Yesterday we released our 2018 Q1 results and I have included some highlights below.
Our 25th year as a Company is off to a strong start: operations are performing well, we are in a strong financial position, and our organic development projects and opportunities continue to progress on schedule.
Key highlights include:
- Our safety performance continues to be strong, with a Total Reportable Injury Frequency Rate of 0.30. While we are trending in the right direction, it is essential that we do not take shortcuts that may compromise safety. No task is more important than your safety.
- Our social responsibility and environmental performance continues to be strong, as indicators for both areas across our global portfolio shows excellent results. We also expect to release our Corporate Responsibility Report around mid-year.
Deliver Mine and Financial Performance
- Operational highlights: Our portfolio of mines performed well in the first quarter, and we are on track to meet our production guidance for the year. In particular, Bald Mountain and Paracatu performed strongly, with significant year-over-year improvements in production and cost of sales. Our Russia and West Africa regions also achieved solid results.
- Financial performance: All-in sustaining cost per ounce decreased to a record low in the first quarter and adjusted cash flow increased significantly by 45% to $364 million compared to Q1 2017. We are well on our way to meet our cost of sales and capital expenditure guidance for the year.
- Balance sheet: Our balance sheet remains one of the strongest among our peers, as we ended the quarter with $1 billion in cash and cash equivalents, for total liquidity of approximately $2.6 billion, and with no scheduled debt repayments until 2021. We are in excellent financial position and have the flexibility to invest in our future as we execute on our high-quality development projects.
- Credit rating upgrade: S&P Global Ratings upgraded Kinross’ credit rating during the quarter to investment grade, recognizing our long track record of maintaining good credit metrics and our consistent operating performance.
Deliver Future Value
- Our organic projects and development opportunities are progressing on schedule:
- The Tasiast Phase One expansion is near completion, on schedule and on budget, to reach 12,000 tonnes per day throughput by the end of June 2018.
- Construction of the Round Mountain Phase W project is progressing according to schedule, with engineering 90% complete and initial low-grade ore expected in mid-2019.
- At the Bald Mountain Vantage Complex engineering is now 90% complete with commissioning of the heap leach pad and processing facilities expected to commence in Q1 2019.
- In Russia, the Moroshka project located near Kupol remains on schedule and on budget, with mining expected to begin in the second half of the year.
- The Fort Knox Gilmore project feasibility study in Alaska is on schedule for completion in June 2018.
- We expect to initiate a feasibility study for the La Coipa Restart project mid-year.
- The Strategic Business Planning process is underway. Strategic options day took place on May 1 where various potential future projects were reviewed. Sites are beginning to develop their strategic business plans for submission in the third quarter.
Continuous Improvement and Innovation
- The Innovation Opportunity Fund was launched in January, which is a program designed to encourage employees to submit ideas that can improve our business and make us a more safe and efficient company. We have received some great ideas that we are already testing. Key site CI initiatives are also progressing well.
I am very pleased with the great start to our year and I wanted to thank you all for your contributions. Keep up the hard work and let’s keep this strong momentum going for the rest of 2018.
J. Paul Rollinson
President & CEO