Kinross reports 2018 third-quarter results

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Algemeen advies 08/11/2018 07:00
. On track to meet company-wide annual production and cost guidance
Tasiast Phase One commissioning complete; construction of U.S. and Russia projects on schedule
TORONTO, Nov. 07, 2018 (GLOBE NEWSWIRE) -- Kinross Gold Corporation (TSX: K, NYSE: KGC) today announced its results for the third-quarter ended September 30, 2018.

(This news release contains forward-looking information about expected future events and financial and operating performance of the Company. We refer to the risks and assumptions set out in our Cautionary Statement on Forward-Looking Information located on page 18 of this release. All dollar amounts are expressed in U.S. dollars, unless otherwise noted.)

2018 third-quarter highlights:
• Production 1: 586,260 gold equivalent ounces (Au eq. oz.), compared with 653,993 Au eq. oz. in Q3 2017.
• Gold equivalent ounces sold: 618,463 Au eq. oz. compared with 638,659 Au eq. oz. sold in Q3 2017.
• Revenue: $753.9 million, compared with $828.0 million in Q3 2017.
• Production cost of sales 2: $777 per Au eq. oz., compared with $662 in Q3 2017.
• All-in sustaining cost 2: $1,049 per Au eq. oz. sold, compared with $937 in Q3 2017. All-in sustaining cost per gold ounce (Au oz.) sold on a by-product basis was $1,046 in Q3 2018, compared with $927 in Q3 2017.
• Operating cash flow: $127.2 million, compared with $197.7 million in Q3 2017.
• Adjusted operating cash flow 2: $143.2 million, compared with $320.8 million in Q3 2017.
• Reported net earnings/loss 3: loss of 104.4 million, or $0.08 per share, compared with net earnings of $60.1 million, or $0.05 per share, in Q3 2017.
• Adjusted net earnings/loss 2,3: loss of $48.4 million, or $0.04 per share, compared with adjusted net earnings of $84.1 million, or $0.07 per share, in Q3 2017.

Organic projects and development opportunities:
•Tasiast expansion: Phase One SAG mill commissioning has been completed. The Company continues to assess alternative throughput approaches to expand Tasiast and advanced discussions with the Government of Mauritania. Kinross also advanced project financing activities during the quarter.
•Round Mountain Phase Wproject: On schedule and on budget, with initial ore expected in mid-2019.
•Fort Knox Gilmoreproject: On schedule and on budget, with initial production expected in early 2020.
•Bald Mountain Vantage Complexproject: On schedule and on budget, as stripping and stacking on the new heap leach pad have now commenced. On October 2, 2018, the Company acquired the remaining 50% interest in the Bald Mountain Exploration Joint Venture that it did not already own from Barrick Gold for consideration including $15.5 million in cash and a 1.25% net smelter royalty, giving Kinross 100% ownership of the entire Bald Mountain land package.
•Russia satellite projects: The Moroshka project was completed as production commenced at the high-grade deposit located near Kupol. Development at Dvoinoye Zone 1 is proceeding as planned.
•Chile projects: The La Coipa Restart project feasibility study remains on schedule to be completed in the second half of 2019, with permitting now complete for the project. The Lobo Marte scoping study also remains on schedule, and is expected to be completed in the first half of 2019.

Outlook: Kinross expects to produce 2.5 million Au eq. oz. (+/- 5%) at a production cost of sales per Au eq. oz. of $730 (+/- 5%) and all-in sustaining cost of $975 (+/- 5%) per ounce sold on both a gold equivalent and by-product basis for 2018. Total capital expenditures are forecast to be approximately $1,075 million (+/- 5%).

Balance sheet: As of September 30, 2018, Kinross had cash and cash equivalents of $470.1 million and available credit of $1,554.3 million, for total liquidity of approximately $2.0 billion, and no debt maturities until 2021.

Board Chair update: John Oliver has announced he will retire from his role as Board Chair effective December 31, 2018. Catherine McLeod-Seltzer, a Board member since 2005, has been appointed the new Independent Chair effective January 1, 2019.

CEO Commentary
J. Paul Rollinson, President and CEO, made the following comments in relation to 2018 third-quarter results:

“During the first nine months of 2018, our global portfolio of mines achieved solid production and generated robust cash flow. Our Nevada, Brazil, Ghana and Russia operations performed well during the quarter and we remain on track to meet our company-wide production and cost guidance for the year.

“Commissioning of the new SAG mill for the Tasiast Phase One expansion has been completed. Performance at Tasiast is expected to further improve in the fourth quarter, as the mine delivered record monthly production in October and began mining higher grade ore. We also continue to advance discussions with the Government of Mauritania regarding our operations in the country and have now signed mandate letters with Export Development Canada (EDC) and the International Finance Corporation (IFC), a division of the World Bank, regarding project financing.

“Construction at our U.S. projects – Round Mountain Phase W and Bald Mountain Vantage Complex in Nevada and Fort Knox Gilmore in Alaska – remain on schedule and on budget as we continue to solidify our production footprint in the country. In Russia, the Moroskha project was completed and production commenced at the high-grade satellite deposit near Kupol, while our studies assessing a return to long-term production in Chile are proceeding well.”

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