KINROSS GOLD CORP

Moody's lifted Kinross to Baa2 from Baa3, and the company repaid the entire US$500 million of 4.50% notes some nineteen months before their July 2027 maturity. That is about US$700 million of debt repaid in 2025 and US$1.5 billion across 2024-2025, leaving US$750 million of senior notes outstanding.

debt financing

Third-quarter results carried a 17% dividend increase and a 20% rise in the 2025 buyback target to US$600 million, on production of 503,862 gold-equivalent ounces at US$1,150 cost of sales and US$1,622 all-in sustaining cost per ounce. Free cash flow of US$686.7 million was a record and the company reached a net cash position.

dividend declaration

The Great Bear preliminary economic assessment set out a combined open pit and underground mine of about twelve years, producing over 500,000 ounces a year at US$594 cost of sales and roughly US$800 all-in sustaining cost in the first eight years. Kinross also reported drilling below the resource used in the study.

resource reserve update

Declared the first mineral resource for Great Bear, twelve months after paying about US$1.4 billion for it: 2.737 million ounces indicated at 2.57 g/t over 33.1 million tonnes in an open pit, plus 2.290 million inferred, of which 1.684 million is underground at 4.50 g/t. That is still below the 8.5 million ounce measured and indicated threshold attached to the contingent value rights in the purchase agreement.

resource reserve update

Committed to buy back US$300 million of stock over the rest of 2022 and 75% of excess cash in 2023 and 2024, subject to leverage limits, while keeping the dividend. Kinross said the programme followed discussions with activist holder Elliott Investment Management, which supported it.

security holder rights change

Closed the Chirano sale to Asante, taking US$60 million cash and 35.0 million Asante shares valued at US$36.2 million for a 9.9% stake, with US$128.8 million deferred over two years. With Russia and Ghana both gone, about 70% of 2022 production was expected from the Americas.

asset acquisition disposition

Completed the Russian exit for US$340 million, half the US$680 million agreed in April, after the Russian foreign-investment sub-commission capped the approved price. US$300 million was received in cash with US$40 million deferred a year; Kinross has no remaining Russian obligations.

asset acquisition disposition

Agreed to sell its 90% of the Chirano mine in Ghana to Asante Gold for US$225 million in cash, Asante shares and deferred payments, exiting Ghana entirely. Chirano was about 3% of Kinross reserves and had been acquired with Tasiast in the 2010 Red Back deal that produced the US$2.9 billion goodwill write-off.

asset acquisition disposition

Agreed to sell 100% of its Russian assets to Highland Gold for US$680 million, of which only US$100 million was payable at closing and US$580 million spread over annual payments to 2027, secured by share pledges, guarantees and an escrow.

asset acquisition disposition

Four weeks after suspending its Russian operations over the invasion of Ukraine, Kinross said it was in exclusive talks to sell all of its Russian assets and would treat them as held for sale. The parent would take no benefit from the operations meanwhile and fund the transition from cash already in the country.

asset acquisition disposition

La Coipa in Chile poured its first gold bar, on schedule and under budget, with the plant to reach full rate by mid-year. At the 2021 year end Kinross had lifted La Coipa's life-of-mine production 45% to about 1 million gold-equivalent ounces and extended it from 2024 to 2026 by adding the nearby Puren pit.

production update

Arranged a new US$1.0 billion three-year term loan maturing March 2025 with no scheduled amortisation, used to repay the revolver drawn to fund the Great Bear purchase. Acquisition debt termed out rather than added to.

debt financing

Suspended all work at the Udinsk development project and began suspending the Kupol mine after the invasion of Ukraine, with more than 2,000 employees in the country, and donated US$1 million to the Canadian Red Cross appeal. Russia had been a producing region for Kinross for 25 years.

production update

Closed the Great Bear acquisition. Shareholders electing cash were pro-rated to about C$25.80 plus 0.4257 Kinross shares each, against caps of roughly US$1.1 billion cash and 80.8 million Kinross shares. Kinross set a target of 200,000 metres of drilling at Dixie in 2022.

business combination

Agreed to buy Great Bear Resources and its Dixie project in Red Lake, Ontario for about US$1.4 billion (C$29.00 a share) in cash and stock, plus contingent value rights worth roughly US$46 million payable only if commercial production is declared with at least 8.5 million ounces of measured and indicated resources. Kinross was paying a top-tier price for a deposit with no declared resource of its own at the time.

business combination

Signed the definitive Mauritania agreement first agreed in principle a year earlier: fuel duty exemptions continue, the government repays about US$40 million of overdue VAT, Kinross pays US$10 million to settle disputes, and a gold-price-linked escalating royalty replaces the old structure, with two government observers on the Tasiast subsidiary board. The prospective Tasiast Sud ground is excluded and still unresolved.

material agreement

A fire at the Tasiast SAG mill trommel on 15 June, during scheduled maintenance welding, suspended milling and forced a cut to 2021 production guidance, though mining, stripping and 24k construction work resumed. Kinross said ball mills, leaching and crushing were undamaged, held 2022-2023 guidance, and had property and business-interruption cover in place.

production update

Agreed to buy 70% of the Peak Gold project in Alaska from Royal Gold and Contango ORE for US$93.7 million cash, with Contango keeping 30% and no vote on operations. Ore would be trucked 400km to the existing Fort Knox mill, giving about 1 million ounces over 4.5 years at roughly 6 g/t and an estimated US$750 all-in sustaining cost for US$110 million of project capital.

business combination

Declared a quarterly dividend of US$0.03 a share and committed to keeping it, alongside three-year guidance of production rising 20% to 2.9 million gold-equivalent ounces by 2023 with costs and capital spending trending down. Reserves stood at 24.3 million ounces at the end of 2019.

dividend declaration

The Lobo-Marte pre-feasibility in Chile added 6.4 million ounces of reserves, about a 25% increase on the company total, on 147 million tonnes at 1.35 g/t with 71% recovery, 4.5 million ounces produced over 15 years at US$545 cost of sales and US$745 all-in sustaining cost. Reserve growth from a shelved project brought back rather than from the drill bit.

resource reserve update

Filed a new Paracatu technical report lifting expected life-of-mine production about 24% against the 2014 report, to an average 540,000 ounces a year from 2020 to 2031, and adding 828,000 ounces of reserves plus 1.1 million ounces of measured and indicated resources. The gain came from a grade-control and optimisation programme run through 2018-2019 rather than from new discovery.

resource reserve update

Closed the Chulbatkan purchase from N-Mining for US$283 million and immediately started a roughly US$10 million drilling programme, targeting reserves and a feasibility study within three years and construction over two more.

business combination

Signed a loan of up to US$300 million for the Tasiast mine with the IFC, Export Development Canada, ING and Societe Generale, borrowed at the Mauritanian subsidiary rather than the parent.

debt financing

Committed to the Tasiast 24k project, raising throughput to 24,000 tonnes a day for US$150 million of incremental capital, guided at 563,000 ounces a year over 2022-2028 at US$485 cost of sales and US$560 all-in sustaining cost with a 60% incremental return. A third, smaller step at Tasiast after the abandoned 38,000 tonne plan and the 12,000 tonne Phase One.

resource reserve update

Agreed to buy the Chulbatkan heap-leach development project in Russia from N-Mining for US$283 million fixed, split roughly US$113 million cash and US$170 million in Kinross shares, plus a 1.5% net smelter royalty and payments contingent on future reserve additions. Stated indicated resource was about 3.9 million ounces at the time of the deal.

drilling result

Committed to the initial Gilmore expansion at Fort Knox for about US$100 million of initial capital plus US$60 million of capitalised stripping, extending mining to 2027 and leaching to 2030 and adding 1.51 million ounces at US$650 cost of sales and US$950 all-in sustaining cost. The supporting Fort Knox technical report was filed with it.

resource reserve update

Agreed to buy two hydroelectric plants in Brazil from a Gerdau subsidiary for US$257 million to lock in about 70% of the Paracatu mine's power at a fixed cost, expected to cut production cost of sales by about US$80 an ounce over the mine life. Kinross planned to fund roughly US$200 million of it with debt.

business combination

Acquired mineral rights to the 287-hectare Gilmore parcel next to Fort Knox, adding 2.1 million ounces of measured and indicated and 300,000 ounces of inferred resources after 73,000 metres of drilling in 205 holes. About 260,000 ounces were also converted to reserves, offsetting most of the year's depletion and extending Fort Knox by roughly a year.

resource reserve update

Committed to both the Tasiast Phase Two expansion to 30,000 tonnes per day and the Round Mountain Phase W layback. Phase Two is guided at about 812,000 ounces a year for five years at US$440 cost of sales and US$655 all-in sustaining cost, a 24% return and US$2.2 billion of life-of-mine cash flow.

resource reserve update

Closed the Cerro Casale and Quebrada Seca sale to Goldcorp on the terms announced in March, receiving US$260 million cash with the US$40 million construction payment and 1.25% royalty still contingent.

asset acquisition disposition

Agreed to sell its 25% of the undeveloped Cerro Casale project and 100% of neighbouring Quebrada Seca in Chile to Goldcorp for US$260 million cash at closing, a further US$40 million on a construction decision, assumption of a US$20 million obligation to Barrick, and a 1.25% royalty. Kinross also secured rights to surplus project water for its other Chilean mines.

asset acquisition disposition

Committed to Tasiast Phase One, lifting mill throughput from 8,000 to 12,000 tonnes a day for about US$300 million, guided at 409,000 ounces a year over 2018-2027 at US$535 cost of sales and US$760 all-in sustaining cost for a 20% return. Three years after the 38,000 tonne-a-day feasibility study, Kinross built a fraction of it.

resource reserve update

Announced a bought deal of 83.4 million shares at US$3.00 for about US$250 million, with roughly US$175 million going to repay the credit facility drawn to buy the Nevada mines from Barrick six weeks earlier. Equity issued to term out an acquisition, at a share price near the bottom of the cycle.

capital raising announcement

Closed the US$610 million Barrick purchase of Bald Mountain and the remaining half of Round Mountain, funded initially by drawing the credit facility.

business combination

Agreed to buy 100% of Bald Mountain and the other half of Round Mountain from Barrick for US$610 million cash, adding about 430,000 gold-equivalent ounces a year over three years and lifting US production 56%. The Bald Mountain purchase includes a 600 square kilometre land package, 40% of which will be explored in a 50/50 joint venture with Barrick.

business combination

Completed the Fruta del Norte sale for US$240 million, taken as US$150 million cash and US$90 million in Fortress stock at C$4.00 a share, leaving Kinross with about 25.8% of Fortress. Kinross agreed to hold the shares for six to twelve months.

asset acquisition disposition

Agreed to sell Aurelian Resources and the abandoned Fruta del Norte project in Ecuador to Fortress Minerals, a Lundin group company, for US$240 million in cash and Fortress shares. This closes out the project Kinross walked away from in June 2013.

asset acquisition disposition

The Tasiast expansion feasibility study cut expected initial capital from the pre-feasibility US$2.7 billion to about US$1.6 billion and lifted reserves by 3.1 million ounces to 9.6 million, for average output of 848,000 ounces a year over five years at US$501 cash cost and a 17% return. Kinross did not commit to build it at this point.

resource reserve update

Dvoinoye, a high-grade underground mine 100km from Kupol, reached commercial production on schedule and on budget, feeding the expanded Kupol mill. Guided to add 235,000-300,000 gold-equivalent ounces a year in its first three full years at a Russian regional cost of sales of US$545-600 an ounce.

production update

Two announcements in one filing. The larger one abandons the Fruta del Norte project in Ecuador after two years of failed negotiation with the government, ending the asset Kinross bought with Aurelian Resources; the second extends the US$1.5 billion revolver to August 2018 and the US$1.0 billion term loan to August 2017, leaving no debt maturing before 2016.

debt financing

The Tasiast expansion pre-feasibility put a 30,000 tonne-per-day mill at roughly 830,000 ounces a year for five years, cash costs near US$500 an ounce and all-in sustaining costs near US$735, but at a capital cost of about US$2.7 billion for an 11% return. Kinross opted to study a larger 38,000 tonne-per-day mill instead.

resource reserve update

The material change report behind the 2011 year-end results: a non-cash goodwill impairment of US$2,937.6 million on the Tasiast and Chirano assets bought from Red Back Mining in September 2010, of which US$2,490.1 million was Tasiast and US$447.5 million Chirano. Kinross blamed industry-wide cost inflation, lower sector valuations and its own improving understanding of the Tasiast mine plan, and cut back capital, deferring Fruta del Norte and Lobo-Marte.

other material event

Preliminary 2011 production of about 2.6 million gold-equivalent ounces at roughly US$600 cost of sales per ounce, both within guidance, with 2012 guided at 2.6-2.8 million ounces but at a higher US$670-715. Alongside it Kinross opened a capital and project optimisation review, the first public signal that the Tasiast expansion plan was being cut back.

production update

Priced US$1 billion of senior unsecured notes in three tranches: US$250 million of 3.625% due 2016, US$500 million of 5.125% due 2021 and US$250 million of 6.875% due 2041, for general corporate purposes and capital spending. Kinross was funding the Tasiast build-out at the top of the gold cycle.

debt financing

The business acquisition report for Red Back Mining, acquired 17 September 2010. Consideration was 1.778 Kinross shares plus 0.11 of a four-year warrant exercisable at US$21.30 for each Red Back share, with options exchanged at a 1.81 ratio. No cash was paid; the whole US$7.1 billion was Kinross paper.

business combination

Closed the Dvoinoye and Vodorazdelnaya purchase for US$165 million cash and about 10.56 million new Kinross shares held for four months. Dvoinoye reached commercial production in October 2013 and was sold with the rest of the Russian business in 2022. Classified as a drill result by the headline classifier; it is a completion.

business combination

Agreed to acquire Red Back Mining in a friendly all-share plan of arrangement valued at about US$7.1 billion fully diluted, a 21% premium, issuing roughly 425 million Kinross shares and 26 million warrants and leaving existing Kinross holders with about 63% of the company. Red Back brought the Tasiast mine in Mauritania and Chirano in Ghana, and Kinross said it would accelerate development at Tasiast. This is the transaction Kinross wrote US$2,937.6 million of goodwill off in 2011 and a further US$3.1 billion against Tasiast in 2012.

business combination

Agreed in principle to buy the high-grade Dvoinoye deposit and the Vodorazdelnaya property, 90km north of Kupol in Chukotka, for US$368 million comprising US$165 million cash and Kinross shares, with ore to be processed at the existing Kupol mill. Classified as a drill result by the headline classifier; it is an acquisition.

business combination

Completed the purchase of 40% of Minera Santa Rosa, owner of the Lobo-Marte project in Chile, from Anglo American for US$140 million, with the remaining 60% to come from Teck for about 5.6 million Kinross shares, roughly US$40 million net cash and a 1.75% royalty on 60% of future production. Lobo-Marte sat unbuilt until its 2020 pre-feasibility added 6.4 million ounces of reserves.

business combination

Agreed a friendly all-share offer for Aurelian Resources worth about US$1.2 billion, at 0.317 Kinross shares plus 0.1429 of a five-year warrant struck at US$32.00 per Aurelian share, a 63% premium. The asset is the Fruta del Norte deposit in Ecuador, which Kinross would abandon in 2013 and sell for US$240 million in 2014.

business combination

Closed the Bema acquisition, each Bema share exchanged for 0.4447 Kinross shares plus C$0.01, with Bema delisted from the TSX and NYSE. Kupol, Paracatu and Cerro Casale are now Kinross assets. Bema's management team went on to found B2Gold later that year.

business combination

Agreed to acquire Bema Gold in a US$3.1 billion all-share transaction, creating a US$7.9 billion producer with nine mines in five countries, 50 million ounces of gold reserves and resources, and 2006 output of 1.8 million gold-equivalent ounces guided to grow 56% to about 2.8 million by 2009. Bema brought Kupol in Russia, Paracatu in Brazil and a share of Cerro Casale in Chile.

business combination

Completed the acquisition of Crown Resources and its Buckhorn deposit in Washington State, 76km by road from Kinross's Kettle River mill, expected to add about 200,000 ounces a year from late 2007. Ore trucked to an existing mill, the pattern Kinross would repeat with Dvoinoye at Kupol and Peak Gold at Fort Knox.

business combination