2010 Revenue Exceeds $3 Billion, Up 25%; Adjusted Net Earnings Per Share Up 32%
Total Gold Reserves Increase by 23%; Tasiast Reserves and Resources Grow Significantly
TORONTO, ONTARIO, Feb. 16, 2011 (Marketwire) --
(This news release contains forward-looking information that is subject to the risks and assumptions set out in our Cautionary Statement on Forward-Looking Information located on page 13 of this news release. All dollar amounts in this news release are expressed in U.S. dollars, unless otherwise noted.)
Highlights
-- Production(1) in the fourth quarter of 2010 was 676,635 gold equivalent
ounces, a 10% increase over Q4 2009. For full-year 2010, gold equivalent
production was 2,334,104 ounces, in line with previously announced
guidance.
-- Revenue for the quarter was a record $920.4 million, compared with
$699.0 million in the fourth quarter of 2009, an increase of 32%, with
an average realized gold price of $1,333 per ounce sold compared with
$1,094 per ounce sold in Q4 2009. Revenue for the full-year 2010 was a
record $3,010.1 million, a 25% increase over full-year 2009.
-- Cost of sales per gold equivalent ounce(2) was $551 for Q4, which
includes a Red Back Mining purchase accounting increase of $13, compared
with $437 for Q4 2009. Cost of sales per ounce sold for full-year 2010
was $508, inclusive of a full year Red Back purchase accounting increase
of $5, compared with $437 for full-year 2009. Full-year cost of sales
per ounce was in line with previously stated guidance. Kinross'
attributable margin per ounce sold(3) was a record $782 in Q4, a year-
over-year increase of 19%. The attributable margin per ounce sold for
full-year 2010 was $683, a 29% increase over 2009.
-- Adjusted operating cash flow(4) for Q4 was $332.7 million, a 14%
increase over Q4 2009, and $1,091.2 million for the full year, a 16%
increase over full-year 2009. Adjusted operating cash flow per share was
$0.29 in Q4, versus $0.42 Q4 2009, and $1.32 per share for full-year
2010, compared with $1.36 for full-year 2009.
-- Adjusted net earnings(4) were $144.7 million, or $0.13 per share, in Q4,
compared with $148.6 million, or $0.21 per share, for Q4 2009. Adjusted
net earnings for full-year 2010 were $478.8 million, or $0.58 per share,
compared with $304.9 million, or $0.44 per share, for full-year 2009.
Reported net earnings were $210.3 million, or $0.19 per share in Q4,
compared with $235.6 million, or $0.34 per share, for Q4 2009. Full year
reported net earnings were $771.6 million, or $0.94 per share, compared
with $309.9 million, or $0.45 per share for full-year 2009. Earnings
were reduced by additional exploration expenditures of approximately $23
million at Tasiast, and by the timing of year-end metal shipments, which
deferred sales of approximately 30,000 ounces of Q4 2010 gold production
to Q1 2011.
-- Kinross forecasts 2011 production of 2.5-2.6 million gold equivalent
ounces at an average cost of sales per gold equivalent ounce of $565 -
610.
-- Proven and probable mineral reserves as of December 31, 2010 were 62.4
million gold ounces, an 11.5 million ounce, or 23% increase year-over-
year.
-- Proven and probable mineral reserves at Tasiast increased to 7.6 million
gold ounces, measured and indicated mineral resources were 2.1 million
gold ounces and inferred mineral resources increased to 8.6 million gold
ounces. The Company has completed a scoping study for the Tasiast
expansion project based on a 16-year life for the expanded project with
average annual production of approximately 1.5 million ounces at an
average gold grade of approximately 2 g/t for the first eight full years
of the expanded project.
-- Kinross has declared its first proven and probable gold reserves of 6.8
million ounces at Fruta del Norte (FDN). The Company has prepared a pre-
feasibility study and technical report for FDN that estimates average
annual production of 410,000 gold ounces over the 16-year life-of-mine.
FDN permitting is on schedule to support the project development
timeline.
-- The Company has completed a scoping study for Dvoinoye that contemplates
processing higher-grade Dvoinoye ore at the Kupol mill, and an increase
in Kupol throughput from 3,000 to 4,000 tonnes per day.
-- The Board of Directors declared a dividend of $0.05 per share payable on
March 31, 2011 to shareholders of record on March 24, 2011.
CEO Commentary
Tye Burt, President and CEO, made the following comments in relation to fourth quarter and year-end 2010 results:
"Our aggressive exploration and technical work since acquiring Tasiast confirms our view of its potential to become one of the world's great gold mines. Gold grades are higher than expected in the early years of production, the deposit continues to be open, reserves and resources have grown significantly, and we've completed a scoping study that helps to define the project's impressive magnitude. Tasiast will be a cornerstone asset for Kinross as its production expands to 1.5 million ounces, while averaging down company-wide production costs.
"In 2010, Kinross' proven and probable gold reserves increased by 23%. Our production reached a new record with strong performance from our mines, and for the first time, annual revenue exceeded $3 billion while adjusted operating cash flow(4) exceeded $1 billion. Margins averaged $683 per ounce in 2010, an increase of 29% year-over-year, compared with a 23% year-over-year increase in the average realized gold price per ounce.
"In 2011, with a full year of output from our West African mines, we forecast production will increase to 2.5-2.6 million gold equivalent ounces, while we also expect higher costs as a result of increased energy and labour costs, and lower average grades. By 2015, we expect production to grow to 4.5-4.9 million ounces, as our suite of new projects start up in 2013 and 2014. With new studies completed at Tasiast, FDN, Lobo-Marte, and Dvoinoye, we are making significant and steady progress advancing the projects that give Kinross the best growth profile among senior gold producers."
Financial results
Summary of financial and operating results
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Three months ended Year ended
December 31, December 31,
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(dollars in millions,
except per share and
per ounce amounts) 2010 2009 2010 2009
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Total(a) gold equivalent
ounces(b) - produced 734,126 668,761 2,527,695 2,470,042
Total gold equivalent
ounces - sold 696,355 636,601 2,537,175 2,487,076
Attributable(c) gold
equivalent ounces -
produced 676,635 613,858 2,334,104 2,238,665
Attributable(c) gold
equivalent ounces -
sold 647,494 586,543 2,343,505 2,251,189
Metal sales $ 920.4 $ 699.0 $ 3,010.1 $ 2,412.1
Cost of sales (excludes
accretion and
reclamation expense,
depreciation, depletion
and amortization) $ 374.3 $ 271.0 $ 1,255.4 $ 1,047.1
Accretion and
reclamation expense $ 13.4 $ 5.4 $ 29.0 $ 19.3
Depreciation, depletion
and amortization $ 159.2 $ 109.4 $ 517.5 $ 447.3
Operating earnings $ 240.2 $ 226.2 $ 867.2 $ 645.9
Net earnings (loss) $ 210.3 $ 235.6 $ 771.6 $ 309.9
Basic earnings (loss)
per share $ 0.19 $ 0.34 $ 0.94 $ 0.45
Diluted earnings (loss)
per share $ 0.18 $ 0.34 $ 0.93 $ 0.44
Adjusted net earnings
(d) $ 144.7 $ 148.6 $ 478.8 $ 304.9
Adjusted net earnings
per share (d) $ 0.13 $ 0.21 $ 0.58 $ 0.44
Cash flow provided from
(used for) operating
activities $ 268.3 $ 306.5 $ 968.4 $ 785.6
Adjusted operating cash
flow (d) $ 332.7 $ 292.2 $ 1,091.2 $ 937.2
Adjusted operating cash
flow per share (d) $ 0.29 $ 0.42 $ 1.32 $ 1.36
Average realized gold
price per ounce $ 1,333 $ 1,094 $ 1,191 $ 967
Consolidated cost of
sales per equivalent
ounce sold (e) $ 537 $ 426 $ 495 $ 421
Attributable(c) cost of
sales per equivalent
ounce sold (f) $ 551 $ 437 $ 508 $ 437
Attributable cost of
sales per ounce sold on
a by-product basis (g) $ 494 $ 383 $ 462 $ 388
(a) "Total" includes 100% of Kupol and Chirano production.
(b) "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 ratio for the
fourth quarter of 2010 was 51.93:1, compared with 62.54:1 for the
fourth quarter of 2009; year to date 2010 was 60.87:1, compared with
66.97:1 for 2009.
(c) "Attributable" includes Kinross' share of Kupol (75%) and Chirano (90%)
production.
(d) "Adjusted net earnings", "Adjusted net earnings per share", "Adjusted
operating cash flow" and "Adjusted operating cash flow per share" are
non-GAAP measures. The reconciliation of these non-GAAP financial
measures is located in this news release.
(e) "Consolidated cost of sales per ounce" is a non-GAAP measure and is
defined as cost of sales as per the consolidated financial statements
divided by the total number of gold equivalent ounces sold.
(f) "Attributable cost of sales per ounce" is a non-GAAP measure and is
defined as attributable cost of sales divided by the attributable
number of gold equivalent ounces sold.
(g) "Attributable cost of sales per ounce on a by-product basis" is a non-
GAAP measure and is defined as cost of sales as per the consolidated
financial statements less attributable(c) silver revenue divided by the
total number of attributable(c) gold ounces sold.
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(1) Unless otherwise stated, production figures in this release are based on
Kinross' 75% share of Kupol production and 90% of Chirano production.
(2) Cost of sales per ounce is a non-GAAP measure and is defined as cost of
sales as per the financial statements divided by the number of gold
equivalent ounces sold, both reduced for Kupol sales attributable to a
third-party 25% shareholder and Chirano sales to a 10% minority interest
holder.
(3) Attributable margin per ounce sold is a non-GAAP measure and is defined
as average realized gold price per ounce less attributable cost of sales
per gold equivalent ounce sold.
(4) Reconciliation of non-GAAP measures is located on page 14 of this news
release.
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Kinross produced 676,635 attributable gold equivalent ounces in the fourth quarter of 2010, a 10% increase over the fourth quarter of 2009, mainly due to improved performance at the Paracatu expansion plant, and the addition of new production from Tasiast and Chirano. Full year production was 2,334,104 gold equivalent ounces, in line with previously stated guidance, and a 4% increase over full-year 2009.
Cost of sales per gold equivalent ounce for Kinross operations was $551, compared with $437 for the fourth quarter of 2009, an increase of 26%. Cost of sales per gold equivalent ounce for full-year 2010 was $508, in line with previously stated guidance, compared with $437 for full-year 2009. Cost of sales per gold equivalent ounce on a by-product basis was $494 in Q4, compared with $383 in Q4 2009. Cost of sales per gold equivalent ounce on a by-product basis was $462 for the full year, compared with $388 for full-year 2009.
Revenue from metal sales was $920.4 million in the fourth quarter of 2010, versus $699.0 million during the same period in 2009, an increase of 32%. The average realized gold price was $1,333 per ounce in Q4, compared with $1,094 per ounce for Q4 2009, an increase of 22%. 2010 full-year revenue was a record $3,010.1 million, compared with $2,412.1 million for full-year 2009, an increase of 25%. The average realized gold price per ounce was $1,191 for full-year 2010, versus $967 per ounce for full-year 2009, an increase of 23%.
Kinross' margin per gold equivalent ounce sold was a record $782 for the quarter, an increase of 19% compared with the fourth quarter of 2009. Full year margin per gold equivalent ounce sold was $683 compared with $530 for full-year 2009, a 29% increase.
Adjusted operating cash flow(4) was $332.7 million for the quarter, or $0.29 per share, compared with $292.2 million, or $0.42 per share, for Q4 2009. Adjusted operating cash flow for full-year 2010 was $1,091.2, or $1.32 per share, compared with $937.2 million, or $1.36 per share, for full-year 2009. Cash, cash equivalents and short term investments were $1,466.6 million at December 31, 2010 compared with $632.4 million at December 31, 2009.
Adjusted net earnings(4) were $144.7 million, or $0.13 per share for Q4 2010, compared with $148.6 million, or $0.21 per share, for Q4 2009. Adjusted net earnings were $478.8 million, or $0.58 per share, for full-year 2010, compared with $304.9 million, or $0.44 per share, for full-year 2009.
Reported net earnings were $210.3 million, or $0.19 per share, for Q4 2010, compared with $235.6 million, or $0.34 per share, for Q4 2009. Reported net earnings were $771.6 million, or $0.94 per share, for full-year 2010, compared with $309.9 million, or $0.45 per share, for full-year 2009.
Capital expenditures were $236.5 million for Q4 2010, compared with $137.5 million for the same period last year. Capital expenditures totalled $563.7 million for full-year 2010, slightly below guidance, compared with $481.2 million the previous year.
Operating results
Mine-by-mine summaries of fourth quarter and full-year 2010 operating results may be found on pages 16 and 20 of this news release. Highlights include the following:
-- Full-year production at Paracatu was approximately 482,000 gold
equivalent ounces, a 36% increase over 2009, largely due to
significantly improved performance of Plant 2. Fourth quarter 2010
production at Paracatu was slightly lower than in the third quarter of
2010, but full-year production remained well ahead of guidance.
-- At Kupol, fourth quarter and full year production were lower compared to
2009 due to the expected year- over-year decline in grades. However,
mine and mill performance were strong during the quarter and production
for the full year was ahead of guidance. Gold equivalent ounces sold
during the fourth quarter were lower than ounces produced due to the
timing of shipments.
-- In Chile, fourth quarter 2010 mine production was slightly higher and
per ounce cost of sales was lower than in the previous quarter, due
largely to improved performance at La Coipa, where enhancements to the
filter plant began to show results in the fourth quarter. As a result,
the full-year cost of sales per ounce for Chile was lower than the
revised Chile guidance provided in the third quarter 2010 news release.
Fourth quarter production and costs at Maricunga were negatively
impacted by performance issues related to slower than expected gold
release, but by year-end, heap leach performance was showing
improvement, which has carried over into significantly improved
performance in January 2011.
-- Full-year production at Fort Knox was approximately 350,000 gold
equivalent ounces, a 33% increase over 2009, due to additional
production from the new heap leach. Fourth quarter production was lower
than third quarter production, as less ore is stacked on the heap during
winter months, which is also expected to affect production in the first
quarter of 2011. As planned, production for the full-year 2011 at Fort
Knox is expected to be less than 2010 due to lower grades, as most of
the mining activity will be focused on capitalized stripping, and as a
result, the majority of ore processed will be sourced from stockpiles.
-- Fourth quarter production at Tasiast was approximately 48,000 gold
equivalent ounces. Production was impacted negatively during the quarter
by leaks in one of the two water supply lines, but this situation was
resolved in early 2011 and full water supply to the site has been
restored.
-- Chirano had a strong fourth quarter, with production of approximately
77,000 ounces.
Project update and new developments
The forward-looking information contained in this section of the release is subject to the risks and assumptions contained in the Cautionary Statement on Forward-Looking Information on page 13 of this news release.
Kinross expects to increase its annual production from current levels to approximately 4.5-4.9 million ounces by 2015 through its suite of growth projects at existing mines and new development projects.
Growth projects at sites
Tasiast expansion project
Kinross ramped up drilling activities at the Tasiast site in Mauritania through the fourth quarter 2010. As at December 31, 2010, proven and probable mineral reserves at Tasiast were 7.6 million ounces, measured and indicated mineral resources were 2.1 million ounces, and inferred mineral resources were 8.6 million ounces.(5) With a total of 25 drills currently active, the Company is continuing its aggressive exploration and engineering drilling campaign at Tasiast in 2011.
Kinross has completed a scoping study for the Tasiast expansion project, based on a 16-year mine plan for the expanded project. During the first eight full years of operation, average annual production is expected to be approximately 1.5 million gold equivalent ounces at an average cost of sales per ounce of approximately $480-520, with an expected average gold grade of approximately 2 g/t, and expected average recoveries of 93%.
The proposed open pit mine will feed both the existing 8,000 tonne per day plant and an expansion plant. The proposed expansion plant is a conventional gold cyanidation plant, consisting of primary crushing, grinding, gravity separation, carbon-in-leach cyanidation and cyanide destruction, with a design throughput of approximately 60,000 tonnes per day.
The scoping level pre-commissioning capital cost estimate for the process plant, initial mine fleet equipment and associated infrastructure is approximately $1.8 billion, plus a contingency of approximately $400 million. Post start-up capital is expected to include an estimated $500 million in additional fleet purchases to sustain full mining and stripping activity. The project team continues to refine its estimates for operating costs, which are expected to be included in the project feasibility study, scheduled for completion in mid-2011.
An international Engineering, Procurement, Construction Management (EPCM) joint venture firm has been retained and is proceeding with the project feasibility study and basic engineering. Kinross has appointed a Regional Vice-President for its West Africa region and a Project Director for the Tasiast project.
Key processing equipment for the expanded plant has now been ordered, including one SAG mill and two ball mills, wrap-around motors for the mills, and three crushers. The Company is currently in advanced negotiations regarding the purchase of trucks and shovels for the expanded mining fleet.
The Company has had initial meetings with key government ministries concerning project permitting, and a permitting strategy has been developed to support the project timeline. Pending approval of necessary Environmental Impact Assessments for the expansion project, construction is expected to start in mid-2012, with operations expected to commence early in 2014.
(5) In its mineral reserves and mineral resources estimates, Kinross reports mineralization that is above a set cut-off grade and confined within a defined mining shape, using the assumptions outlined on page 26 of this news release. Red Back Mining's historical mineral reserves and mineral resource estimates for the Tasiast resource included all qualifying mineralization that appeared above a set cut-off grade, but was not confined to a defined mining shape. For comparative purposes, applying this Red Back methodology to current drill results and mineral resource estimates at Tasiast would result in an additional of 64,734 K tonnes of inferred mineral resource with a grade of 1.16 grams per tonne, for an additional 2.412 million ounces of gold.
Dvoinoye development
A scoping study on the Dvoinoye project was completed in January 2011. The scoping study is based on developing Dvoinoye as an underground mine with a mine life of at least eight years, with an average output of approximately 900 tonnes per day from 2013 through 2020. Dvoinoye feed will be processed at the Kupol mill and is expected to allow an increase in mill throughput to approximately 4,000 tonnes per day, requiring only minor modifications to the mill. Batch processing is proposed, using one week of Dvoinoye feed and three weeks of Kupol feed per month. The average gold grade of Dvoinoye feed is expected to be approximately 17.5 g/tonne. Initial capex for the project is estimated to be approximately $300 million. Processing of Dvoinoye ore at Kupol is targeted to commence in the second half of 2013.
Permitting is proceeding as planned, and as previously disclosed, the five-year exploration plan for Dvoinoye, including an exploration decline, has been approved by government authorities. Exploration drilling is expected to continue at Dvoinoye in 2011 to further define resources and reserves and assist with engineering and hydrology studies in support of a pre-feasibility study, scheduled for completion in the third quarter of 2011, and a feasibility study, scheduled for completion in the first quarter of 2012. Key project development milestones for 2011 include construction of the mine portal, exploration decline development, and construction of additional facilities and infrastructure.
Paracatu third ball mill
Construction for the third Paracatu ball mill is proceeding on schedule and on budget, with construction 75% complete and the project at 82% completion. The ball mill has been mounted on its foundations, structural steel is substantially erected, and electrical equipment installation is well advanced. The project remains on target for commissioning in the first half of 2011.
Paracatu fourth ball mill
An EPCM contract is being finalized for the fourth Paracatu ball mill with the same firm completing the third ball mill. Engineering on the project is well advanced. The fourth ball mill has been ordered and is expected to be delivered by mid-year, and an additional shovel and mine truck have been purchased. Construction activities are expected to commence mid-2011. The project remains on target to be operational in the first half of 2012.
Maricunga projects
Engineering on the Maricunga SART (Sulphidization, Acidification, Recycling and Thickening) plant is complete and construction commenced late in the fourth quarter of 2010. The plant remains on schedule to be operational in late 2011. Once the SART plant begins operation, additional copper production at Maricunga is expected to result in a cost of sales credit of approximately $40 per ounce.
Major work on upgrades to the ADR (Adsorption, Desorption and Refining) plant at Maricunga has been completed on schedule, with commissioning of the new kiln in December 2010. Additional modifications to the adsorption and elution sections are expected to be completed early in the second quarter of 2011.
New Developments
Lobo-Marte
Kinross has completed an update to its earlier pre-feasibility study on Lobo-Marte. The updated study is based on a mine life of approximately 10 years and confirms the viability of a 47,000 tonne per day open pit heap leach operation incorporating SART technology.
The updated study estimates an average annual production of approximately 350,000 ounces per year, with average operating costs of $11.00-11.50 per tonne. The average gold grade over the life of mine is estimated to be 1.17 g/t and average recovery 60-70%. The average cost of sales is estimated to be approximately $500 per ounce, or approximately $450 per ounce net of a copper credit of approximately $50 per ounce, based on a copper price of $2.50 per pound. Capital expenditures are estimated to be approximately $700 million, versus the earlier pre-feasibility estimate of $575-650 million. The increase is due to enhancements to the site layout and facilities, including installation of an overland conveyor and a conveyer loading system for the leach pad, which optimizes layout and allows for potential future expansion.
Kinross received approval for an additional 20,000 metres of drilling at Lobo-Marte late in the fourth quarter of 2010. The Company is proceeding with further infill and geotechnical drilling in support of the project feasibility study, which is scheduled for completion in mid-2011. Hydrogeological, geotechnical and infill drilling associated with the previous permit was completed in the fourth quarter, with condemnation drilling expected to be completed in the second quarter of 2011. The Company expects to complete an Environmental Impact Assessment (EIA) for the project in mid-2011. The project remains on target to commence commissioning in 2014.
Fruta del Norte
Kinross has prepared a pre-feasibility study and technical report for Fruta del Norte (FDN), incorporating reserve and resource information as of year-end 2010. Proven and probable mineral reserves are estimated at 6.8 million ounces of gold and 9.1 million ounces of silver. The study is based on a mine life of approximately 16 years, with life of mine gold production of 6.3 million ounces and silver production of 6.7 million ounces.
Annual production is expected to average approximately 410,000 gold equivalent ounces per annum over the life of mine. The average gold grade is expected to be 8.07 g/t, and the average silver grade is expected to be 10.89 g/t, with an expected average recovery rate of 93% for gold and 74% for silver. The average cost of sales is estimated to be approximately $370 per gold equivalent ounce.
Plant commissioning is expected to begin at a rate of approximately 2,500 tonnes per day, processing non-refractory ore, and is expected to ramp up over a period of three years to a rate of 5,000 tonnes per day with the addition of a pressure oxidation (POX) circuit, 18 months after commissioning, which will allow the processing of refractory ore. The initial capital cost for Phase I is expected to be approximately $700 million, with additional capital expenditures of approximately $400 million expected in Phase 2 with the addition of the POX circuit.
The Company obtained a number of permits to advance work on FDN in 2010. In addition, in early January 2011, Kinross obtained its environmental licence to construct the underground exploration decline at La Zarza, the location of the FDN orebody. Construction of the decline is expected to commence in the second quarter of 2011 with surface preparatory work commencing in the first quarter. Future drilling at FDN will target an extension of the ore body at depth and along strike and upgrading existing resources.
The Company expects to submit EIAs to build and operate the mine and processing facilities by mid-2011. Kinross expects to complete a feasibility study in the second half of 2011, and is targeting start up in late 2014.
Throughout 2010, the Company maintained informal dialogue with the Ecuadorian government authorities respecting the negotiation process for the FDN exploitation contract. Formal contract negotiations are expected to begin in the first half of 2011, following the agreement of the Company and government to enter into the economic evaluation phase of the project.
Cerro Casale
Barrick Gold Corporation will provide an update on the Cerro Casale project in its Q4 and year-end release, scheduled to be issued on February 17.
2010 Mineral Reserves and Mineral Resources Update
Please refer to the Mineral Reserve and Mineral Resource tables and corresponding notes located at the end of this news release.
Proven and Probable Mineral Reserves
Kinross' total estimated proven and probable mineral reserves at year-end 2010 increased by 11.5 million ounces to 62.4 million ounces of gold, a 23% increase over year-end 2009. The net increase is due to the acquisition of Red Back Mining which added 10.0 million ounces to mineral reserves through the addition of the Tasiast (7.6 million ounces) and Chirano (2.4 million ounces) properties. Mineral reserves of 6.8 million ounces were also reported for the first time at the Fruta del Norte development property upon completion of the pre-feasibility study. This addition offset the 5.8 million ounce decrease at Cerro Casale from the sale of 25% of the project.
In 2010, depletion from production at all operations totaled 2.4 million ounces.
The chart below summarizes changes to proven and probable gold reserves at year-end 2010 compared to year-end 2009.
To view the chart associated with this release, please visit the following link: http://media3.marketwire.com/docs/kinchartb2011.pdf.
Proven and probable silver reserves at year-end 2010 decreased by 12.0 million ounces, or 12% to 91.0 million ounces, versus 103 million ounces at year-end 2009 as a result of depletion at La Coipa and Kupol.
Proven and probable copper reserves at year-end 2010 decreased to 1.4 billion pounds primarily due to the sale of half our interest in the Cerro Casale project.
Measured and Indicated Mineral Resources
Kinross' total measured and indicated (M&I) mineral resources at year-end 2010 increased by 1.1 million ounces of gold, or 7%, to 17.7 million ounces versus 16.6 million ounces at year-end 2009. Silver measured and indicated resources increased marginally by 0.2 million ounces, or 1%, to 25.6 million ounces versus 25.4 million ounces at year-end 2009.
Inferred Mineral Resources
Kinross' total inferred mineral resources at year-end 2010 increased by 7.8 million ounces of gold, or 48%, to 24.0 million ounces versus 16.2 million ounces at year-end 2009. The net increase in inferred mineral resources is due primarily to the addition of 8.6 million gold ounces at the Tasiast project.
Assumptions for Mineral Reserves and Resources
2010 year-end mineral reserves were estimated using a $900 per ounce gold price, a $14.00 per ounce silver price, and a $2.00 per pound copper price. 2009 year-end reserves were estimated using an $800 per ounce gold price, $12.50 per ounce silver price, and a $1.75 per pound copper price.
2010 year-end mineral resources were estimated using a $1,000 per ounce gold price, a $15.00 per ounce silver price, and a $2.50 per pound copper price. 2009 year-end resources were estimated using an $875 per ounce gold price, a $13.75 per ounce silver price, and a $2.25 per pound copper price.
The technical information about the Company's material mineral properties contained in this news release has been prepared under the supervision of Mr. Rob Henderson, an officer of the Company who is a "qualified person" within the meaning of National Instrument 43-101.
Exploration update
Exploration and business development expenses for full-year 2010 were $142.7 million, compared with $72.5 million for full-year 2009. Of the total exploration and business development expense, expenditures on exploration totalled $54.9 million and $120.1 million for the quarter and year, respectively. Capitalized exploration expenses totalled $7.1 million in 2010.
Kinross was active on 44 mine site, near-mine and greenfields projects in 2010 with a total of 375,084 metres drilled (353,547 metres expensed and 21,537 metres capitalized). Gold reserves increased by 11.5 million ounces during the year. Details are outlined in the 2010 Mineral Reserves and Resources update above. Highlights of the 2010 exploration program include the following:
-- Tasiast: Eleven drills were added to the project in Q4 2010. Three
additional drills were contracted at the beginning of 2011 bringing the
total number of drills at Tasiast to 25. Approximately 64,000 metres
were drilled in the West Branch area targeting deeper extensions of the
Greenschist Zone. Drilling also focused on extending Greenschist-style
mineralization closer to surface. A further 22,000 metres of shallow
reverse circulation drilling was completed on regional geochemical and
geophysical targets. A sample preparation facility was installed in the
Mauritanian capital of Nouakchott to expedite sample analytical
timelines.
-- Dvoinoye: Three core rigs were active during the fourth quarter,
resulting in the completion of over 15,000 metres of drilling since work
that commenced in the summer. Drilling successfully added 1.1 million
ounces of NI 43-101 compliant indicated mineral resources and 0.4
million ounces of NI 43-101 compliant inferred mineral resources.
-- Chirano: Five core rigs were active at Chirano in Q4 2010 completing
12,088 metres. Drilling was focused at Akoti North, Tano and on a
regional target called Kolua. Three drills continued testing extensions
of mineralized intercepts encountered in earlier drilling at Akoti. A
single drill was deployed to Kolua, 4 km south of the plant, to test the
size potential of mineralization encountered in previous drilling. A
further 2,000 metres are planned to fully evaluate the target.
-- La Coipa: Over 27,000 metres of drilling was completed for the year at
La Coipa. Part of the drilling focused on the Can Can and Portezuelo
targets to upgrade resource classification. Drilling encountered
encouraging silver results at Puren Sur, Pompeya and Puren West,
warranting follow-up early in the summer of 2011.
-- Lobo-Marte: Three holes (1,532 metres) were completed at the Valy target
five kilometres south of Lobo. Porphyry-style gold mineralization
characteristic of Lobo-Marte grades was encountered in the first hole.
Drilling is continuing in 2011 with results awaited for other completed
holes.
-- Fruta del Norte/Condor Project: Over 22,000 metres of infill drilling
was completed and resulted in the conversion of 6.8 million ounces to
mineral reserves by year-end. A number of environmental permits were
granted on exploration licenses surrounding FDN, allowing exploration
work to recommence. Re-interpretation of the geologic model at FDN
generated a number of new targets in the vicinity of the main FDN ore
body.
-- Kupol: One hundred and fifty-three holes were drilled at Kupol in 2010
for 49,270 metres. Definition drilling at the 650 and North Extension
zones converted 0.4 million ounces of gold resources to gold reserves,
replacing the majority of attributable 2010 production.
-- White Gold: Compilation and interpretation of final results from the
2010 field season continued during the fourth quarter. Planning for the
2011 field season was well underway by year-end with field work
scheduled to commence in May.
-- Generative projects: New joint venture agreements completed in 2010
include Laurentian Goldfields (Goldpines, western Ontario), Millrock
Resources (Humble project, Alaska), Quebrada Valiente (Codelco) and the
Camacho and Pirelli projects in Mexico (Fortunate Sun Mining).
In 2011, the Company's exploration efforts will focus on pursuing a strategy of upgrading the asset portfolio through organic growth. Key initiatives include expansion and upgrading of mineral resources and mineral reserves at Tasiast, Dvoinoye and White Gold, along with advancing exploration work at key brownfields targets in the Lobo- Marte, Vodorazdelnaya, La Coipa, Fruta del Norte, Kupol and Buckhorn districts. Greenfields and generative exploration will continue to focus in West Africa, Alaska, Yukon Territory, Mexico and Chukotka.
Exploration expenditures in 2011 are forecast to be $175 million, with expensed exploration costs forecast to be $110 million, and capitalized exploration costs forecast to be $65 million. Just under half the budget ($75 million) will be invested in Africa with $55 million allocated to Tasiast. Work will focus on infill and mineral resource expansion drilling of the Greenschist zone at West Branch (130,000 metres) which remains open down-plunge, targeting extension of mineralization beneath the open pits (84,000 metres) and drilling district targets (100,000 metres) along the 70 km greenstone trend beyond the mine corridor.
At Kupol, the Company has budgeted $12 million to continue definition drilling at the North Extension target and to test new targets on the mine licenses and adjacent Kupol East and West exploration licenses. A total of 35,000 metres is planned for the year. Exploration will continue at Dvoinoye with the aim of expanding mineral resources beyond the current footprint of drilling. Approximately $7 million has been budgeted for 33,000 metres drilling.
Other key initiatives in 2011 include Fort Knox ($8 million), Chirano ($8 million) and White Gold ($7 million). Over 14,000 metres of drilling is planned at White Gold focusing on key targets at Golden Saddle, Arc and McKinnon. Continuation of district wide geochemical sampling and mapping is planned to identify new targets and to better understand the potential scale of the mineralized system.
Recent transactions
Sale of interest in Osisko
On December 13, 2010, the Company completed the sale of its 1.8% interest in Osisko Mining Corporation, consisting of approximately 6.8 million Osisko common shares, on an underwritten block trade basis, at a gross price of CDN$14.70 per share, for net proceeds of $97.5 million. The transaction resulted in a gain of $74.1 million.
Outlook
The forward-looking information contained in this section is subject to the risk factors and assumptions contained in the Cautionary Statement on Forward-Looking Information located on page 13 of this news release.
In 2011, Kinross expects to produce approximately 2.5-2.6 million gold equivalent ounces, an increase of 10% compared to 2010 production. Cost of sales per gold equivalent ounce is expected to be in the range of $565 - 610 for the full-year 2011. The Company has prepared forecasts for 2011 production and average cost of sales on both a gold equivalent and by-product accounting basis, as summarized in the table below:
---------------------------------------------------------------------------- Accounting basis 2011 (forecast) ---------------------------------------------------------------------------- Gold equivalent basis Production (gold equivalent ounces) 2.5-2.6 million Average cost of sales per gold equivalent ounce $565-610 By-product basis Gold ounces 2.3-2.4 million Silver ounces 10.9-11.3 million Average cost of sales per gold ounce $520-570 ----------------------------------------------------------------------------
Material assumptions used to forecast 2011 cost of sales are: a gold price of $1,300 per ounce, a silver price of $24 per ounce, an oil price of $85 per barrel, and foreign exchange rates of 1.75 Brazilian reais to the U.S. dollar, 1.02 Canadian dollars to the U.S. dollar, 32 Russian roubles to the U.S. dollar, 500 Chilean pesos to the U.S. dollar, 1.45 Ghanaian cedi to the U.S. dollar and 275 Mauritanian ouguiya to the U.S. dollar. Taking into account existing currency and oil hedges, respectively, a 10% change in foreign currency exchange rates would be expected to result in an approximate $7 impact on our cost of sales per ounce(6), a $10 per barrel change in the price of oil would be expected to result in an approximate $3 impact on our cost of sales per ounce, and a $100 change in the price of gold would be expected to result in an approximate $3 impact on our cost of sales per ounce as a result of a change in royalties.
Overall, production is expected to be positively impacted in 2011 by a full year of production at the Tasiast and Chirano mines and higher forecast South American production, offset by lower production in Russia and the U.S. due to a planned decline in grades. The 2011 forecast for cost of sales per gold equivalent ounce is expected to increase due to a decline in grades at our existing mines and higher consumable and labour costs.
The following table provides a summary of the 2011 production and cost of sales forecast by region:
----------------------------------------------------------------------------
Forecast 2011 Percentage of Cost of sales ($
production (gold total per Au equivalent
Region equivalent oz) production(7) oz)
----------------------------------------------------------------------------
South America 1,000,000-1,070,000 41% 585-650
North America 590,000-630,000 24% 625-685
West Africa
(attributable) 440,000-500,000 18% 595-655
Russia
(attributable) 435,000-455,000 17% 395-435
----------------------------------------------------------
Total 2.5-2.6 million 100% 565-610
----------------------------------------------------------------------------
Capital expenditures for the full-year 2011 are forecast to total approximately $1.5 billion, including $70 million which was budgeted for 2010, but unspent, and carried over to 2011. Subsequent to the sale of half its interest in Cerro Casale, Kinross accounts for its remaining investment in the project under the equity method. As a result, the $90 million which the Company expects to spend on the project this year is excluded from the 2011 capital expenditure forecast. The following table provides a summary of the 2011 capital expenditure forecast:
----------------------------------------------------------------------------
Mine and
processing
Maintenance development New projects
Region ($ mm) ($ mm) ($ mm) Total ($ mm)
----------------------------------------------------------------------------
South America 130 505 95 730
North America 10 155 - 165
West Africa 50 180 210 440
Russia 15 30 110 155
Corporate 10 - - 10
------------------------------------------------------
Total CAPEX 215 870 415 1,500
----------------------------------------------------------------------------
Maintenance includes $80 million for site infrastructure and $65 million for plant sustaining capital. Mine and processing development includes $280 million for processing facility improvements (including the third and fourth ball mills, desulphurization units, and flash flotation cells at Paracatu, the SART plant at Maricunga and the ADR plant at Tasiast), $210 million for capitalized mine development, $125 million for mine equipment, $130 million for tailings facilities, and $45 million for heap leach expansions.
New project capital expenditures include $210 million for Tasiast, $110 million for Dvoinoye, $60 million for Fruta del Norte, and $35 million for Lobo-Marte. Not included in the 2011 capital forecast is approximately $130 million in expected advance payments to suppliers for the Tasiast expansion project.
The 2011 forecast for exploration and business development expenses is approximately $146 million, of which $110 million is for exploration expenses. Capitalized exploration is forecast to be $65 million, for total 2011 forecast exploration expenditures of $175 million.
Other operating costs are forecast to be $25 million. General and administrative expense is forecast to be approximately $170 million, which includes approximately $20 million for additional resources related to newly acquired West African operations. General and administrative expense includes approximately $35 million relating to equity-based compensation. The Company's tax rate in 2011 is forecast to be in the range of 34% to 39% and depreciation, depletion and amortization is forecast to be approximately $651 million.
As a result of gold forward purchase contracts entered into during the year and subsequent to December 31, the Company has de-designated 96% of Kupol gold forward sales contracts maturing in 2011 and 100% of such contracts maturing in 2012. As a result, Kinross expects the net impact of locked-in Kupol gold hedges to be a $155 million reduction in revenue in 2011. Kupol silver hedges are expected to reduce revenue by $40 million in 2011, based on a budgeted silver price of $24 per ounce.
(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.
(7) The percentages are calculated based on the mid-point of regional 2011 forecast production.
Conference call details
In connection with this news release, Kinross will hold a conference call and audio webcast on Thursday, February 17, 2011 at 8:00 a.m. ET to discuss the results, followed by a question-and-answer session. To access the call, please dial:
Canada & US toll-free - 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' 2010 year-end Financial Statements and Management's Discussion and Analysis report at www.kinross.com.
Kinross' audited annual statements have been filed with Canadian securities regulators (available at www.sedar.com) and furnished with the U.S. Securities and Exchange Commission (available at www.sec.gov). Kinross shareholders may obtain a copy of the 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 Canada, the United States, Brazil, Chile, Ecuador, Russia, Ghana and Mauritania, employing approximately 7,000 people worldwide.
Kinross' strategic focus is to maximize net asset value and cash flow per share through a four-point plan built on: delivering mine and financial performance; attracting and retaining the best people in the industry; achieving operating excellence through the "Kinross Way"; and delivering future value through profitable growth opportunities.
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, 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 include, without limitation, possible events, statements with respect to possible events, the future price of gold and silver, the estimation of mineral reserves and resources, the realization of mineral reserve and resource estimates, the timing and amount of estimated future production, costs of production, expected capital expenditures, costs and timing of the development of 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 "plans", "proposes", "expects" or "does not expect", "is expected", "budget", "scheduled", "envision"; "estimates", "forecasts", "guidance"; "targets", "models", "intends", "anticipates", or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "should", "might", or "will be taken", "occur" or "be achieved" and similar 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 most recently filed 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, expansion and acquisitions at Paracatu (including, without limitation, land acquisitions for and permitting and construction of the new tailings facility) being consistent with our current expectations; (3) development of and production from the Phase 7 pit expansion and heap leach project at Fort Knox continuing on a basis consistent with Kinross' current expectations; (4) the viability, permitting and development of the Fruta del Norte deposit being consistent with Kinross' current expectations;
(5) political 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 implementation of Ecuador's new mining law and related regulations and policies, and negotiation of an exploitation contract with the government, being consistent with Kinross' current expectations; (6) permitting, construction, development and production at Cerro Casale being consistent with the new feasibility study prepared and approved by the joint venture and the Company's current expectations; (7) the viability, permitting and development of the Lobo-Marte project, including, without limitation, the metallurgy and processing of its ore, being consistent with our current expectations; (8) 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; (9) certain price assumptions for gold and silver; (10) prices for natural gas, fuel oil, electricity and other key supplies being approximately consistent with current levels; (11) 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; (12) the accuracy of the current mineral reserve and mineral resource estimates of the Company and any entity in which it now or hereafter directly or indirectly holds an investment; (13) labour and materials costs increasing on a basis consistent with Kinross' current expectations; and (14) the development of the Dvoinoye and Vodorazdelnaya deposits being consistent with Kinross' expectations;
(15) the viability of the Tasiast and Chirano mines, and the development and expansion of the Tasiast and Chirano mines on a basis consistent with Kinross' 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: fluctuations in the currency markets; fluctuations in the spot and forward price of gold or certain other commodities (such as diesel fuel and electricity); changes in interest rates or gold or silver lease rates that could impact the mark-to-market value of outstanding derivative instruments and ongoing payments/receipts under any interest rate swaps and variable rate debt 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, controls, policies and regulations, the security of personnel and assets, and 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 investment, do business or may carry on business in the future; business opportunities that may be presented to, or pursued by, us; our ability to successfully integrate acquisitions; operating or technical difficulties in connection with mining or development activities; employee relations; the speculative nature of gold exploration and development, including 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. 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. 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 $7 impact in cost of sales per ounce.(8)
A $10 change in the price of oil could result in an approximate $3 impact on 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 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.
(8) 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.
Reconciliation of non-GAAP financial measures
The Company has included certain non-GAAP financial measures in this document. The Company believes that these measures, together with measures determined in accordance with GAAP, 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 GAAP. These measures are not necessarily standard and therefore may not be comparable to other issuers.
Adjusted net earnings 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, such as the impact of foreign exchange gains and losses, reassessment of prior year taxes and non-hedge derivative gains and losses. Management believes that these measures, which are also used internally, provide investors with the ability to better evaluate underlying performance particularly since the excluded items are typically not included in public guidance. The following table provides a reconciliation of consolidated net earnings to adjusted net earnings for the periods presented:
----------------------------------------------------------------------------
GAAP to Adjusted Earnings Reconciliation
-------------------------------------------------------
(in US$ millions) Three months ended Year ended
December 31 December 31
-------------------------------------------------------
2010 2009 2010 2009
-------------------------------------------------------
Net earnings - GAAP $ 210.3 $ 235.6 $ 771.6 $ 309.9
-------------------------------------------------------
Adjusting items:
Foreign exchange
losses 1.0 4.1 12.7 91.0
Non-hedged
derivatives losses
(gains) - net of
tax 4.5 (2.9) 19.9 (2.9)
Gains on sale of
assets and
investments - net
of tax (73.0) (13.2) (328.5) (12.9)
Litigation reserve
adjustment - - - (18.5)
Asset Retirement
Obligation (6.3) (2.7) (6.3) (2.7)
Change in future
income tax due to
the change in Chile
and Ecuador's
corporate income
tax rate (24.3) - (26.6) -
Brazilian tax
settlement - (53.0) - (53.0)
Inventory fair value
adjustment - net of
tax 5.9 - 9.4 -
Taxes on
repatriation of
certain foreign
earnings 20.0 - 20.0 -
Taxes in respect of
prior years 6.6 (19.3) 6.6 (6.0)
-------------------------------------------------------
(65.6) (87.0) (292.8) (5.0)
-------------------------------------------------------
Net earnings -
Adjusted $ 144.7 $ 148.6 $ 478.8 $ 304.9
-------------------------------------------------------
Weighted average
number of common
shares outstanding -
Basic 1,132.2 695.9 824.5 691.5
-------------------------------------------------------
Net earnings loss per
share - Adjusted $ 0.13 $ 0.21 $ 0.58 $ 0.44
-------------------------------------------------------
-------------------------------------------------------
----------------------------------------------------------------------------
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. Management believes that, by excluding these items from operating cash flow, this non-GAAP measure provides investors with the ability to better evaluate the cash flow performance of the Company.
The following table provides a reconciliation of adjusted cash flow from operations:
----------------------------------------------------------------------------
GAAP to Adjusted Operating Cash Flow
-------------------------------------------------------
(in US$ millions) Three months ended Year ended
December 31 December 31
-------------------------------------------------------
2010 2009 2010 2009
-------------------------------------------------------
Cash flow provided
from operating
activities - GAAP $ 268.3 $ 306.5 $ 968.4 $ 785.6
-------------------------------------------------------
Adjusting items:
Brazilian tax
settlement - 71.0 - 71.0
Working capital
changes:
Accounts receivable
and other assets 1.4 (50.1) 82.9 14.9
Inventories 82.7 39.9 98.5 115.1
Accounts payable
and other
liabilities (19.7) (75.1) (58.6) (49.4)
-------------------------------------------------------
64.4 (14.3) 122.8 151.6
-------------------------------------------------------
Adjusted operating
cash flow $ 332.7 $ 292.2 $ 1,091.2 $ 937.2
-------------------------------------------------------
-------------------------------------------------------
Weighted average
number of common
shares outstanding -
Basic 1,132.2 695.9 824.5 691.5
-------------------------------------------------------
Adjusted operating
cash flow per share $ 0.29 $ 0.42 $ 1.32 $ 1.36
-------------------------------------------------------
----------------------------------------------------------------------------
Attributable 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 cost of sales, 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, which is also used internally, provides investors with the ability to better evaluate Kinross' 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 cost of sales per ounce sold on a by-product basis for the periods presented:
----------------------------------------------------------------------------
Attributable Cost of Sales Per Ounce Sold on a By-
Product Basis
-------------------------------------------------------
(in US$ millions) Three months ended Year ended
December 31 December 31
-------------------------------------------------------
2010 2009 2010 2009
-------------------------------------------------------
Cost of sales $ 374.3 $ 271.0 $ 1,255.4 $ 1,047.1
Less: portion
attributable to
Kupol non-
controlling interest (13.1) (14.9) (60.6) (63.5)
Less: portion
attributable to
Chirano non-
controlling interest (4.2) - (4.8) -
Less: attributable
silver sales (62.9) (47.7) (179.8) (180.0)
-------------------------------------------------------
Attributable cost of
sales net of silver
by-product revenue $ 294.1 $ 208.4 $ 1,010.2 $ 803.6
-------------------------------------------------------
Gold ounces sold 637,012 587,345 2,352,044 2,277,721
Less: portion
attributable to
Kupol non-
controlling interest (33,492) (42,598) (158,407) (205,342)
Less: portion
attributable to
Chirano non-
controlling interest (7,859) - (8,504) -
-------------------------------------------------------
Attributable gold
ounces sold 595,660 544,747 2,185,132 2,072,379
-------------------------------------------------------
-------------------------------------------------------
Attributable cost of
sales per ounce sold
on a by-product
basis $ 494 $ 383 $ 462 $ 388
-------------------------------------------------------
-------------------------------------------------------
----------------------------------------------------------------------------
Review of Operations
----------------------------------------------------------------------------
Three months ended December 31,
Gold equivalent ounces
----------------------------------------------------
Produced Sold
----------------------------------------------------
2010 2009 2010 2009
----------------------------------------------------
Fort Knox 85,139 86,614 85,848 89,244
Round Mountain 43,521 53,043 43,631 52,564
Kettle River - Buckhorn 53,255 62,363 49,842 62,065
----------------------------------------------------
US Total 181,915 202,020 179,321 203,873
Kupol (100%) 199,338 219,612 163,909 200,234
----------------------------------------------------
Russia Total 199,338 219,612 163,909 200,234
Paracatu 117,567 108,421 112,523 98,126
Crixas 17,979 22,030 19,078 21,686
----------------------------------------------------
Brazil Total 135,546 130,451 131,601 119,812
La Coipa 60,020 56,785 59,528 48,979
Maricunga 32,979 59,893 30,825 63,703
----------------------------------------------------
Chile Total 92,999 116,678 90,353 112,682
Tasiast (1) 47,758 - 52,336 -
Chirano (100%) (1) 76,570 - 78,835 -
----------------------------------------------------
Africa Total 124,328 - 131,171 -
----------------------------------------------------
Operations Total 734,126 668,761 696,355 636,601
Less Kupol non-
controlling interest
(25%) (49,834) (54,903) (40,977) (50,058)
Less Chirano non-
controlling interest
(10%) (1) (7,657) - (7,884) -
----------------------------------------------------
Attributable 676,635 613,858 647,494 586,543
----------------------------------------------------
Cost of sales ($millions) Cost of sales/oz
----------------------------------------------------
2010 2009 2010 2009
----------------------------------------------------
Fort Knox $ 47.0 $ 40.2 $ 547 $ 450
Round Mountain 34.8 25.6 798 487
Kettle River - Buckhorn 18.1 16.5 363 266
----------------------------------------------------
US Total 99.9 82.3 557 404
Kupol (100%) 51.3 58.2 313 291
----------------------------------------------------
Russia Total 51.3 58.2 313 291
Paracatu 63.0 63.6 560 648
Crixas 9.8 8.0 514 369
----------------------------------------------------
Brazil Total 72.8 71.6 553 598
La Coipa 36.1 26.5 606 541
Maricunga 31.0 32.4 1,006 509
----------------------------------------------------
Chile Total 67.1 58.9 743 523
Tasiast (1) 37.9 - 724 -
Chirano (100%) (1) 45.3 - 575 -
----------------------------------------------------
Africa Total 83.2 - 634 -
----------------------------------------------------
Operations Total $ 374.3 $ 271.0 $ 537 $ 426
Less Kupol non-
controlling interest
(25%) (13.1) (14.9)
Less Chirano non-
controlling interest
(10%) (1) (4.2) -
----------------------------------------------------
Attributable $ 357.0 $ 256.1 $ 551 $ 437
----------------------------------------------------
----------------------------------------------------------------------------
(1) On September 17, 2010, Kinross acquired all of the outstanding common
shares of Red Back Mining Inc. that it did not already own. As this
purchase is a business acquisition, with Kinross as the acquirer, results of
operations of Red Back, including those of the Taiast and Chirano mines,
have been consolidated for the period from September 17, 2010 to December
31, 2010. Cost of sales includes $7.4 million and $1.1 million fair value
purchase accounting adjustments for Tasiast and Chirano, respectively.
----------------------------------------------------------------------------
Year ended December 31,
Gold equivalent ounces
----------------------------------------------------
Produced Sold
----------------------------------------------------
2010 2009 2010 2009
----------------------------------------------------
Fort Knox 349,729 263,260 349,460 263,046
Round Mountain 184,554 213,916 184,503 215,469
Kettle River - Buckhorn 198,810 173,555 196,282 182,472
----------------------------------------------------
US Total 733,093 650,731 730,245 660,987
Kupol (100%) 738,677 925,507 740,566 943,548
----------------------------------------------------
Russia Total 738,677 925,507 740,566 943,548
Paracatu 482,397 354,396 487,877 347,664
Crixas 74,777 74,654 77,156 75,173
----------------------------------------------------
Brazil Total 557,174 429,050 565,033 422,837
La Coipa 196,330 231,169 203,626 222,664
Maricunga 156,590 233,585 155,320 237,040
----------------------------------------------------
Chile Total 352,920 464,754 358,946 459,704
Tasiast (1) 56,611 - 57,097 -
Chirano (100%) (1) 89,220 - 85,288 -
----------------------------------------------------
Africa Total 145,831 - 142,385 -
----------------------------------------------------
Operations Total 2,527,695 2,470,042 2,537,175 2,487,076
Less Kupol non-
controlling interest
(25%) (184,669) (231,377) (185,141) (235,887)
Less Chirano non-
controlling interest
(10%) (1) (8,922) - (8,529) -
----------------------------------------------------
Attributable 2,334,104 2,238,665 2,343,505 2,251,189
----------------------------------------------------
----------------------------------------------------------------------------
Cost of sales ($millions) Cost of sales/oz
----------------------------------------------------
2010 2009 2010 2009
----------------------------------------------------
Fort Knox $ 192.1 $ 143.7 $ 550 $ 546
Round Mountain 121.3 111.4 657 517
Kettle River - Buckhorn 64.7 53.6 330 294
----------------------------------------------------
US Total 378.1 308.7 518 467
Kupol (100%) 236.2 245.5 319 260
----------------------------------------------------
Russia Total 236.2 245.5 319 260
Paracatu 261.0 240.9 535 693
Crixas 37.5 31.0 486 412
----------------------------------------------------
Brazil Total 298.5 271.9 528 643
La Coipa 132.0 97.6 648 438
Maricunga 115.9 123.4 746 521
----------------------------------------------------
Chile Total 247.9 221.0 691 481
Tasiast (1) 43.1 - 755 -
Chirano (100%) (1) 51.6 - 605 -
----------------------------------------------------
Africa Total 94.7 - 665 -
----------------------------------------------------
Operations Total $ 1,255.4 $ 1,047.1 $ 495 $ 421
Less Kupol non-
controlling interest
(25%) (60.6) (63.5)
Less Chirano non-
controlling interest
(10%) (1) (4.8) -
----------------------------------------------------
Attributable $ 1,190.0 $ 983.6 $ 508 $ 437
----------------------------------------------------
----------------------------------------------------------------------------
(1) On September 17, 2010, Kinross acquired all of the outstanding common
shares of Red Back Mining Inc. that it did not already own. As this
purchase is a business acquisition, with Kinross as the acquirer, results of
operations of Red Back, including those of the Taiast and Chirano mines,
have been consolidated for the period from September 17, 2010 to December
31, 2010. Cost of sales includes $9.3 million and $3.5 million fair value
purchase accounting adjustments for Tasiast and Chirano, respectively.
----------------------------------------------------------------------------
Consolidated balance sheets
(expressed in millions of United States dollars, except share amounts)
----------------------------------------------------------------------------
As at
December 31, December 31,
2010 2009
Assets
Current assets
Cash, cash equivalents and short-term
investments $ 1,466.6 $ 632.4
Restricted cash 2.1 24.3
Accounts receivable and other assets 329.4 135.5
Inventories 737.0 554.4
Unrealized fair value of derivative
assets 133.4 44.3
-----------------------------------
2,668.5 1,390.9
Property, plant and equipment 6,911.5 4,989.9
Goodwill 5,980.0 1,179.9
Long-term investments 629.9 292.2
Unrealized fair value of derivative
assets 2.6 1.9
Deferred charges and other long-term
assets 204.6 158.4
-----------------------------------
$ 16,397.1 $ 8,013.2
-----------------------------------
Liabilities
Current liabilities
Accounts payable and accrued
liabilities $ 496.6 $ 312.9
Current portion of long-term debt 48.4 177.0
Current portion of reclamation and
remediation obligations 23.1 17.1
Current portion of unrealized fair
value of derivative liabilities 359.3 131.0
-----------------------------------
927.4 638.0
Long-term debt 454.6 515.2
Other long-term liabilities 532.4 543.0
Future income and mining taxes 883.8 624.6
-----------------------------------
2,798.2 2,320.8
-----------------------------------
Non-controlling interest 198.4 132.9
-----------------------------------
Common shareholders' equity
Common share capital and common share
purchase warrants $ 13,468.6 $ 6,448.1
Contributed surplus 231.7 169.6
Accumulated deficit (137.1) (838.1)
Accumulated other comprehensive loss (162.7) (220.1)
-----------------------------------
13,400.5 5,559.5
Contingencies
Subsequent events
-----------------------------------
$ 16,397.1 $ 8,013.2
-----------------------------------
Common shares
Authorized Unlimited Unlimited
Issued and outstanding 1,133,294,930 696,027,270
----------------------------------------------------------------------------
Consolidated statements of operations
(expressed in millions of United States dollars, except per share and share
amounts)
----------------------------------------------------------------------------
Year ended December 31,
-----------------------------------------
2010 2009 2008
-----------------------------------------
Revenue
Metal sales $ 3,010.1 $ 2,412.1 $ 1,617.0
Operating costs and expenses
Cost of sales (excludes accretion,
depreciation, depletion and
amortization) 1,255.4 1,047.1 768.8
Accretion and reclamation expense 29.0 19.3 24.7
Depreciation, depletion and
amortization 517.5 447.3 273.8
-----------------------------------------
1,208.2 898.4 549.7
Other operating costs 53.8 62.3 7.4
Exploration and business
development 142.7 72.5 59.0
General and administrative 144.5 117.7 100.8
Impairment charges: goodwill - - 994.1
-----------------------------------------
Operating earnings (loss) 867.2 645.9 (611.6)
Other income (expense) - net 293.0 (74.3) (42.7)
-----------------------------------------
Earnings (loss) before taxes and
other items 1,160.2 571.6 (654.3)
Income and mining taxes expense -
net (275.4) (150.8) (101.1)
Equity in losses of associated
companies (3.9) (8.6) (8.7)
Non-controlling interest (109.3) (102.3) (42.3)
Dividends on convertible preferred
shares of subsidiary - - (0.8)
-----------------------------------------
Net earnings (loss) $ 771.6 $ 309.9 $ (807.2)
-----------------------------------------
-----------------------------------------
Earnings (loss) per share
Basic $ 0.94 $ 0.45 $ (1.28)
Diluted $ 0.93 $ 0.44 $ (1.28)
Weighted average number of common
shares outstanding (millions)
Basic 824.5 691.5 628.6
Diluted 829.2 696.5 628.6
----------------------------------------------------------------------------
Consolidated statements of cash flows
(expressed in millions of United States dollars)
----------------------------------------------------------------------------
Year ended December 31,
-----------------------------------------
2010 2009 2008
-----------------------------------------
Net inflow (outflow) of cash
related to the following
activities:
Operating:
Net earnings (loss) $ 771.6 $ 309.9 $ (807.2)
Adjustments to reconcile net
earnings (loss) to net cash
provided from operating
activities:
Depreciation, depletion and
amortization 517.5 447.3 273.8
Accretion and reclamation expenses 29.0 19.3 24.7
Accretion of convertible debt and
deferred financing costs 18.4 17.1 15.4
Impairment charges:
Goodwill - - 994.1
Investments and other assets - - 83.9
Gain on disposal of assets and
investments - net (348.4) (16.2) (30.2)
Equity in losses of associated
companies 3.9 8.6 8.7
Non-hedge derivative losses - net 20.1 (2.9) (41.6)
Future income and mining taxes (79.2) (27.9) 27.9
Non-controlling interest 109.3 102.3 42.3
Stock-based compensation expense 33.0 29.0 21.6
Foreign exchange losses and Other 16.0 50.7 21.2
Brazilian tax settlement - (71.0) -
Changes in operating assets and
liabilities:
Accounts receivable and other
assets (82.9) (14.9) (33.7)
Inventories (98.5) (115.1) (145.4)
Accounts payable and other
liabilities 58.6 49.4 (11.9)
-----------------------------------------
Cash flow provided from operating
activities 968.4 785.6 443.6
-----------------------------------------
Investing:
Additions to property, plant and
equipment (563.7) (481.2) (714.7)
Asset purchases - net of cash
acquired 504.0 (41.7) 21.2
Net proceeds from the sale of long-
term investments and other assets 846.4 6.7 37.3
Net acquisitions of long-term
investments and other assets (617.8) (178.1) (168.9)
Net proceeds from the sale of
property, plant and equipment 3.1 0.9 -
Disposals (additions) to short-term
investments 35.0 (0.5) (24.6)
Decrease (increase) in restricted
cash 22.2 (11.9) (10.0)
Other 2.6 (45.7) 3.5
-----------------------------------------
Cash flow provided from (used in)
investing activities 231.8 (751.5) (856.2)
-----------------------------------------
Financing:
Issuance of common shares - 396.4
Issuance of common shares on
exercise of options and warrants 15.9 25.1 31.7
Proceeds from issuance of debt 127.3 77.7 123.2
Proceeds from issuance of
convertible debentures - - 449.9
Debt issuance costs - - (1.6)
Repayment of debt (334.9) (325.9) (123.5)
Dividends paid to common
shareholders (70.6) (62.4) (51.5)
Dividends paid to non-controlling
shareholder (47.7) (25.8) -
Settlement of derivative
instruments (27.3) (19.4) (23.2)
Other - (2.4) (29.3)
-----------------------------------------
Cash flow provided from (used in)
financing activities (337.3) 63.3 375.7
-----------------------------------------
Effect of exchange rate changes on
cash 6.3 9.4 (23.8)
-----------------------------------------
Increase (decrease) in cash and
cash equivalents 869.2 106.8 (60.7)
Cash and cash equivalents,
beginning of year 597.4 490.6 551.3
-----------------------------------------
Cash and cash equivalents, end of
year $ 1,466.6 $ 597.4 $ 490.6
Short-term investments $ - $ 35.0 $ 34.5
-----------------------------------------
Cash, cash equivalents and short-
term investments $ 1,466.6 $ 632.4 $ 525.1
----------------------------------------------------------------------------
Operating Summary
----------------------------------------------------------------------------
Ore
Processed Recovery Gold Eq
Mine Period Ownership (1) Grade (2) Production
----------------------------------------------------------------------------
('000
(%) tonnes) (g/t) (%) (ounces)
----------------------------------------------------------------------------
Q4 2010 100 6,350 0.72 77% 85,139
----------------------------------------------------------
Q3 2010 100 7,655 0.96 82% 108,680
Fort Q2 2010 100 7,761 0.76 80% 86,270
Knox(3) Q1 2010 100 3,969 0.71 80% 69,640
Q4 2009 100 6,816 0.65 83% 86,614
---------------------------------------------------------------------
Q4 2010 50 7,830 0.46 nm 43,521
----------------------------------------------------------
U.S.A Round Q3 2010 50 7,196 0.50 nm 48,477
Mountain Q2 2010 50 7,390 0.50 nm 46,927
Q1 2010 50 7,932 0.53 nm 45,629
Q4 2009 50 6,748 0.65 nm 53,043
---------------------------------------------------------------------
Q4 2010 100 131 14.80 87% 53,255
----------------------------------------------------------
Q3 2010 100 114 13.39 87% 46,687
Kettle Q2 2010 100 99 18.20 91% 50,463
River Q1 2010 100 92 19.58 91% 48,405
Q4 2009 100 97 20.73 92% 62,363
----------------------------------------------------------------------------
Q4 2010 75 321 16.94 95% 199,338
----------------------------------------------------------
Q3 2010 75 269 16.55 94% 159,393
Kupol - Q2 2010 75 290 18.55 94% 187,025
100% Q1 2010 75 283 20.20 95% 192,921
Russia Q4 2009 75 279 21.50 93% 219,612
---------------------------------------------------------------------
Q4 2010 75 321 16.94 95% 149,504
----------------------------------------------------------
Q3 2010 75 269 16.55 94% 119,545
Kupol(5) Q2 2010 75 290 18.55 94% 140,268
(6) Q1 2010 75 283 20.20 95% 144,691
Q4 2009 75 279 21.50 93% 164,709
----------------------------------------------------------------------------
Q4 2010 100 11,225 0.43 76% 117,567
----------------------------------------------------------
Q3 2010 100 11,144 0.45 79% 129,257
Paracatu Q2 2010 100 10,179 0.45 79% 118,101
Q1 2010 100 10,110 0.46 76% 117,472
Brazil Q4 2009 100 10,401 0.44 74% 108,421
---------------------------------------------------------------------
Q4 2010 50 272 4.38 94% 17,979
----------------------------------------------------------
Q3 2010 50 296 4.51 93% 19,866
Crixas Q2 2010 50 288 4.26 92% 18,076
Q1 2010 50 276 4.44 95% 18,856
Q4 2009 50 254 5.74 90% 22,030
----------------------------------------------------------------------------
Q4 2010 100 1,092 1.18 80% 60,020
----------------------------------------------------------
Q3 2010 100 1,124 1.29 79% 53,471
La Coipa Q2 2010 100 998 1.00 80% 35,175
(4) Q1 2010 100 1,231 1.08 78% 47,664
Chile Q4 2009 100 1,262 1.17 80% 56,785
---------------------------------------------------------------------
Q4 2010 100 4,243 0.77 nm 32,979
----------------------------------------------------------
Q3 2010 100 3,302 0.71 nm 28,844
Maricunga Q2 2010 100 3,118 0.77 nm 42,990
Q1 2010 100 3,604 0.81 nm 51,777
Q4 2009 100 4,068 0.76 nm 59,893
----------------------------------------------------------------------------
Tasiast Q4 2010 100 1,942 2.32 87% 47,758
----------------------------------------------------------
Q3 2010 100 117 2.51 94% 8,853
---------------------------------------------------------------------
Africa Chirano - Q4 2010 90 930 2.72 91% 76,570
100% (7) ----------------------------------------------------------
Q3 2010 90 212 2.07 90% 12,650
---------------------------------------------------------------------
Chirano Q4 2010 90 930 2.72 91% 68,913
(7) ----------------------------------------------------------
Q3 2010 90 212 2.07 90% 11,385
----------------------------------------------------------------------------
Gold Eq Cost of
Mine Period Sales Sales COS/oz Cap Ex DD&A
----------------------------------------------------------------------------
($ ($ ($
(ounces) millions) ($/ounce) millions) millions)
----------------------------------------------------------------------------
Q4 2010 85,848 47.0 547 24.9 14.2
----------------------------------------------------------
Fort Q3 2010 112,797 56.5 501 24.5 15.3
Knox(3) Q2 2010 80,999 52.0 642 16.8 8.1
Q1 2010 69,816 36.6 524 21.7 15.9
Q4 2009 89,244 40.2 450 36.7 14.3
---------------------------------------------------------------------
Q4 2010 43,631 34.8 798 9.3 4.8
----------------------------------------------------------
U.S.A Round Q3 2010 49,892 32.3 647 7.3 5.6
Mountain Q2 2010 45,448 25.9 570 9.1 3.9
Q1 2010 45,532 28.3 622 7.0 4.7
Q4 2009 52,564 25.6 487 7.2 (3.9)
---------------------------------------------------------------------
Q4 2010 49,842 18.1 363 2.9 23.8
----------------------------------------------------------
Q3 2010 46,996 17.3 368 1.5 22.7
Kettle Q2 2010 53,364 16.4 307 2.8 23.9
River Q1 2010 46,080 12.9 280 2.0 21.1
Q4 2009 62,065 16.5 266 6.1 23.0
----------------------------------------------------------------------------
Q4 2010 163,909 51.3 313 7.9 34.7
----------------------------------------------------------
Kupol - Q3 2010 164,392 57.0 347 12.9 35.2
100% Q2 2010 205,670 63.1 307 2.9 42.9
Q1 2010 206,595 64.8 314 8.4 43.8
Russia Q4 2009 200,234 58.2 291 10.5 41.9
---------------------------------------------------------------------
Q4 2010 122,933 37.7 307 6.1 26.0
----------------------------------------------------------
Q3 2010 123,294 42.2 342 9.7 26.4
Kupol(5) Q2 2010 154,252 47.0 305 2.0 35.7
(6) Q1 2010 154,946 48.7 314 6.3 36.4
Q4 2009 150,176 43.3 288 7.9 38.8
----------------------------------------------------------------------------
Q4 2010 112,523 63.0 560 62.8 11.9
----------------------------------------------------------
Q3 2010 134,702 68.0 505 42.2 18.4
Paracatu Q2 2010 119,531 62.7 525 47.6 16.8
Q1 2010 121,121 67.3 556 8.8 15.8
Brazil Q4 2009 98,126 63.6 648 39.3 9.5
---------------------------------------------------------------------
Q4 2010 19,078 9.8 514 7.9 4.8
----------------------------------------------------------
Q3 2010 20,743 10.0 482 5.9 5.0
Crixas Q2 2010 16,751 8.8 525 4.6 3.4
Q1 2010 20,584 8.9 432 6.2 3.9
Q4 2009 21,686 8.0 369 4.8 2.9
----------------------------------------------------------------------------
Q4 2010 59,528 36.1 606 9.5 11.4
----------------------------------------------------------
Q3 2010 46,747 34.1 729 4.9 7.9
La Coipa Q2 2010 38,663 31.8 822 5.6 8.6
(4) Q1 2010 58,688 30.0 511 6.5 17.9
Chile Q4 2009 48,979 26.5 541 6.6 14.3
---------------------------------------------------------------------
Q4 2010 30,825 31.0 1,006 29.3 3.0
----------------------------------------------------------
Q3 2010 31,215 27.1 868 17.7 3.4
Maricunga Q2 2010 42,950 29.2 680 12.5 3.9
Q1 2010 50,330 28.6 568 12.5 4.2
Q4 2009 63,703 32.4 509 13.6 6.2
----------------------------------------------------------------------------
Tasiast Q4 2010 52,336 37.9 724 50.4 19.9
----------------------------------------------------------
Q3 2010 4,761 5.2 1,098 3.4 0.5
---------------------------------------------------------------------
Africa Chirano - Q4 2010 78,835 45.3 575 10.0 29.4
100% (7) ----------------------------------------------------------
Q3 2010 6,453 6.3 970 0.1 1.7
---------------------------------------------------------------------
Chirano Q4 2010 70,952 41.1 579 9.1 26.5
(7) ----------------------------------------------------------
Q3 2010 5,808 5.7 970 - 1.5
----------------------------------------------------------------------------
(1) Ore processed is to 100%, production and costs are to Kinross' account.
(2) Due to the nature of heap leach operations at Round Mountain and
Maricunga, recovery rates cannot be accurately measured on a quarterly
basis. Fort Knox recovery represents mill recovery only and excludes
the heap leach.
(3) Includes 3,006,000 tonnes placed on the heap leach pad during the
fourth quarter of 2010 and 12,528,000 for the year ended December 31,
2010. Grade and recovery represent mill processing only. Ore placed on
the heap leach pad had an average grade of 0.23 grams per tonne for the
fourth quarter of 2010 and 0.28 grams per tonne for the year.
(4) La Coipa silver grade and recovery were as follows: Q4 (2010) 77.70
g/t, 56.6% ; Q3 (2010) 48.84g/t, 57%; Q2 (2010) 37.56g/t, 59%; Q1
(2010) 38.15g/t, 62%; Q4 (2009) 35.80g/t, 66%;
(5) Kupol silver grade and recovery were as follows: Q4 (2010) 213.90 g/t,
84% Q3 (2010) 202.27g/t, 85%; Q2 (2010) 209.73g/t, 83%; Q1 (2010)
241.99g/t, 83%; Q4 (2009) 247.21g/t, 83%
(6) Includes Kinross' share of Kupol at 75%.
(7) Includes Kinross' share of Chirano at 90%.
Proven and Probable Mineral Reserves
----------------------------------------------------------------------------
MINERAL RESERVE AND MINERAL RESOURCE STATEMENT GOLD
PROVEN AND PROBABLE MINERAL RESERVES (1,3,5,6,7)
Kinross Gold Corporation's Share at December 31, 2010
----------------------------------------------------------------------------
-------------------------------------------------------------
Proven
-------------------------
Kinross
Property Location Interest Tonnes Grade Ounces
-------------------------------------
(%) (kt) (g/t) (koz)
-------------------------------------------------------------
NORTH
AMERICA
-------------------------------------------------------------
Fort Knox
Area USA 100.0% 146,271 0.38 1,799
-------------------------------------------------------------
Kettle
River 13 USA 100.0% - - -
-------------------------------------------------------------
Round
Mountain
Area USA 50.0% 24,412 0.72 563
-------------------------------------------------------------
SUBTOTAL 170,683 0.43 2,362
-------------------------------------------------------------
SOUTH
AMERICA
-------------------------------------------------------------
Cerro
Casale 10 Chile 25.0% 57,888 0.64 1,192
-------------------------------------------------------------
Crixas 9 Brazil 50.0% 1,964 3.42 216
-------------------------------------------------------------
Fruta del
Norte 5 Ecuador 100.0% - - -
-------------------------------------------------------------
La Coipa 11 Chile 100.0% 16,863 1.36 739
-------------------------------------------------------------
Lobo
Marte 5 Chile 100.0% - - -
-------------------------------------------------------------
Maricunga
Area Chile 100.0% 133,511 0.75 3,238
-------------------------------------------------------------
Paracatu Brazil 100.0% 724,520 0.38 8,965
-------------------------------------------------------------
SUBTOTAL 934,746 0.48 14,350
-------------------------------------------------------------
AFRICA
-------------------------------------------------------------
Chirano Ghana 90.0% 14,501 1.40 651
-------------------------------------------------------------
Tasiast Mauritania 100.0% 68,816 1.65 3,661
-------------------------------------------------------------
SUBTOTAL 83,317 1.61 4,312
-------------------------------------------------------------
RUSSIA
-------------------------------------------------------------
Kupol Russia 75.0% 1,375 13.96 617
-------------------------------------------------------------
SUBTOTAL 1,375 13.96 617
-------------------------------------------------------------
TOTAL
GOLD 1,190,121 0.57 21,641
-------------------------------------------------------------
-----------------------------------------------------------
Probable
------------------------
Kinross
Property Location Interest Tonnes Grade Ounces
-----------------------------------
(%) (kt) (g/t) (koz)
-----------------------------------------------------------
NORTH
AMERICA
-----------------------------------------------------------
Fort Knox
Area USA 100.0% 107,163 0.52 1,780
-----------------------------------------------------------
Kettle
River 13 USA 100.0% 1,545 11.30 562
-----------------------------------------------------------
Round
Mountain
Area USA 50.0% 41,829 0.56 756
-----------------------------------------------------------
SUBTOTAL 150,537 0.64 3,098
-----------------------------------------------------------
SOUTH
AMERICA
-----------------------------------------------------------
Cerro
Casale 10 Chile 25.0% 245,334 0.58 4,601
-----------------------------------------------------------
Crixas 9 Brazil 50.0% 1,319 4.15 176
-----------------------------------------------------------
Fruta del
Norte 5 Ecuador 100.0% 26,117 8.07 6,775
-----------------------------------------------------------
La Coipa 11 Chile 100.0% 4,865 1.27 199
-----------------------------------------------------------
Lobo
Marte 5 Chile 100.0% 164,230 1.14 6,028
-----------------------------------------------------------
Maricunga
Area Chile 100.0% 136,290 0.65 2,851
-----------------------------------------------------------
Paracatu Brazil 100.0% 736,541 0.40 9,520
-----------------------------------------------------------
SUBTOTAL 1,314,696 0.71 30,150
-----------------------------------------------------------
AFRICA
-----------------------------------------------------------
Chirano Ghana 90.0% 16,060 3.45 1,783
-----------------------------------------------------------
Tasiast Mauritania 100.0% 60,100 2.02 3,902
-----------------------------------------------------------
SUBTOTAL 76,160 2.32 5,685
-----------------------------------------------------------
RUSSIA
-----------------------------------------------------------
Kupol Russia 75.0% 5,871 9.88 1,865
-----------------------------------------------------------
SUBTOTAL 5,871 9.88 1,865
-----------------------------------------------------------
TOTAL
GOLD 1,547,264 0.82 40,798
-----------------------------------------------------------
------------------------------------------------------------
Proven and Probable
-------------------------
Kinross
Property Location Interest Tonnes Grade Ounces
------------------------------------
(%) (kt) (g/t) (koz)
------------------------------------------------------------
NORTH
AMERICA
------------------------------------------------------------
Fort Knox
Area USA 100.0% 253,434 0.44 3,579
------------------------------------------------------------
Kettle
River 13 USA 100.0% 1,545 11.30 562
------------------------------------------------------------
Round
Mountain
Area USA 50.0% 66,241 0.62 1,319
------------------------------------------------------------
SUBTOTAL 321,220 0.53 5,460
------------------------------------------------------------
SOUTH
AMERICA
------------------------------------------------------------
Cerro
Casale 10 Chile 25.0% 303,222 0.59 5,793
------------------------------------------------------------
Crixas 9 Brazil 50.0% 3,283 3.71 392
------------------------------------------------------------
Fruta del
Norte 5 Ecuador 100.0% 26,117 8.07 6,775
------------------------------------------------------------
La Coipa 11 Chile 100.0% 21,728 1.34 938
------------------------------------------------------------
Lobo
Marte 5 Chile 100.0% 164,230 1.14 6,028
------------------------------------------------------------
Maricunga
Area Chile 100.0% 269,801 0.70 6,089
------------------------------------------------------------
Paracatu Brazil 100.0% 1,461,061 0.39 18,485
------------------------------------------------------------
SUBTOTAL 2,249,442 0.62 44,500
------------------------------------------------------------
AFRICA
------------------------------------------------------------
Chirano Ghana 90.0% 30,561 2.48 2,434
------------------------------------------------------------
Tasiast Mauritania 100.0% 128,916 1.82 7,563
------------------------------------------------------------
SUBTOTAL 159,477 1.95 9,997
------------------------------------------------------------
RUSSIA
------------------------------------------------------------
Kupol Russia 75.0% 7,246 10.66 2,482
------------------------------------------------------------
SUBTOTAL 7,246 10.66 2,482
------------------------------------------------------------
TOTAL
GOLD 2,737,385 0.71 62,439
------------------------------------------------------------
----------------------------------------------------------------------------
MINERAL RESERVE AND MINERAL RESOURCE STATEMENT SILVER
PROVEN AND PROBABLE MINERAL RESERVES (1,3,5,6,7)
Kinross Gold Corporation's Share at December 31, 2010
----------------------------------------------------------------------------
------------------------------------------------------------
Proven
----------------------
Kinross
Property Location Interest Tonnes Grade Ounces
----------------------------------
(%) (kt) (g/t) (koz)
------------------------------------------------------------
NORTH
AMERICA
------------------------------------------------------------
Round
Mountain
Area USA 50.0% 104 7.7 26
------------------------------------------------------------
SUBTOTAL 104 7.7 26
------------------------------------------------------------
SOUTH
AMERICA
------------------------------------------------------------
Cerro
Casale 10 Chile 25.0% 57,888 1.9 3,494
------------------------------------------------------------
Fruta del
Norte 5 Ecuador 100.0% - - -
------------------------------------------------------------
La Coipa 11 Chile 100.0% 16,863 51.0 27,668
------------------------------------------------------------
SUBTOTAL 74,751 13.0 31,162
------------------------------------------------------------
RUSSIA
------------------------------------------------------------
Kupol Russia 75.0% 1,375 205.4 9,080
------------------------------------------------------------
SUBTOTAL 1,375 205.4 9,080
------------------------------------------------------------
TOTAL
SILVER 76,230 16.4 40,268
------------------------------------------------------------
-------------------------------------------------------------
Probable
------------------------
Kinross
Property Location Interest Tonnes Grade Ounces
-----------------------------------
(%) (kt) (g/t) (koz)
-------------------------------------------------------------
NORTH
AMERICA
-------------------------------------------------------------
Round
Mountain
Area USA 50.0% 10,917 7.2 2,534
-------------------------------------------------------------
SUBTOTAL 10,917 7.2 2,534
-------------------------------------------------------------
SOUTH
AMERICA
-------------------------------------------------------------
Cerro
Casale 10 Chile 25.0% 245,334 1.4 11,188
-------------------------------------------------------------
Fruta del
Norte 5 Ecuador 100.0% 26,117 10.9 9,141
-------------------------------------------------------------
La Coipa 11 Chile 100.0% 4,865 33.9 5,306
-------------------------------------------------------------
SUBTOTAL 276,316 2.9 25,635
-------------------------------------------------------------
RUSSIA
-------------------------------------------------------------
Kupol Russia 75.0% 5,871 119.1 22,471
-------------------------------------------------------------
SUBTOTAL 5,871 119.1 22,471
-------------------------------------------------------------
TOTAL
SILVER 293,104 5.4 50,640
-------------------------------------------------------------
-----------------------------------------------------------
Proven and Probable
----------------------
Kinross
Property Location Interest Tonnes Grade Ounces
---------------------------------
(%) (kt) (g/t) (koz)
-----------------------------------------------------------
NORTH
AMERICA
-----------------------------------------------------------
Round
Mountain
Area USA 50.0% 11,021 7.2 2,560
-----------------------------------------------------------
SUBTOTAL 11,021 7.2 2,560
-----------------------------------------------------------
SOUTH
AMERICA
-----------------------------------------------------------
Cerro
Casale 10 Chile 25.0% 303,222 1.5 14,682
-----------------------------------------------------------
Fruta del
Norte 5 Ecuador 100.0% 26,117 10.9 9,141
-----------------------------------------------------------
La Coipa 11 Chile 100.0% 21,728 47.2 32,974
-----------------------------------------------------------
SUBTOTAL 351,067 5.0 56,797
-----------------------------------------------------------
RUSSIA
-----------------------------------------------------------
Kupol Russia 75.0% 7,246 135.4 31,551
-----------------------------------------------------------
SUBTOTAL 7,246 135.4 31,551
-----------------------------------------------------------
TOTAL
SILVER 369,334 7.7 90,908
-----------------------------------------------------------
----------------------------------------------------------------------------
MINERAL RESERVE AND MINERAL RESOURCE STATEMENT COPPER
PROVEN AND PROBABLE MINERAL RESERVES (3,5,6,7)
Kinross Gold Corporation's Share at December 31, 2010
----------------------------------------------------------------------------
--------------------------------------------------------------
Proven
--------------------------------------------------------------
Kinross
Property Location Interest Tonnes Grade Pounds
--------------------------------------------------------------
(%) (kt) (%) (Mlb)
--------------------------------------------------------------
SOUTH
AMERICA
--------------------------------------------------------------
Cerro Casale 10 Chile 25.0% 57,888 0.19 241
--------------------------------------------------------------
SUBTOTAL 57,888 0.19 241
--------------------------------------------------------------
TOTAL COPPER 57,888 0.19 241
--------------------------------------------------------------
-------------------------------------------------------------
Probable
-------------------------------------------------------------
Kinross
Property Location Interest Tonnes Grade Pounds
-------------------------------------------------------------
(%) (kt) (%) (Mlb)
-------------------------------------------------------------
SOUTH
AMERICA
-------------------------------------------------------------
Cerro Casale 10 Chile 25.0% 245,334 0.22 1,205
-------------------------------------------------------------
SUBTOTAL 245,334 0.22 1,205
-------------------------------------------------------------
TOTAL COPPER 245,334 0.22 1,205
-------------------------------------------------------------
-------------------------------------------------------------
Proven and Probable
-------------------------------------------------------------
Kinross
Property Location Interest Tonnes Grade Pounds
-------------------------------------------------------------
(%) (kt) (%) (Mlb)
-------------------------------------------------------------
SOUTH
AMERICA
-------------------------------------------------------------
Cerro Casale 10 Chile 25.0% 303,222 0.22 1,446
-------------------------------------------------------------
SUBTOTAL 303,222 0.22 1,446
-------------------------------------------------------------
TOTAL COPPER 303,222 0.22 1,446
-------------------------------------------------------------
Measured and Indicated Mineral Resources (excludes Proven and Probable
Reserves)
----------------------------------------------------------------------------
MINERAL RESERVE AND MINERAL RESOURCE STATEMENT GOLD
MEASURED AND INDICATED MINERAL RESOURCES (EXCLUDES PROVEN AND PROBABLE
MINERAL RESERVES) (2,3,4,6,7,8)
Kinross Gold Corporation's Share at December 31, 2010
----------------------------------------------------------------------------
---------------------------------------------------------------
Measured
-----------------------
Kinross
Property Location Interest Tonnes Grade Ounces
-----------------------------------
(%) (kt) (g/t) (koz)
---------------------------------------------------------------
NORTH
AMERICA
---------------------------------------------------------------
Fort Knox
Area USA 100.0% 14,031 0.43 194
---------------------------------------------------------------
Round
Mountain
Area USA 50.0% 11,784 0.97 366
---------------------------------------------------------------
White Gold
Area 12 Yukon 100.0% - - -
---------------------------------------------------------------
SUBTOTAL 25,815 0.67 560
---------------------------------------------------------------
SOUTH
AMERICA
---------------------------------------------------------------
Cerro
Casale 10 Chile 25.0% 4,428 0.38 55
---------------------------------------------------------------
Crixas 9 Brazil 50.0% 108 4.04 14
---------------------------------------------------------------
Fruta del
Norte Ecuador 100.0% - - -
---------------------------------------------------------------
La Coipa 11 Chile 100.0% 11,040 0.99 351
---------------------------------------------------------------
Lobo Marte Chile 100.0% - - -
---------------------------------------------------------------
Maricunga
Area Chile 100.0% 23,670 0.60 458
---------------------------------------------------------------
Paracatu Brazil 100.0% 57,597 0.28 519
---------------------------------------------------------------
SUBTOTAL 96,843 0.45 1,397
---------------------------------------------------------------
AFRICA
---------------------------------------------------------------
Chirano Ghana 90.0% 1,555 1.59 80
---------------------------------------------------------------
Tasiast Mauritania 100.0% 45,199 0.60 874
---------------------------------------------------------------
SUBTOTAL 46,754 1.59 954
---------------------------------------------------------------
RUSSIA
---------------------------------------------------------------
Dvoinoye Russia 100.0% - - -
---------------------------------------------------------------
SUBTOTAL - - -
---------------------------------------------------------------
TOTAL GOLD 169,412 0.53 2,911
---------------------------------------------------------------
--------------------------------------------------------------
Indicated
-----------------------
Kinross
Property Location Interest Tonnes Grade Ounces
----------------------------------
(%) (kt) (g/t) (koz)
--------------------------------------------------------------
NORTH
AMERICA
--------------------------------------------------------------
Fort Knox
Area USA 100.0% 146,427 0.43 2,020
--------------------------------------------------------------
Round
Mountain
Area USA 50.0% 34,361 0.67 741
--------------------------------------------------------------
White Gold
Area 12 Yukon 100.0% 9,797 3.19 1,005
--------------------------------------------------------------
SUBTOTAL 190,585 0.61 3,766
--------------------------------------------------------------
SOUTH
AMERICA
--------------------------------------------------------------
Cerro
Casale 10 Chile 25.0% 56,004 0.41 737
--------------------------------------------------------------
Crixas 9 Brazil 50.0% 326 3.63 38
--------------------------------------------------------------
Fruta del
Norte Ecuador 100.0% 3,583 5.50 634
--------------------------------------------------------------
La Coipa 11 Chile 100.0% 3,622 1.16 135
--------------------------------------------------------------
Lobo Marte Chile 100.0% 34,052 0.83 908
--------------------------------------------------------------
Maricunga
Area Chile 100.0% 163,941 0.56 2,970
--------------------------------------------------------------
Paracatu Brazil 100.0% 299,209 0.34 3,263
--------------------------------------------------------------
SUBTOTAL 560,737 0.48 8,685
--------------------------------------------------------------
AFRICA
--------------------------------------------------------------
Chirano Ghana 90.0% 2,503 1.38 111
--------------------------------------------------------------
Tasiast Mauritania 100.0% 51,135 0.74 1,214
--------------------------------------------------------------
SUBTOTAL 53,638 1.38 1,325
--------------------------------------------------------------
RUSSIA
--------------------------------------------------------------
Dvoinoye Russia 100.0% 1,047 31.48 1,059
--------------------------------------------------------------
SUBTOTAL 1,047 31.48 1,059
--------------------------------------------------------------
TOTAL GOLD 806,007 0.57 14,835
--------------------------------------------------------------
--------------------------------------------------------------
Measured and Indicated
-----------------------
Kinross
Property Location Interest Tonnes Grade Ounces
----------------------------------
(%) (kt) (g/t) (koz)
--------------------------------------------------------------
NORTH
AMERICA
--------------------------------------------------------------
Fort Knox
Area USA 100.0% 160,458 0.43 2,214
--------------------------------------------------------------
Round
Mountain
Area USA 50.0% 46,145 0.75 1,107
--------------------------------------------------------------
White Gold
Area 12 Yukon 100.0% 9,797 3.19 1,005
--------------------------------------------------------------
SUBTOTAL 216,400 0.62 4,326
--------------------------------------------------------------
SOUTH
AMERICA
--------------------------------------------------------------
Cerro
Casale 10 Chile 25.0% 60,432 0.41 792
--------------------------------------------------------------
Crixas 9 Brazil 50.0% 434 3.73 52
--------------------------------------------------------------
Fruta del
Norte Ecuador 100.0% 3,583 5.50 634
--------------------------------------------------------------
La Coipa 11 Chile 100.0% 14,662 1.03 486
--------------------------------------------------------------
Lobo Marte Chile 100.0% 34,052 0.83 908
--------------------------------------------------------------
Maricunga
Area Chile 100.0% 187,611 0.57 3,428
--------------------------------------------------------------
Paracatu Brazil 100.0% 356,806 0.33 3,782
--------------------------------------------------------------
SUBTOTAL 657,580 0.48 10,082
--------------------------------------------------------------
AFRICA
--------------------------------------------------------------
Chirano Ghana 90.0% 4,058 1.46 191
--------------------------------------------------------------
Tasiast Mauritania 100.0% 96,334 0.67 2,088
--------------------------------------------------------------
SUBTOTAL 100,392 1.46 2,279
--------------------------------------------------------------
RUSSIA
--------------------------------------------------------------
Dvoinoye Russia 100.0% 1,047 31.48 1,059
--------------------------------------------------------------
SUBTOTAL 1,047 31.48 1,059
--------------------------------------------------------------
TOTAL GOLD 975,419 0.57 17,746
--------------------------------------------------------------
----------------------------------------------------------------------------
MINERAL RESERVE AND MINERAL RESOURCE STATEMENT SILVER
MEASURED AND INDICATED MINERAL RESOURCES (EXCLUDES PROVEN AND
PROBABLE MINERAL RESERVES) (2,3,4,6,7,8)
Kinross Gold Corporation's Share at December 31, 2010
----------------------------------------------------------------------------
-----------------------------------------------------------
Measured
----------------------
Kinross
Property Location Interest Tonnes Grade Ounces
---------------------------------
(%) (kt) (g/t) (koz)
-----------------------------------------------------------
NORTH
AMERICA
-----------------------------------------------------------
Round
Mountain
Area USA 50.0% 9 9.9 3
-----------------------------------------------------------
SUBTOTAL 9 9.9 3
-----------------------------------------------------------
SOUTH
AMERICA
-----------------------------------------------------------
Cerro
Casale 10 Chile 25.0% 4,428 1.5 212
-----------------------------------------------------------
Fruta del
Norte Ecuador 100.0% - - -
-----------------------------------------------------------
La Coipa 11 Chile 100.0% 11,040 50.5 17,913
-----------------------------------------------------------
SUBTOTAL 15,468 36.4 18,125
-----------------------------------------------------------
RUSSIA
-----------------------------------------------------------
Dvoinoye Russia 100.0% - - -
-----------------------------------------------------------
SUBTOTAL - - -
-----------------------------------------------------------
TOTAL
SILVER 15,477 36.4 18,128
-----------------------------------------------------------
----------------------------------------------------------
Indicated
----------------------
Kinross
Property Location Interest Tonnes Grade Ounces
--------------------------------
(%) (kt) (g/t) (koz)
----------------------------------------------------------
NORTH
AMERICA
----------------------------------------------------------
Round
Mountain
Area USA 50.0% 1,296 7.2 301
----------------------------------------------------------
SUBTOTAL 1,296 7.2 301
----------------------------------------------------------
SOUTH
AMERICA
----------------------------------------------------------
Cerro
Casale 10 Chile 25.0% 56,004 1.1 1,949
----------------------------------------------------------
Fruta del
Norte Ecuador 100.0% 3,583 10.7 1,235
----------------------------------------------------------
La Coipa 11 Chile 100.0% 3,622 23.6 2,753
----------------------------------------------------------
SUBTOTAL 63,209 2.9 5,937
----------------------------------------------------------
RUSSIA
----------------------------------------------------------
Dvoinoye Russia 100.0% 1,047 35.7 1,201
----------------------------------------------------------
SUBTOTAL 1,047 35.7 1,201
----------------------------------------------------------
TOTAL
SILVER 65,552 3.5 7,439
----------------------------------------------------------
----------------------------------------------------------
Measured and Indicated
----------------------
Kinross
Property Location Interest Tonnes Grade Ounces
--------------------------------
(%) (kt) (g/t) (koz)
----------------------------------------------------------
NORTH
AMERICA
----------------------------------------------------------
Round
Mountain
Area USA 50.0% 1,305 7.2 304
----------------------------------------------------------
SUBTOTAL 1,305 7.2 304
----------------------------------------------------------
SOUTH
AMERICA
----------------------------------------------------------
Cerro
Casale 10 Chile 25.0% 60,432 1.1 2,161
----------------------------------------------------------
Fruta del
Norte Ecuador 100.0% 3,583 10.7 1,235
----------------------------------------------------------
La Coipa 11 Chile 100.0% 14,662 43.8 20,666
----------------------------------------------------------
SUBTOTAL 78,677 9.5 24,062
----------------------------------------------------------
RUSSIA
----------------------------------------------------------
Dvoinoye Russia 100.0% 1,047 35.7 1,201
----------------------------------------------------------
SUBTOTAL 1,047 35.7 1,201
----------------------------------------------------------
TOTAL
SILVER 81,029 9.8 25,567
----------------------------------------------------------
----------------------------------------------------------------------------
MINERAL RESERVE AND MINERAL RESOURCE STATEMENT COPPER
MEASURED AND INDICATED MINERAL RESOURCES (EXCLUDES PROVEN AND
PROBABLE MINERAL RESERVES) (3,4,7,8)
Kinross Gold Corporation's Share at December 31, 2010
----------------------------------------------------------------------------
------------------------------------------------------------------
Measured
----------------------
Kinross
Property Location Interest Tonnes Grade Pounds
-----------------------------------
(%) (kt) (%) (Mlb)
------------------------------------------------------------------
SOUTH
AMERICA
------------------------------------------------------------------
Cerro Casale 10 Chile 25.0% 4,428 0.15 15
------------------------------------------------------------------
SUBTOTAL 4,428 0.15 15
------------------------------------------------------------------
TOTAL COPPER 4,428 0.15 15
------------------------------------------------------------------
----------------------------------------------------------------
Indicated
----------------------
Kinross
Property Location Interest Tonnes Grade Pounds
---------------------------------
(%) (kt) (%) (Mlb)
----------------------------------------------------------------
SOUTH
AMERICA
----------------------------------------------------------------
Cerro Casale 10 Chile 25.0% 56,004 0.18 224
----------------------------------------------------------------
SUBTOTAL 56,004 0.18 224
----------------------------------------------------------------
TOTAL COPPER 56,004 0.18 224
----------------------------------------------------------------
----------------------------------------------------------------
Measured and Indicated
----------------------
Kinross
Property Location Interest Tonnes Grade Pounds
---------------------------------
(%) (kt) (%) (Mlb)
----------------------------------------------------------------
SOUTH
AMERICA
----------------------------------------------------------------
Cerro Casale 10 Chile 25.0% 60,432 0.18 239
----------------------------------------------------------------
SUBTOTAL 60,432 0.18 239
----------------------------------------------------------------
TOTAL COPPER 60,432 0.18 239
----------------------------------------------------------------
Inferred Mineral Resources
----------------------------------------------------------------------------
MINERAL RESERVE AND MINERAL RESOURCE STATEMENT GOLD
INFERRED MINERAL RESOURCES (2,3,4,6,7,8)
Kinross Gold Corporation's Share at December 31, 2010
----------------------------------------------------------------------------
Inferred
------------------------------
Kinross
Property Location Interest Tonnes Grade Ounces
-----------------------------------------
(%) (kt) (g/t) (koz)
----------------------------------------------------------------------------
NORTH AMERICA
----------------------------------------------------------------------------
Fort Knox Area USA 100.0% 12,547 0.46 187
----------------------------------------------------------------------------
Kettle River USA 100.0% 319 10.00 103
----------------------------------------------------------------------------
Round Mountain Area USA 50.0% 22,562 0.61 443
----------------------------------------------------------------------------
White Gold Area 12 Yukon 100.0% 9,391 1.91 578
----------------------------------------------------------------------------
SUBTOTAL 44,819 0.91 1,311
----------------------------------------------------------------------------
SOUTH AMERICA
----------------------------------------------------------------------------
Cerro Casale 10 Chile 25.0% 116,228 0.39 1,450
----------------------------------------------------------------------------
Crixas 9 Brazil 50.0% 2,278 5.00 366
----------------------------------------------------------------------------
Fruta del Norte Ecuador 100.0% 19,553 5.50 3,460
----------------------------------------------------------------------------
La Coipa 11 Chile 100.0% 3,123 4.70 472
----------------------------------------------------------------------------
Lobo Marte Chile 100.0% 112,767 0.78 2,834
----------------------------------------------------------------------------
Maricunga Area Chile 100.0% 201,092 0.46 3,004
----------------------------------------------------------------------------
Paracatu Brazil 100.0% 117,530 0.42 1,572
----------------------------------------------------------------------------
SUBTOTAL 572,571 0.71 13,158
----------------------------------------------------------------------------
AFRICA
----------------------------------------------------------------------------
Chirano Ghana 90.0% 2,468 2.33 185
----------------------------------------------------------------------------
Tasiast Mauritania 100.0% 182,805 1.47 8,615
----------------------------------------------------------------------------
SUBTOTAL 185,273 1.48 8,800
----------------------------------------------------------------------------
RUSSIA
----------------------------------------------------------------------------
Dvoinoye Russia 100.0% 645 19.47 404
----------------------------------------------------------------------------
Kupol Russia 75.0% 1,097 9.86 348
----------------------------------------------------------------------------
SUBTOTAL 1,742 13.43 752
----------------------------------------------------------------------------
TOTAL GOLD 804,405 0.93 24,021
----------------------------------------------------------------------------
----------------------------------------------------------------------------
MINERAL RESERVE AND MINERAL RESOURCE STATEMENT SILVER
INFERRED MINERAL RESOURCES (2,3,4,6,7,8)
Kinross Gold Corporation's Share at December 31, 2010
----------------------------------------------------------------------------
Inferred
------------------------------
Kinross
Property Location Interest Tonnes Grade Ounces
-----------------------------------------
(%) (kt) (g/t) (koz)
----------------------------------------------------------------------------
NORTH AMERICA
----------------------------------------------------------------------------
Round Mountain Area USA 50.0% 134 2.1 9
----------------------------------------------------------------------------
SUBTOTAL 134 2.1 9
----------------------------------------------------------------------------
SOUTH AMERICA
----------------------------------------------------------------------------
Cerro Casale 10 Chile 25.0% 116,228 1.0 3,879
----------------------------------------------------------------------------
Fruta del Norte Ecuador 100.0% 19,553 10.7 6,707
----------------------------------------------------------------------------
La Coipa 11 Chile 100.0% 3,123 53.3 5,351
----------------------------------------------------------------------------
SUBTOTAL 138,904 3.6 15,937
----------------------------------------------------------------------------
RUSSIA
----------------------------------------------------------------------------
Dvoinoye Russia 100.0% 645 20.8 431
----------------------------------------------------------------------------
Kupol Russia 75.0% 1,097 132.2 4,664
----------------------------------------------------------------------------
SUBTOTAL 1,742 91.0 5,095
----------------------------------------------------------------------------
TOTAL SILVER 140,780 4.6 21,041
----------------------------------------------------------------------------
----------------------------------------------------------------------------
MINERAL RESERVE AND MINERAL RESOURCE STATEMENT COPPER
INFERRED MINERAL RESOURCES (3,4,8)
Kinross Gold Corporation's Share at December 31, 2010
----------------------------------------------------------------------------
Inferred
------------------------------
Kinross
Property Location Interest Tonnes Grade Pounds
-----------------------------------------
(%) (kt) (%) (Mlb)
----------------------------------------------------------------------------
SOUTH AMERICA
----------------------------------------------------------------------------
Cerro Casale 10 Chile 25.0% 116,228 0.20 505
----------------------------------------------------------------------------
SUBTOTAL 116,228 0.20 505
----------------------------------------------------------------------------
TOTAL COPPER 116,228 0.20 505
----------------------------------------------------------------------------
Mineral Reserves and Mineral Resources Statement Notes
(1) Unless otherwise noted, the Company's mineral reserves are estimated using appropriate cut-off grades based on an assumed gold price of $US 900 per ounce, a silver price of $US 14.00 per ounce and a copper price of $2.00 per pound. Mineral reserves are estimated using appropriate process recoveries, operating costs and mine plans that are unique to each property and include estimated allowances for dilution and mining recovery. Mineral reserves are reported in contained units and are estimated based on the following foreign exchange rates:
Russian Rubles to $US 32 Chilean Peso to $US 550 Brazilian Reais to $US 2.00 Ghanaian Cedi to $US 1.50 Mauritanian Ouguiya to $US 300
(2) Unless otherwise noted, the Company's mineral resources are estimated using appropriate cut-off grades based on a gold price of $US 1000 per ounce, a silver price of $US 15.00 per ounce, a copper price of $2.50 per pound and the following foreign exchange rates:
Russian Rubles to $US 32 Chilean Peso to $US 550 Brazilian Reais to $US 2.00 Ghanaian Cedi to $US 1.50 Mauritanian Ouguiya to $US 300
(3) The Company's mineral reserves and mineral resources as at December 31, 2010 are classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum's "CIM Definition Standards - For Mineral Resources and Mineral Reserves" in accordance with the requirements of National Instrument 43-101 "Standards of Disclosure for Mineral Projects" (the Instrument). Mineral reserve and mineral resource estimates reflect the Company's reasonable expectation that all necessary permits and approvals will be obtained and maintained.
(4) Cautionary note to U.S. investors concerning estimates of measured, indicated and inferred mineral resources. U.S. investors are advised that the terms "measured mineral resource", "indicated mineral resource" and "inferred mineral resource" are recognized and required by Canadian securities laws. These terms are not recognized by the U.S. Securities and Exchange Commission. U.S. investors should not assume that all or any part of mineral deposits in these categories will ever be converted into mineral reserves and that as compared with measured and indicated mineral resources, inferred mineral resources have a greater amount of uncertainty as to their existence, and great uncertainty as to their economic feasibility. It should not be assumed that any part of an inferred mineral resource will ever be upgraded to a higher category.
(5) The mineral reserves presented herein comply with the reserve categories of Industry Guide 7 published by the U.S. Securities and Exchange Commission except for mineral reserves at Lobo Marte and Fruta del Norte, which estimates are based on recently completed pre- feasibility studies. For mineral reserves under the Instrument, a pre-feasibility study is sufficient, however for reserves under Industry Guide 7, a feasibility study is required.
(6) Except as provided in Note (12), the Company's mineral resource and mineral reserve estimates were prepared under the supervision of Mr. R. Henderson, P. Eng., an officer of Kinross, who is a qualified person as defined by the Instrument.
(7) The Company's normal data verification procedures have been used in collecting, compiling, interpreting and processing the data used to estimate mineral reserves and mineral resources. Independent data verification has not been performed.
(8) Mineral resources that are not mineral reserves do not have to demonstrate economic viability. Mineral resources are subject to infill drilling, permitting, mine planning, mining dilution and recovery losses, among other things, to be converted into mineral reserves. Due to the uncertainty associated with inferred mineral resources, it cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to indicated or measured mineral resources, including as a result of continued exploration.
(9) The Crixas mine is operated by AngloGold Ashanti Ltd. Mineral reserves are reported based on a gold price of $US 850 per ounce. Mineral resources are reported using a gold price of $US 1,100 per ounce. Mineral resources and mineral reserves are reported using the following foreign exchange rate: Brazilian Reais to $US 1.94.
(10) Estimates for the Cerro Casale project are based on the feasibility study completed in 2009 by the joint venture. Mineral reserves and mineral resources are estimated using appropriate cut-off grades based on the following commodity prices and foreign exchange rates:
Mineral reserves - Gold price of $US 1000 per ounce, Silver price of $US
16.00 per ounce, Copper price of $US2.00 per pound
Mineral resources - Gold price of $US 1200 per ounce, Silver price of $US
19.00 per ounce, Copper price of $US 2.50 per pound
Chilean Peso to $US 525
(11) Includes mineral reserves and mineral resources from the Puren deposit in which the Company holds a 65% interest.
(12) The mineral resource estimates for the White Gold Property were prepared by Mr. Wayne Barnett, Pr.Sci.Nat., and Mr. Marek Nowak, P. Eng., of SRK Consulting, both of whom are qualified persons as defined by the Instrument. Mineral resources are reported at a cut-off of 0.5 g/t for open pit and 2.0 g/t for underground.
(13) Kettle River mineral resources were estimated using the same gold price as mineral reserves ($US900/oz).
Mineral Reserve and Mineral Resource Definitions
A Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined.
A 'Probable Mineral Reserve' is the economically mineable part of an Indicated and, in some circumstances, a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.
A 'Proven Mineral Reserve' is the economically mineable part of a Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified.
A Mineral Resource is a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth's crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.
An 'Inferred Mineral Resource' is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
An 'Indicated Mineral Resource' is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
A 'Measured Mineral Resource' is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.
For more information, please see Kinross' 2010 year-end Financial Statements and MD&A at www.kinross.com.
Media Contact: Kinross Gold Corporation
Vice-President, Corporate Communications
416-365-2726
steve.mitchell@kinross.com
Investor Relations Contact: Kinross Gold Corporation
Vice-President, Investor Relations
416-365-2744
erwyn.naidoo@kinross.com
www.kinross.com
