Kinross to proceed with Tasiast Phase Two and Round Mountain Phase W expansion projects Phase Two expected to transform Tasiast into a large, world-class mine with low costs; feasibility study indicates 24% IRR and $2.2 billion in cash flow over life of mine
Kinross Gold Corporation
25 York Street, 17th Floor
Toronto, ON Canada M5J 2V5
NEWS RELEASE
Kinross to proceed with Tasiast Phase Two and
Round Mountain Phase W expansion projects
Phase Two expected to transform Tasiast into a large, world-class mine with low costs;
feasibility study indicates 24% IRR and $2.2 billion in cash flow over life of mine
(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 eight of this news release. All dollar amounts are
expressed in U.S. dollars, unless otherwise noted.)
Toronto, Ontario, September 18, 2017 – Kinross Gold Corporation (TSX: K; NYSE: KGC) is pleased to announce
that it is proceeding with the Phase Two expansion of its Tasiast mine in Mauritania, which is expected to transform
Tasiast into a large, world-class operation , with low costs , and a long mine life that is expected to generate
significant cash flow.
Phase Two is expected to increase mill capacity to 30,000 tonnes per day ( t/d) to produce an average of
approximately 812,000 gold ounces (Au oz.) per year for the first five years, at an average production cost of sales
of $440 per Au oz. and all-in sustaining cost of $655 per Au oz. The project is expected to generate strong free
cash flow of $2.2 billion over the life of mine. Initial construction for Phase Two is expected to begin in early 2018,
with expected initial plant and infrastructure capital costs of approximately $590 million. Commercial production is
expected to begin in Q3 2020.
Tasiast Phase Two Feasibility Study Highlights
Metric Combined Phase One and Phase Two estimates
Throughput capacity (t/d) 30,000
Average annual production (Au oz.) (2020 – 2024) 812,000
All-in sustaining cost1 (per oz.) (2020 – 2024) $655
Production cost of sales (per oz.) (2020 – 2024) $440
Net present value2 (NPV) (billion) $1.43
Cash flow (billion) (2018 – 2029) $2.2
Metric Phase Two standalone
Initial capital expenditures (million) $590
Internal rate of return3 (IRR) 24%
*Based on a $1,200 per ounce gold price assumption and $55/bbl oil price assumption.
The Company is also pleased to announce its intent to proceed with the Round Mountain Phase W project in
Nevada, pending completion of the permitting process, which is proceeding as planned . Phase W is expected to
extend mining by five years and increase life -of-mine production by 1. 5 million Au oz. at one of Kinross’ top
performing mines located in one of the best mining jurisdictions in the world.
Round Mountain Phase W Feasibility Study Highlights
Metric Phase W (incremental) estimates4
Life of mine production (million Au oz.) 1.5
Initial plant and infrastructure capital costs (million) $230
Capitalized stripping (million) (2018-2020) $213
Internal rate of return3 (IRR) 13%
Net present value2 (NPV) (million) $135
Cash flow (million) $265
*Based on a $1,200 per ounce gold price assumption and $55/bbl oil price assumption.
1 Throughout this news release, forecast site-level all-in sustaining cost excludes corporate overhead costs. This is a non-GAAP measure and is not defined under
IFRS. Refer to “Reconciliation of non-GAAP financial measures” section in the Company’s Q2 2017 MD&A.
2 Throughout this news release, calculated based on a 5% discount rate from January 1, 2018 and after tax.
3 Throughout this news release, calculated January 1, 2018 forward.
4 Incremental to pre-Phase W mine plan and estimated mineral reserves.
Kinross Gold Corporation
25 York Street 17th Floor
Toronto, ON, Canada M5J 2V5
p. 2 Kinross to proceed with Tasiast Phase Two and Round Mountain Phase W expansion projects www.kinross.com
Kinross expects to finance both projects with its strong balance sheet and existing liquidity, and operating cash
flows. As of June 30, 2017, Kinross had cash and cash equivalents of $1,061.3 million , and available credit of
$1,433.1 million, for total liquidity of approximately $2.5 billion. Kinross also has no debt maturities prior to 2021 .
Maintaining balance sheet strength and financial flexibility continue to be top priorities as the Company develops
both projects.
The Phase Two and Phase W feasibility studies have been reviewed by third-party independent reviewers and were
found to be consistent with industry best practices.
CEO commentary
J. Paul Rollinson, President and CEO, made the following comments in relation to the Tasiast Phase Two and Round Mountain Phase W projects:
“Our decision to proceed with the Tasiast Phase Two expansion underscores our determination to realize the
potential of this world -class asset and generate significant value for our shareholders. Our continued focus on
financial discipline and technical excellence has resulted in lower capital requirements than originally forecast, which
would materially improve project IRR and NPV.
“With Phase Two, Tasiast’s annual production is expected to increase to more than 800,000 gold ounces per year
for the first five years and significantly reduce costs. This strong improvement in Tasiast’s performance is expected
to positively impact overall company performance metrics, strengthening our production profile and increasing cash
flow.
“We have applied the same financial and technical rigour to the Phase W expansion at Round Mountain. Lower
operating costs, combined with an optimized mine plan, have contributed to a further de -risking of the project and
improved returns. Phase W is expected to add five years of mining at one of our best performing operations.
“We are delivering on our strategy while opening a new chapter as we invest in our long -term future growth. In
short, this is great news for our shareholders.”
Tasiast Phase Two overview
The Phase Two feasibility study contemplates installing additional mill throughput of 18,000 t/d to the Phase One
project’s 12,000 t/d capacity for a total combined capacity of 30,000 t/d.
Initial plant and infrastructure capital costs for the additional 18,000 t/d expansion are forecast to be $590 million,
which is lower than the pre -feasibility estimate of $620 million . The combined Phase One and Phase Two non-
sustaining capitalized stripping is expected to be $370 million from 2018 through the first half of 2020.
The Phase Two project is expected to generate significant positive economic benefits for Mauritania and its people
through additional taxes, duties, wages and locally supplied goods and services. The Company is appreciative of
the support of the Government of Mauritania during its seven years of operation in the country, and it continues to
maintain a cooperative and constructive relationship with the Government and other local stakeholders . Major
permitting for the Phase Two expansion has been completed.
“We support the Kinross decision to proceed with the Tasiast Phase Two expansion and the additional investment
and long-term benefits the project will bring to the country and our people,” said Mauritania’s Minister of Petroleum,
Energy & Mines Mohamed Abdel Vetah.
The completed Phase Two fe asibility study reaffirms the previous pre -feasibility study results and has factored in
recent improvements at Tasiast – including productivity improvements, lower input prices and increased throughput
at the existing mill – to increase confidence in the feasibility study assumptions, lower execution risk, and generate
a robust internal rate of return.
The expansion would replace the two current ball mills with a new larger ball mill, and add new leaching, thickening
and refinery capacity and additions to the mining fleet. A new power plant would be added to power the 30,000 t/d
mill, which is forecast to have an average production of approximately 812,000 Au oz. per year for its first five years
Kinross Gold Corporation
25 York Street 17th Floor
Toronto, ON, Canada M5J 2V5
p. 3 Kinross to proceed with Tasiast Phase Two and Round Mountain Phase W expansion projects www.kinross.com
of mine life (2020 -2024), with a forecast cumulative gold production of 6.3 million Au oz. from 2020 to 2029.
Operational metrics for the Phase Two expansion can be found in the table below.
Tasiast Phase Two 30,000 t/d Expansion*
Timeline Operational metric Estimate
2020-2024
(First five years of
mining Phase Two
operation)
Average annual production (Au oz.) 812,000
Production cost of sales (per Au oz.) $440
All-in sustaining costs1 (per Au oz.) $655
Average CIL grade processed (g/t) 2.50
Strip ratio 6.4
Average processing cost (per tonne) $14.50
Average mining cost (per tonne)** $2.05
Total tonnes mined (tonnes) 438,400,000
2025-2029
(Remaining life of
mine)
Average annual production (Au oz.) 457,000
Production cost of sales (per Au oz.) $680
All-in sustaining costs1 (per Au oz.) $835
Average CIL grade processed (g/t) 1.45
Strip ratio 4.8
Average processing cost (per tonne) $14.30
Average mining cost (per tonne)** $2.75
Total tonnes mined (tonnes) 141,000,000
2020-2029
(Life of Project)
Average annual production (Au oz.) 634,000
Production cost of sales (per Au oz.) $530
All-in sustaining costs1 (per Au oz.) $720
Average CIL grade processed (g/t) 1.95
Average recovery rate 93%
Strip ratio 5.9
Average processing cost (per tonne) $14.40
Average mining cost (per tonne)** $2.25
Total tonnes mined (tonnes) 579,300,000
*Based on a $1,200 per ounce gold price assumption and $55/bbl oil price assumption and combined Phase One and Phase Two expansion.
**Includes re-handle costs.
Based on an assumed gold price of $1,200/oz. and oil price of $55/bbl, the Phase Two expansion has an estimated
incremental IRR of 24%, and the combined two -phased expansion has an NPV of $1.43 billion (after tax and
unlevered, from January 1, 2018 forward ). The two-phased expansion is expected to generate $2.2 billion in free
cash flow after tax over the life of mine.
With the go-ahead decision for Phase Two, a project team has been established and advanced engineering has
begun. Procurement of critical work equipment packages is advancing, as the construction period is expected to
commence by early 2018, with Phase Two commercial production expected in Q3 2020.
Kinross Gold Corporation
25 York Street 17th Floor
Toronto, ON, Canada M5J 2V5
p. 4 Kinross to proceed with Tasiast Phase Two and Round Mountain Phase W expansion projects www.kinross.com
Forecast Phase Two Initial Plant and
Infrastructure Capital Costs2 ($ millions)
Processing plant 137
Power plant 76
Water supply 50
Mining fleet 49
EPCM 27
Indirect, owner’s cost and taxes 120
Contingency 79
Miscellaneous 52
Total 590
Tasiast Phase One update
The Tasiast Phase One project continues to progress well , being on time and on budget, with full commercial
production expected in Q2 2018 . Plant construction is now two-thirds complete. The SAG mill is now in place and
work has begun on the installation of its gearless motor drive. M echanical installations at the crusher, conveyor,
stockpile and in the existing plant are proceeding well. The oxygen plant has been commissioned and is supporting
the mine’s current production, and the new tailings storage facility is expected to be operational shortly.
Round Mountain Phase W overview
The Round Mountain Phase W feasibility study contemplates a layback of the current pit, construction of a new
Carbon in Column (CIC) plant and heap leach pad, additions to the mining fleet and equipment, and relocation of
some existing infrastructure. Stripping of Phase W ore is expected to begin in early 2018, pending the permitting
process, which is proceeding on schedule. Construction and relocation of infrastructure is expected to be completed
by Q2 2019, and initial low grade Phase W ore to be encountered in mid-2019.
Phase W is expected to add 1.5 million Au oz. to the life of mine plan and generate an incremental IRR of 13% and
incremental NPV of $135 million based on a $1,200/oz. gold price and $55/bbl oil price (after tax and unlevered ,
from January 1, 2018 forward) . Phase W is expected to generate incremental cash flow of $265 million, extend
mining by five years from 2020 to 2024, and sustain the operation’s annual production at an average of
approximately 341,000 Au oz. through 2024, at an average cost of sales of $765 per Au oz. The initial capital costs
are forecast to be $230 million, plus incremental non-sustaining capitalized stripping of $215 million (2018 -2020).
Life of mine sustaining capital is expected to be $135 million.
The Phase W feasibility study has optimized the project plan by finding efficiencies to lower the cost structure. First,
the operational team lowered mining, processing and G&A costs at the current operation through continuous
improvement initiatives, directly benefitting the project mine plan. Second, after the Company acquired the 50% of
Round Mountain it did not already own, the project team completed approximately 115,000 feet of infill, metallurgical
and geotechnical drilling and rebuilt the Phase W geology model based on drilling results and historical production,
substantially increas ing the team’ s understanding of the deposit . Third, through mine plan optimization and
geotechnical analysis, a larger mineral inventory, now approximately 2 .0 million gold ounces compared with 1.3
million gold ounces in the 2016 scoping study, was included in the project. This increase includes higher grade
ounces at the bottom of the pit.
With the go -ahead decision for Phase W, procurement activities for long lead items and mining equipment ha ve
commenced, along with advanced engineering. Additional state and federal p ermitting for the project is required
and is proceeding as planned.
Kinross Gold Corporation
25 York Street 17th Floor
Toronto, ON, Canada M5J 2V5
p. 5 Kinross to proceed with Tasiast Phase Two and Round Mountain Phase W expansion projects www.kinross.com
Round Mountain Phase W Expansion*
Timeline Operational metric Combined estimate
(current mine plan + Phase W)
2018 – 2024**
(Mining)
Average annual production (Au oz.) 341,000
Production cost of sales (per Au eq. oz.) $765
All-in sustaining costs1 (per Au eq. oz.) $905
Average grade processed (g/t) 0.65
Strip ratio 2.9
Average processing cost (per tonne) $4.60
Average mining cost (per tonne) $2.00
2025 – 2027
(Stockpile
Milling/Leaching)
Average annual production (Au oz.) 46,000
Production cost of sales (per Au eq. oz.) $720
All-in sustaining costs1 (per Au eq. oz.) $785
Average grade processed (g/t) 0.46
Strip ratio N/A
Average processing cost (per tonne) $14.70
Average re-handle cost (per tonne) $1.80
2018 – 2027
(Life of Project)
Average annual production (Au oz.) 253,000
Production cost of sales (per Au eq. oz.) $765
All-in sustaining costs1 (per Au eq. oz.) $900
Average grade processed (g/t) 0.65
Strip ratio 2.9
Average processing cost (per tonne) $4.80
Average mining cost (per tonne) $2.00
*Based on a $1,200 per ounce gold price assumption and $55/bbl oil price assumption.
**Includes years with large variances from the forecast average of up to +/-150 koz.
Round Mountain Phase W Expansion*
Operational metric Incremental Phase W estimate
Life of mine production (million Au oz.) 1.5
Life of mine ore processed (million tonnes) 77.6
Average grade processed (g/t) 0.8
Strip ratio 4.0
Initial plant and infrastructure capital costs (million) $230
Capitalized stripping (million) $215
Internal rate of return3 (IRR) 13%
Net present value2 (NPV) (million) $135
*Based on a $1,200 per ounce gold price assumption and $55/bbl oil price assumption.
Kinross Gold Corporation
25 York Street 17th Floor
Toronto, ON, Canada M5J 2V5
p. 6 Kinross to proceed with Tasiast Phase Two and Round Mountain Phase W expansion projects www.kinross.com
Forecast Phase W Capital Costs2 ($ millions)
Mining fleet 75
Infrastructure 65
Heap leach pad 21
Process facilities 17
Tailings 9
Indirect, owner’s cost, and taxes 18
Contingency 27
Total 230
Gold price sensitivity estimates
Tasiast Phase Two Expansion (30,000 t/d)
Average Gold Price
Financial Metric $1,100/oz. $1,200/oz. $1,300/oz. $1,400/oz.
IRR3 (standalone) 19% 24% 28% 31%
NPV2 (combined Phase One
and Phase Two) $977 million $1.43 billion $1.83 billion $2.22 billion
Round Mountain Phase W Project (incremental)
Average Gold Price
Financial Metric $1,100/oz. $1,200/oz. $1,300/oz. $1,400/oz.
IRR3 7% 13% 17% 20%
NPV2 $31 million $135 million $216 million $295 million
Oil price sensitivity estimates
Tasiast Phase Two Expansion (30,000 t/d)
Oil Price
Financial Metric $45/bbl $50/bbl $55/bbl $60/bbl $65/bbl
IRR3 (standalone) 24.9% 24.6% 24.2% 23.9% 23.5%
NPV2 (combined Phase
One and Phase Two) $1.49 billion
$1.46 billion
$1.43 billion $1.39 billion $1.36 billion
Round Mountain Phase W Project (incremental)
Oil Price
Financial Metric $45/bbl $55/bbl $60/bbl $65/bbl
IRR3 14.1% 12.7% 12.0% 11.3%
NPV2 $159 million $135 million $123 million $111 million
Kinross Gold Corporation
25 York Street 17th Floor
Toronto, ON, Canada M5J 2V5
p. 7 Kinross to proceed with Tasiast Phase Two and Round Mountain Phase W expansion projects www.kinross.com
Mineral reserves and mineral resource estimates5
As a result of the Phase W feasibility study, estimated proven and probabl e mineral reserves at Round Mountain
increased from 1.3 million Au oz. (as of December 31, 2016) to 2.8 million Au oz. This incorporates mining depletion
of approximately 400,000 Au oz. from January 1, 2017 to July 31, 2017. The estimated mineral resource decreased
from approximately 3.8 million Au oz. to 3.7 million Au oz. This change is the net of the 2.0 million Au oz. that were
converted from mineral resources to mineral reserves offset by the addition of the 1.9 million Au oz. of new mineral
resources.
Round Mountain Proven and Probable Mineral Reserves6
(Closing Balance July 31, 2017)
Tonnes
(kt)
Grade
(Au g/t)
Ounces
(Au koz)
Proven 31,173 0.60 599
Probable 92,964 0.73 2,197
Total 124,137 0.70 2,796
Round Mountain Measured and Indicated Mineral Resources7
(Closing Balance July 31, 2017)
Tonnes
(kt)
Grade
(Au g/t)
Ounces
(Au koz)
Measured 598 0.50 11
Indicated 85,881 0.81 1,958
Total 86,478 0.71 1,969
Round Mountain Inferred Mineral Resources
(Closing Balance July 31, 2017)
Tonnes
(kt)
Grade
(Au g/t)
Ounces
(Au koz)
Inferred 70,132 0.75 1,700
5 These updated estimates are different from those reported in the 2016 fourth -quarter and year-end results news release dated February 15, 2017. For further
information and assumptions see the Company’s Annual Information Form dated March 31, 2017, available at www.kinross.com and under the Company’s profile
on SEDAR (www.sedar.com).
6 Proven mineral reserve estimates include the reserve stockpile.
7 Measured mineral resource estimates include the resource stockpile.
Kinross Gold Corporation
25 York Street 17th Floor
Toronto, ON, Canada M5J 2V5
p. 8 Kinross to proceed with Tasiast Phase Two and Round Mountain Phase W expansion projects www.kinross.com
Presentation and question and answer session
In connection with the release, Kinross will hold a conference call and audio webcast today at 1 0:00 a.m. ET to
discuss the details of the studies, followed by a question-and-answer session. To access the call, please dial:
Canada & US toll-free – 1-800-319-4610
Outside of Canada & US – 1-604-638-5340
UK toll-free – 0808-101-2791
Replay (available up to 14 days after the call):
Canada & US toll-free – 1-800-319-6413; Passcode – 1683 followed by #.
Outside of Canada & US – 1-604-638-9010; Passcode – 1683 followed by #.
You may also access the presentation and question and answer session on a listen-only basis via webcast at our
website www.kinross.com. The audio webcast will be archived on www.kinross.com.
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. Our focus is on delivering value based on the core principles of operational
excellence, balance sheet strength, discipline d growth and responsible mining. Kinross maintains listings on the
Toronto Stock Exchange (symbol:K) and the New York Stock Exchange (symbol:KGC).
Media Contact
Louie Diaz
Director, Corporate Communications
Phone: 416-369-6469
Investor Relations Contact
Tom Elliott
Senior Vice-President, Investor Relations and Corporate Development
Phone: 416-365-3390
Cautionary Statement on forward-looking information
All statements, other than statements of historical fact, contained or incorporated by reference in this news release including, but not limited to,
any information as to the future financial or operating performance of Kinross, constitute ‘‘forward -looking information’’ or ‘‘forward -looking
statements’’ within the meaning of certain securities laws, including the provisions of the Securities Act (Ontario) and the provisions for ‘‘safe
harbor’’ under the United States Private Securities Litigation Reform Act of 1995 and are based on expectations, estimates and projections as
of the date of this news release. Forward -looking statements contained in this news release include those under the headings CEO
Commentary”, “Tasiast Phase Two overview”, “Tasiast Phase One update”, “Round Mountain Phase W overview”, “Gold Price Sensitivity
Estimates”, and “Mineral reserve and mineral resource estimates””, and include, without limitation, statements with respect t o: our estimates,
expectations, forecasts and guidance for production, production costs of sales, all -in sustaining cost and capital expenditures, cost savings,
project economics (including net present value and internal rates of return) and other information contained in the feasibility studies; as well as
references to other possible events, the future price of gold and silver, the estimation of mineral reserves and mineral resources, the realization
of mineral reserve and mineral resource estimates, the timing and amount of estimated future production, costs of production, capital
expenditures, costs and timing of the development of expansion development and mining activities, permitting timelines, currency fluctuations,
requirements for additional capital, government regulation of mining operations, and environmental risks. The words “anticipates”, “contemplate”,
‘‘estimate’’, ‘‘expect’’, “explore”, “feasibility”, “focus”, ‘‘forecast”, “future”, “guidance”, “indicate”, “intent”, “liquidity”, “model”, “optimize”, “phased”,
“planned”, “potential”, “proceeding”, “projected”, “realized”, “schedule”, “study”, or “timeline”, or variations of or similar such words and phrases
or statements that certain actions, events or results ‘‘may’’, ‘‘could’’, “will” or ‘‘would’’ occur, and similar expressions identify forward-looking