Kinross Quarterly Update: 2021 Q4/year-end results

On February 16th, we released our 2021 Q4/full-year results, provided an update on our development projects and exploration activities and also announced our Climate Change Strategy.

In spite of challenges over the year, Kinross was able to make tangible progress in advancing our long-term strategy in 2021.

“Despite some challenges during 2021, we produced approximately 2.1 million gold ounces. We expect to increase our production in 2022 and 2023 to 2.65 million and 2.8 million ounces, respectively, to drive robust free cash flow. Our long-term production profile remains strong, with expected production of 2.6 million ounces in 2024 and an annual average production estimate of at least 2.5 million ounces over the remainder of the decade,” said J. Paul Rollinson, President and CEO. “Our development projects are also advancing well, and Kinross successfully added to its mineral reserve estimates, which increased by 2.7 million ounces to 32.6 million gold equivalent ounces, at year-end 2021.”

A summary of 2021 highlights can be found below:

First Priorities

Safety continued to be our first priority over the year. In the important area of ESG we strenghthened our strategy and governance in 2021. We also made a commitment to being a net-zero GHG emissions company by 2050, and outlined our Climate Change Strategy which sets out tangible GHG reduction goals for 2030.

  • Once again, Kinross’ ESG performance ranked in the top quartile of its peer group, as measured by multiple ESG ratings.
  • The Company outlined its Climate Change Strategy, with the target of reducing the intensity of its scope 1 and scope 2 emissions by 30% by 2030. 
  • Injury frequency rates remained in line with Kinross’ three-year averages, however, this was overshadowed by a tragic fatality at Chirano and a mill fire at Tasiast. 
  • Kinross continued to work to mitigate the risks associated with the ongoing COVID-19 pandemic, and provided support to bolster vaccination rates of its workforce.
  • The Company established an ESG Executive Committee to help further strengthen ESG governance and strategy.

Operational & Financial Highlights

  • Produced 487,621 Au eq. oz. in Q4 2021, and 2,067,549 Au eq. oz. in 2021. 
  • Successfully restarted the Tasiast mill and completed definitive agreement with Government of Mauritania.
  • Production cost of sales was $864 per ounce in Q4 2021, and $828 per ounce in 2021.
  • All-in sustaining cost was $1,312 per ounce in Q4 2021, and $1,138 per ounce in 2021.
  • Free cash flow was a net outflow of  $100.7 million in Q4 2021, and a net inflow of $196.6 million in 2021.
  • Adjusted net earnings were $101.8 million, or $0.08 per share in Q4 2021, and $541.3 million, or $0.43 per share, in 2021.
  • Cash and cash equivalents of $531.5 million, and total liquidity of $1.9 billion at December 31, 2021.
  • Returned more than $250 million in capital to shareholders through our share buyback and quarterly dividend programs. 

Deliver Future Value

Our projects continue to advance, with Tasiast 24k and La Coipa on schedule, and we also added 2.7 million gold ounces to our mineral reserve estimates.

Furthermore, with our exciting pipeline of projects and the expected upcoming completion of the acquisition of Great Bear Resources, we are well-positioned to deliver on our longer-term growth plans.

  • At Tasiast 24k, we are on schedule to reach sustained throughput of 21,000 tonnes per day by the end of Q1 2022, and 24,000 tonnes per day by mid-2023.
    • We are also proceeding with the development of a 34 MW solar power plant to support our GHG reduction goals.
  • Commissioning commenced in February 2022 on schedule and on budget at the La Coipa Restart project. The project increased estimated life of mine production by 45% to 1 million ounces and mine life to early 2026.
  • At Udinsk, the feasibility study is advancing well and remains on schedule to be completed in Q3 2022.   
  • Activities related to permitting continue at Lobo-Marte after the completion of the project feasibility study last quarter.
  • We are also advancing the feasibility study at Manh Choh, which is on schedule to be completed by the end of 2022.
  • We added 2.7 million gold ounces, net of depletion, to Kinross’ proven and probable mineral reserve estimates, which increased to 32.6 million gold ounces.
  • Chirano extended its estimated mine life by one year to 2026.
  • In 2022, we plan to ramp up our global exploration program with the goal of adding to mineral reserve and resource estimates by following up on key targets identified in 2021. These include significant results at Round Mountain and the Kayenmyvaam license near Kupol.
  • Following the completion of our acquisition of Great Bear Resources, we will also be launching a comprehensive drilling program at the Dixie project.

We look forward to continuing to safely advance our future value strategy as we move forward into 2022.

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