Factsheet: Kinross Gold Corporation 5.95% 15-Mar-2024 USD Senior Unsecured Bond

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Issuer Overview
Kinross Gold Corporation (Kinross) is one of the largest gold producers in the world based on 2013 production volumes. Its market capitalization was approximately US$4.1 billion as at January 2015. Based in Toronto, Ontario, Kinross was formed in 1993 from three predecessor mining companies, and now owns or has a joint venture interests in nine operating mines in Brazil, Chile, Russia, Mauritania, Ghana and the United States. Kinross has approximately 39.7 million ounces of gold, 44.8 million ounces of silver and 1.4 billion pounds of copper in proven and probable mineral reserves based on its 2013 Mineral Reserve and Mineral Resource Statement.

Kinross’ principal product is gold, produced in the form of ore that is sent to refineries for final processing. As a by-product, Kinross also produces limited amounts of silver (primarily from its mines in Chile and Russia). Gold sales represent about 95% of Kinross’ total revenues, with the remainder coming from the sale of silver.
  • Kinross ranks among the top 10 mining companies in the world. The company has a large and geographically diversified production base, relatively long reserve life and relatively stable reserve grades
  • Strong liquidity position with US$900m of cash on hand and US$1.5bn available under a line of credit, against total debt of US$2.1bn. Kinross has no significant debt maturities until 2016. The company is projecting a net debt to EBITDA ratio of 1.2x for FY15 which is at the lower end of its peer group. In comparison, Newcrest’s FY14 net debt to EBITDA ratio was 2.6x
  • Even at a gold price of US$1,100/ounce, all of its operations are free cash flow positive, except Tasiast, which at present only accounts for about 7% of total production
  • In its previous results announcement, Kinross improved 2014 guidance across the board:
    • Cash production costs were lowered to a range of US$720-750/oz (previous US$730-780/oz);
    • Production is expected to be at the high end of the tightened guidance range of US2.6-2.7 million ounces (previous 2.5-2.7 million ounces);
    • All-in sustaining cost range lowered to US$950-$990/oz (previous US$950-$1,050/oz)
    • Capex guidance has been dropped to US$630-$650 million (from US$675 million)
  • Assuming current gold prices continue, it is very likely that the Tasiast expansion project will go ahead, which presents a ‘brownfield’ expansion opportunity which would allow
  • Kinross to maintain current production levels Kinross has reduced its capital expenditure by 50% year on year, and we expect the company will use the additional cash towards debt repayment in 2015