Kinross reports strong 2023 third-quarter results
Company on track to meet annual guidance
Tasiast achieves record quarterly production and delivers strong free cash flow
Phase S supports production at Round Mountain through end of decade
TORONTO, Nov. 08, 2023 (GLOBE NEWSWIRE) -- Kinross Gold Corporation (TSX: K, NYSE: KGC) (“Kinross” or the “Company”) today announced its results for the third quarter ended September 30, 2023.
This news release contains forward-looking information about expected future events and financial and operating performance of the Company. Please refer to the risks and assumptions set out in our Cautionary Statement on Forward-Looking Information located on page 29 of this release. All dollar amounts are expressed in U.S. dollars, unless otherwise noted.
*Q3 2023 highlights from continuing operations: *
· *Guidance: *Kinross remains on track to meet its 2023 annual guidance ranges for production, cost of sales per ounce, all-in sustaining cost and attributable capital expenditures. The Company is tracking in the lower end of its 2023 production cost of sales guidance and the higher end of its capital expenditure guidance.
· *Production* of 585,449 gold equivalent ounces (Au eq. oz.), a 11% year-over-year increase.
· *Production cost of sales*^1 of $911 per Au eq. oz. sold and *all-in sustaining cost*^2 of $1,296 per Au eq. oz. sold.
· *Margins*^3 of $1,018 per Au eq. oz. sold.
· *Operating cash flow*^4 of $406.8 million and *adjusted operating cash flow*^2 of $470.6 million. *Free cash flow*^2 of $122.9 million.
· *Reported net earnings*^5 of $109.7 million, or $0.09 per share, with *adjusted net earnings*^2^, ^6 of $144.6 million, or $0.12 per share^2.
· *Cash and cash equivalents* of $464.9 million, and* total* *liquidity*^7 of approximately $2.0 billion at September 30, 2023.
· Kinross’ Board of Directors declared a quarterly *dividend* of $0.03 per common share payable on December 14, 2023, to shareholders of record at the close of business on November 30, 2023.
*Operational and development project highlights: *
· *Tasiast* achieved record quarterly production and sales, significantly exceeding the previous record achieved in the second quarter.
· *Paracatu* delivered higher production both quarter-over-quarter and year-over-year.
· *La Coipa *performed well and was once again the lowest cost mine in the portfolio, delivering high-margin production*. *
· At* Manh Choh*, a ceremonial groundbreaking was held, pre-stripping has commenced, and the project remains on track for initial production in the second half of 2024.
· At *Round Mountain*, Kinross has approved mining of the optimized *Phase S* open pit, which is expected to extend production out to the end of the decade and increase life-of-mine production by ~750,000 Au eq. oz. Phase S could provide synergies with potential future production from underground at *Phase X *and* Gold Hill. *
· At *Great Bear*, the exploration program continues to make excellent progress and drill results continue to exceed expectations around the strong resource potential of the deposit, including a recent high-grade intercept from the Hinge zone that returned 2.8 metres true width grading at approximately 260 grams per tonne (g/t) at a vertical depth of 870 metres. Permitting is ongoing at both the provincial and federal levels.
*CEO commentary:*
J. Paul Rollinson, President and CEO, made the following comments in relation to 2023 third-quarter results:
“It has been a great nine months at Kinross and we have delivered another strong quarter. Our production profile has been solid and generated significant cash flow. We continue to reduce the debt on our investment grade balance sheet and have completed our expansion projects at Tasiast and La Coipa. We remain well positioned to meet our annual guidance building on the robust results year-to-date.
“Our project pipeline continued to make excellent progress. At Great Bear, permitting is advancing well and drill results continue to exceed our expectations, demonstrating the strength of the resource at depth and in less-explored areas of the deposit, including a recent exceptional intercept from the Hinge zone. We officially broke ground at Manh Choh as the project continues to advance on schedule and on budget for initial production in the second half of next year.
“Our decision to proceed with Round Mountain Phase S underscores the successful optimization work to build a lower-investment, high-return operation that we expect will add approximately 750,000 ounces to the life-of-mine production profile. The future of Round Mountain has become clear, with the approval of Phase S, combined with Phase W that we are currently mining, we’re now expecting production at Round Mountain until the end of the decade. Longer-term, we see strong potential to supplement that production with high-grade contributions from Phase X and Gold Hill, which we continue to explore and study.
“Kinross is delivering on its ESG commitments. In that regard, we’re excited that our 34MW solar power plant at Tasiast is on schedule to deliver power by the end of the year. This, combined with other elements of our Climate Strategy, means Kinross is well on track to meet our goal of a 30% reduction in greenhouse gas emissions by 2030.”
*Summary of financial and operating results*
*Three months ended
* *Nine months ended* *September 30,
* *September 30,*
(unaudited, in millions of U.S. dollars, except ounces, per share amounts, and per ounce amounts) *2023* 2022 *2023* 2022
*Operating Highlights*
Total gold equivalent ounces from continuing operations^(a),(b)
Produced *585,449* 529,155 *1,606,507* 1,361,554
Sold *571,248* 494,413 *1,614,547* 1,307,219
*Financial Highlights from Continuing Operations^(a)*
Metal sales *$* *1,102.4* $ 856.5 *$* *3,124.0* $ 2,378.9
Production cost of sales *$* *520.6* $ 465.3 *$* *1,502.4* $ 1,279.2
Depreciation, depletion and amortization *$* *263.9* $ 185.1 *$* *715.1* $ 532.1
Operating earnings *$* *226.2* $ 111.3 *$* *607.9* $ 277.8
Net earnings from continuing operations attributable to common shareholders *$* *109.7* $ 65.9 *$* *350.9* $ 137.9
Basic earnings per share from continuing operations attributable to common shareholders *$* *0.09* $ 0.05 *$* *0.29* $ 0.11
Diluted earnings per share from continuing operations attributable to common shareholders *$* *0.09* $ 0.05 *$* *0.28* $ 0.11
Adjusted net earnings from continuing operations attributable to common shareholders^(c) *$* *144.6* $ 68.7 *$* *399.8* $ 174.9
Adjusted net earnings from continuing operations per share^(c) *$* *0.12* $ 0.05 *$* *0.33* $ 0.14
Net cash flow of continuing operations provided from operating activities *$* *406.8* $ 173.2 *$* *1,194.4* $ 528.2
Adjusted operating cash flow from continuing operations^(c) *$* *470.6* $ 259.4 *$* *1,262.5* $ 760.4
Capital expenditures from continuing operations^(d) *$* *283.9* $ 197.3 *$* *787.0* $ 447.4
Free cash flow from continuing operations^(c) *$* *122.9* $ (24.1 ) *$* *407.4* $ 80.8
Average realized gold price per ounce from continuing operations^(e) *$* *1,929* $ 1,732 *$* *1,935* $ 1,821
Production cost of sales from continuing operations per equivalent ounce^(b) sold^(f) *$* *911* $ 941 *$* *931* $ 979
Production cost of sales from continuing operations per ounce sold on a by-product basis^(c) *$* *860* $ 919 *$* *876* $ 966
All-in sustaining cost from continuing operations per ounce sold on a by-product basis^(c) *$* *1,264* $ 1,269 *$* *1,269* $ 1,279
All-in sustaining cost from continuing operations per equivalent ounce^(b) sold^(c) *$* *1,296* $ 1,282 *$* *1,303* $ 1,287
Attributable all-in cost^(g) from continuing operations per ounce sold on a by-product basis^(c) *$* *1,561* $ 1,555 *$* *1,590* $ 1,543
Attributable all-in cost^(g) from continuing operations per equivalent ounce^(b) sold^(c) *$* *1,579* $ 1,560 *$* *1,608* $ 1,547
(a) Results for the three and nine months ended September 30, 2023 and 2022 are from continuing operations and exclude results from the Company’s Chirano and Russian operations due to the classification of these operations as discontinued and their sale in 2022.
(b) “Gold equivalent ounces” include silver ounces produced and sold converted to a gold equivalent based on a ratio of the average spot market prices for the commodities for each period. The ratio for the third quarter and first nine months of 2023 was 81.82:1 and 82.50:1, respectively (third quarter and first nine months of 2022 – 89.91:1 and 83.22:1, respectively).
(c) The definition and reconciliation of these non-GAAP financial measures and ratios is included on pages 17 to 21 of this news release. Non-GAAP financial measures and ratios have no standardized meaning under IFRS and therefore, may not be comparable to similar measures presented by other issuers.
(d) “Capital expenditures from continuing operations” is as reported as “Additions to property, plant and equipment” on the interim condensed consolidated statements of cash flows.
(e) “Average realized gold price per ounce from continuing operations” is defined as gold metal sales from continuing operations divided by total gold ounces sold from continuing operations.
(f) “Production cost of sales from continuing operations per equivalent ounce sold” is defined as production cost of sales divided by total gold equivalent ounces sold from continuing operations.
(g) “Attributable all-in cost” includes Kinross’ share of Manh Choh (70%) costs.
The following operating and financial results are based on third-quarter gold equivalent production:*Production*: Kinross produced 585,449 Au eq. oz. in Q3 2023 from continuing operations, compared with 529,155 Au eq. oz. in Q3 2022. The 11% year-over-year increase was primarily attributable to higher mill grades, recovery and throughput at Tasiast, higher production at La Coipa due to the ramp-up of operations in 2022, and higher production at Paracatu due to higher throughput and timing of ounces processed.
*Average realized gold price*: The average realized gold price from continuing operations in Q3 2023 was $1,929 per ounce, compared with $1,732 per ounce in Q3 2022.
*Revenue*: During the third quarter, revenue from continuing operations increased to $1,102.4 million, compared with $856.5 million during Q3 2022. The 29% increase is due to an increase in gold equivalent ounces sold and an increase in average realized gold price.
*Production cost of sales*: Production cost of sales^1 from continuing operations per Au eq. oz. sold decreased to $911 for the quarter, compared with $941 in Q3 2022. The 12% decrease was primarily due to the ramp-up of production at La Coipa, which continued to be the lowest cost operation in Q3 2023.
Production cost of sales from continuing operations per Au oz. sold^2 on a by-product basis decreased to $860 in Q3 2023, compared with $919 in Q3 2022, based on gold sales of 544,199 ounces and silver sales of 2,213,044 ounces.
*Margins*^3: Kinross’ margin from continuing operations per Au eq. oz. sold increased to $1,018 for Q3 2023, compared with the Q3 2022 margin of $791.
*All-in sustaining cost*^2: All-in sustaining cost from continuing operations per Au eq. oz. sold was $1,296 in Q3 2023, compared with $1,282 in Q3 2022.
In Q3 2023, all-in sustaining cost from continuing operations per Au oz. sold on a by-product basis was $1,264, compared with $1,269 in Q3 2022.
*Operating cash flow*: Operating cash flow from continuing operations^4 was $406.8 million for Q3 2023, compared with $173.2 million for Q3 2022.
Adjusted operating cash flow from continuing operations^2 increased to $470.6 million in Q3 2023, compared with $259.4 million for Q3 2022.
*Free cash flow*^2*: *Free cash flow from continuing operations in Q3 2023 was $122.9 million, compared with an outflow of $24.1 million in Q3 2022. Excluding working capital changes^8, free cash flow from continuing operations in Q3 2023 was $186.7 million, compared with $62.1 million in Q3 2022.
*Earnings*: Reported net earnings^5 from continuing operations increased to $109.7 million, or $0.09 per share for Q3 2023, compared with $65.9 million, or $0.05 per share, for Q3 2022. The increase in reported net earnings was mainly due to the increase in margins.
Adjusted net earnings from continuing operations^2^,^6 was $144.6 million, or $0.12 per share, for Q3 2023, compared with $68.7 million, or $0.05 per share, for Q3 2022.
*Capital expenditures*: Capital expenditures from continuing operations increased to $283.9 million for Q3 2023, compared with $197.3 million for Q3 2022, primarily due to an increase in capital stripping at Tasiast and Fort Knox and development activities at Manh Choh.
*Balance sheet *
As of September 30, 2023, Kinross had cash and cash equivalents of $464.9 million, compared with $478.4 million at June 30, 2023.
The Company had available credit^9 of approximately $1.5 billion and total liquidity^7 of approximately $2.0 billion as of September 30, 2023, an increase from $1.9 billion at June 30, 2023.
In the third quarter of 2023, the Company issued $500 million 6.25% senior notes due in 2033 and used the net proceeds to redeem the $500 million 5.95% senior notes due March 15, 2024. The Company also repaid $50.0 million of the outstanding balance on the revolving credit facility during the quarter and repaid the remaining balance of $50.0 million in October 2023.
*Return of capital*
As part of its continuing quarterly dividend program, the Company declared a dividend of $0.03 per common share payable on December 14, 2023, to shareholders of record as of November 30, 2023.*Operating results*
Mine-by-mine summaries for 2023 third-quarter operating results may be found on pages 12 and 16 of this news release. Highlights include the following:
*Tasiast* had another strong quarter and achieved record quarterly production and sales. Quarter-over-quarter, production increased mainly due to higher throughput and cost of sales per ounce sold was slightly higher due to the timing of inventory movements. Year-over-year production increased mainly due to higher grades, recoveries and throughput as mining continued in the higher-grade section of West Branch 4. Cost of sales per ounce sold was lower year-over-year due to the increase in production and less operating waste mined as the site progressed with capital stripping of West Branch 5.
*Paracatu *delivered higher production in both comparable periods. Quarter-over-quarter production increased mainly due to the timing of processing higher-grade ounces from the southwest area of the pit, and year-over-year production increased mainly due to higher throughput and timing of ounces processed. Cost of sales per ounce sold were slightly higher quarter-over-quarter due to timing of inventory movements and lower year-over-year mainly due to the increase in production.
*La Coipa* performed well with an increase in production in both comparable periods mainly due to higher throughput and grades. Cost of sales per ounce sold was slightly lower compared with the previous quarter, and higher year-over-year mainly due to increased production as the site reached higher production following its ramp-up in 2022.
At *Fort Knox*, quarter-over-quarter production increased due to more ounces recovered from the heap leach pads. Cost of sales per ounce sold was in line compared with the previous quarter. Year-over-year production was lower mainly due to lower mill throughput, partially offset by higher mill grade and an increase in ounces recovered from the heap leach pads. Cost of sales per ounce sold was slightly lower compared with Q3 2022 mainly due to planned mine sequencing involving less operating waste mined.
At* Round Mountain, *production increased compared with the previous quarter primarily due to higher-grade ore from Phase W2. Quarter-over-quarter, cost of sales per ounce sold was slightly higher due to timing of ounces recovered from the heap leach pads, however it was lower than expected due to increased stacking and mill grades. Year-over-year, production increased slightly due to higher grades, and cost of sales per ounce sold increased mainly as a result of less capital development.
At *Bald Mountain*, production and cost of sales per ounce sold were largely in line quarter-over-quarter. Compared with Q3 2022, production decreased mainly due to the timing of ounces recovered from the heap leach pads. Year-over-year, cost of sales per ounce sold was higher mainly due to lower production, lower capital development and higher contractor and maintenance costs.
*Projects and exploration updates*
*Tasiast Solar Power Plant*
The *Tasiast solar power plant*, which has power generation capacity of 34MW and a battery system of 18MW, continues to advance on plan for solar power-to-grid by the end of the year. Integration and load scenario testing is expected to continue into early 2024 while delivering maximum allowable power. Installation of the photovoltaic panels, inverters and transformer stations are complete, and the battery system installation is well progressed and awaiting battery module delivery. Electrical works and completion of the grid connection are continuing with pre-commissioning testing of the panel arrays and inverters underway.
*Great Bear*
At the *Great Bear* project, the Company’s robust exploration program continues to make excellent progress, with approximately 48,500 metres drilled in the third quarter and the completion of feasibility level engineering for the advanced exploration decline.
Kinross’ focus this year is on inferred drilling in the area half a kilometre to one kilometre below surface. In the second quarter, the Company began using directional drilling, which allows multiple drill holes to branch off from a single pilot hole. The system is now being used on 6 of the 11 drills on site to target the LP Fault and Hinge zones, with the goal of further delineating the deposit at depth as well as adding inferred resource ounces. This is complemented by additional exploration drilling on other areas of the property.
Drilling-to-date has demonstrated potential for a meaningful increase in the LP Fault underground resource and the potential of the Hinge and Limb zones to supplement the LP Fault zone with their demonstrated continuity of mineralization at depth. The Company expects to declare a resource update as part of its year-end results.
Since the last update on August 2, 2023, the Company has received additional assay results, with a selection of the new results highlighted in the table below.
Notable exploration results^10 at Great Bear in the third quarter include:
· BR-696 (Bruma) 4.1 m @ 15.53 g/t Au at a vertical depth of 1150 m
· Including 1.4 m @ 45.60 g/t Au
· BR-778C1 (Yuma) 14.2 m @ 5.63 g/t Au at a vertical depth of 1075 m
· Including 4.9 m @ 15.57 g/t Au
· BR-806 (Discovery) 3.6 m @ 11.20 g/t Au at a vertical depth of 600 m
· BR-814C1A (Yauro) 8.3 m @ 5.28 g/t Au at a vertical depth of 700 m
· BR-825 (Viggo) 0.5 m @ 147.0 g/t Au at a vertical depth of 580 m
· DL-085C7 (Hinge) 2.8 m @ 259.45 g/t Au at a vertical depth of 870 m
Recent results continue to support the view of a high-grade, large, long-life mining complex. Holes BR-696 and BR-778C1 continue to demonstrate the potential for wide, high-grade mineralization at greater than 1-kilometre vertical depth under Bruma and Yuma while holes BR-806 and BR-814C1A demonstrate the continuity between the new deep intercepts and the current resource. Hole BR-825 intersected 0.5 m @ 147 g/t in under-tested ground between Viggo and Auro demonstrating potential that mineralization exists at depths greater than 500 m between the two zones.
With the goal of deep resource growth, recent drilling at the Hinge zone has yielded promising results. The more accurate targeting, afforded through directional drilling, has allowed for precise infill drilling of the known quartz vein hosted mineralization at approximately 900 m vertical depth. Following on the success of previously reported holes DL-132 and DL-142, hole DL-085C7 has intersected 2.8 m @ 259 g/t, showing continuity of mineralization.
For the main project, Kinross continues to advance technical studies, including engineering and field testwork campaigns, with plans to release the results of this work in the form of a preliminary economic assessment in the second half of 2024. Also underway is geochemical work that includes static testing, humidity cells, column testing, tailings residue sampling and field leach barrels. An extensive field bedrock and soils geotechnical drilling and testing program was kicked off in August, building on the campaign completed late last year. Bedrock geotechnical analysis is indicating very robust rock strengths in both the open pit and underground.
The Company continues to progress studies and provincial permitting for an advanced exploration program that would establish an underground decline to obtain a bulk sample and allow for definition and infill drilling in the LP Fault zone. Feasibility level engineering for advanced exploration infrastructure is now complete and the procurement process for long-lead items such as the camp, power infrastructure and water treatment plant is progressing well.
Kinross is targeting a potential start of the surface construction for the advanced exploration program in the second half of 2024, subject to receipt of permits.
Permitting for the main project is ongoing at both the provincial and federal levels. Permitting efforts have been initiated with the Impact Assessment Agency of Canada to review potential project impacts within Federal authority. The comprehensive baseline study program encompassing air, noise, hydrogeology, geochemistry, archeology, water quality and a number of other metrics continues to advance. These studies underpin the Company’s Indigenous consultation process and permitting efforts.
*Selected Great Bear Drill Results*
See Appendix A for full results.
*Hole ID* * * *From
(m)* *To *
*(m)* *Width
(m)* * True *
*Width (m) * *Au *
*(g/t)* *Target*
*BR-696* 1,347.7 1,352.2 4.5 4.1 15.53 Bruma
*BR-696* including 1,349.2 1,350.7 1.5 1.4 45.60
*BR-696* and 1,364.1 1,367.8 3.7 3.4 1.33
*BR-696* and 1,510.0 1,514.0 4.0 3.7 0.53
*BR-696* and 1,521.0 1,526.4 5.4 5.0 0.41
*BR-696* and 1,539.4 1,543.5 4.1 3.8 0.43
*BR-696* and 1,568.0 1,578.0 10.0 9.2 0.63
*BR-696* and 1,583.5 1,587.2 3.7 3.4 0.75
*BR-696* and 1,594.5 1,597.5 3.0 2.8 0.33
*BR-696* and 1,599.6 1,603.2 3.6 3.3 0.40
*BR-778C1* 1,392.7 1,396.1 3.4 2.3 0.64 Yuma
*BR-778C1* and 1,452.8 1,473.4 20.6 14.2 5.63
*BR-778C1* including 1,466.3 1,473.4 7.1 4.9 15.57
*BR-778C1* and 1,489.0 1,546.7 57.7 39.8 0.94
*BR-778C1* including 1,534.8 1,540.3 5.5 3.8 6.16
*BR-778C1* and 1,559.2 1,572.8 13.7 9.4 4.51
*BR-778C1* including 1,565.9 1,568.3 2.4 1.6 22.81
*BR-778C1* and 1,595.3 1,602.5 7.2 4.9 2.01
*BR-778C1* including 1,598.6 1,600.8 2.2 1.5 4.23
*BR-806* 732.9 738.0 5.1 3.6 11.20 Discovery
*BR-806* including 736.7 738.0 1.4 0.9 39.50
*BR-806* and 785.4 795.4 10.0 7.0 0.47
*BR-806* and 810.0 824.1 14.1 9.9 0.60
*BR-806* and 844.0 875.3 31.3 21.9 0.51
*BR-814C1A* 850.5 853.5 3.0 2.2 1.95 Yauro
*BR-814C1A* and 867.6 879.0 11.4 8.3 5.28
*BR-814C1A* including 868.6 877.0 8.4 6.1 6.95
*BR-814C1A* and 880.0 883.0 3.0 2.2 0.36
*BR-814C1A* and 899.4 903.0 3.6 2.6 0.54
*BR-814C1A* and 927.0 928.5 1.5 1.1 17.00
*BR-825* 696.8 896.4 199.6 157.7 0.51 Viggo
*BR-825* including 741.2 741.8 0.6 0.5 147.00
*DL-085C7* 868.0 871.5 3.5 2.8 259.45 Hinge
*DL-085C7* including 869.8 870.3 0.5 0.4 908.00
Results are preliminary in nature and are subject to on-going QA/QC. Lengths are subject to rounding.
See Appendix B for a LP Fault zone long section.
See Appendix C for a Hinge zone long section.
*Manh Choh *
At the 70% owned *Manh Choh** *project, of which Kinross is the operator, activities remain on budget and on schedule for initial production in the second half of 2024. Construction is now 90% complete with commissioning activities underway, pre-stripping has commenced, and work is ongoing to transition the project to operations.
At Fort Knox, where the Manh Choh ore will be processed, outdoor construction continues to progress with all concrete works complete. Work continues inside the mill with progress on tanks and piping and further work on additional mill modifications expected during the winter months.
A groundbreaking ceremony was held during the quarter and Kinross was pleased to welcome Chief Michael Sam, elders, and delegates from the Native Village of Tetlin, as well as Alaska Governor Michael Dunleavy and other government officials.
*Round Mountain*
At Round Mountain, Kinross is continuing to mine *Phase W2 *and will be proceeding with mining of the optimized *Phase S *open pit early next year, providing production out to the end of the decade and a bridge to the potential higher margin underground opportunities at *Phase X *and *Gold Hill*,* *which the Company continues to explore and study.
Kinross is pleased to announce that the optimization work at *Phase S* over the last year has resulted in an improved design with a lower overall strip ratio, higher grade, similar overall ounces, and a significantly lower capital investment and cash outflow. This was achieved by stepping-in the pit design in areas that had higher stripping, lower-margin ounces and identifying opportunities to add some near-surface, lower-strip ounces that come earlier in the plan, helping to reduce the cash outflow in the near term. With this optimized design and plan, at current gold prices we expect Round Mountain to be able to self-fund the Phase S expansion, driving a significant change in the risk profile and return of this expansion for the Company.
Phase S is expected to increase life-of-mine production by approximately 750,000 Au eq. oz. and generate an incremental internal rate of return^11 (IRR) of 45% and incremental net present value^11 (NPV) of $170 million. Initial capital expenditures are expected to be $170 million, of which $140 million is related to pre-stripping. The remaining $30 million is planned for an expansion of the existing North Heap Leach Pad and some additional tailings infrastructure. Phase S is expected to improve the cash cost at Round Mountain, particularly later in the mine life, as the mine plan reaches the higher-grade Phase S ore towards the bottom of the pit. Including Phase S, the Company expects Round Mountain to produce approximately 215,000 Au eq. oz. per year from 2024-2028.
Phase S was included in the Company's 2022 year-end estimated mineral reserves and the Company expects to provide an update with the optimized Phase S design at the 2023 year-end.
*Round Mountain Phase S *
*Operational metric* *Incremental Phase S estimate*^*11*
NPV (5%) (million) $170
IRR 45%
Total life-of-mine cash flow (million) $220
Total production (thousand Au oz.) ~750
Initial capital costs (million)^12 $30
Initial capital costs (million) (strip)^11^, 12 $140
Sustaining capital costs (million) $60
Payback 2027
Total material mined (million tonnes) 153
Average strip ratio 2.1
Ore milled (million tonnes) 17
Ore leached (million tonnes) 32
Mill grade 0.83 g/t
Leach grade 0.52 g/t
*Round Mountain Phase S gold price sensitivity estimates **(incremental) *
Average gold price
*Financial Metric* *$1,650/oz.* *$1,750/oz.* *$1,850/oz.* *$1,950/oz.* *$2,050/oz.*
*Incremental IRR* 19% 33% 45% 58% 70%
*Incremental NPV* $52 million $111 million $170 million $229 million $288 millionThe combination of the optimization results and extensive technical diligence completed over the last year on Phase S provides confidence in strong returns and margins while proceeding with this next phase of mine life at Round Mountain.
By providing meaningful production scale at Round Mountain out to the end of the decade, the Phase S pushback could also drive cost synergies if the Company proceeds with future underground mining at *Phase X* and *Gold Hill*. The two underground opportunities continue to show potential for higher-margin, higher-return operations at Round Mountain, particularly when combined with production and scale from Phase S.
While still mining Phase S, Round Mountain could potentially develop and ramp-up Phase X underground, which could then concurrently be exploited with Phase S in the second half of the decade. Gold Hill underground development could follow Phase X, adding higher-grade mill feed to supplement production from Phase X at the end of the decade and into the 2030s.
At Phase X*, *construction of the exploration decline continues to progress well with approximately 1,000 metres developed so far, remaining on plan to start definition drilling in early 2024. Kinross has also initiated technical studies for the Phase X project. Phase X is envisioned to be a bulk long-hole open stoping operation. Current intercepts suggest 3 to 4 g/t average stope grades.
At Gold Hill, located approximately seven kilometres northeast of Round Mountain, prior drill results show potential for a higher-grade narrow vein operation which could supplement mill feed from Phase X, increasing the average processed grade and margin. Kinross plans to continue drilling at Gold Hill in Q4 2023 and into 2024 to progress exploration and studies.
*Chile*
Kinross’ activities in Chile are currently focused on La Coipa and potential opportunities to extend its mine life. The Lobo-Marte project continues to provide optionality as a potential large, low-cost mine upon the conclusion of mining at La Coipa. While the Company focuses its technical resources on La Coipa, it will continue to engage and build relationships with communities related to Lobo-Marte and government stakeholders.*Curlew Basin exploration*
At the Curlew Basin exploration project in Washington State, underground exploration drill results documented a new vein zone, ‘Roadrunner’. The new vein zone is open and more drilling will be conducted over the coming quarters in order to delineate the extents. Underground exploration drilling in the third quarter also continued to build on the existing resource through proximal growth.
The top three significant intercepts received during the quarter include:
· *Roadrunner*:
· RR-1168 – *14.2m @* *16.5 g/t Au*, includes *7.3m @ 25.3 g/t Au*
· ST-1179 – 4.7m @ 11.7 g/t Au
· K2N-1171 – 3.9m @ 11.3 g/t Au
Results-to-date continue to demonstrate the high grade and upside potential of the Curlew Basin.
*Company Guidance *
The following section of the news release represents forward-looking information and users are cautioned that actual results may vary. We refer to the risks and assumptions contained in the Cautionary Statement on Forward-Looking Information on page 29.
The Company is on track to meet its 2023 production guidance range of 2.1 million Au eq. oz. (+/- 5%) and all-in sustaining cost guidance range.
The Company is tracking in the lower end of its production cost of sales guidance range of $970 per Au eq. oz. (+/- 5%) and the higher end of its attributable^13 capital expenditure guidance range.
Kinross’ annual production is expected to remain stable in 2024 and 2025 at 2.1 million and 2.0 million attributable^14 Au eq. oz. (+/- 5%), respectively.
*Environment, Social and Governance (ESG) update*
In accordance with the Company’s updated ESG strategy, Kinross has conducted a comprehensive review of its Community Engagement Management System with the objective of supporting sites with improved clarity and ease of application. Kinross’ updated Social Performance Management System will be rolled out across sites beginning in late 2023, on plan, and will enhance local accountability with clear expectations and guidance recognizing the role that all site functions have in social performance.
Kinross completed the first steps towards developing a specific Natural Capital Strategy to enhance the approach in this priority focus area. Natural capital is fundamentally about minimizing loss, ensuring reclamation and the restoration of valuable natural habitats through proper water, air, and mining waste management, as well as wholistic mine closure. Kinross’ vision for natural capital builds upon the sustainability foundation established across its operations and projects.
Kinross has also progressed on its Climate Strategy. The Tasiast 34MW photovoltaic solar facility is one of the important steps the Company is taking to address climate change through renewable energy projects. Kinross is also focused on renewable power purchase agreements, electric autonomous haulage partnerships, and energy-efficient opportunities across sites. The outcome of these initiatives is that Kinross is on track to achieve its greenhouse gas reduction goal of reducing emissions intensity by 30% in 2030 from its baseline.
*Conference call details *
In connection with this news release, Kinross will hold a conference call and audio webcast on Thursday, November 9, 2023, 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 (888) 330-2446; Passcode: 4915537
*Outside of Canada & US* – 1 (240) 789-2732; Passcode: 4915537
Replay (available up to 14 days after the call):
*Canada & US toll-free* – 1-800-770-2030; Passcode: 4915537
*Outside of Canada & US* – 1-647-362-9199; Passcode: 4915537
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 www.kinross.com.
This release should be read in conjunction with Kinross’ 2023 third-quarter unaudited Financial Statements and Management’s Discussion and Analysis report at www.kinross.com. Kinross’ 2023 third-quarter unaudited Financial Statements and Management’s Discussion and Analysis 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 financial statements free of charge upon request to the Company.
*About Kinross Gold Corporation *
Kinross is a Canadian-based global senior gold mining company with operations and projects in the United States, Brazil, Mauritania, Chile and Canada. Our focus is on delivering value based on the core principles of responsible mining, operational excellence, disciplined growth, and balance sheet strength. Kinross maintains listings on the Toronto Stock Exchange (symbol:K) and the New York Stock Exchange (symbol:KGC).
*Media Contact *
Victoria Barrington
Senior Director, Corporate Communications
phone: 647-788-4153
victoria.barrington@kinross.com
*Investor Relations Contact*
Chris Lichtenheldt
Vice-President, Investor Relations
phone: 416-365-2761
chris.lichtenheldt@kinross.com*Review of operations*
*Three months ended September 30, (unaudited)
* *Gold equivalent ounces* *Produced* *Sold* *Production cost of sales *($millions) *Production cost of sales/equivalent ounce sold* *2023* 2022 *2023* 2022 *2023* 2022 *2023* 2022
Tasiast *171,140* 132,754 *162,823* 128,014 *$* *108.5* $ 94.8 *$* *666* $ 741
Paracatu *172,482* 159,113 *167,105* 152,616 *141.2* 131.1 *845* 859
La Coipa *65,975* 33,955 *65,856* 24,681 *41.4* 12.2 *629* 494
Fort Knox *71,611* 75,522 *71,616* 74,221 *82.3* 88.6 *1,149* 1,194
Round Mountain *63,648* 62,417 *61,931* 61,757 *93.1* 87.0 *1,503* 1,409
Bald Mountain *40,593* 65,394 *41,300* 52,472 *53.9* 51.2 *1,305* 976
*United States Total* *175,852* 203,333 *174,847* 188,450 *229.3* 226.8 *1,311* 1,204
Maricunga *-* - *617* 652 *0.2* 0.4 *324* 613
*Continuing Operations Total* *585,449* 529,155 *571,248* 494,413 *520.6* 465.3 *911* 941
*Discontinued Operations*
Kupol *-* - *-* - *-* - *$* *-* $ -
Chirano (100%) *-* 13,522 *-* 15,018 *-* 24.3 *-* 1,618 *-* 13,522 *-* 15,018 *-* 24.3
*Nine months ended September 30, (unaudited)
* *Gold equivalent ounces* *Produced* *Sold* *Production cost of sales *($millions) *Production cost of sales/equivalent ounce sold* *2023* 2022 *2023* 2022 *2023* 2022 *2023* 2022
Tasiast *460,029* 395,589 *443,866* 372,273 *$* *296.4* $ 283.9 *$* *668* $ 763
Paracatu *460,059* 396,545 *459,338* 387,974 *394.4* 367.3 *859* 947
La Coipa *186,315* 41,893 *195,014* 31,780 *129.9* 17.8 *666* 560
Fort Knox *206,436* 207,509 *206,226* 204,732 *239.2* 248.6 *1,160* 1,214
Round Mountain *179,926* 164,445 *177,569* 160,171 *275.1* 214.1 *1,549* 1,337
Bald Mountain *113,742* 155,573 *130,764* 147,961 *166.4* 146.0 *1,273* 987
*United States Total* *500,104* 527,527 *514,559* 512,864 *680.7* 608.7 *1,323* 1,187
Maricunga *-* - *1,770* 2,328 *1.0* 1.5 *565* 644
*Continuing Operations Total* *1,606,507* 1,361,554 *1,614,547* 1,307,219 *1,502.4* 1,279.2 *931* 979
*Discontinued Operations*
Kupol *-* 169,156 *-* 122,295 *-* 83.8 *-* 685
Chirano (100%) *-* 82,060 *-* 87,823 *-* 131.2 *-* 1,494 *-* 251,216 *-* 210,118 *-* 215.0
*
*
*Interim condensed consolidated balance sheets*
(unaudited, expressed in millions of U.S. dollars, except share amounts) *As at* *September 30,* December 31, *2023* 2022
*Assets*
Current assets
Cash and cash equivalents *$* *464.9* $ 418.1
Restricted cash *8.9* 10.1
Accounts receivable and other assets *280.9* 318.2
Current income tax recoverable *6.2* 8.5
Inventories *1,202.3* 1,072.2
Unrealized fair value of derivative assets *15.3* 25.5 *1,978.5* 1,852.6
Non-current assets
Property, plant and equipment *7,843.1* 7,741.4
Long-term investments *65.2* 116.9
Other long-term assets *700.6* 680.9
Deferred tax assets *5.7* 4.6
*Total assets* *$* *10,593.1* $ 10,396.4
*Liabilities*
Current liabilities
Accounts payable and accrued liabilities *$* *545.8* $ 550.0
Current income tax payable *79.8* 89.4
Current portion of long-term debt and credit facilities *32.0* 36.0
Current portion of provisions *58.6* 50.8
Other current liabilities *16.1* 25.3 *732.3* 751.5
Non-current liabilities
Long-term debt and credit facilities *2,383.3* 2,556.9
Provisions *768.9* 755.9
Long-term lease liabilities *20.2* 23.1
Other long-term liabilities *129.1* 125.3
Deferred tax liabilities *394.3* 301.5
*Total liabilities* *$* *4,428.1* $ 4,514.2
*Equity*
Common shareholders' equity
Common share capital *$* *4,480.8* $ 4,449.5
Contributed surplus *10,645.8* 10,667.5
Accumulated deficit *(9,011.2* *)* (9,251.6 )
Accumulated other comprehensive income (loss) *(55.0* *)* (41.7 )
*Total common shareholders' equity* *6,060.4* 5,823.7
Non-controlling interests *104.6* 58.5
*Total equity* *6,165.0* 5,882.2
*Total liabilities and equity* *$* *10,593.1* $ 10,396.4
*Common shares*
*Authorized* *Unlimited
* Unlimited
*Issued and outstanding* *1,227,699,367* 1,221,891,341
*
*
*Interim condensed consolidated statements of operations*
(unaudited, expressed in millions of U.S. dollars, except share and per share amounts) *Three months ended* *Nine months ended* *September 30,* September 30, *September 30,* September 30, *2023* 2022 *2023* 2022
*Revenue*
Metal sales *$* *1,102.4* $ 856.5 *$* *3,124.0* $ 2,378.9
*Cost of sales*
Production cost of sales *520.6* 465.3 *1,502.4* 1,279.2
Depreciation, depletion and amortization *263.9* 185.1 *715.1* 532.1
*Total cost of sales* *784.5* 650.4 *2,217.5* 1,811.3
*Gross profit* *317.9* 206.1 *906.5* 567.6
Other operating expense *14.9* 12.2 *82.1* 83.7
Exploration and business development *51.0* 42.3 *134.3* 105.6
General and administrative *25.8* 40.3 *82.2* 100.5
*Operating earnings* *226.2* 111.3 *607.9* 277.8
Other (expense) income - net *(0.3* *)* 5.6 *(6.3* *)* (0.4 )
Finance income *11.3* 6.5 *32.2* 10.7
Finance expense *(25.9* *)* (23.3 ) *(79.4* *)* (68.0 )
*Earnings from continuing operations before tax* *211.3* 100.1 *554.4* 220.1
Income tax expense - net *(102.4* *)* (34.5 ) *(204.2* *)* (82.7 )
Earnings from continuing operations after tax *108.9* 65.6 *350.2* 137.4
Loss from discontinued operations after tax *-* (0.8 ) *-* (636.3 )
*Net earnings (loss)* *$* *108.9* $ 64.8 *$* *350.2* $ (498.9 )
*Net earnings (loss) from continuing operations attributable to:*
Non-controlling interests *$* *(0.8* *)* $ (0.3 ) *$* *(0.7* *)* $ (0.5 )
Common shareholders *$* *109.7* $ 65.9 *$* *350.9* $ 137.9
*Net earnings (loss) from discontinued operations attributable to:*
Non-controlling interests *$* *-* $ 0.2 *$* *-* $ 0.8
Common shareholders *$* *-* $ (1.0 ) *$* *-* $ (637.1 )
*Net earnings (loss) attributable to:*
Non-controlling interests *$* *(0.8* *)* $ (0.1 ) *$* *(0.7* *)* $ 0.3
Common shareholders *$* *109.7* $ 64.9 *$* *350.9* $ (499.2 )
*Earnings per share from continuing operations attributable to common shareholders*
Basic *$* *0.09* $ 0.05 *$* *0.29* $ 0.11
Diluted *$* *0.09* $ 0.05 *$* *0.28* $ 0.11
*Earnings (loss) per share from discontinued operations attributable to common shareholders* *$* *-* $ - *$* *-* $ (0.49 )
Basic *$* *-* $ - *$* *-* $ (0.49 )
Diluted
*Earnings (loss) per share attributable to common shareholders*
Basic *$* *0.09* $ 0.05 *$* *0.29* $ (0.39 )
Diluted *$* *0.09* $ 0.05 *$* *0.28* $ (0.39 )
*
*
*Interim condensed consolidated statements of cash flows*
(unaudited, expressed in millions of U.S. dollars) *Three months ended* *Nine months ended* *September 30,* September 30, *September 30,* September 30, *2023* 2022 *2023* 2022
*Net inflow (outflow) of cash related to the following activities:*
Operating:
Earnings from continuing operations after tax *$* *108.9* $ 65.6 *$* *350.2* $ 137.4
Adjustments to reconcile net earnings from continuing operations to net cash provided from operating activities:
Depreciation, depletion and amortization *263.9* 185.1 *715.1* 532.1
Share-based compensation expense *2.9* 1.4 *4.3* 7.4
Finance expense *25.9* 23.3 *79.4* 68.0
Deferred tax expense *74.1* 5.5 *92.8* 3.4
Foreign exchange losses (gains) and other *13.0* (1.5 ) *34.8* 8.2
Reclamation (recovery) expense *(18.1* *)* (20.0 ) *(14.1* *)* 3.9
Changes in operating assets and liabilities:
Accounts receivable and other assets *(21.0* *)* (15.6 ) *66.6* 47.0
Inventories *(10.1* *)* (70.0 ) *(93.2* *)* (222.4 )
Accounts payable and accrued liabilities *(15.0* *)* 12.9 *70.4* 64.0
*Cash flow provided from operating activities* *424.5* 186.7 *1,306.3* 649.0
Income taxes paid *(17.7* *)* (13.5 ) *(111.9* *)* (120.8 )
*Net cash flow of continuing operations provided from operating activities* *406.8* 173.2 *1,194.4* 528.2
*Net cash flow of discontinued operation provided from (used in) operating activities* *-* (1.6 ) *-* 47.6
*Investing:*
Additions to property, plant and equipment *(283.9* *)* (197.3 ) *(787.0* *)* (447.4 )
Interest paid capitalized to property, plant and equipment *(43.0* *)* (20.5 ) *(89.8* *)* (36.7 )
Acquisitions net of cash acquired *-* - *-* (1,027.5 )
Net (additions) disposals to long-term investments and other assets *(2.5* *)* (9.5 ) *2.4* (43.6 )
(Increase) decrease in restricted cash - net *(0.2* *)* (1.2 ) *1.2* (2.3 )
Interest received and other - net *6.6* 2.0 *13.5* 6.7
*Net cash flow of continuing operations used in investing activities* *(323.0* *)* (226.5 ) *(859.7* *)* (1,550.8 )
*Net cash flow of discontinued operations provided from investing activities* *-* 43.3 *45.0* 296.2
*Financing:*
Proceeds from issuance or drawdown of debt *488.1* 100.0 *588.1* 1,197.6
Repayment of debt *(550.0* *)* (200.0 ) *(770.0* *)* (320.0 )
Interest paid *(26.5* *)* (26.2 ) *(53.0* *)* (51.8 )
Payment of lease liabilities *(4.4* *)* (6.0 ) *(25.5* *)* (17.1 )
Funding from non-controlling interest *27.0* - *38.8* 1.5
Dividends paid to common shareholders *(36.8* *)* (39.0 ) *(110.5* *)* (116.9 )
Repurchase and cancellation of shares *-* (60.2 ) *-* (60.2 )
Other - net *6.3* (4.9 ) *(1.2* *)* 2.4
*Net cash flow of continuing operations (used in) provided from financing activities* *(96.3* *)* (236.3 ) *(333.3* *)* 635.5
*Net cash flow of discontinued operations provided from financing activities* *-* - *-* -
*Effect of exchange rate changes on cash and cash equivalents of continuing operations* *(1.0* *)* (1.0 ) *0.4* (1.4 )
*Effect of exchange rate changes on cash and cash equivalents of discontinued operations* *-* (0.3 ) *-* 1.6
*(Decrease) increase in cash and cash equivalents* *(13.5* *)* (249.2 ) *46.8* (43.1 )
*Cash and cash equivalents, beginning of period* *478.4* 719.1 *418.1* 531.5
*Cash and cash equivalents of assets held for sale, beginning of period* *-* 18.5 *-* -
*Cash and cash equivalents, end of period* *$* *464.9* $ 488.4 *$* *464.9* $ 488.4
*Operating Summary
* *Mine* *Period* *Tonnes Ore Mined* *Ore
Processed (Milled)* *Ore
Processed (Heap Leach)* *Grade (Mill)* *Grade (Heap Leach)* *Recovery ^(a)(d)* *Gold Eq Production^(b)* *Gold Eq Sales^(b)* *Production cost of sales* *Production cost of sales/oz^(c)* *Cap Ex - sustaining^(e)* *Total Cap Ex ^(e)* *DD&A* ('000 tonnes) ('000 tonnes) ('000 tonnes) (g/t) (g/t) (%) (ounces) (ounces) ($ millions) ($/ounce) ($ millions) ($ millions) ($ millions)
*West Africa* *Tasiast* *Q3 2023* *3,486* *1,796* *-* *3.10* *-* *92%* *171,140* *162,823* *$* *108.5* *$* *666* *$* *12.2* *$* *77.3* *$* *69.0*
Q2 2023 1,688 1,663 - 3.25 - 93% 157,844 152,564 $ 99.5 $ 652 $ 9.1 $ 81.9 $ 58.6
Q1 2023 1,690 1,208 - 3.49 - 91% 131,045 128,479 $ 88.4 $ 688 $ 14.6 $ 64.6 $ 46.2
Q4 2022 3,737 1,627 - 3.21 - 90% 143,002 147,019 $ 96.2 $ 654 $ 38.3 $ 90.3 $ 48.7
Q3 2022 4,437 1,741 - 2.72 - 89% 132,754 128,014 $ 94.8 $ 741 $ 3.6 $ 33.4 $ 58.0
*Americas* *Paracatu* *Q3 2023* *14,725* *14,669* *-* *0.41* *-* *79%* *172,482* *167,105* *$* *141.2* *$* *845* *$* *58.4* *$* *58.4* *$* *53.1*
Q2 2023 14,199 15,104 - 0.42 - 80% 164,243 163,889 $ 135.2 $ 825 $ 39.7 $ 39.7 $ 49.8
Q1 2023 8,056 15,130 - 0.37 - 79% 123,334 128,344 $ 118.0 $ 919 $ 27.8 $ 27.8 $ 40.4
Q4 2022 13,324 13,847 - 0.50 - 81% 180,809 183,190 $ 130.3 $ 711 $ 43.9 $ 43.9 $ 52.7
Q3 2022 11,752 13,797 - 0.45 - 79% 159,113 152,616 $ 131.1 $ 859 $ 33.6 $ 33.6 $ 47.2
*La Coipa^(f)* *Q3 2023* *1,137* *1,017* *-* *1.69* *-* *81%* *65,975* *65,856* *$* *41.4* *$* *629* *$* *7.5* *$* *15.2* *$* *48.3*
Q2 2023 869 971 - 1.62 - 81% 66,744 67,378 $ 43.6 $ 647 $ 19.9 $ 23.3 $ 48.3
Q1 2023 748 691 - 1.68 - 88% 53,596 61,780 $ 44.9 $ 727 $ 1.6 $ 25.4 $ 36.4
Q4 2022 1,047 933 - 1.47 - 84% 67,683 68,135 $ 39.4 $ 578 $ 2.6 $ 46.0 $ 25.6
Q3 2022 1,079 637 - 1.19 - 83% 33,955 24,681 $ 12.1 $ 490 $ 2.9 $ 34.7 $ -
*Fort Knox* *Q3 2023* *6,667* *1,912* *5,961* *0.81* *0.21* *78%* *71,611* *71,616* *$* *82.3* *$* *1,149* *$* *52.1* *$* *57.8* *$* *24.6*
Q2 2023 7,624 2,075 6,837 0.82 0.24 82% 69,438 69,206 $ 79.3 $ 1,146 $ 52.1 $ 58.2 $ 22.1
Q1 2023 7,412 1,966 5,972 0.78 0.22 82% 65,387 65,404 $ 77.6 $ 1,186 $ 38.6 $ 39.1 $ 18.6
Q4 2022 12,205 2,395 11,454 0.69 0.20 79% 83,739 87,061 $ 102.1 $ 1,173 $ 34.4 $ 39.1 $ 40.9
Q3 2022 15,547 2,477 13,120 0.71 0.21 80% 75,522 74,221 $ 88.6 $ 1,194 $ 30.5 $ 31.0 $ 21.8
*Round Mountain* *Q3 2023* *8,474* *911* *7,644* *0.75* *0.38* *75%* *63,648* *61,931* *$* *93.1* *$* *1,503* *$* *7.7* *$* *7.8* *$* *44.1*
Q2 2023 10,496 1,021 10,028 0.67 0.35 76% 57,446 57,412 $ 85.5 $ 1,489 $ 10.5 $ 10.5 $ 33.5
Q1 2023 5,019 878 4,367 0.81 0.44 79% 58,832 58,226 $ 96.5 $ 1,657 $ 7.4 $ 7.4 $ 34.6
Q4 2022 5,177 962 4,772 0.74 0.36 74% 61,929 67,484 $ 95.1 $ 1,409 $ 41.1 $ 41.1 $ 19.1
Q3 2022 8,856 1,021 8,336 0.64 0.27 79% 62,417 61,757 $ 87.0 $ 1,409 $ 24.7 $ 24.7 $ 17.6
*Bald Mountain* *Q3 2023* *7,412* *-* *7,412* *-* *0.39* *nm* *40,593* *41,300* *$* *53.9* *$* *1,305* *$* *20.6* *$* *24.9* *$* *23.3*
Q2 2023 4,142 - 4,119 - 0.42 nm 39,321 42,181 $ 54.5 $ 1,292 $ 16.5 $ 31.4 $ 25.6
Q1 2023 1,864 - 1,857 - 0.47 nm 33,828 47,283 $ 58.0 $ 1,227 $ 6.1 $ 25.2 $ 33.9
Q4 2022 3,002 - 2,957 - 0.37 nm 58,521 66,847 $ 62.8 $ 939 $ 17.2 $ 37.4 $ 63.4
Q3 2022 4,152 - 4,152 - 0.37 nm 65,394 52,472 $ 51.2 $ 976 $ 10.4 $ 28.2 $ 39.1
(a) Due to the nature of heap leach operations, recovery rates at Bald Mountain cannot be accurately measured on a quarterly basis. Recovery rates at Fort Knox and Round Mountain represent mill recovery only.
(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 ratios for the quarters presented are as follows: Q3 2023: 81.82:1; Q2 2023: 81.88:1; Q1 2023: 83.82:1; Q4 2022: 81.88:1; Q3 2022: 89.91:1.
(c) “Production cost of sales per equivalent ounce sold” is defined as production cost of sales divided by total gold equivalent ounces sold from continuing operations.
(d) "nm" means not meaningful.
(e) "Total Cap Ex" is as reported as “Additions to property, plant and equipment” on the interim condensed consolidated statements of cash flows. "Capital expenditures - sustaining" is a non-GAAP financial measure. The definition and reconciliation of this non-GAAP financial measure is included on page 21 of this news release.
(f) La Coipa silver grade and recovery were as follows: Q3 2023: 106.70 g/t, 63%; Q2 2023: 109.84 g/t, 56%; Q1 2023: 125.77 g/t, 70%; Q4 2022: 137.53 g/t, 68%; Q3 2022: 121.06 g/t, 61%.
*Reconciliation of non-GAAP financial measures and ratios*The Company has included certain non-GAAP financial measures and ratios in this document. These financial measures and ratios are not defined under International Financial Reporting Standards (IFRS) and should not be considered in isolation. The Company believes that these financial measures and ratios, together with financial measures and ratios determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. The inclusion of these financial measures and ratios is meant to provide additional information and should not be used as a substitute for performance measures prepared in accordance with IFRS. These financial measures and ratios are not necessarily standard and therefore may not be comparable to other issuers.
All the non-GAAP financial measures and ratios in this document are from continuing operations and exclude results from the Company’s Chirano and Russian operations due to the classification of these operations as discontinued and their sale in 2022. As a result of the exclusion of Chirano, the following non-GAAP financial measures and ratios are no longer on an attributable basis, but on a total basis: production cost of sales from continuing operations per ounce sold on a by-product basis and all-in-sustaining cost from continuing operations per equivalent ounce sold and per ounce sold on a by-product basis.
*Adjusted net earnings from continuing operations attributable to common shareholders *and* adjusted net earnings from continuing operations per share *are non-GAAP financial measures and ratios which determine the performance of the Company, excluding certain impacts which the Company believes are not reflective of the Company’s underlying performance for the reporting period, such as the impact of foreign exchange gains and losses, reassessment of prior year taxes and/or taxes otherwise not related to the current period, impairment charges (reversals), gains and losses and other one-time costs related to acquisitions, dispositions and other transactions, and non-hedge derivative gains and losses. Although some of the items are recurring, the Company believes that they are not reflective of the underlying operating performance of its current business and are not necessarily indicative of future operating results. Management believes that these measures and ratios, which are used internally to assess performance and in planning and forecasting future operating results, provide investors with the ability to better evaluate underlying performance, particularly since the excluded items are typically not included in public guidance. However, adjusted net earnings from continuing operations and adjusted net earnings from continuing operations per share measures and ratios are not necessarily indicative of net earnings from continuing operations and earnings per share measures and ratios as determined under IFRS.
The following table provides a reconciliation of net earnings from continuing operations to adjusted net earnings from continuing operations for the periods presented:
(unaudited, expressed in millions of U.S dollars,
except per share amounts) *Three months ended* *Nine months ended*
*September 30,* *September 30,* *2023* 2022 *2023* 2022
Net earnings from continuing operations attributable to common shareholders - as reported *$* *109.7* $ 65.9 *$* *350.9* $ 137.9
Adjusting items: Foreign exchange gains *(7.1* *)* (5.9 ) *(0.8* *)* (0.1 ) Foreign exchange losses (gains) on translation of tax basis and foreign exchange on deferred income taxes within income tax expense *36.9* 3.1 *5.2* (8.4 ) Taxes in respect of prior periods *5.2* 5.0 *33.8* 15.8 Reclamation (recovery) expense *(18.1* *)* (20.0 ) *(14.1* *)* 3.9 Other^(a) *16.2* 16.9 *26.6* 21.4 Tax effects of the above adjustments *1.8* 3.7 *(1.8* *)* 4.4 *34.9* 2.8 *48.9* 37.0
Adjusted net earnings from continuing operations attributable to common shareholders *$* *144.6* $ 68.7 *$* *399.8* $ 174.9
Weighted average number of common shares outstanding - Basic *1,227.6* 1,299.8 *1,226.7* 1,288.0
Adjusted net earnings from continuing operations per share *$* *0.12* $ 0.05 *$* *0.33* $ 0.14
Basic earnings per share from continuing operations attributable to common shareholders - as reported *$* *0.09* $ 0.05 *$* *0.29* $ 0.11
(a) Other includes various impacts, such as one-time costs at sites, and gains and losses on hedges and the sale of assets, which the Company believes are not reflective of the Company’s underlying performance for the reporting period.
*Free cash flow from continuing operations* is a non-GAAP financial measure and is defined as net cash flow of continuing operations provided from operating activities less additions to property, plant and equipment. The Company believes that this measure, which is used internally to evaluate the Company’s underlying cash generation performance and the ability to repay creditors and return cash to shareholders, provides investors with the ability to better evaluate the Company’s underlying performance. However, the free cash flow from continuing operations measure is not necessarily indicative of operating earnings or net cash flow of continuing operations provided from operating activities as determined under IFRS.The following table provides a reconciliation of free cash flow from continuing operations for the periods presented:
(unaudited, expressed in millions of U.S dollars) *Three months ended* *Nine months ended*
*September 30,* *September 30,* *2023* 2022 *2023* 2022
Net cash flow of continuing operations provided from operating activities - as reported *$* *406.8* $ 173.2 *$* *1,194.4* $ 528.2
Less: Additions to property, plant and equipment *(283.9* *)* (197.3 ) *(787.0* *)* (447.4 )
Free cash flow from continuing operations *$* *122.9* $ (24.1 ) *$* *407.4* $ 80.8
*
Adjusted operating cash flow from continuing operations* is a non-GAAP financial measure and is defined as net cash flow of continuing operations provided from operating activities 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. The Company uses adjusted operating cash flow from continuing operations internally as a measure of the underlying operating cash flow performance and future operating cash flow-generating capability of the Company. However, the adjusted operating cash flow from continuing operations measure is not necessarily indicative of net cash flow of continuing operations provided from operating activities as determined under IFRS.
The following table provides a reconciliation of adjusted operating cash flow from continuing operations for the periods presented:
(unaudited, expressed in millions of U.S dollars) *Three months ended* *Nine months ended*
*September 30,* *September 30,* *2023* 2022 *2023* 2022
Net cash flow of continuing operations provided from operating activities - as reported *$* *406.8* $ 173.2 *$* *1,194.4* $ 528.2
Adjusting items: Working capital changes: Accounts receivable and other assets *21.0* 15.6 *(66.6* *)* (47.0 ) Inventories *10.1* 70.0 *93.2* 222.4 Accounts payable and other liabilities, including income taxes paid *32.7* 0.6 *41.5* 56.8 Total working capital changes *63.8* 86.2 *68.1* 232.2
Adjusted operating cash flow from continuing