TORONTO, ONTARIO
-- (Marketwired)
-- 07/30/14
Kinross Gold Corporation (TSX:K)(NYSE:KGC) today announced its results for the second quarter ended June 30, 2014.
(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 six of this release. All dollar amounts are expressed in U.S. dollars, unless otherwise noted.)
Highlights:
-- Production(1): 679,831 gold equivalent ounces (Au eq. oz.), compared
with 655,381 ounces in Q2 2013.
-- Revenue: $911.9 million, compared with $968.0 million in Q2 2013.
-- Production cost of sales(2): $742 per Au eq. oz., compared with $737 in
Q2 2013.
-- All-in sustaining cost(2): $976 per Au eq. oz. sold, compared with
$1,038 in Q2 2013.
-- Adjusted operating cash flow(2): $228.3 million, or $0.20 per share,
compared with $256.7 million, or $0.22 per share, in Q2 2013.
-- Adjusted net earnings(2,3): $32.9 million, or $0.03 per share, compared
with adjusted earnings of $119.5 million, or $0.10 per share, in Q2
2013.
-- Reported net earnings(3): $46.0 million, or $0.04 per share, compared
with a net loss of $2,481.9 million, or $2.17 per share, in Q2 2013.
-- Average realized gold price: $1,285 per Au oz., compared with $1,394 per
Au oz. in Q2 2013.
-- Outlook: Kinross expects to be within its 2014 forecast guidance for
production (2.5-2.7 million Au eq. oz.), production cost of sales ($730-
780 per Au eq. oz. sold), all-in sustaining cost ($950-1,050 per Au eq.
oz. sold), and total capital expenditures ($675 million).
-- Corporate Responsibility (CR) Report: Kinross has published its 2013 CR
report, available at
http://2013corporateresponsibilityreport.kinross.com/
CEO Commentary
J. Paul Rollinson, CEO, made the following comments in relation to 2014 second-quarter results:
"Kinross' focus on financial discipline and operational excellence continues to deliver results, with another strong quarter that puts the Company at the high end of its 2014 guidance range on production, and the low end of its 2014 guidance range on costs at the half-year mark.
"All-in sustaining cost is down compared with the first quarter of 2014 and the same quarter last year, as we continue to focus on opportunities to reduce spending across the Company. The Russia region is outperforming on both costs and production, while our West Africa operations have reduced their operating costs in the first half of 2014 compared with the last six months of 2013. In the Americas, operational improvements at Maricunga in the first half of 2014 have increased production by 40% and reduced cost of sales per ounce, compared with the second half of 2013.
"With strong, consistent performance from our core assets, we are also advancing opportunities for new production. We continue to explore project financing options for a potential Tasiast expansion as we pursue opportunities to enhance project economics and reduce execution risk. In addition, with encouraging exploration results at La Coipa, we plan to launch a pre-feasibility study in the second half of 2014 to explore the possible re-start of operations."
Financial results
Summary of financial and operating results
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Three months ended Six months ended
June 30, June 30,
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(in millions, except ounces,
per share amounts, and per
ounce amounts) 2014 2013 2014 2013
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Operating Highlights from
Continuing Operations
Total gold equivalent
ounces(a)
Produced(c) 686,130 661,636 1,358,310 1,317,246
Sold(c) 709,606 695,541 1,338,243 1,347,738
Attributable gold equivalent
ounces(a)
Produced(c) 679,831 655,381 1,344,521 1,304,278
Sold(c) 703,234 689,501 1,324,765 1,334,753
Financial Highlights from
Continuing Operations
Metal sales $ 911.9 $ 968.0 $ 1,729.3 $ 2,026.1
Production cost of sales $ 525.9 $ 513.5 $ 981.9 $ 989.2
Depreciation, depletion and
amortization $ 215.3 $ 210.1 $ 411.7 $ 437.8
Impairment charges $ - $ 2,433.1 $ - $ 2,433.1
Operating earnings (loss) $ 80.2 $ (2,283.7) $ 161.6 $ (2,031.0)
Net earnings (loss)
attributable to common
shareholders $ 46.0 $ (2,481.9) $ 77.8 $ (2,319.5)
Basic earnings (loss) per
share attributable to common
shareholders $ 0.04 $ (2.17) $ 0.07 $ (2.03)
Diluted earnings (loss) per
share attributable to common
shareholders $ 0.04 $ (2.17) $ 0.07 $ (2.03)
Adjusted net earnings
attributable to common
shareholders(b) $ 32.9 $ 119.5 $ 67.0 $ 291.9
Adjusted net earnings per
share(b) $ 0.03 $ 0.10 $ 0.06 $ 0.26
Net cash flow provided from
operating activities $ 163.9 $ 106.4 $ 374.4 $ 471.7
Adjusted operating cash
flow(b) $ 228.3 $ 256.7 $ 467.3 $ 670.4
Adjusted operating cash flow
per share(b) $ 0.20 $ 0.22 $ 0.41 $ 0.59
Average realized gold price
per ounce $ 1,285 $ 1,394 $ 1,292 $ 1,505
Consolidated production cost
of sales per equivalent
ounce(c) sold(b) $ 741 $ 738 $ 734 $ 734
Attributable(a) production
cost of sales per equivalent
ounce(c) sold(b) $ 742 $ 737 $ 735 $ 734
Attributable(a) production
cost of sales per ounce sold
on a by-product basis(b) $ 725 $ 697 $ 717 $ 686
Attributable(a) all-in
sustaining cost per ounce
sold on a by-product basis(b) $ 967 $ 1,017 $ 978 $ 1,006
Attributable(a) all-in
sustaining cost per
equivalent ounce(c) sold(b) $ 976 $ 1,038 $ 988 $ 1,034
Attributable(a) all-in cost
per ounce sold on a by-
product basis(b) $ 1,055 $ 1,350 $ 1,078 $ 1,333
Attributable(a) all-in cost
per equivalent ounce(c)
sold(b) $ 1,062 $ 1,351 $ 1,084 $ 1,342
(a) "Total" includes 100% of Chirano production. "Attributable" includes
Kinross' share of Chirano (90%) production.
(b) The definition and reconciliation of these non-GAAP financial measures
is included on pages eight to 12 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 second
quarter of 2014 was 65.67:1, compared with 61.14:1 for the second quarter
of 2013 and for the first six months of 2014 was 64.36:1, compared with
57.21:1 for the first six months of 2013.
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The following operating and financial results are based on second-quarter 2014 gold equivalent production from continuing operations. Production and cost measures are on an attributable basis:
Production: Kinross produced 679,831 attributable Au eq. oz. in the second quarter of 2014, a 4% increase over the second quarter of 2013, mainly due to increased production at Kupol as a result of processing higher grade ore from Dvoinoye.
Production cost of sales: Production cost of sales per Au eq. oz.(2) was $742 for the second quarter of 2014, compared with $737 for the second quarter of 2013. Production cost of sales per Au oz.(2) on a by-product basis was $725 in Q2 2014, compared with $697 in Q2 2013, based on Q2 2014 attributable gold sales of 681,974 ounces and attributable silver sales of 1,396,135 ounces.
All-in sustaining cost: All-in sustaining cost per Au eq. oz. sold(2) decreased to $976 in Q2 2014, compared with $1,038 in Q2 2013, primarily due to decreases in sustaining capital and exploration and business development expenditures.
All-in sustaining cost per Au oz. sold on a by-product basis(2) was $967 in Q2 2014, compared with $1,017 in Q2 2013.
Revenue: Revenue from metal sales was $911.9 million in the second quarter of 2014, compared with $968.0 million during the same period in 2013. The decrease was due mainly to the lower average realized gold price for the quarter.
Average realized gold price: The average realized gold price was $1,285 per ounce in Q2 2014, compared with $1,394 per ounce in Q2 2013.
Margins: Kinross' attributable margin per Au eq. oz. sold(4) was $543 for the second quarter of 2014, compared with the Q2 2013 margin of $657 per Au eq. oz. sold.
Operating cash flow: Adjusted operating cash flow(2) was $228.3 million for the second quarter of 2014, or $0.20 per share, compared with $256.7 million, or $0.22 per share, for Q2 2013.
Earnings: Adjusted net earnings(2,3) were $32.9 million, or $0.03 per share, for Q2 2014, compared with adjusted earnings of $119.5 million, or $0.10 per share, for Q2 2013, mainly due to a lower average realized gold price.
Reported net earnings(3) were $46.0 million, or $0.04 per share, for Q2 2014, compared with a loss of $2,481.9 million, or $2.17 per share, in Q2 2013. The reported net loss from Q2 2013 included an after-tax non-cash impairment charge of $2,289.3 million.
Capital expenditures: Capital expenditures decreased to $120.0 million for Q2 2014, compared with $321.0 million for the same period last year, due mainly to lower spending at Tasiast.
Operating results
Mine-by-mine summaries for second-quarter 2014 operating results can be found on pages 13 and 17 of this news release. Highlights include the following:
Americas
Regional performance was strong in Q2, as production was higher compared with the previous quarter due to the expected seasonal increase of heap leach processing at Fort Knox, better grades at Kettle-River Buckhorn and improved heap leach performance at Maricunga. Regional production(5) was in line year over year due to higher grades and improved performance at Maricunga, offset by the impact of lower mill grades at Fort Knox. Maricunga saw a 40% increase in production in the first half of 2014 compared with the last six months of 2013 as a result of improvements to the crushing plant, and enhanced management of the heap leach and ADR plant. As a result of the variability of B1 ore, Paracatu began processing a greater percentage of B2 ore, which has higher grades and a higher work index. This includes blending B1 and B2 ore through both Plant 1 and Plant 2, which resulted in Q2 production comparable to the previous quarter, as higher grades and better recoveries in both plants offset lower throughput.
Production cost of sales per ounce in the second quarter increased compared with Q1 2014 and Q2 2013. The increase was due mainly to higher cost of sales at Fort Knox as the operation entered a phase of the mine that has more operating waste and lower grades, which is expected to continue for another quarter, with mill grades expected to improve in the fourth quarter. Paracatu has maintained its cost of sales per ounce compared with the previous quarter, while improved efficiencies at Maricunga have resulted in a 19% reduction in costs per ounce compared with Q2 2013. The region is on target to meet both production and production cost of sales guidance for the year.
Russia
The combined Kupol and Dvoinoye operation continued to perform well in Q2, with higher production compared with the previous quarter and year over year. Gold grades at the combined operation increased by 23% compared with Q2 2013 due to the processing of higher grade ore from Dvoinoye, partially offset by the anticipated decline in grades at Kupol. Approximately 83,000 Au eq. oz. were produced from processing Dvoinoye ore in the expanded Kupol mill during Q2, in line with the previous quarter.
Production cost of sales per ounce increased slightly compared with the previous quarter, due mainly to higher ounces sold from Kupol. The region is on track to be at the higher end of production and lower end of cost of sales guidance for the year.
West Africa
The region remains on target to meet its production guidance for the year, although production was lower compared with the previous quarter and year over year. As expected, Chirano production was down compared with Q1 2014 due mainly to lower throughput as a result of mill repairs, which were completed ahead of schedule in June. The lower throughput at Chirano was partially offset by prioritizing the processing of higher grade ore. At Tasiast, production was down slightly from the previous quarter as a result of lower mill grades.
Production cost of sales per ounce decreased 13% compared with Q2 2013 due mainly to the move to self-perform at Chirano, and continuous improvement programs at Tasiast. Production cost of sales per ounce were comparable with the previous quarter, with a small increase at Chirano due to lower production and mill repair costs. The region remains on target to meet its production cost of sales guidance for the year.
Tasiast expansion project update
Kinross continues to pursue a number of opportunities to further enhance the viability of a potential expansion at Tasiast. The project execution plan is being further defined and optimized, the bidders list for preassembly work has been expanded and commercial terms solicited, permitting approval for the seawater pipeline has been obtained, and an agreement-in-principle has been reached with an engineering firm for the project execution stage. The Company has engaged BNP Paribas to assist with securing project financing, and is considering financing in the range of $700 - $750 million of the project's cost, with the balance of funding expected to come from existing cash balances and cash flow.
Discussions continue between the Company and the Government of Mauritania on a range of tax- and labour-related issues. The Company has advised the Government that the results of this exercise will be an important consideration in its investment decision, and is targeting to have these issues resolved in advance of its decision, which is not expected until 2015.
La Coipa Phase 7 update
Kinross expects to move forward with a pre-feasibility study (PFS) in the second half of 2014 to explore re-start options at La Coipa. The proposed PFS will focus on the Pompeya pit (Phase 7), and oxide/transition mineral resources at the existing Puren deposit, and follows the completion of a Phase 7 scoping study in 2013. Kinross will also conduct a scoping study focusing on processing options for known near-surface sulfide mineralization in the district. Exploration continues at La Coipa, with some attractive opportunities being assessed to extend the mine life beyond what the PFS will contemplate.
Liquidity
On July 28, 2014, the Company extended the maturity dates of its $500 million term loan and $1.5 billion revolving credit facility by one year to August 10, 2018 and August 10, 2019, respectively. With this extension completed, the Company's only debt maturity prior to 2018 is the $250 million Senior Notes due 2016 and regular principal amortization payments due on the Kupol loan of $110 million.
During the quarter, the Company also increased the Export Development Canada letter of credit guarantee facility for reclamation bonding obligations on its US properties from $200 million to $250 million.
Cash and cash equivalents and short-term investments were $738.7 million as at June 30, 2014, compared with $734.5 million as at December 31, 2013.
Board of Directors update
Mr. John Macken has resigned from the Kinross Board of Directors, effective today. Kinross thanks him for his contributions to the Company.
Outlook
The following section of the news release represents forward-looking information and users are cautioned that actual results may vary. We refer to the risks and assumptions contained in the Cautionary Statement on Forward-Looking Information on page six of this news release.
As previously announced on February 12, 2014, Kinross expects to produce approximately 2.5-2.7 million gold equivalent ounces for the year.
The Company expects to be within its regional production cost of sales guidance and meet its company-wide production cost of sales guidance range of $730-$780 per gold equivalent ounce and its all-in sustaining costs guidance range of $950-$1,050 per gold ounce sold in 2014.The Company also expects to meet its 2014 capital expenditures forecast of approximately $675 million.
Conference call details
In connection with the release, Kinross will hold a conference call and audio webcast on Thursday, July 31, 2014 at 8 a.m. ET to discuss the results, 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
Replay (available up to 14 days after the call):
Canada & US toll-free - 1-800-319-6413; Passcode - 3310 followed by #.
Outside of Canada & US - 1-604-638-9010; Passcode - 3310 followed by #.
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 our website at www.kinross.com.
This release should be read in conjunction with Kinross' 2014 second-quarter unaudited Financial Statements and Management's Discussion and Analysis report at www.kinross.com.
Kinross' unaudited 2014 second-quarter 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 gold mining company with mines and projects in Brazil, Canada, Chile, Ghana, Mauritania, Russia and the United States. Kinross maintains listings on the Toronto Stock Exchange (symbol:K) and the New York Stock Exchange (symbol:KGC).
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 harbour" 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, but are not limited to, those under the headings "CEO Commentary", "Tasiast expansion project update", "La Coipa Phase 7 update", "Liquidity", "Outlook", and include, without limitation, statements with respect to: our guidance for production; production costs of sales, all-in sustaining cost and capital expenditures; expected savings pursuant to our cost review and reduction initiatives including, without limitation, the continuation of the Way Forward: modifications to projects and operations and our exploration budget, 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 projects and new deposits, success of exploration, development and mining activities, permitting timelines, currency fluctuations, requirements for additional capital, government regulation of mining
operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. The words "anticipate", "encouraging", "estimates", "expects", "explore", "forecasts", "focus", "guidance", "initiative", "on track", "options", "outlook", "opportunity", "plan", "potential", "proposed", "pursue", "study", or "targets", or variations of or similar such words and phrases or statements that certain actions, events or results "may", "could" or "will be taken", "will occur" or "will be achieved", and similar such expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Kinross as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The estimates, models and assumptions of Kinross referenced, contained or incorporated by reference in this news release, which may prove to be incorrect, include, but are not limited to, the various assumptions set forth herein and in our most recently filed Annual
Information Form and our Management's Discussion and Analysis as well as: (1) there being no significant disruptions affecting the operations of the Company or any entity in which it now or hereafter directly or indirectly holds an investment, whether due to labour disruptions, supply disruptions, power disruptions, damage to equipment or otherwise; (2) permitting, development, operations and expansion at Paracatu (including, without limitation, land acquisitions and permitting for the construction and operation of the new tailings facility) being consistent with our current expectations; (3) the cessation by the Company of further investment and development of the Fruta del Norte deposit and La Zarza mining concession ("FDN") being consistent with Kinross' current expectations including, without limitation, as to the reasonable cooperation of the Government of Ecuador in ensuring an orderly transition with respect to FDN (including, without limitation, any related transactions) that respects the interests of both parties; continuing recognition of the Company's other remaining mining concessions and other assets, rights, titles and
interests in Ecuador; the implementation of Ecuador's mining and investment laws (and prospective amendment to these laws) and related regulations and policies; and compliance with, and the implementation and enforcement of, the Canada-Ecuador Agreement for the Promotion and Reciprocal Protection of Investments; (4) political and legal developments in any jurisdiction in which the Company, or any entity in which it now or hereafter directly or indirectly holds an investment, operates being consistent with its current expectations including, without limitation, the impact of escalating political tensions and uncertainty in the Russian Federation and Ukraine or any related sanctions and any other similar restrictions or penalties imposed by any government, the transition period as we reduce our level of activity in Ecuador and any potential amendments to the Brazilian Mining Code, the Mauritanian Customs Code, the Mauritanian VAT regime and water legislation or other water use restrictions in Chile, being consistent with Kinross' current expectations; (5) the exchange rate between the Canadian dollar, Brazilian real, Chilean peso, Russian rouble, Mauritanian ouguiya, Ghanaian cedi and the U.S. dollar being approximately consistent with current levels; (6) certain price assumptions for gold and silver; (7) prices for diesel, natural gas, fuel oil, electricity and other key supplies being approximately consistent with current levels;
(8) production and cost of sales forecasts for the Company, and entities in which it now or hereafter directly or indirectly holds an investment, meeting expectations; (9) the accuracy of the current mineral reserve and mineral resource estimates of the Company (including but not limited to ore tonnage and ore grade estimates); (10) labour and materials costs increasing on a basis consistent with Kinross' current expectations; (11) the development of, operations at and production from the Company's operations, including but not limited to production from Dvoinoye and permitting, development and expansion at Tasiast (including but not limited to, opportunities to enhance project economics and reduce execution risk of the potential expansion, and any resulting optimization initiatives which may, among other things, lead to changes in processing approach and maintenance, and conversion of adjacent exploration licences to exploitation licences) being consistent with Kinross' current expectations; (12) the terms and conditions of the legal and fiscal stability agreements for the Tasiast and Chirano operations being interpreted and applied in a manner consistent with their intent and Kinross' expectations; (13) goodwill and/or asset impairment potential; and (14) access to capital markets, including but not limited to maintaining an investment grade debt rating and, as required, securing and maintaining partial project financing for Dvoinoye, Kupol and any expansion at Tasiast, being consistent with the Company's current expectations. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: sanctions (any other similar restrictions or penalties) now or subsequently imposed by, against, in respect of or otherwise impacting any jurisdiction in which the Company is domiciled or operates (including but not limited to the Russian Federation, Canada, the European Union and the United
States), or any government or citizens of, persons or companies domiciled in, or the Company's business, operations or other activities in, any such jurisdiction; our ability to successfully cease further investment in and development of FDN and, in cooperation with the Government of Ecuador, successfully complete an orderly transition with respect to FDN that is respectful of the interests of both parties and does not impose on the Company (and/or any of its directors, officers or employees) any unreasonable obligations or liabilities; litigation commenced, or other claims or actions brought, against the Company (and/or any of its directors, officers or employees) in respect of the cessation by the Company of further investment in and development of FDN, or any of the Company's prior or continuing activities on or in respect thereof or otherwise in Ecuador; fluctuations in the currency markets; fluctuations in the spot and forward price of gold or certain other commodities (such as fuel and electricity); changes in the discount rates applied to calculate the present value of net future cash flows based on country-specific real weighted average cost of capital; changes in the market valuations of peer group gold producers and the Company, and the resulting impact on market price to net asset value multiples; changes in various market variables, such as interest rates, foreign exchange rates, gold or silver prices and lease rates, or global fuel prices, that could impact the mark-to-market value of outstanding derivative instruments and ongoing payments/receipts under any financial obligations; risks arising from holding derivative instruments (such as credit risk, market liquidity risk and mark-to-market risk); changes in national and local government legislation, taxation (including but not limited to income tax,
advance income tax, stamp tax, withholding tax, capital tax, tariffs, value-added or sales tax, capital outflow tax, capital gains tax, windfall or windfall profits tax, royalty, excise tax, customs/import or export taxes/duties, asset taxes, asset transfer tax, property use or other real estate tax, together with any related fine, penalty, surcharge, or interest imposed in connection with such taxes), controls, policies and regulations; the security of personnel and assets; political or economic developments in Canada, the United States, Chile, Brazil, Russia, Ecuador, Mauritania, Ghana, or other countries in which Kinross, or entities in which it now or hereafter directly or indirectly holds an interest, do business or may carry on business; business opportunities that may be presented to, or pursued by, us; our ability to successfully integrate acquisitions and complete divestitures; operating or technical difficulties in connection with mining or development activities; employee relations; litigation against the Company including, but not limited to, securities class action litigation in Canada and/or the United States; the speculative nature of gold exploration and development including, but not limited to, the risks of obtaining necessary licenses and permits; diminishing quantities or grades of reserves; adverse changes in our credit rating;
and contests over title to properties, particularly title to undeveloped properties. In addition, there are risks and hazards associated with the business of gold exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance, or the inability to obtain insurance, to cover these risks). Many of these uncertainties and contingencies can directly or indirectly affect, and could cause, Kinross' actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Kinross, including but not limited to resulting in an impairment charge on goodwill and/or assets. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management's expectations and plans relating to the future. All of the forward-looking statements made in this news release are qualified by these cautionary statements and those made in our other filings with the securities regulators of Canada and the United States including, but not limited to, the cautionary statements made in the "Risk Factors" section of our most recently filed Annual Information Form and Management Discussion and Analysis. These factors are not intended to represent a complete list of the factors that could affect Kinross. Kinross disclaims any intention or obligation to update or revise any forward-looking statements or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law.
Key Sensitivities
Approximately 60%-70% of the Company's costs are denominated in US dollars.
A 10% change in foreign exchange could result in an approximate $12 impact on production cost of sales per ounce(6).
A $10 per barrel change in the price of oil could result in an approximate $3 impact on production cost of sales per ounce.
The impact on royalties of a $100 change in the gold price could result in an approximate $3 impact on production cost of sales per ounce.
Other information
Where we say "we", "us", "our", the "Company", or "Kinross" in this news release, we mean Kinross Gold Corporation and/or one or more or all of its subsidiaries, as may be applicable.
The technical information about the Company's material mineral properties contained in this news release has been prepared under the supervision of and verified by Mr. John Sims, an officer of the Company who is a "qualified person" within the meaning of National Instrument 43-101.
Reconciliation of non-GAAP financial measures
The Company has included certain non-GAAP financial measures in this document. These measures are not defined under IFRS and should not be considered in isolation. The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. The inclusion of these measures is meant to provide additional information and should not be used as a substitute for performance measures prepared in accordance with IFRS. These measures are not necessarily standard and therefore may not be comparable to other issuers.
Adjusted net earnings attributable to common shareholders and adjusted net earnings per share are non-GAAP measures which determine the performance of the Company, excluding certain impacts which the Company believes are not reflective of the Company's underlying performance for the reporting period, such as the impact of foreign exchange gains and losses, reassessment of prior year taxes and/or taxes otherwise not related to the current period, impairment charges, gains and losses and other one-time costs related to acquisitions, dispositions and other transactions, and non-hedge derivative gains and losses. Although some of the items are recurring, the Company believes that they are not reflective of the underlying operating performance of its current business and are not necessarily indicative of future operating results. Management believes that these measures, which are used internally to assess performance and in planning and forecasting future operating results, provide investors with the ability to better evaluate underlying performance, particularly since the excluded items are typically not included in public guidance. However, adjusted net earnings and adjusted net earnings per share measures are not necessarily indicative of net earnings and earnings per share measures as determined under IFRS.
The following table provides a reconciliation of net earnings from continuing operations to adjusted net earnings from continuing operations for the periods presented:
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GAAP to Adjusted Earnings Reconciliation
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(in millions, except share and
per share amounts) Three months ended Six months ended
June 30, June 30,
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2014 2013 2014 2013
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Net earnings (loss) from
continuing operations
attributable to common
shareholders - as reported $ 46.0 $(2,481.9) $ 77.8 $(2,319.5)
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Adjusting items:
Foreign exchange losses 1.3 17.7 9.6 21.3
Non-hedge derivatives (gains)
losses - net of tax 0.2 (0.1) 3.2 (0.1)
(Gains) losses on sale of other
assets - net of tax - 0.2 (0.2) (0.4)
Foreign exchange (gains) losses
on translation of tax basis
and foreign exchange on
deferred income taxes within
income tax expense (14.4) 35.5 (23.9) 32.9
Taxes in respect of prior years (0.2) (3.8) 0.5 0.2
Impairment charges - net of tax - 2,324.4 - 2,324.4
Impairment of investments - 227.5 - 233.1
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(13.1) 2,601.4 (10.8) 2,611.4
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Adjusted net earnings from
continuing operations
attributable to common
shareholders $ 32.9 $ 119.5 $ 67.0 $ 291.9
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Weighted average number of
common shares outstanding -
Basic 1,144.4 1,141.7 1,144.1 1,141.2
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Adjusted net earnings from
continuing operations per share $ 0.03 $ 0.10 $ 0.06 $ 0.26
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The Company makes reference to a non-GAAP measure for adjusted operating cash flow and adjusted operating cash flow per share. Adjusted operating cash flow is defined as cash flow from operations excluding certain impacts which the Company believes are not reflective of the Company's regular operating cash flow, and excluding changes in working capital. Working capital can be volatile due to numerous factors, including the timing of tax payments, and in the case of Kupol, a build-up of inventory due to transportation logistics. The Company uses adjusted operating cash flow internally as a measure of the underlying operating cash flow performance and future operating cash flow-generating capability of the Company. However, adjusted operating cash flow and adjusted operating cash flow per share measures are not necessarily indicative of net cash flow from operations as determined under IFRS.
The following table provides a reconciliation of adjusted operating cash flow from continuing operations for the periods presented:
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GAAP to Adjusted Operating Cash Flow
(in millions, except share and per
share amounts) Three months ended Six months ended
June 30, June 30,
--------------------- --------------------
2014 2013 2014 2013
--------------------- --------------------
Net cash flow of continuing
operations used in operating
activities - as reported $ 163.9 $ 106.4 $ 374.4 $ 471.7
--------------------- --------------------
Adjusting items:
Working capital changes:
Accounts receivable and other
assets 113.5 103.2 63.5 74.1
Inventories (31.7) 7.8 (8.3) 42.7
Accounts payable and other
liabilities, including taxes (17.4) 39.3 37.7 81.9
--------------------- --------------------
64.4 150.3 92.9 198.7
--------------------- --------------------
Adjusted operating cash flow from
continuing operations $ 228.3 $ 256.7 $ 467.3 $ 670.4
--------------------- --------------------
Weighted average number of common
shares outstanding - Basic 1,144.4 1,141.7 1,144.1 1,141.2
--------------------- --------------------
Adjusted operating cash flow from
continuing operations per share $ 0.20 $ 0.22 $ 0.41 $ 0.59
--------------------- --------------------
----------------------------------------------------------------------------
Consolidated production cost of sales per gold equivalent ounce sold is a non-GAAP measure and is defined as production cost of sales as per the consolidated financial statements divided by the total number of gold equivalent ounces sold. This measure converts the Company's non-gold production into gold equivalent ounces and credits it to total production.
Attributable production cost of sales per gold equivalent ounce sold is a non-GAAP measure and is defined as attributable production cost of sales divided by the attributable number of gold equivalent ounces sold. This measure converts the Company's non-gold production into gold equivalent ounces and credits it to total production.
Management uses these measures to monitor and evaluate the performance of its operating properties. The following table presents a reconciliation of consolidated and attributable production cost of sales per equivalent ounce sold for the periods presented:
----------------------------------------------------------------------------
Consolidated and Attributable Production
Cost of
Sales Per Equivalent Ounce Sold
--------------------------------------------
(in millions, except ounces and
production cost of sales per
equivalent ounce) Three months ended Six months ended
June 30, June 30,
---------------------- ---------------------
2014 2013 2014 2013
---------------------- ---------------------
Production cost of sales - as
reported $ 525.9 $ 513.5 $ 981.9 $ 989.2
Less: portion attributable to
Chirano non-controlling
interest (4.0) (5.0) (8.4) (10.1)
---------------------- ---------------------
Attributable production cost of
sales $ 521.9 $ 508.5 $ 973.5 $ 979.1
---------------------- ---------------------
1,338,24 1,347,73
Gold equivalent ounces sold 709,606 695,541 3 8
Less: portion attributable to
Chirano non-controlling
interest (6,372) (6,040) (13,478) (12,985)
---------------------- ---------------------
Attributable gold equivalent 1,324,76 1,334,75
ounces sold 703,234 689,501 5 3
---------------------- ---------------------
Consolidated production cost of
sales per equivalent ounce sold $ 741 $ 738 $ 734 $ 734
Attributable production cost of
sales per equivalent ounce sold $ 742 $ 737 $ 735 $ 734
----------------------------------------------------------------------------
Attributable production cost of sales per ounce sold on a by-product basis is a non-GAAP measure which calculates the Company's non-gold production as a credit against its per ounce production costs, rather than converting its non-gold production into gold equivalent ounces and crediting it to total production, as is the case in co-product accounting. Management believes that this measure provides investors with the ability to better evaluate Kinross' production cost of sales per ounce on a comparable basis with other major gold producers who routinely calculate their cost of sales per ounce using by-product accounting rather than co-product accounting.
The following table provides a reconciliation of attributable production cost of sales per ounce sold on a by-product basis for the periods presented:
----------------------------------------------------------------------------
Attributable Production Cost of Sales Per
Ounce Sold
on a By-Product Basis
(in millions, except ounces and
production cost of sales per
ounce) Three months ended Six months ended
June 30, June 30,
---------------------- ---------------------
2014 2013 2014 2013
---------------------- ---------------------
Production cost of sales - as
reported $ 525.9 $ 513.5 $ 981.9 $ 989.2
Less: portion attributable to
Chirano non-controlling
interest (4.0) (5.0) (8.4) (10.1)
Less: attributable silver
revenues (27.2) (57.0) (51.7) (118.9)
---------------------- ---------------------
Attributable production cost of
sales net of silver by-product
revenue $ 494.7 $ 451.5 $ 921.8 $ 860.2
---------------------- ---------------------
1,298,49 1,267,37
Gold ounces sold 688,334 653,696 2 9
Less: portion attributable to
Chirano non-controlling
interest (6,360) (6,025) (13,445) (12,941)
---------------------- ---------------------
1,285,04 1,254,43
Attributable gold ounces sold 681,974 647,671 7 8
---------------------- ---------------------
Attributable production cost of
sales per ounce sold on a by-
product basis $ 725 $ 697 $ 717 $ 686
---------------------- ---------------------
----------------------------------------------------------------------------
In June 2013, the World Gold Council ("WGC") published its guidelines for reporting all-in sustaining costs and all-in costs. The WGC is a market development organization for the gold industry and is an association whose membership comprises leading gold mining companies including Kinross. Although the WGC is not a mining industry regulatory organization, it worked closely with its member companies to develop these non-GAAP measures. Adoption of the all-in sustaining cost and all-in cost metrics is voluntary and not necessarily standard, and therefore, these measures presented by the Company may not be comparable to similar measures presented by other issuers. The Company believes that the all-in sustaining cost and all-in cost measures complement existing measures reported by Kinross.
All-in sustaining cost includes both operating and capital costs required to sustain gold production on an ongoing basis. The value of silver sold is deducted from the total production cost of sales as it is considered residual production. Sustaining operating costs represent expenditures incurred at current operations that are considered necessary to maintain current production. Sustaining capital represents capital expenditures at existing operations comprising mine development costs and ongoing replacement of mine equipment and other capital facilities, and does not include capital expenditures for major growth projects or enhancement capital for significant infrastructure improvements at existing operations.
All-in cost is comprised of all-in sustaining cost as well as operating expenditures incurred at locations with no current operation, or costs related to other non-sustaining activities, and capital expenditures for major growth projects or enhancement capital for significant infrastructure improvements at existing operations.
Attributable all-in sustaining cost and all-in cost per ounce sold on a by-product basis are calculated by adjusting total production cost of sales, as reported on the consolidated statement of operations, as follows:
----------------------------------------------------------------------------
Attributable All-In Sustaining Cost and All-In
Cost Per
Ounce Sold on a By-Product Basis
Three months ended Six months ended
June 30, June 30,
------------------------ -----------------------
(in millions, except ounces
and costs per ounce) 2014 2013 2014 2013
------------------------ -----------------------
Production cost of sales -
as reported $ 525.9 $ 513.5 $ 981.9 $ 989.2
Less: portion attributable
to Chirano non-controlling
interest(1) (4.0) (5.0) (8.4) (10.1)
Less: attributable(2) silver
revenues(3) (27.2) (57.0) (51.7) (118.9)
------------------------ -----------------------
Attributable(2) production
cost of sales net of silver
by-product revenue $ 494.7 $ 451.5 $ 921.8 $ 860.2
------------------------ -----------------------
Adjusting items on an
attributable(2) basis:
General and
administrative(4) 46.2 42.4 89.4 81.9
Other operating expense -
sustaining(5) 7.6 (2.1) 15.6 11.3
Reclamation and remediation
- sustaining(6) 15.8 15.0 30.3 29.9
Exploration and business
development -
sustaining(7) 13.3 24.9 26.9 49.2
Additions to property,
plant and equipment -
sustaining(8) 81.6 127.2 172.6 229.3
------------------------ -----------------------
All-in Sustaining Cost on a
by-product basis -
attributable(2) $ 659.2 $ 658.9 $ 1,256.6 $ 1,261.8
------------------------ -----------------------
Other operating expense -
non-sustaining(5) 9.3 11.3 20.2 21.8
Exploration - non-
sustaining(7) 15.3 18.0 25.0 31.9
Additions to property,
plant and equipment - non-
sustaining(8) 35.7 186.3 82.9 356.9
------------------------ -----------------------
All-in Cost on a by-product
basis - attributable(2) $ 719.5 $ 874.5 $ 1,384.7 $ 1,672.4
------------------------ -----------------------
Gold ounces sold 688,334 653,696 1,298,492 1,267,379
Less: portion attributable
to Chirano non-controlling
interest(9) (6,360) (6,025) (13,445) (12,941)
------------------------ -----------------------
Attributable(2) gold ounces
sold 681,974 647,671 1,285,047 1,254,438
------------------------ -----------------------
Attributable(2) all-in
sustaining cost per ounce
sold on a by-product basis $ 967 $ 1,017 $ 978 $ 1,006
Attributable(2) all-in cost
per ounce sold on a by-
product basis $ 1,055 $ 1,350 $ 1,078 $ 1,333
----------------------------------------------------------------------------
The Company also assesses its all-in sustaining cost and all-in cost on a gold equivalent ounce basis. Under these non-GAAP measures, the Company's production of silver is converted into gold equivalent ounces and credited to total production.
Attributable all-in sustaining cost and all-in cost per equivalent ounce sold are calculated by adjusting total production cost of sales, as reported on the consolidated statement of operations, as follows:
----------------------------------------------------------------------------
Attributable All-In Sustaining Cost and All-
In Cost Per
Equivalent Ounce Sold
Three months ended Six months ended
June 30, June 30,
--------------------------------------------
(in millions, except ounces and
costs per equivalent ounce) 2014 2013 2014 2013
--------------------------------------------
Production cost of sales - as
reported $ 525.9 $ 513.5 $ 981.9 $ 989.2
Less: portion attributable to
Chirano non-controlling
interest(1) (4.0) (5.0) (8.4) (10.1)
---------------------- ---------------------
Attributable(2) production cost
of sales $ 521.9 $ 508.5 $ 973.5 $ 979.1
---------------------- ---------------------
Adjusting items on an
attributable(2) basis:
General and administrative(4) 46.2 42.4 89.4 81.9
Other operating expense -
sustaining(5) 7.6 (2.1) 15.6 11.3
Reclamation and remediation -
sustaining(6) 15.8 15.0 30.3 29.9
Exploration and business
development - sustaining(7) 13.3 24.9 26.9 49.2
Additions to property, plant
and equipment - sustaining(8) 81.6 127.2 172.6 229.3
---------------------- ---------------------
All-in Sustaining Cost -
attributable(2) $ 686.4 $ 715.9 $ 1,308.3 $ 1,380.7
---------------------- ---------------------
Other operating expense - non-
sustaining(5) 9.3 11.3 20.2 21.8
Exploration - non-sustaining(7) 15.3 18.0 25.0 31.9
Additions to property, plant
and equipment - non-
sustaining(8) 35.7 186.3 82.9 356.9
---------------------- ---------------------
All-in Cost - attributable(2) $ 746.7 $ 931.5 $ 1,436.4 $ 1,791.3
---------------------- ---------------------
1,338,24 1,347,73
Gold equivalent ounces sold 709,606 695,541 3 8
Less: portion attributable to
Chirano non-controlling
interest(9) (6,372) (6,040) (13,478) (12,985)
---------------------- ---------------------
Attributable(2) gold equivalent 1,324,76 1,334,75
ounces sold 703,234 689,501 5 3
---------------------- ---------------------
Attributable(2) all-in
sustaining cost per equivalent
ounce sold $ 976 $ 1,038 $ 988 $ 1,034
Attributable(2) all-in cost per
equivalent ounce sold $ 1,062 $ 1,351 $ 1,084 $ 1,342
----------------------------------------------------------------------------
(1) "Portion attributable to Chirano non-controlling interest" represents
the non-controlling interest (10%) in the production cost of sales for the
Chirano mine.
(2) "Attributable" includes Kinross' share of Chirano (90%) production.
(3) "Attributable silver revenues" represents the attributable portion of
metal sales realized from the production of the secondary or by-product
metal (i.e. silver). Revenue from the sale of silver, which is produced as a
by-product of the process used to produce gold, effectively reduces the cost
of gold production.
(4) "General and administrative" expenses is as reported on the interim
condensed consolidated statement of operations, net of certain severance
expenses. General and administrative expenses are considered sustaining
costs as they are required to be absorbed on a continuing basis for the
effective operation and governance of the Company.
(5) "Other operating expense - sustaining" is calculated as "Other operating
expense" as reported on the interim condensed consolidated statement of
operations, less other operating expenses related to non-sustaining
activities. Other operating expenses are classified as either sustaining or
non-sustaining based on the type and location of the expenditure incurred.
The majority of other operating expenses that are incurred at existing
operations are considered costs necessary to sustain operations, and are
therefore classified as sustaining. Other operating expenses incurred at
locations where there is no current operation or related to other non-
sustaining activities are classified as non-sustaining.
(6) "Reclamation and remediation" is calculated as current period accretion
related to reclamation and remediation obligations plus current period
amortization of the corresponding reclamation and remediation assets, and is
intended to reflect the periodic cost of reclamation and remediation for
currently operating mines. Reclamation and remediation costs for development
projects or closed mines are excluded from this amount and classified as
non-sustaining.
(7) "Exploration and business development - sustaining" is calculated as
"Exploration and business development" expenses as reported on the interim
condensed consolidated statement of operations, less non-sustaining
exploration expenses. Exploration expenses are classified as either
sustaining or non-sustaining based on a determination of the type and
location of the exploration expenditure. Exploration expenditures within the
footprint of operating mines are considered costs required to sustain
current operations and so are included in sustaining costs. Exploration
expenditures focused on new ore bodies near existing mines (i.e.
brownfield), new exploration projects (i.e. greenfield) or for other
generative exploration activity not linked to existing mining operations are
classified as non-sustaining. Business development expenses are considered
sustaining costs as they are required for general operations.
(8) "Additions to property, plant and equipment - sustaining" represents the
majority of capital expenditures at existing operations including
capitalized exploration costs, capitalized stripping and underground mine
development costs, ongoing replacement of mine equipment and other capital
facilities and other capital expenditures and is calculated as total
additions to property, plant and equipment (as reported on the interim
condensed consolidated statements of cash flows), less capitalized interest
and non-sustaining capital. Non-sustaining capital represents capital
expenditures for major growth projects as well as enhancement capital for
significant infrastructure improvements at existing operations. Non-
sustaining capital expenditures during the second quarter and first six
months of 2014 relate to projects at Tasiast, Chirano and Dvoinoye.
(9) "Portion attributable to Chirano non-controlling interest" represents
the non-controlling interest (10%) in the ounces sold for the Chirano mine.
Review of Operations
----------------------------------------------------------------------------
Three months ended June 30, Gold equivalent ounces
Produced Sold
-------------------- --------------------
2014 2013 2014 2013
-------------------- --------------------
Fort Knox 91,316 102,740 85,938 98,998
Round Mountain 42,275 41,016 42,378 43,035
Kettle River - Buckhorn 40,555 45,044 38,801 46,015
Paracatu 124,329 120,247 132,327 118,243
La Coipa - 48,237 21 46,574
Maricunga 64,290 49,032 64,333 55,163
-------------------- --------------------
Americas Total 362,765 406,316 363,798 408,028
Kupol 195,275 121,728 216,765 164,627
-------------------- --------------------
Russia Total 195,275 121,728 216,765 164,627
Tasiast 65,099 71,047 65,319 62,489
Chirano (100%) 62,991 62,545 63,724 60,397
-------------------- --------------------
West Africa Total 128,090 133,592 129,043 122,886
-------------------- --------------------
Operations Total 686,130 661,636 709,606 695,541
Less Chirano non-controlling
interest (10%) (6,299) (6,255) (6,372) (6,040)
-------------------- --------------------
Attributable Total 679,831 655,381 703,234 689,501
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) "nm" means not meaningful
----------------------------------------------------------------------------
------------------------------------------
Six months ended June 30, Gold equivalent ounces
-----------------------------------------
Produced Sold
-------------------- --------------------
2014 2013 2014 2013
-------------------- --------------------
Fort Knox 174,904 195,992 198,649 217,032
Round Mountain 87,329 80,437 83,768 81,831
Kettle River - Buckhorn 66,472 84,914 64,630 85,688
Paracatu 251,414 240,138 248,103 240,271
La Coipa - 101,966 1,365 103,816
Maricunga 117,019 104,094 120,190 109,954
-------------------- --------------------
Americas Total 697,138 807,541 716,705 838,592
Kupol 386,513 246,226 355,051 248,426
-------------------- --------------------
Russia Total 386,513 246,226 355,051 248,426
Tasiast 136,770 133,804 131,705 130,870
Chirano (100%) 137,889 129,675 134,782 129,850
-------------------- --------------------
West Africa Total 274,659 263,479 266,487 260,720
-------------------- --------------------
Operations Total 1,358,310 1,317,246 1,338,243 1,347,738
Less Chirano non-controlling
interest (10%) (13,789) (12,968) (13,478) (12,985)
-------------------- --------------------
Attributable Total 1,344,521 1,304,278 1,324,765 1,334,753
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
-------------------------------------------------------------------------
Three months ended June 30,
Production
Production cost of sales
cost of sales equivalent
($millions) ounce sold
-------------------- ------------------
2014 2013 2014(1) 2013
-------------------- ------------------
Fort Knox $ 71.7 $ 56.9 $ 834$ 575
Round Mountain 36.9 35.0 871 813
Kettle River - Buckhorn 24.9 22.8 642 495
Paracatu 114.6 101.9 866 862
La Coipa 0.1 36.0 nm 773
Maricunga 56.2 59.3 874 1,075
-------------------- ------------------
Americas Total 304.4 311.9 837 764
Kupol 114.8 84.9 530 516
-------------------- ------------------
Russia Total 114.8 84.9 530 516
Tasiast 66.5 66.6 1,018 1,066
Chirano (100%) 40.2 50.1 631 830
-------------------- ------------------
West Africa Total 106.7 116.7 827 950
-------------------- ------------------
Operations Total 525.9 513.5 741 738
Less Chirano non-controlling
interest (10%) (4.0) (5.0)
-------------------- ------------------
Attributable Total $ 521.9 $ 508.5 $ 742$ 737
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) "nm" means not meaningful
-------------------------------------------------------------------------
---------------------------------------
Six months ended June 30,
Production
Production cost of sales/
cost of sales equivalent
($millions) ounce sold
-------------------- ------------------
2014 2013 2014 2013
-------------------- ------------------
Fort Knox $ 135.9 $ 122.8 $ 684$ 566
Round Mountain 74.2 66.2 886 809
Kettle River - Buckhorn 41.3 43.1 639 503
Paracatu 214.7 203.3 865 846
La Coipa 1.7 76.3 1,245 735
Maricunga 114.8 119.1 955 1,083
-------------------- ------------------
Americas Total 582.6 630.8 813 752
Kupol 181.3 130.8 511 527
-------------------- ------------------
Russia Total 181.3 130.8 511 527
Tasiast 134.0 126.8 1,017 969
Chirano (100%) 84.0 100.8 623 776
-------------------- ------------------
West Africa Total 218.0 227.6 818 873
-------------------- ------------------
Operations Total 981.9 989.2 734 734
Less Chirano non-controlling
interest (10%) (8.4) (10.1)
-------------------- ------------------
Attributable Total $ 973.5 $ 979.1 $ 735$ 734
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Consolidated balance sheets
(unaudited, expressed in millions of United States
dollars, except share amounts)
----------------------------------------------------------------------------
As at
-----------------------------------
June 30, December 31,
2014 2013
----------------- -----------------
Assets
Current assets
Cash and cash equivalents $ 738.7 $ 734.5
Restricted cash 43.3 59.0
Accounts receivable and other assets 354.8 284.3
Inventories 1,289.6 1,322.9
Unrealized fair value of derivative
assets 3.0 5.1
----------------- -----------------
2,429.4 2,405.8
----------------- -----------------
Non-current assets
Property, plant and equipment 6,456.9 6,582.7
Goodwill 308.0 308.0
Long-term investments 30.3 20.4
Investments in associate and joint
venture 315.0 315.2
Unrealized fair value of derivative
assets 0.4 0.6
Deferred charges and other long-term
assets 503.8 490.5
Deferred tax assets 134.8 163.5
----------------- -----------------
Total assets $ 10,178.6 $ 10,286.7
----------------- -----------------
Liabilities
Current liabilities
Accounts payable and accrued
liabilities $ 445.1 $ 544.5
Current tax payable 26.0 27.0
Current portion of long-term debt 60.0 60.0
Current portion of provisions 30.2 40.1
Current portion of unrealized fair
value of derivative liabilities 9.5 41.3
----------------- -----------------
570.8 712.9
----------------- -----------------
Non-current liabilities
Long-term debt 2,026.5 2,059.6
Provisions 703.7 683.9
Unrealized fair value of derivative
liabilities 3.3 14.0
Other long-term liabilities 149.8 192.7
Deferred tax liabilities 513.3 533.7
----------------- -----------------
Total liabilities 3,967.4 4,196.8
----------------- -----------------
Equity
Common shareholders' equity
Common share capital and common share
purchase warrants $ 14,751.6 $ 14,737.1
Contributed surplus 81.1 84.5
Accumulated deficit (8,697.4) (8,771.1)
Accumulated other comprehensive
income (loss) 0.7 (36.5)
----------------- -----------------
Total common shareholders' equity 6,136.0 6,014.0
----------------- -----------------
Non-controlling interest 75.2 75.9
----------------- -----------------
Total equity 6,211.2 6,089.9
----------------- -----------------
Total liabilities and equity $ 10,178.6 $ 10,286.7
----------------- -----------------
Common shares
Authorized Unlimited Unlimited
Issued and outstanding 1,144,431,104 1,143,428,055
Consolidated statements of operations
(unaudited, expressed in millions of United States
dollars, except per share and share amounts)
----------------------------------------------------------------------------
Three months ended Six months ended
--------------------- ---------------------
June 30, June 30, June 30, June 30,
2014 2013 2014 2013
--------------------- ---------------------
Revenue
Metal sales $ 911.9 $ 968.0 $ 1,729.3 $ 2,026.1
Cost of sales
Production cost of sales 525.9 513.5 981.9 989.2
Depreciation, depletion and
amortization 215.3 210.1 411.7 437.8
Impairment charges - 2,433.1 - 2,433.1
---------- ---------- ---------- ----------
Total cost of sales 741.2 3,156.7 1,393.6 3,860.1
---------- ---------- ---------- ----------
Gross profit (loss) 170.7 (2,188.7) 335.7 (1,834.0)
---------- ---------- ---------- ----------
Other operating expense 15.3 9.4 33.0 33.4
Exploration and business
development 29.0 43.2 51.7 81.7
General and administrative 46.2 42.4 89.4 81.9
---------- ---------- ---------- ----------
Operating earnings (loss) 80.2 (2,283.7) 161.6 (2,031.0)
---------- ---------- ---------- ----------
Other income (expense) - net (1.1) (243.3) (7.3) (251.7)
Equity in earnings (losses) of
associate and joint venture (0.7) (2.2) (2.0) (3.1)
Finance income 4.4 2.3 5.8 4.3
Finance expense (19.9) (9.1) (32.7) (17.7)
---------- ---------- ---------- ----------
Earnings (loss) before tax 62.9 (2,536.0) 125.4 (2,299.2)
Income tax recovery (expense) -
net (17.2) 53.6 (48.3) (19.2)
---------- ---------- ---------- ----------
Earnings (loss) from continuing
operations after tax 45.7 (2,482.4) 77.1 (2,318.4)
Loss from discontinued operations
after tax (1.9) (721.1) (4.1) (723.0)
---------- ---------- ---------- ----------
Net earnings (loss) $ 43.8 $(3,203.5) $ 73.0 $(3,041.4)
---------- ---------- ---------- ----------
Net earnings (loss) from
continuing operations
attributable to:
Non-controlling interest $ (0.3) $ (0.5) $ (0.7) $ 1.1
---------- ---------- ---------- ----------
Common shareholders $ 46.0 $(2,481.9) $ 77.8 $(2,319.5)
---------- ---------- ---------- ----------
Net earnings (loss) attributable
to:
Non-controlling interest $ (0.3) $ (0.5) $ (0.7) $ 1.1
---------- ---------- ---------- ----------
Common shareholders $ 44.1 $(3,203.0) $ 73.7 $(3,042.5)
---------- ---------- ---------- ----------
Earnings (loss) per share from
continuing operations
attributable to common
shareholders
Basic $ 0.04 $ (2.17) $ 0.07 $ (2.03)
Diluted $ 0.04 $ (2.17) $ 0.07 $ (2.03)
Earnings (loss) per share
attributable to common
shareholders
Basic $ 0.04 $ (2.81) $ 0.06 $ (2.67)
Diluted $ 0.04 $ (2.81) $ 0.06 $ (2.67)
Weighted average number of common
shares outstanding (millions)
Basic 1,144.4 1,141.7 1,144.1 1,141.2
Diluted 1,153.9 1,141.7 1,152.5 1,141.2
----------------------------------------------------------------------------
Consolidated statements of cash flows
(unaudited, expressed in millions
of United States dollars)
----------------------------------------------------------------------------
Three months ended Six months ended
--------------------- ---------------------
June 30, June 30, June 30, June 30,
2014 2013 2014 2013
--------------------- ---------------------
Net inflow (outflow) of cash
related to the following
activities:
Operating:
Net earnings (loss) from
continuing operations $ 45.7 $(2,482.4) $ 77.1 $(2,318.4)
Adjustments to reconcile net
earnings (loss) from continuing
operations to net cash provided
from (used in) operating
activities:
Depreciation, depletion and
amortization 215.3 210.1 411.7 437.8
Losses (gains) on sale of other
assets - net (0.1) 0.2 (0.5) (0.6)
Impairment charges - 2,433.1 - 2,433.1
Impairment of investments - 227.5 - 233.1
Equity in losses (earnings) of
associate and joint venture 0.7 2.2 2.0 3.1
Non-hedge derivative (gains)
losses - net 0.2 (0.1) 3.6 (0.1)
Settlement of derivative
instruments - - - 0.2
Share-based compensation expense 7.0 9.4 14.2 18.1
Accretion expense 7.9 5.1 17.5 10.5
Deferred tax recovery (33.9) (164.1) (5.1) (184.9)
Foreign exchange (gains) losses
and other (14.5) 15.7 (53.2) 38.5
Changes in operating assets and
liabilities:
Accounts receivable and other
assets (113.5) (103.2) (63.5) (74.1)
Inventories 31.7 (7.8) 8.3 (42.7)
Accounts payable and accrued
liabilities 63.1 59.6 52.3 92.6
---------- ---------- ---------- ----------
Cash flow provided from operating
activities 209.6 205.3 464.4 646.2
---------- ---------- ---------- ----------
Income taxes paid (45.7) (98.9) (90.0) (174.5)
---------- ---------- ---------- ----------
Net cash flow of continuing
operations provided from
operating activities 163.9 106.4 374.4 471.7
---------- ---------- ---------- ----------
Net cash flow of discontinued
operations used in operating
activities (2.0) (2.5) (4.4) (9.7)
---------- ---------- ---------- ----------
Investing:
Additions to property, plant and
equipment (120.0) (321.0) (288.9) (630.5)
Net additions to long-term
investments and other assets (19.7) (18.8) (49.2) (43.3)
Net proceeds from the sale of
property, plant and equipment 0.3 0.1 1.4 1.4
Disposals of short-term
investments - - - 349.8
Decrease (increase) in
restricted cash 16.6 (0.9) 15.8 (0.9)
Interest received 1.1 2.1 2.5 4.2
---------- ---------- ---------- ----------
Net cash flow of continuing
operations used in investing
activities (121.7) (338.5) (318.4) (319.3)
---------- ---------- ---------- ----------
Net cash flow of discontinued
operations used in investing
activities - (6.0) - (14.3)
---------- ---------- ---------- ----------
Financing:
Issuance of common shares on
exercise of options - 1.4 0.1 3.0
Proceeds from issuance of debt 119.8 - 742.2 -
Repayment of debt (125.3) (6.3) (779.3) (493.3)
Interest paid (1.4) (1.2) (3.3) (2.7)
Dividends paid to common
shareholders - - - (91.3)
Settlement of derivative
instruments - - (2.1) -
Other (0.2) (1.7) 0.2 (1.7)
---------- ---------- ---------- ----------
Net cash flow of continuing
operations used in financing
activities (7.1) (7.8) (42.2) (586.0)
---------- ---------- ---------- ----------
Net cash flow of discontinued
operations used in financing
activities - - - -
---------- ---------- ---------- ----------
Effect of exchange rate changes
on cash and cash equivalents of
continuing operations 1.6 (9.3) (5.2) (12.0)
---------- ---------- ---------- ----------
Increase (decrease) in cash and
cash equivalents 34.7 (257.7) 4.2 (469.6)
Cash and cash equivalents,
beginning of period 704.0 1,420.8 734.5 1,632.7
---------- ---------- ---------- ----------
Cash and cash equivalents, end of
period $ 738.7 $ 1,163.1 $ 738.7 $ 1,163.1
---------- ---------- ---------- ----------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating Summary
----------------------------------------------------------------------------
Ore
Tonnes Ore Processed
Ore Processed (Heap
Mined(1) (Milled)(1) Leach)
Mine Period Ownership (1)
----------------------------------------------------------------------------
('000 ('000 ('000
(%) tonnes) tonnes) tonnes)
----------------------------------------------------------------------------
Americas Fort Knox Q2 2014 100 3,241 3,479 6,638
--------------------------------------------------------
Q1 2014 100 3,655 3,307 2,790
Q4 2013 100 4,659 3,169 8,624
Q3 2013 100 4,566 3,374 10,330
Q2 2013 100 5,048 3,231 10,261
------------------------------------------------------------------
Round
Mountain Q2 2014 50 6,475 1,008 5,258
--------------------------------------------------------
Q1 2014 50 6,670 910 5,466
Q4 2013 50 5,130 1,025 4,128
Q3 2013 50 3,974 982 3,090
Q2 2013 50 4,070 868 4,098
------------------------------------------------------------------
Kettle
River-
Buckhorn Q2 2014 100 78 95 -
--------------------------------------------------------
Q1 2014 100 97 102 -
Q4 2013 100 91 86 -
Q3 2013 100 89 91 -
Q2 2013 100 96 106 -
------------------------------------------------------------------
Paracatu Q2 2014 100 13,332 12,167 -
--------------------------------------------------------
Q1 2014 100 16,083 15,047 -
Q4 2013 100 14,024 13,874 -
Q3 2013 100 14,600 14,306 -
Q2 2013 100 13,836 13,451 -
------------------------------------------------------------------
La Coipa
(3) Q2 2014 100 - - -
--------------------------------------------------------
Q1 2014 100 - - -
Q4 2013 100 107 421 -
Q3 2013 100 577 1,373 -
Q2 2013 100 584 1,331 -
------------------------------------------------------------------
Maricunga Q2 2014 100 3,854 - 3,792
--------------------------------------------------------
Q1 2014 100 4,491 - 3,860
Q4 2013 100 5,780 - 4,107
Q3 2013 100 4,197 - 3,431
Q2 2013 100 3,807 - 3,659
----------------------------------------------------------------------------
Kupol
Russia (4)(5)(7) Q2 2014 100 437 419 -
--------------------------------------------------------
Q1 2014 100 440 409 -
Q4 2013 100 457 424 -
Q3 2013 100 379 377 -
Q2 2013 100 318 306 -
----------------------------------------------------------------------------
West
Africa Tasiast Q2 2014 100 4,643 663 2,297
--------------------------------------------------------
Q1 2014 100 7,333 659 2,289
Q4 2013 100 9,189 636 3,197
Q3 2013 100 6,218 577 3,197
Q2 2013 100 5,314 652 3,838
------------------------------------------------------------------
Chirano -
100% Q2 2014 90 666 615 -
--------------------------------------------------------
Q1 2014 90 902 817 -
Q4 2013 90 970 861 -
Q3 2013 90 985 829 -
Q2 2013 90 826 854 -
------------------------------------------------------------------
Chirano -
90% Q2 2014 90 666 615 -
--------------------------------------------------------
Q1 2014 90 902 817 -
Q4 2013 90 970 861 -
Q3 2013 90 985 829 -
Q2 2013 90 826 854 -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating Summary
----------------------------------------------------------------------------
Grade
Grade (Heap Recovery
Mine Period Ownership (Mill) Leach) (2)
----------------------------------------------------------------------------
(%) (g/t) (g/t) (%)
----------------------------------------------------------------------------
Americas Fort Knox Q2 2014 100 0.50 0.29 84%
--------------------------------------------------------
Q1 2014 100 0.66 0.27 84%
Q4 2013 100 0.86 0.28 84%
Q3 2013 100 0.76 0.28 84%
Q2 2013 100 0.80 0.30 84%
------------------------------------------------------------------
Round
Mountain Q2 2014 50 0.91 0.37 63%
--------------------------------------------------------
Q1 2014 50 1.02 0.32 82%
Q4 2013 50 0.86 0.36 58%
Q3 2013 50 0.67 0.33 66%
Q2 2013 50 0.56 0.34 68%
------------------------------------------------------------------
Kettle
River-
Buckhorn Q2 2014 100 11.96 - 94%
--------------------------------------------------------
Q1 2014 100 10.93 - 92%
Q4 2013 100 13.10 - 94%
Q3 2013 100 12.50 - 95%
Q2 2013 100 13.09 - 94%
------------------------------------------------------------------
Paracatu Q2 2014 100 0.42 - 75%
--------------------------------------------------------
Q1 2014 100 0.35 - 68%
Q4 2013 100 0.37 - 76%
Q3 2013 100 0.39 - 76%
Q2 2013 100 0.37 - 75%
------------------------------------------------------------------
La Coipa
(3) Q2 2014 100 - - 0%
--------------------------------------------------------
Q1 2014 100 - - 0%
Q4 2013 100 0.93 - 72%
Q3 2013 100 0.80 - 86%
Q2 2013 100 0.93 - 88%
------------------------------------------------------------------
Maricunga Q2 2014 100 - 0.77 nm
--------------------------------------------------------
Q1 2014 100 - 0.74 nm
Q4 2013 100 - 0.68 nm
Q3 2013 100 - 0.63 nm
Q2 2013 100 - 0.53 nm
----------------------------------------------------------------------------
Kupol
Russia (4)(5)(7) Q2 2014 100 13.77 - 95%
--------------------------------------------------------
Q1 2014 100 13.81 - 94%
Q4 2013 100 11.35 - 92%
Q3 2013 100 11.37 - 94%
Q2 2013 100 11.16 - 94%
----------------------------------------------------------------------------
West
Africa Tasiast Q2 2014 100 2.04 0.62 89%
--------------------------------------------------------
Q1 2014 100 2.15 0.63 89%
Q4 2013 100 2.21 0.56 92%
Q3 2013 100 1.83 0.46 93%
Q2 2013 100 2.03 0.29 92%
------------------------------------------------------------------
Chirano -
100% Q2 2014 90 3.42 - 92%
--------------------------------------------------------
Q1 2014 90 3.06 - 92%
Q4 2013 90 2.95 - 94%
Q3 2013 90 2.65 - 95%
Q2 2013 90 2.50 - 94%
------------------------------------------------------------------
Chirano -
90% Q2 2014 90 3.42 - 92%
--------------------------------------------------------
Q1 2014 90 3.06 - 92%
Q4 2013 90 2.95 - 94%
Q3 2013 90 2.65 - 95%
Q2 2013 90 2.50 - 94%
----------------------------------------------------------------------------
----------------------------------------------------------------
Operating Summary
----------------------------------------------------------------
Gold Eq Gold Eq
Production Sales
Mine Period Ownership (6) (6)
----------------------------------------------------------------
(%) (ounces) (ounces)
----------------------------------------------------------------
Americas Fort Knox Q2 2014 100 91,316 85,938
--------------------------------------------
Q1 2014 100 83,588 112,711
Q4 2013 100 103,612 79,236
Q3 2013 100 122,037 119,835
Q2 2013 100 102,740 98,998
------------------------------------------------------
Round
Mountain Q2 2014 50 42,275 42,378
--------------------------------------------
Q1 2014 50 45,054 41,390
Q4 2013 50 40,316 39,963
Q3 2013 50 42,073 40,042
Q2 2013 50 41,016 43,035
------------------------------------------------------
Kettle
River-
Buckhorn Q2 2014 100 40,555 38,801
--------------------------------------------
Q1 2014 100 25,917 25,829
Q4 2013 100 30,642 30,995
Q3 2013 100 34,601 34,876
Q2 2013 100 45,044 46,015
------------------------------------------------------
Paracatu Q2 2014 100 124,329 132,327
--------------------------------------------
Q1 2014 100 127,085 115,776
Q4 2013 100 124,694 127,349
Q3 2013 100 135,548 140,333
Q2 2013 100 120,247 118,243
------------------------------------------------------
La Coipa
(3) Q2 2014 100 - 21
--------------------------------------------
Q1 2014 100 - 1,344
Q4 2013 100 16,737 25,392
Q3 2013 100 43,702 45,340
Q2 2013 100 48,237 46,574
------------------------------------------------------
Maricunga Q2 2014 100 64,290 64,333
--------------------------------------------
Q1 2014 100 52,729 55,857
Q4 2013 100 45,595 44,783
Q3 2013 100 38,126 37,800
Q2 2013 100 49,032 55,163
----------------------------------------------------------------
Kupol
Russia (4)(5)(7) Q2 2014 100 195,275 216,765
--------------------------------------------
Q1 2014 100 191,238 138,286
Q4 2013 100 153,529 200,141
Q3 2013 100 150,433 120,865
Q2 2013 100 121,728 164,627
----------------------------------------------------------------
West
Africa Tasiast Q2 2014 100 65,099 65,319
--------------------------------------------
Q1 2014 100 71,671 66,386
Q4 2013 100 62,963 64,629
Q3 2013 100 51,051 49,455
Q2 2013 100 71,047 62,489
------------------------------------------------------
Chirano -
100% Q2 2014 90 62,991 63,724
--------------------------------------------
Q1 2014 90 74,898 71,058
Q4 2013 90 75,717 78,812
Q3 2013 90 70,010 69,509
Q2 2013 90 62,545 60,397
------------------------------------------------------
Chirano -
90% Q2 2014 90 56,692 57,352
--------------------------------------------
Q1 2014 90 67,408 63,952
Q4 2013 90 68,146 70,931
Q3 2013 90 63,009 62,558
Q2 2013 90 56,290 54,357
----------------------------------------------------------------
------------------------------------------------------------------
Operating Summary
------------------------------------------------------------------
Production Production
cost of cost of
Mine Period Ownership sales sales/oz
------------------------------------------------------------------
(%) ($ millions) ($/ounce)
------------------------------------------------------------------
Americas Fort Knox Q2 2014 100$ 71.7$ 834
----------------------------------------------
Q1 2014 100 64.2 570
Q4 2013 100 47.3 597
Q3 2013 100 66.5 555
Q2 2013 100 56.9 575
--------------------------------------------------------
Round
Mountain Q2 2014 50 36.9 871
----------------------------------------------
Q1 2014 50 37.3 901
Q4 2013 50 36.6 916
Q3 2013 50 32.5 812
Q2 2013 50 35.0 813
--------------------------------------------------------
Kettle
River-
Buckhorn Q2 2014 100 24.9 642
----------------------------------------------
Q1 2014 100 16.4 635
Q4 2013 100 19.0 613
Q3 2013 100 21.0 602
Q2 2013 100 22.8 495
--------------------------------------------------------
Paracatu Q2 2014 100 114.6 866
----------------------------------------------
Q1 2014 100 100.1 865
Q4 2013 100 113.5 891
Q3 2013 100 108.1 770
Q2 2013 100 101.9 862
--------------------------------------------------------
La Coipa
(3) Q2 2014 100 0.1 nm
----------------------------------------------
Q1 2014 100 1.6 1,190
Q4 2013 100 31.6 1,244
Q3 2013 100 34.3 757
Q2 2013 100 36.0 773
--------------------------------------------------------
Maricunga Q2 2014 100 56.2 874
----------------------------------------------
Q1 2014 100 58.6 1,049
Q4 2013 100 54.5 1,217
Q3 2013 100 51.7 1,368
Q2 2013 100 59.3 1,075
------------------------------------------------------------------
Kupol
Russia (4)(5)(7) Q2 2014 100 114.8 530
----------------------------------------------
Q1 2014 100 66.5 481
Q4 2013 100 95.6 478
Q3 2013 100 62.2 515
Q2 2013 100 84.9 516
------------------------------------------------------------------
West
Africa Tasiast Q2 2014 100 66.5 1,018
----------------------------------------------
Q1 2014 100 67.5 1,017
Q4 2013 100 72.5 1,122
Q3 2013 100 57.4 1,161
Q2 2013 100 66.6 1,066
--------------------------------------------------------
Chirano -
100% Q2 2014 90 40.2 631
----------------------------------------------
Q1 2014 90 43.8 616
Q4 2013 90 57.8 733
Q3 2013 90 53.1 764
Q2 2013 90 50.1 830
--------------------------------------------------------
Chirano -
90% Q2 2014 90 36.2 631
----------------------------------------------
Q1 2014 90 39.4 616
Q4 2013 90 52.0 733
Q3 2013 90 47.8 764
Q2 2013 90 45.1 830
------------------------------------------------------------------
------------------------------------------------------------------
Operating Summary
------------------------------------------------------------------
Cap
Ex
Mine Period Ownership (8) DD&A
------------------------------------------------------------------
(%) ($ millions) ($ millions)
------------------------------------------------------------------
Americas Fort Knox Q2 2014 100$ 26.0$ 30.7
----------------------------------------------
Q1 2014 100 29.7 28.5
Q4 2013 100 28.8 21.2
Q3 2013 100 29.2 30.0
Q2 2013 100 27.9 25.3
--------------------------------------------------------
Round
Mountain Q2 2014 50 8.3 5.0
----------------------------------------------
Q1 2014 50 6.6 4.6
Q4 2013 50 23.9 5.4
Q3 2013 50 15.7 2.8
Q2 2013 50 13.5 9.3
--------------------------------------------------------
Kettle
River-
Buckhorn Q2 2014 100 1.0 15.6
----------------------------------------------
Q1 2014 100 1.6 9.7
Q4 2013 100 3.2 12.8
Q3 2013 100 3.1 14.8
Q2 2013 100 1.1 18.8
--------------------------------------------------------
Paracatu Q2 2014 100 14.5 40.5
----------------------------------------------
Q1 2014 100 16.8 33.9
Q4 2013 100 70.1 30.2
Q3 2013 100 39.9 27.6
Q2 2013 100 25.7 26.3
--------------------------------------------------------
La Coipa
(3) Q2 2014 100 0.1 -
----------------------------------------------
Q1 2014 100 0.4 0.1
Q4 2013 100 6.2 18.9
Q3 2013 100 1.1 25.7
Q2 2013 100 2.2 29.5
--------------------------------------------------------
Maricunga Q2 2014 100 11.4 11.5
----------------------------------------------
Q1 2014 100 9.4 4.6
Q4 2013 100 26.0 14.9
Q3 2013 100 5.3 11.7
Q2 2013 100 10.2 11.0
------------------------------------------------------------------
Kupol
Russia (4)(5)(7) Q2 2014 100 15.7 58.7
----------------------------------------------
Q1 2014 100 39.5 56.4
Q4 2013 100 29.2 39.2
Q3 2013 100 30.0 20.7
Q2 2013 100 20.7 27.9
------------------------------------------------------------------
West
Africa Tasiast Q2 2014 100 25.8 15.1
----------------------------------------------
Q1 2014 100 51.3 15.9
Q4 2013 100 105.6 20.4
Q3 2013 100 161.8 11.7
Q2 2013 100 186.2 28.4
--------------------------------------------------------
Chirano -
100% Q2 2014 90 9.0 35.5
----------------------------------------------
Q1 2014 90 10.7 40.5
Q4 2013 90 29.2 41.4
Q3 2013 90 11.6 37.2
Q2 2013 90 27.2 31.7
--------------------------------------------------------
Chirano -
90% Q2 2014 90 8.1 32.0
----------------------------------------------
Q1 2014 90 9.6 36.5
Q4 2013 90 26.3 37.3
Q3 2013 90 10.4 33.5
Q2 2013 90 24.5 28.5
------------------------------------------------------------------
(1) Ore processed is to 100%, production and costs are to Kinross' account.
(2) Due to the nature of heap leach operations, recovery rates at Maricunga
cannot be accurately measured on a quarterly basis. Recovery rates at
Fort Knox, Round Mountain and Tasiast represent mill recovery only.
(3) La Coipa silver grade and recovery were as follows: Q2 (2014) nil, nil;
Q1 (2014) nil, nil; Q4 (2013) 34.94 g/t, 58%; Q3 (2013) 32.03 g/t, 60%;
Q2 (2013) 32.45 g/t, 61%.
(4) The Kupol segment includes the Kupol and Dvoinoye mines.
(5) Kupol silver grade and recovery were as follows: Q2 (2014) 88.79 g/t,
84%; Q1 (2014) 106.4 g/t, 84%; Q4 (2013) 131.91 g/t, 92%; Q3 (2013)
136.33 g/t, 86%; Q2 (2013) 139.03 g/t, 83%.
(6) 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: Q2 2014: 65.67:1, Q1 2014: 63.15:1, Q4 2013:
61.18:1, Q3 2013: 62.21:1, Q2 2013: 61.14:1.
(7) Dvoinoye ore processed and grade were as follows: Q2 (2014) 91,204
tonnes, 28.68 g/t; Q1 (2014) 85,242 tonnes, 30.5 g/t; Q4 (2013) 26,743
tonnes, 28.15 g/t; Q3 (2013) 13,000 tonnes, 30.03 g/t; Q2 (2013) nil,
nil.
(8) Capital expenditures are presented on a cash basis, consistent with the
statement of cash flows.
For more information, please see Kinross' 2014 second-quarter Financial Statements and MD&A at www.kinross.com.
(1) Unless otherwise stated, production figures in this news release are based on Kinross' 90% share of Chirano production.
(2) These figures are non-GAAP financial measures and are defined and reconciled on pages eight to 12 of this news release.
(3) Net earnings figures in this release represent "net earnings (loss) from continuing operations attributable to common shareholders".
(4) Attributable margin per equivalent ounce sold is a non-GAAP measure defined as "average realized gold price per ounce" less "attributable production cost of sales per gold equivalent ounce sold."
(5) Excluding production from La Coipa, where mining at the existing ore body was suspended at the end of October 2013.
(6) 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.
Contacts:
Media Contact: Kinross Gold Corporation
Steve Mitchell
Vice-President, Corporate Communications
416-365-2726
steve.mitchell@kinross.com
Investor Relations Contact: Kinross Gold Corporation
Tom Elliott
Vice-President, Investor Relations
416-365-3390
tom.elliott@kinross.com
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