million for Q3 2020, compared with $231.7 million for Q3 2019.
Earnings: Adjusted net earnings 2 nearly tripled to $310.2 million, or $0.25 per share, for Q3 2020, compared with $104.0 million, or $0.08 per share, for Q3
2019, primarily due to the increase in margins.
Reported net earnings5 nearly quadrupled to $240.7 million, or $0.19 per share, for Q3 2020, compared with $60.9 million, or $0.05 per share, for Q3 2019.
Capital expenditures : Capital expenditures were $212.1 million for Q3 2020, compared with $242.6 million for Q3 2019, primarily due to decreases in
spending at Bald Mountain and Tasiast.
Balance sheet and financial position
As of September 30, 2020, Kinross had cash and cash equivalents of $933.5 million, compared with $1,527.1 million at June 30, 2020. The decrease was
primarily related to the full repayment of the $750 million drawn from the Company’s $1.5 billion credit facility earlier in the year as a precaution against
uncertainties caused by the COVID-19 pandemic and the acquisition of the Peak project. Strong free cash flow generated during Q3 2020 partially offset the
cash used for the repayment and acquisition.
The Company had additional available credit of $1,565.3 million as of September 30, 2020, and total liquidity of approximately $2.5 billion. Kinross had total
debt of approximately $1.9 billion, of which $500 million in senior notes are due in September 2021, which the Company intends to repay.
Kinross continues to prioritize maintaining and strengthening its investment grade balance sheet.
Operating results
The Company’s comprehensive response to the COVID-19 pandemic continued to maintain the safety of its global workforce and host communities while
mitigating operational impacts.
Mine-by-mine summaries for 2020 third-quarter results can be found on pages eight and 12 of this news release. Operational highlights from Q3 2020 include
the following:
Americas
Fort Knox performed well during the quarter, with higher production and lower cost of sales per ounce sold compared with Q2 2020 mainly due to strong mill
performance. The operation delivered higher production compared with Q3 2019 as a result of higher mill grades and mill throughput. Cost of sales per ounce
sold decreased year-over-year due to increased production and mill throughput, partially offset by higher operating waste mined.
Round Mountain ’s production was largely in line with Q2 2020, with cost of sales per ounce sold decreasing mainly as a result of lower contractor costs.
Year-over-year production decreased primarily as a result of lower mill grades, partially offset by higher ounces recovered from the heap leach pads. Cost of
sales per ounce sold was lower compared with Q3 2019 mainly due to a decrease in operating waste mined and lower fuel costs.
At Bald Mountain , both production and cost of sales per ounce sold were largely consistent with Q2 2020. Production increased compared with Q3 2019 as
more ounces were recovered from the Vantage Complex heap leach pad due to higher grades. Cost of sales per ounce sold increased year-over-year mainly
due to higher royalty expenses driven by higher gold prices.
At Paracatu , production was lower quarter-over-quarter mainly due to a decrease in mill throughput as a result of planned maintenance and lower grades. The
lower throughput, and a decrease in recoveries, contributed to the lower production year-over-year. Production is expected to improve in the fourth quarter as
mining is expected to transition to higher grade ore. Cost of sales per ounce sold increased compared with Q2 2020 and Q3 2019 mainly as a result of lower
ounces produced, higher contractor costs and maintenance supplies, partially offset by favourable foreign exchange movements.
Russia
At Kupol and Dvoinoye, production was largely in line with the previous quarter and was lower year-over-year mainly due to anticipated lower grades at
Kupol. Cost of sales per ounce sold was lower compared with Q2 2020 and Q3 2019, primarily due to reduced mining activity at Dvoinoye. Favourable foreign
exchange rates also contributed to the year-over-year decrease in cost of sales per ounce sold, which was partially offset by higher royalties associated with
the increase in the average realized gold price.
West Africa
Tasiast performed well, with higher production quarter-over-quarter and year-over-year. While production in the second quarter was negatively impacted by a
strike, Q3 2020 production improved as a result of record mill grades and higher mill throughput, with Tasiast achieving a record production month in August.
Cost of sales per ounce sold increased compared with Q2 2020 mainly due to higher royalty expenses and increased milling supplies. Compared with Q3
2019, production increased due to higher mill grades, which was partially offset by lower mill throughput and recoveries, while cost of sales per ounce sold
was largely consistent.
During the quarter, Tasiast’s mining rate continued to ramp up and is now operating at near full capacity after rates were affected by the strike in Q2 2020 and
COVID-19 impacts earlier in the year. As a result of lower mining rates, approximately 100k Au eq. oz. of production is expected to be deferred from 2021 to
2022. Kinross does not expect any impacts to Tasiast’s life of mine production.
At Chirano, production increased compared with the previous quarter primarily due to higher mill throughput, and cost of sales per ounce sold increased due
to higher milling costs. Year-over-year production was lower as a result of lower grades, and cost of sales per ounce sold increased due to higher milling
costs and maintenance supplies, partially offset by lower operating waste mined.
Long-term production outlook
On September 17, 2020, Kinross announced a growing three-year production profile, with production expected to increase by approximately half a million
ounces, or 20%, to 2.9 million Au eq. oz. in 2023. The Company expects production 1 (+/- 5%) of 2.4 million Au eq. oz. in 2021, 2.7 million Au eq. oz. in
2022, and 2.9 million Au eq. oz. in 2023.
On October 20, 2020, Kinross provided a long-term production outlook, with expected average annual production of 2.5 million Au eq. oz. 1 to 2029. Kinross’
production outlook is based on long-life assets that anchor the Company’s global portfolio, along with numerous growth projects in all operating regions.
Development projects
Alaska projects
At the Fort Knox Gilmore project, work on infrastructure and processing facilities is now substantially complete. First ore was placed on the new Barnes
Creek heap leach pad in early October, as construction of the pad was completed on time and under budget during the quarter. Stripping is progressing well,
and the Company expects to accelerate production at the Gilmore project to bring ounces forward as part of Kinross’ growing three-year production profile.
On September 30, 2020, the Company acquired a 70% interest in the open pit Peak project in Alaska for total cash consideration of $93.7 million. As the
project operator, Kinross expects to process Peak ore at its Fort Knox mill. Processing ore at Fort Knox avoids mill construction at Peak and is expected to
decrease execution risk, lower capital expenditures, drive attractive returns, and reduce the project’s environmental footprint and permitting requirements.
Blending the higher grade ore from Peak with Fort Knox ore is expected to extend mill operation at Fort Knox, reduce overall costs and increase cash flow.
The project is expected to benefit the state and local communities, in particular, the Upper Tanana Athabascan Village of Tetlin.
Kinross expects to commence production at Peak in 2024, with total production of approximately 1 million Au eq. oz. over 4.5 years at average mining grades
of approximately 6 g/t. Kinross plans to commence a drilling program before year end to further develop the project’s resource base, and expects to complete
permitting and a feasibility study by the end of 2022.
Tasiast 24k
The Tasiast 24k project is advancing well and 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. The project is now approximately 45% complete, with civil and mechanical works progressing well in the processing plant, including the gravity
circuit, thickener and screens. Work on power plant construction, which was previously delayed by COVID-19 impacts, is now ramping up.
Chulbatkan license – Udinsk project
At the Udinsk development project – the first project the Company expects to develop on the larger Chulbatkan license – study work is advancing well. The
2020 drill program has ramped back up after challenges related to COVID-19 earlier in the year, and as of the end of Q3 2020, approximately 50,000 metres
of drilling have been completed. All of the current estimated mineral resources at Chulbatkan are located at Udinsk, which has a footprint that represents less
than 1% of the approximately 450 sq. kilometre Chulbatkan license area.
On the Chulbatkan license, a geochemistry and geophysics exploration program completed outside of Udinsk has returned positive results, with new
anomalies identified. The large, prospective Chulbatkan license area provides exploration potential that is incremental to the Udinsk project.
La Coipa Restart and Lobo-Marte
The La Coipa Restart project is progressing well and is on schedule to begin pre-stripping in early 2021, with first production expected in mid-2022. An
access road to the Phase 7 pit has been established and refurbishments of the fleet that was successfully transferred from Maricunga in April 2020 are
progressing well. Early work on refurbishing the plant and existing infrastructure is also advancing well as the team continues to work to offset challenges to
project timing caused by COVID-19 impacts. The Company continues to study opportunities to incorporate adjacent deposits with existing mineral reserves
and resources into the La Coipa mine plan and potentially extend mine life.
At the Lobo-Marte project, work on permitting and the feasibility study (FS) is advancing, with the FS on schedule to be completed in Q4 2021. The
Company is targeting production at Lobo-Marte to commence in 2027 after the completion of mining at La Coipa. Kinross continues to believe that Lobo-
Marte offers the potential of a long-life, cornerstone asset with attractive costs.
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 18 of this news release.
On September 17, 2020, the Company reinstated its 2020 guidance originally announced on February 12, 2020.
Kinross is on track to meet its production 1 guidance of 2.4 million Au eq. oz. (+/- 5%), its cost of sales per ounce 1 guidance of $720 per Au eq. oz. sold (+/-
5%), and its all-in sustaining cost 1 guidance of $970 per Au eq. oz. sold (+/- 5%) for 2020. The Company also remains on track to meet its capital
expenditures guidance of $900 million (+/- 5%).
2019 Sustainability Report
In August 2020, Kinross released its biennial Sustainability Report (“Report”) detailing the Company’s progress over the past two years in delivering on its
commitment to responsible mining. The Report provides a transparent account of Kinross’ sustainability performance, including ESG activities, and an in-
depth review of the Company’s relationships with host communities, workforce and host governments.
Health and safety remains Kinross’ top priority and is exemplified by its strong safety performance. Incident frequency rates have remained among the lowest
in the industry, and on par with, or better than rates in low-risk, non-industrial sectors. In line with this commitment, the Report provides comprehensive
information on Kinross’ COVID-19 Response, which includes rigorous measures to keep its employees safe, mitigate the spread of the virus, maintain
business continuity and production, and support employees and host communities.
The Company continued to deliver socio-economic value, and provided benefits to host countries with a total of $3.2 billion spent in-country in 2019 through
taxes, wages, procurement and community support.
Kinross has adopted the World Gold Council’s Responsible Gold Mining Principles (RGMPs), proceeded with the implementation of the recommendations of
the Task Force on Climate-related Financial Disclosures (TCFD) and continued to advance the UN Sustainable Development Goals (SDGs). The Report
follows the Global Reporting Initiative (GRI) framework, fulfills Kinross’ commitment as a participant in the UN Global Compact, and includes metrics from the
Mining and Metals Standard of the Sustainability Accounting Standards Board (SASB).
Q3 2020 conference call details
In connection with the release, Kinross will hold a conference call and audio webcast on Thursday, November 5, 2020 at 8:00 a.m. ET followed by a question-
and-answer session. Please enter the passcode: 8369428 to access the call.
Canada & US toll-free – +1 (833) 968-2237; Passcode: 8369428
Outside of Canada & US – +1 (825) 312-2059; Passcode: 8369428
Replay (available up to 14 days after the call):
Canada & US toll-free – +1 (800) 585-8367; Passcode: 8369428
Outside of Canada & US – +1 (416) 621-4642; Passcode: 8369428
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 third-quarter unaudited Financial Statements and Management’s Discussion and Analysis
report at www.kinross.com. Kinross’ 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
phone: 416-365-3390
Review of operations
Three months ended September 30,
(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 72,705 54,027 73,267 51,606 $ 69.5 $ 58.3 $ 949 $ 1,130
Round Mountain 76,039 82,195 72,717 81,617 49.7 57.5 683 705
Bald Mountain 49,339 33,995 37,492 37,644 32.1 30.6 856 813
Paracatu 131,000 146,396 128,782 145,662 96.6 99.5 750 683
Maricunga 3,132 18,016 4,442 9,203 1.0 7.0 225 761
Americas Total 332,215 334,629 316,700 325,732 248.9 252.9 786 776
Kupol 128,144 137,562 126,637 136,088 69.2 82.6 546 607
Russia Total 128,144 137,562 126,637 136,088 69.2 82.6 546 607
Tasiast 103,065 93,865 103,295 86,357 65.2 55.1 631 638
Chirano (100%) 44,320 46,641 46,586 49,458 56.1 50.0 1,204 1,011
West Africa Total 147,385 140,506 149,881 135,815 121.3 105.1 809 774
Operations Total 607,744 612,697 593,218 597,635 439.4 440.6 741 737
Less Chirano non-controlling interest (10%) (4,432) (4,664) (4,659) (4,946) (5.6) (5.0)
Attributable Total 603,312 608,033 588,559 592,689 $ 433.8 $ 435.6 $ 737 $ 735
Nine months ended September 30,
(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 180,402 147,080 180,500 145,283 $ 200.2 $ 147.8 $ 1,109 $ 1,017
Round Mountain 234,855 258,163 229,519 252,337 157.4 171.3 686 679
Bald Mountain 139,795 121,814 129,462 112,421 110.5 86.8 854 772
Paracatu 394,217 479,339 390,625 478,579 267.7 301.2 685 629
Maricunga 3,132 35,380 6,912 26,301 2.6 19.8 376 753
Americas Total 952,401 1,041,776 937,018 1,014,921 738.4 726.9 788 716
Kupol 380,012 395,334 379,432 391,375 225.4 230.8 594 590
Russia Total 380,012 395,334 379,432 391,375 225.4 230.8 594 590
Tasiast 295,481 288,124 295,924 280,863 174.9 180.0 591 641
Chirano (100%) 127,469 152,312 126,005 154,682 150.5 140.7 1,194 910
West Africa Total 422,950 440,436 421,929 435,545 325.4 320.7 771 736
Operations Total 1,755,363 1,877,546 1,738,379 1,841,841 1,289.2 1,278.4 742 694
Less Chirano non-controlling interest (10%) (12,747) (15,231) (12,601) (15,468) (15.0) (14.1)
Attributable Total 1,742,616 1,862,315 1,725,778 1,826,373 $ 1,274.2 $ 1,264.3 $ 738 $ 692
Interim condensed consolidated balance sheets
(unaudited, expressed in millions of U.S. dollars, except share amounts)
As at
September 30, December 31,
2020 2019
Assets
Current assets
Cash and cash equivalents $ 933.5 $ 575.1
Restricted cash 13.1 15.2
Accounts receivable and other assets 182.4 137.4
Current income tax recoverable 157.0 43.2
Inventories 1,032.0 1,053.8
2,318.0 1,824.7
Non-current assets
Property, plant and equipment 6,836.3 6,340.0
Goodwill 158.8 158.8
Long-term investments 106.2 126.2
Investment in joint venture 18.3 18.4
Other long-term assets 570.4 572.7
Deferred tax assets - 35.2
Total assets $ 10,008.0 $ 9,076.0
Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 468.2 $ 469.3
Dividend payable 37.7 -
Current income tax payable 72.8 68.0
Current portion of long-term debt and credit facilities 499.6 -
Current portion of provisions 56.7 57.9
Other current liabilities 40.2 20.3
Deferred payment obligation 141.5 -
1,316.7 615.5
Non-current liabilities
Long-term debt and credit facilities 1,423.1 1,837.4
Provisions 815.6 838.6
Long-term lease liabilities 28.9 38.9
Unrealized fair value of derivative liabilities 14.0 0.8
Other long-term liabilities 94.6 107.7
Deferred tax liabilities 435.5 304.5
Total liabilities $ 4,128.4 $ 3,743.4
Equity
Common shareholders' equity
Common share capital $ 4,473.6 $ 14,926.2
Contributed surplus 10,705.7 242.1
Accumulated deficit (9,308.0) (9,829.4)
Accumulated other comprehensive income (loss) (48.6) (20.4)
Total common shareholders' equity 5,822.7 5,318.5
Non-controlling interests 56.9 14.1
Total equity 5,879.6 5,332.6
Total liabilities and equity $ 10,008.0 $ 9,076.0
Common shares
Authorized Unlimited Unlimited
Issued and outstanding 1,258,287,630 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 Nine months ended
September 30, September 30, September 30, September 30,
2020 2019 2020 2019
Revenue
Metal sales $ 1,131.3 $ 877.1 $ 3,018.3 $ 2,501.1
Cost of sales
Production cost of sales 439.4 440.6 1,289.2 1,278.4
Depreciation, depletion and amortization 204.8 176.9 608.3 520.9
Reversal of impairment charge - - (48.3) -
Total cost of sales 644.2 617.5 1,849.2 1,799.3
Gross profit 487.1 259.6 1,169.1 701.8
Other operating expense 43.6 29.1 118.4 91.5
Exploration and business development 24.8 35.6 61.8 83.5
General and administrative 25.3 32.3 81.8 104.5
Operating earnings 393.4 162.6 907.1 422.3
Other income (expense) - net (3.4) 5.2 5.2 5.4
Finance income 0.8 2.3 3.8 6.3
Finance expense (27.4) (23.8) (85.9) (77.4)
Earnings before tax 363.4 146.3 830.2 356.6
Income tax expense - net (121.8) (85.5) (269.3) (160.1)
Net earnings $ 241.6 $ 60.8 $ 560.9 $ 196.5
Net earnings (loss) attributable to:
Non-controlling interests $ 0.9 $ (0.1) $ 1.8 $ (0.6)
Common shareholders $ 240.7 $ 60.9 $ 559.1 $ 197.1
Earnings per share attributable to common shareholders
Basic $ 0.19 $ 0.05 $ 0.44 $ 0.16
Diluted $ 0.19 $ 0.05 $ 0.44 $ 0.16
Weighted average number of common shares outstanding
(millions)
Basic 1,258.1 1,252.8 1,256.8 1,251.9
Diluted 1,269.0 1,263.9 1,267.6 1,261.7
Interim condensed consolidated statements of cash flows
(unaudited, expressed in millions of U.S. dollars)
Three months ended Nine months ended
September 30, September 30, September 30, September 30,
2020 2019 2020 2019
Net inflow (outflow) of cash related to the following activities:
Operating:
Net earnings $ 241.6 $ 60.8 $ 560.9 $ 196.5
Adjustments to reconcile net earnings to net cash provided from
operating activities:
Depreciation, depletion and amortization 204.8 176.9 608.3 520.9
Reversal of impairment charge - - (48.3) -
Share-based compensation expense 3.1 3.3 10.4 10.9
Finance expense 27.4 23.8 85.9 77.4
Deferred tax expense (recovery) 63.4 15.3 175.9 (16.1)
Foreign exchange losses (gains) and other 9.3 (1.4) (8.0) 7.6
Changes in operating assets and liabilities:
Accounts receivable and other assets (40.9) (76.2) - (168.6) (101.9)
Inventories (13.0) (40.5) 26.3 9.5
Accounts payable and accrued liabilities 78.4 131.6 190.6 174.0
Cash flow provided from operating activities 574.1 293.6 1,433.4 878.8
Income taxes paid (30.0) (61.9) (156.9) (62.5)
Net cash flow provided from operating activities 544.1 231.7 1,276.5 816.3
Investing:
Additions to property, plant and equipment (212.1) (242.6) (617.8) (762.3)
Interest paid capitalized to property, plant and equipment (16.9) (22.9) (43.0) (44.7)
Acquisitions (122.5) - (250.8) (30.0)
Net proceeds from the sale of (additions to) long-term investments and
other assets 2.4 (0.6) (0.9) (12.9)
Net proceeds from the sale of property, plant and equipment 1.1 0.8 3.3 2.9
Decrease (increase) in restricted cash - net 0.2 0.6 (22.9) (0.2)
Interest received and other - net 0.7 1.1 2.4 3.2
Net cash flow used in investing activities (347.1) (263.6) (929.7) (844.0)
Financing:
Proceeds from drawdown of debt - 40.0 950.0 300.0
Repayment of debt (750.0) (95.0) (850.0) (200.0)
Interest paid (34.1) (26.6) (63.1) (55.0)
Payment of lease liabilities (4.0) (3.2) (13.5) (10.4)
Other - net 1.0 1.0 (3.6) 0.8
Net cash flow (used in) provided from financing activities (787.1) (83.8) 19.8 35.4
Effect of exchange rate changes on cash and cash equivalents (3.5) (1.7) (8.2) 1.3
(Decrease) increase in cash and cash equivalents (593.6) (117.4) 358.4 9.0
Cash and cash equivalents, beginning of period 1,527.1 475.4 575.1 349.0
Cash and cash equivalents, end of period $ 933.5 $ 358.0 $ 933.5 $ 358.0
Operating
Summary
Mine Period Ownership
Tonnes
Ore
Mined
(a)
Ore
Processed
(Milled) (a)
Ore
Processed
(Heap
Leach) (a)
Grade
(Mill)
Grade
(Heap
Leach)
Recovery
(b)(h)
Gold Eq
Production
(e)
Gold Eq
Sales (e)
Production
cost of
sales
Production
cost of
sales/oz
Cap Ex
(g) DD&A
(%) ('000
tonnes)
('000
tonnes)
('000
tonnes) (g/t) (g/t) (%) (ounces) (ounces) ($ millions) ($/ounce) ($
millions)
($
millions)
Fort Knox
Q3
2020 100 7,202 2,664 5,497 0.67 0.19 83% 72,705 73,267 $ 69.5 $ 949 $ 39.7 $ 27.9
Q2
2020 100 6,116 2,048 4,783 0.73 0.23 83% 56,031 56,465 66.1 $ 1,171 33.9 23.3
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
Americas
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
Round
Mountain
Q3
2020 100 6,085 972 5,884 0.79 0.39 83% 76,039 72,717 $ 49.7 $ 683 $ 39.2 $ 11.6
Q2
2020 100 4,431 911 4,357 0.80 0.36 84% 74,351 71,087 51.6 $ 726 36.9 10.2
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
Bald
Mountain
Q3
2020 100 4,922 - 4,922 - 0.56 nm 49,339 37,492 $ 32.1 $ 856 $ 23.4 $ 27.1
Q2
2020 100 4,051 - 4,051 - 0.53 nm 48,368 49,594 42.7 $ 861 29.6 30.2
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
Paracatu
Q3
2020 100 12,468 13,673 - 0.38 - 74% 131,000 128,782 $ 96.6 $ 750 $ 27.2 $ 42.4
Q2
2020 100 15,223 14,703 - 0.40 - 74% 138,851 140,646 83.6 $ 594 49.1 45.2
Q1
2020 100 12,350 13,224 - 0.39 - 75% 124,367 121,197 87.5 $ 722 14.4 37.7
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
Maricunga
Q3
2020 100 - - - - - nm 3,132 4,442 $ 1.0 $ 225 $ - $ 0.2
Q2
2020 100 - - - - - nm - 1,159 0.8 $ 690 - 0.3
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
Russia Kupol (c)(d)
(f)
Q3
2020 100 365 430 - 8.99 - 95% 128,144 126,637 $ 69.2 $ 546 $ 6.1 $ 27.0
Q2
2020 100 386 416 - 9.73 - 95% 130,983 130,771 79.3 $ 606 5.9 31.1
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
West
Africa
Tasiast
Q3
2020 100 1,338 1,244 - 2.78 - 94% 103,065 103,295 $ 65.2 $ 631 $ 50.0 $ 50.2
Q2
2020 100 1,134 1,168 - 2.40 94% 88,579 98,679 57.8 $ 586 40.6 54.8
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 68.3 32.0
Chirano -
100%
Q3
2020 100 768 815 - 1.87 - 88% 44,320 46,586 $ 56.1 $ 1,204 $ 5.0 $ 16.1
Q2
2020 100 679 785 - 1.85 - 88% 38,683 40,084 46.6 $ 1,163 5.8 13.1
Q1
2020 100 690 873 - 1.73 - 88% 44,465 39,335 47.8 $ 1,215 5.1 15.9
Q4
2019 100 737 844 - 2.00 - 91% 48,984 47,186 49.0 $ 1,038 8.0 21.4
Q3
2019 100 714 801 - 2.02 - 92% 46,641 49,458 50.0 $ 1,011 4.7 22.0
Chirano -
90%
Q3
2020 90 768 815 - 1.87 - 88% 39,888 41,927 $ 50.5 $ 1,204 $ 4.5 $ 14.5
Q2
2020 90 679 785 - 1.85 - 88% 34,815 36,076 41.9 $ 1,163 5.2 11.8
Q1
2020 90 690 873 - 1.73 - 88% 40,019 35,401 43.0 $ 1,215 4.7 14.3