Kinross Gold Update | Andrea Freeborough and Jimmy Connor

Key Concepts

• Great Enhancement Strategy: Kinross’s strategy initiated in 2022 focused on advancing projects and extending mine lives.
• ASIC (All-In Sustaining Cost): A comprehensive metric used to calculate the total cost of gold production per ounce.
• NPV (Net Present Value): A financial metric used to evaluate the profitability of a project, considering the time value of money.
• IRR (Internal Rate of Return): A financial metric representing the expected rate of growth of an investment.
• M&I Resources: Measured and Indicated Mineral Resources – categories of mineral resources with increasing levels of geological confidence.
• Advanced Exploration Decline (AEEX): An underground access route used for advanced exploration drilling, particularly at Great Bear.
• Capital Allocation Framework: Kinross’s three-pronged approach to utilizing cash flow: reinvestment, balance sheet strength, and shareholder returns.

Kinross Gold: Project Updates, Financial Strategy & Future Outlook

I. US Project Developments & Production Growth

Kinross Gold recently approved construction on three projects in the US, expected to contribute approximately 3 million ounces of gold equivalent production. These projects are designed to bolster production starting in 2028, with peak annual output reaching up to 400,000 ounces. The combined ASIC for these projects is $1650 per ounce, with a payback period of less than two years, and a combined NPV of $4.1 billion and an IRR of 55%. This demonstrates resilience even at lower gold prices.

• Round Mountain (Phase X): Transitioning to an underground mine in 2028, combining underground material with existing open-pit operations (Phase S). This will tap into higher-grade mineralization, extending mine life to 2038 with average annual production of 140,000 ounces from the underground operation. Initial capex is $400 million over three years (2026-2028).
• Kettle River (Kuru): Re-establishing production at a previously operating mill in Washington State. This underground operation is expected to yield around 100,000 ounces annually over an 11-year mine life, also starting in 2028. Capex is $485 million, resulting in an NPV of $1.2 billion and an IRR of 44%.
• Bald Mountain (Redbird 2 & Satellite Deposits): Expanding the existing open-pit operation with Redbird 2, a continuation of the current pit, and the addition of five satellite deposits. This is projected to add 640,000 ounces to the mine plan, extending life to 2032. Capex is $490 million, with an NPV of $1 billion and an IRR of 58%, and an ASIC of $1,465 per ounce. Bald Mountain’s large land package offers significant exploration upside.

II. Existing Operations: Paratu & Tacia

Kinross’s two anchor assets, Paratu in Brazil and Tacia in Mauritania, continue to deliver consistent production.

• Paratu: Has consistently produced over 500,000 ounces annually for the past seven years. Reserves stand at nearly 5 million ounces, ensuring a long mine life into the 2030s. Further potential exists with 3.2 million ounces of M&I resources, particularly at higher gold prices.
• Tacia: Produced 622,000 ounces in 2024. Production guidance for 2025-2027 is around 500,000 ounces due to higher stripping ratios, returning to over 600,000 ounces in 2028-2029. Opportunities for mine life extension include open-pit expansions and potential underground development.

III. Greenfield Projects: Great Bear & Lobo Marte

Kinross is actively developing two significant greenfield projects.

• Great Bear (Northern Ontario): Expected to contribute to production in late 2029, with a projected 500,000 ounces per year at an all-in sustaining cost of $800 per ounce. Currently awaiting final permits for underground drilling (Advanced Exploration Decline - AEEX) expected in early 2025.
• Lobo Marte (Chile): A project further down the pipeline, representing a future growth opportunity.

IV. Capital Allocation & Financial Strategy

Kinross operates under a capital allocation framework prioritizing reinvestment in the business, maintaining a strong balance sheet, and returning capital to shareholders.

• Reinvestment: The three US projects exemplify reinvestment, contributing to long-term production and cost efficiency.
• Financial Strength: The company prioritized debt repayment, achieving a net cash position in Q3 2024. They anticipate reaching $1 billion in net cash by the end of 2025, with the next debt maturity not until 2033. The current gold price environment allows for continued balance sheet strengthening.
• Shareholder Returns: Kinross maintains a dividend (increased by 17% in November) and has reactivated a share buyback program, targeting $600 million in 2025 (totaling $750 million in capital returned to shareholders alongside $700 million in debt repayment).

Looking ahead to 2026, capex is projected to be $1.5 billion, manageable within operating cash flow. Kinross intends to continue the buyback program alongside the dividend, with further details to be provided in the February earnings call.

V. Future News Flow

Investors can expect continued updates on the three US projects, Great Bear, and Lobo Marte. Kinross will also focus on identifying and advancing additional opportunities from its existing resource base, and provide further guidance on capital allocation during the February earnings release.

Notable Quote:

“A well-maintained business is a safe and low-risk business.” – Andrea, regarding Kinross’s reinvestment strategy.

This summary provides a detailed overview of the information presented in the transcript, focusing on specific details, financial metrics, and future plans. It aims to be a comprehensive resource for understanding Kinross Gold’s current position and outlook.