CEO Quarterly Update: 2017 Q4/Year-End Results

Today we released our 2017 Q4/Year-End Results and Outlook, as well as an update on our Organic Development Projects and Exploration activities. Here are some highlights:

  • Safety is our number one priority: We improved our safety performance on both frequency and severity compared to last year. However, the metrics are overshadowed by the fact that we had an employee fatality for the first time since 2012.  It puts into perspective how important it is to keep safety front-of-mind for every shift and every task.  Ensuring our employees go home safely and in good health every day is an absolute, so please always keep safety as our number one priority.
  • Met production and cost targets for the sixth straight year: 2017 was a very strong year operationally. We met the high end of our production guidance and reduced our year-over-year costs, achieving production of 2.67 million Au eq. oz., all-in-sustaining costs of $954 per Au eq. oz. and production cost of sales of $669 per Au eq. oz.
  • Maintained our solid financial position: We ended 2017 with liquidity of  approximately $2.6 billion, even as we proceed through this period of investment. We generated $952 million in operating cash flow and our adjusted net earnings almost doubled year-over-year to approximately $180 million. We have a robust balance sheet, no debt maturities until 2021, and are in excellent position to finance our organic development projects.
  • Organic projects poised for execution:  We have five exciting development projects which are all proceeding on schedule and on budget, as well as three development opportunities that are advancing as planned.
    • Tasiast Phase One is expected to commence full commercial production by the end of June and Phase Two construction is expected to commence in the months ahead.
    • Round Mountain Phase W construction has commenced ahead of schedule and will continue in 2018, with initial low-grade ore expected in mid-2019.
    • Bald Mountain Vantage Complex construction is well underway and commissioning is expected in Q1 2019.
    • Mining of high-grade ore at Moroshka is expected to begin in the second half of 2018 for processing in the Kupol mill.
    • Fort Knox Gilmore is the newest addition to our development pipeline and we expect to complete a feasibility at mid-year.
    • Tasiast Sud pre-feasibility study is proceeding as planned and is expected to be completed in the second half of 2018.
    • At the La Coipa Restart project, we recently agreed to acquire full ownership of the Phase 7 deposit and added 844 koz. of gold and 34 Moz. of silver to mineral reserve estimates.
  • Exploration and mineral resource and mineral reserve additions: Additions to estimated mineral reserves are expected to extend mining at Round Mountain by five years, Fort Knox mine life by one year, mill production at Kupol by one year, and Paracatu mine life to 2032. We also added approximately 4.0 Moz. to proven and probable mineral reserve estimates in 2017 to offset depletion of 3.2 Moz.
  • Solid outlook for 2018: We are forecasting another year of solid production of approximately 2.5 million Au eq. ounces, and we expect to be at or slightly above the same level of production over the next three years. For 2018, we are forecasting all-in sustaining costs (AISC) of $975 (+/- 5%) per ounce sold, which is largely in line with 2017 AISC. Production cost of sales is expected to be $730 per Au eq. oz. (+/- 5%) for 2018, and we expect it to decline slightly in 2019 and 2020. Total capital expenditures is expected to be $1,075 million (+/- 5%).

Thank you for all of your hard work during what has been a very busy, but successful year.

The year ahead is also a special year for Kinross as we celebrate our 25th anniversary as a Company.

Looking forward, many of our projects are moving into a phase of execution, and we are in great position to continue delivering value to all our stakeholders.

Let’s work together to stay focused on safety and on achieving strong results.


J. Paul Rollinson
President & CEO
Kinross Gold Corporation



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