Kinross Gold (KGC) 5 Nov 202020 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the Kinross Gold Corporation Third Quarter 2020 Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today’s conference is being recorded. Instructions]. [Operator like Mr. conference now speaker to hand today, for to would over the your I Senior President Elliott, Tom Vice of Investor Relations. Thank you. sir. ahead, go Please

Thank Kinross' us President With Geoff Gold. Freeborough, you. have and Good Rollinson, Paul Paul today, Tomory, and leadership senior we and team, Andrea CEO; morning.

Before I'd presentation. bring like to fact attention the this we we statements will during begin, that be to your making forward-looking

releases from which estimates discussion turn presentation, our for the most of in X the Paul. call performance dated the may assumptions, our lead complete and and which period and Page to AIF, a and filed information, on XXXX, For of being over all our forward-looking uncertainties to XX, November different X, recently are contained our XXXX, to now please ended results I'll actual risks, news refer MD&A available this September website. of

Thanks, cash full operational be hear yield. our with very track strong will strong year our report This a with very The and Tom, communities company you like guidance strong QX our consecutive excellent will all caused by is would free our the of This you deliver be us what track morning, our is start acknowledging delivered quarter the and ongoing morning, joining by meet families always who priority. for record environment to safety I employees, today. that another delivering in employees our continues is for results. on us and their to help thank an Kinross attractive to first I'm all pleased strong challenging host have of to pandemic. to hard It worked year. how remains and technically flow ninth

a quarter. to an Paul Before turning the during and the the performed and quarter review, Andrea will comment financial the a operating briefly notable company's for operations few developments. well I over to review, for All on call

the Paracatu, growth again, in production margins, in with mines and flow. for significant pleased free and the delivered and we XX% costs total achieved lowest Kupol-Dvoinoye, accounted earnings We are largest Once the portfolio. cash Tasiast three among have our of

our quarter, to again, results. delivered tangible the During improvement, commitment continuous

XX% in average outpacing last perhaps realized quarter translated year in gold This compared the free which $XXX with time. robust into growth XX% QX, increase was highest increased million price. the margin our Our cash flow, in some approximately in a

we link First, dividend, on the XXth, As over which million by our strong production had revolver a we released cash $XXX strengthened. result, in with highlighting the quarter. several can In investment finished August, announced company's our to Kinross over And in our the find during accomplishments further million QX. you which notable during was our a repaying release. press fully balance quarter On record grade night's Sustainability sheet following: we after last Report September the ESG strong the the strength a reflection success, repay and financial Second, third, of on reinstatement quarterly revolver multi-year to of is is remaining a have timeframe; intention been; And reinstatement to the XXXX our increase introduction to of to balance now which expected the operational which our X.X ounces XXXX guidance direct our our guidance we XX% of approximately outlook. this and

production decade. expect will detail of sustain recent additional that an update that the ago, transaction quarter, that low-capital Peak demonstrates the acquisition finally, our expertise. our provided projects the pipeline production high-return existing end weeks two of in and and technical opportunities ability operations interest on guidance, the project through During also in X-year find we into And XX% a this leverage to of our completed infrastructure we our This also our visibility provided hosted Alaska. extensive we

us for As call over pleased we a a financial the quarter. you can turn are months of number now of results. to the detailed and busy few for the updates to see, I'll positive it's been during delivered Andrea a on have more very review

few capital our highlights balance financial expenditures from quarter, with Thanks, commenting Paul. on on by touch the and I'll sheet. begin a

attributable During ounces average XXX,XXX QX, we and of sustaining produced an of approximately gold ounce approximately cost $XXX at per and ounce. all-in XXX,XXX ounces equivalent sold sales of $XXX cost

the throughout the production expected, As strongest quarter being did year increase third year to-date. with a

which into add timing outpacing despite in at AISC Bald as Paul commented to is a result not the our trend our of even sold is over within compared QX. increased our control. XX,XXX challenges a per Mountain of our the price outpaced the testament in ounce cost $XXX year, will this Bald at continue our price. cost and the in gold on lag realized mainly uncommon $XXX expect than $XXX to The We're margins increase prior disciplined which approximately sales out to fewer increase by gold also to to pleased average earlier timing and that we I on time. track continue expected our COVID-XX We ounces with guidance. production related performance, We to produced, increase it Mountain. lag the margin

was both $XX performance QX. measures quarantine adjusted up EPS approximately to to COVID-related gold during compared due million at and taken from down are adjusted third year cash driven quarter operating higher million costs costs $X.XX strong prices. These adjusted which Our $X.XX by QX, flow exclude site. of per significantly $XX share figures last and approximately operating of the primarily These in of were

free million was approximately growth in increased Adjusted operating as as for is flow will Paul to mentioned continued as flow the quarter the cash quarantine So cash $XXX million year. throughout long costs million necessary, flow earlier, And demonstrating these $XXX free year. last from $XXX persist. cash

QX. roughly for expect $XXX were was QX line months flow Capital We which nine remain was approximately million. $XXX in expenditures the with the cash expenditures. during strong free million, to in quarter CapEx first

QX guidance range plus spend our within million finish the $XXX year expect in CapEx our to the to we of or minus expect XXXX highest still of X%. be We and

As capital which of stripping COVID-related in movement year related this on the previously by site Tasiast, to also has personnel spending pace by strike year. delays slower the stated, been so earlier constraints impacted at the at of has our mainly far in and been

repaying increasingly and of project fully cash on of Following results September has flow, This strong strong with factors. $XXX living strong two, XXth, interest free cash operating substantial some our key million well-positioned the pandemic-related at is $XXX XX% and of another flow for revolver. combined equivalents. and operational free globally. we’re cash purchase an We've cash quarter we available comfortable the And us repaid revolver we which from million of in after recognize had our various financial million our $XX with now couple and outlook, after a overall a we'll time, cash generating while standpoint. Peak One, for the the environment with reflects our risks we're be

billion. XXXX. As net debt-to-EBITDA gold times. trailing improved of month zero of approaching September, and ratio once the the now we net over our is close again end And be to total end debt of current At at our expect just X.X was prices, XX $X.X debt to

Tomory. amounts to $XXX during the a you of we're with we the $X.XX well share announced of liquidity continue know, an forward. plan annual approximately pay per we This and In our quarter with fits have within quarterly base capacity. and business our Paul to to payout of funding a we million comfortable Kinross’ as I'll over position, Board to going our summary, current the call turn the financial environment. strong dividend dividends believe in reinstatement Finally, dividend the plan approving new now

very you Andrea. much Thank

mentioned, go detailed such, update and on focus through Paul any today new a a updates we our And on ago. projects will As I’ll QX weeks our detailed and results hosted explorations. operations couple as

As topics. questions to always, we'll though, those on have take may happy be you additional

negative brief I'll it a business, COVID-XX. to measures and through First, update minutes achieve took are brief COVID-related guidance acted have how operations performing. continues we projects. summary on our on our on impact a minimize new continue and us material for to that operations track normal. we've to speaking, both and on to I'll to few adjust very portfolio our any and topics, spend of and important impacts We allowed year operations of manage the then the experienced give well To-date, a early not the of remain Broadly providing the

As our production, and quarter mines strong indicated, performance with a their sales just Paul biggest of of three XX% per continued accounted ounce. third cost below $XXX combined for

QX three big producer While deliver up still was with due It of were our largest the once to compared strong results. again to and Paracatu. largely continues costs slightly attractive,

recoveries our report. as next throughput due Costs expected is were with due a our lower during result ounces over the previous and recovery. to to line to once of the higher are into characteristics. by planned Lower in slightly maintenance again, the changes and decreased into of in and in overall the the X,XXX as throughput production result lower technical Production production But compared we low quarter quarter up anticipated the lower improve ore last year. quarter fourth grade a in However, approximately with move also plan was quarter.

ability a as higher sales as delivered with good the and Production was line Russia, exploration last we're another sales our just ounces below continue Russia down to exchange however at said drove improved up the to per the $XXX and record mining ramp our Production rates ounce, Tasiast a in production in years. mine ounce, XX,XXX cost with expand mill quarter below the we and and foreign of Kupol. of and for activity cost was $XXX August with half a in with pleased and grades Dvoinoye excellent lowest of largely record And Kupol positive. net Turning rates XXth two of results life quarter, quarter very operationally reduced of portfolio. had month on throughput. per Dvoinoye mining October in favorable level lowest to

COVID-related and impacts now capacity. early near Following rates the full to are year, strike in back mining

of to XXX,XXX deferred However, expected to production these be 'XX. 'XX ounces approximately of issues, is as result a from

grades, substantially. results of U.S. an despite at quarter continuation quarter. say delivered several excellent our factors. strong pleased across lower Knox, very all forward. production results low throughput achieved to QX. going Turning mill to I'm with delivered we're sites. due at and three to with happy compared both in And operations, And cost production furthering These costs XX% Fort we higher improved during It At which are the increase the of expect a

the to branch in opportunistically caught recoveries. following first would under up a have Gilmore previously send of to mill substantially on We're stacked with infrastructure also contracted positive in that processing period us the and the pads, of costs. the was have allowing that mining grade which course, to the We higher work say with Round we've of budget, facilities achieving pleased completed ore decreasing gone of lowered Barnes cost plan more seen line and now weather At on on some with We very new and current zones. component reconciliation mine been on ore is also production in cutover have to slightly leach the to mainly both economically heap October. QX Mountain, lower sales Creek leach pad projects due challenging time

last technical in QX While the compared with with the from Chirano, unplanned at is at improved Ghana was with and plant Mountain a expectations performing at Concluding compared with as improved downtime production the our process some line gold resolved. second slightly costs Bald throughput quarter operation quarter perspective.

operations on However, per our are are To mine to our priorities higher very employees, life our to like costs extensions. happy on health wrap consistent time At safety continue successful delivering due that, we Chirano, call about be on focusing of budget. over back period, exploration with results Kupol, and and to turn approximately with and costs. optimistic operating projects and the $XX on continued I'll Paul. here and milling this And projects, up, increased ounce our during pandemic the strong particularly delivering

stay together work my gratitude who to employees, and I help governments reiterate the and us communities you, host productive. safe all to continue Thank suppliers, to Paul. to our want

remains work, are As our sites all very on our result well-positioned. to continue hard and time of and business projects budget. everyone's advance on Notwithstanding our of a operating, COVID,

and prices favorable. are commodity Our currencies

portfolio We exploration with projects attractive of opportunities. have coupled an global and operations pipeline robust a of

grow record track excellence operational on continue geographies. and all cash across execution. flow, our we our we sheet. our to build strengthen further proven a And record have balance of to that continue free And project We for and

like and With these to years. over share With operator, continue are characteristics, up to quarters great value -- to now we call meaningful to I'd that in turn creation shape price coming drive the the appreciation questions. open and

[Operator Instructions].

of Genuity. MacRury with comes Canaccord line question Carey first Your the from

your on should of question the pickup the a in tracking looks guidance sort like be you're QX? Just wondering, under for CapEx, expecting year. it we just I'm a

it's well. picked And has Carey, up past Hi, we up Andrea. that expect typically in do Yes, year CapEx as the -- in picked we've this QX.

for they're Tasiast, reasons to the the not slowdown While been getting our planned up at back has stripping rate.

expect guidance $XXX million minus So of to or in we X%. within do our come plus

think sort be it the end at what that range you do will you lower of expect? Do or

just with It'll that We're range. range. sticking within the be

which we've Tasiast that some is the item. just nearly double on a where around Carey, during works you numbers plant at Well, And the a third was to at XX commenced that, quarter quarter. Tasiast, dollar big power give million, on the we're on pretty stripping fourth at looking in

a drive pretty will up. step big Tasiast So

write MD&A is to issue that power into issues about And I in forward Is a guess or be intermittent something QX? at the Tasiast. resolved you carried that

various pretty periodically rain not, believe big site No, And throughput have impacts the events, downtime COVID more take than step was impacts didn't at times just or back, Tasiast, throughput it’s do impacts. people have anticipated one at of enough due a wind were: to of events one mills two resolved. on we rain that. of Tasiast we impact -- the some It to and were result the -- of to is, related a travel and the at there to because one rain downtimes as some it at extreme

one one for maybe And Okay. last me.

on operating the year guidance was of I around start the $XXX Just costs, know the other million. at

of Chile due and half think costs was and that maintenance I to care River. in Kettle

then forward? comes guess when Just I Maricunga of does I that's guess suppose. smelter? wondering take to that how And that I related evolve going more that the should presumably care up,

off, I'll just comment well, guidance. the Yes, first on

related $XXX million COVID the which we've additional was been the guidance costs year. that And is start to increased to the million, $XXX at really we've of So year. that this seeing the

budgeting care In and our in process terms of now. just maintenance, we're

So, with our next we'll year. XXXX come out early guidance for

Maybe it origin much? seems time. some in so so run and like philosophically, will Or heavy a down then and at It pretty point just come rate. timing, not

You’re point. probably where -- I Carey, at that But directionally, just you guess. I see haven’t right, didn’t with coming just that us? you're speak this we from. why We updated

for working I the Maricunga, At on are several mean next years. we there optimized plan the

on So one ongoing reducing is of focus the costs. there

[Operator Instructions]. appears questions no to time. And there be at this

Thank everyone, We you. you, in forward you up operator, weeks. and Thank coming thanks, morning. for look to the joining us this with catching

Ladies and this your participation. Thank today's for conclude gentleman, does call. you conference

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