Kinross Provides Preliminary 2009 Results and Outlook For 2010

 

TORONTO - Tye Burt, President and CEO of Kinross Gold said, "As gold demand surged and prices hit record levels, Kinross delivered its highest-ever quarterly output in the fourth quarter of 2009, and expects to produce a record 2.23 million gold equivalent ounces for the full-year 2009, a 21% increase over 2008. Our new mines at Kupol and Kettle River-Buckhorn both delivered production on plan for their first full year of operation. The ramp-up at our Paracatu expansion continues, and recent improvements to the new plant have boosted recovery and stabilized performance, with production in the fourth quarter slightly higher than our revised forecast. We are adding a third ball mill at the Paracatu expansion, and expect to complete installation and commissioning in the first half of 2011.

"In 2010, as in 2009, we expect to generate strong revenue and cash flow from our operations. Production is expected to be consistent with 2009 levels, with a slight increase in cost of sales per ounce, as grades are expected to decline at Kupol, while performance and production at Paracatu are expected to improve, and the new Fort Knox heap leach is expected to contribute a full year of production.

"With a major phase of growth complete, we're advancing our next round of new projects, and look forward to providing an update on progress at our organic growth and development projects in our fourth quarter 2009 release."

Cost of sales per gold equivalent ounce for 2009 is expected to be within the previously-stated guidance range of $435-450.

At the Paracatu expansion in Brazil, improvements and fine-tuning in the fourth quarter of 2009 have stabilized plant operation and increased recovery to an average of 77%, near the plant design recovery rate of 80%, which resulted in fourth quarter gold equivalent production of approximately 108,000 ounces, slightly higher than previously estimated. The Company has now approved plans to install a third ball mill at the Paracatu expansion to increase the grinding capacity needed to process harder ore from the Paracatu orebody. Delivery of the new 15 MW ball mill is expected in mid-2010, and installation and commissioning are expected to be complete in the first half of 2011. The total capital cost is estimated to be approximately $97 million, of which approximately $90 million will be required in 2010.

At the new Fort Knox in Alaska, heap leach, some 3.7 million tonnes of ore had been stacked as of the end of the fourth quarter, and leaching was progressing well, with production of approximately 7,400 gold equivalent ounces from the leach pads in the fourth quarter.

At Kupol in Russia, ground control issues encountered in the third quarter of 2009 have been addressed with a modified mine plan. Modifications include shortening stopes, restricting air circulation in non-operating areas to maintain permafrost conditions, enhanced rock control procedures, and modified sequencing. Forecast production for 2010 based on the modified mine plan is generally consistent with the original mine plan, with a slight increase expected in cost of sales per gold equivalent ounce.

In the fourth quarter of 2009, Kinross announced an amended revolving credit facility which increased available credit to $450 million, and an agreement with Export Development Canada to guarantee a Letter of Credit Facility for up to $125 million. At year end, Kinross had approximately $620 million of cash and short term investments, and undrawn credit of approximately $325 million, giving the Company approximately $945 million in total available liquidity. Total debt at year end was approximately $695 million, a reduction of $256 million during 2009.

In 2010, Kinross expects to produce approximately 2.2 million gold equivalent ounces, consistent with expected production for 2009. Cost of sales per gold equivalent ounce is expected to be in the range of $460-490 for the full year 2010.

The company’s address is 25 York Street, 17th Floor Toronto, ON M5J 2V5, 416-365-5123, fax: 416-363-6622, email: [email protected].