Kinross Gold Corp. Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Production and Cash Flow: Delivered strong Q4 2024 (over 500,000 ounces) and full-year 2024 (over 2.1 million ounces). Record free cash flow of over $103 million, more than doubling from the prior year. Operating margins increased by 37% compared to a 23% increase in the realized gold price.
• Operations: Tasiast and Paracatu accounted for over half of production. Tasiast had record throughput, production, and cash flow; Paracatu exceeded production guidance for the 7th consecutive year. La Coipa delivered full-year production guidance; U.S. operations had solid year with production and costs on plan.
• Projects: Great Bear PEA confirmed top-tier potential; Round Mountain underground development progressing; Bald Mountain converted 1 million ounces into reserves; Curlew and Lobo-Marte advanced. Great Bear advanced exploration program received necessary permits, with exploration decline construction planned.
• Sustainability: Completed over 15 energy efficiency projects, placed on track to achieve 30% reduction in emissions intensity by 2030; provided food relief aid; received sustainability awards.

Segment Performance

• Tasiast: Delivered record annual throughput, production, and cash flow in 2024, with 622,000 ounces produced at a cost of sales of $681 per ounce. In Q4 2024, produced 139,000 ounces at a cost of sales of $725 per ounce. Expected to produce ~500,000 ounces in 2025 with a target cost of sales of $860 per ounce.
• Paracatu: Delivered full-year production exceeding the midpoint of guidance, with 529,000 ounces produced in 2024 at a cost of sales of $1,039 per ounce. Expected to produce 585,000 ounces in 2025 at a cost of sales of $1,025 per ounce.
• La Coipa: Delivered full-year production guidance, with 246,000 ounces produced in 2024. Anticipated to produce 230,000 ounces in 2025 at a cost of sales of $1,060 per ounce.
• U.S. operations: Full-year production was 731,000 ounces in 2024 at a cost of sales of $1,313 per ounce.
• Great Bear: PEA confirmed top-tier potential with an estimated average annual production of approximately 500,000 ounces at an all-in sustaining cost of approximately $800 per ounce.

Guidance

• 2025 production guidance: 2 million ounces. Cost of sales guidance $1,120 per ounce; all-in sustaining costs guidance $1,500 per ounce (both up ~10% from 2024).
• 2026 and 2027 production guidance: 2 million ounces each. Capital expenditure guidance $1.15 billion for 2025, focusing on advancing Great Bear; ~$650 million of total CapEx expected to be nonsustaining.

Risks

• Permitting Challenges: Delays in obtaining permits, particularly for Great Bear and other projects, which could impact project timelines.
• Commodity Price Volatility: Fluctuations in gold prices could affect financial performance and margin calculations.
• Operational Risks: Seasonal fluctuations, maintenance issues, and potential cost overruns in operations and project advancements.

Question and Answer Q: Michael Parkin asked about Tasiast's throughput and exploration at Round Mountain.

A: Claude Schimper responded that Tasiast's throughput was as planned, with some days above and below the average, and that Round Mountain's underground exploration results were strong but no underground reserve or resource was reported yet, with infill drilling planned.

Q: Anita Soni asked about Red Bird Phase 2 and share buybacks.

A: An executive responded that Phase 2's CapEx was still being worked on and would be cash flow neutral, while J. Rollinson stated that share buybacks would be considered after navigating Q1 cash outflows if gold prices remained favorable.

Q: Carey MacRury asked about cash balance and debt repayment.

A: Andrea Freeborough stated that they aim to repay 2027 debt and balance cash allocation between business needs, balance sheet strength, and return of capital to shareholders, with plans to update return of capital plans in Q1 results.

Q: Lawson Winder asked about exploration at La Coipa and capital return.

A: An executive responded that La Coipa had exploration potential with existing resources, and J. Rollinson stated they aim for balanced capital allocation, considering dividend and share buyback sustainability.

Q: Tanya Jakusconek asked about mine plan sequencing and cash balance.

A: Claude Schimper mentioned no major shutdowns, with maintenance being managed; Andrea Freeborough stated they aim to maintain a cash balance above $500 million, balancing business needs and return of capital.