Board approves plan to pay quarterly dividend of $0.03 per share
Company expects to increase production by 20% with declining cost trend

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

TORONTO, Sept. 17, 2020 (GLOBE NEWSWIRE) -- Kinross Gold Corporation (TSX:K; NYSE:KGC) (“Kinross” or the “Company”) today announced its robust three-year guidance, with production expected to steadily increase by 20% to 2.9 million gold equivalent ounces1 (+/- 5%) in 2023 and an overall downward trend in production cost of sales and capital expenditures to drive strong free cash flow.

The Company also announced that its Board of Directors (“Board”) has declared a dividend of $0.03 per common share payable on October 22, 2020 to shareholders of record at the close of business on October 8, 2020. In addition, the Board has approved a plan to pay quarterly dividends of $0.03 per common share, which would amount to $0.12 per common share on an annualized basis, and represents an annualized yield of approximately 1.3% based on a closing share price of $9.35 on September 17, 2020.

CEO commentary:
J. Paul Rollinson, President and CEO, commented on the dividend and three-year guidance.

“With our investment grade balance sheet, strong free cash flow, significant margins and substantial cash position, we are pleased to return capital to our shareholders in the form of a dividend.

“We expect to increase our production by approximately half a million gold equivalent ounces, or 20%, to 2.9 million ounces over the next three years, which is indicative of the strength of our global portfolio and our ability to optimize mine plans and find value-enhancing opportunities. We are also studying further organic development options given our attractive pipeline of projects and promising exploration results.

“Our growing production profile, combined with our declining cost structure, is expected to drive strong and growing free cash flow. Kinross will continue to prioritize balance sheet strength and disciplined capital allocation as we assess future development opportunities to generate value for our shareholders.”

Growing production and declining costs

The expected production growth represents additional ounces enabled by planned life of mine extensions and projects resulting from the Company’s previous three-year major capital reinvestment phase, which established a low-risk and timely platform for growth in the current gold price environment.

Kinross’ comprehensive continuous improvement programs, which have enhanced productivity and operational efficiencies, and its exploration strategy focused on promising prospects around existing operations, also contributed to the anticipated production increase.

Kinross continues to prioritize adding significant ounces to its mineral reserve estimate of 24.3 million Au oz.2 (as of year-end 2019), which does not include the Company’s recent addition of 6.4 million Au oz.2 from the Lobo-Marte project announced on July 15, 2020. The Company remains optimistic of future mine life extensions given its large estimated measured and indicated mineral resource base of 35.5 million Au oz.2 (as of year-end 2019 and excludes reserves).

The three-year production growth is primarily based on additional ounces from the expected:
•higher production at Kupol and life of mine extension at Chirano, both derived from the successful exploration programs at the two sites;
•enhancements to the Fort Knox mine plan, including accelerating production at the Gilmore project to bring ounces forward;
•continued outperformance at Paracatu driven by improved throughput, more ounces from the reprocessing of tailings and higher grades from accelerated mining of the western area of the pit, and;
•higher production from the north area of Bald Mountain.

Annual gold equivalent production guidance 1
(+/- 5%)
2021 2.4 million oz.
2022 2.7 million oz.
2023 2.9 million oz.

Kinross continues to use a $1,200 per ounce gold price assumption for its mine plans, including the 2021 - 2023 production guidance, and for the Company’s proven and probable mineral reserve estimates.

During the next three years of expected production growth, the Company anticipates a downward trend in production cost of sales per ounce sold as Kinross brings on planned lower cost projects. Cost of sales per ounce sold is expected to be slightly higher in 2021 compared with 2020 guidance, mainly due to COVID-19 impacts, but is expected to progressively decrease in 2022 and 2023.

As the Company transitions from its previous major three-year capital reinvestment phase, annual capital expenditures are expected to decline based on Kinross’ current production guidance. The planned capital expenditures include the initial development of the Chulbatkan project, which has a preliminary capital estimate of approximately $330 million during the 2021 - 2023 timeframe, but excludes additional opportunities in the Company’s pipeline. Kinross is studying additional options in its portfolio that leverage its large mineral resource base and have the potential to sustain strong production beyond 2023, which could generate attractive returns without risking significant capital.

Annual capital expenditures guidance
(+/- 5%)
2021 $900 million
2022 $800 million
2023 $700 million

Kinross Gold President and CEO J. Paul Rollinson is scheduled to speak at the Gold ForumAmericas on September 21, 2020 at 9:00 a.m. ET to discuss the Company’s outlook and performance. The live session can be accessed here: https://www.denvergold.org/company-live-session/dgf20/75/

In addition, Kinross' management team will host a presentation and question and answer session on October 20, 2020 from 10:00 a.m. – 12:00 p.m. ET to discuss operational details regarding the Company’s three-year guidance and additional opportunities in its portfolio. The presentation will be accessible via conference call and audio webcast at www.kinross.com, where it will also be archived.

Reinstating 2020 guidance

Kinross is also reinstating its 2020 guidance originally announced on February 12, 2020. The 2020 guidance includes:

2020 guidance 3
(+/- 5%)
Gold equivalent production 1 2.4 million oz.
Production cost of sales 1, 4 $720 per Au eq. oz.
All-in sustaining cost 1, 4 $970 per Au eq. oz.
Capital expenditures $900 million5


The Company is on track to meet its production, cost of sales per ounce sold, all-in sustaining cost per ounce sold and capital expenditures guidance for 2020.

Other operating costs for 2020 are now expected to be approximately $140 million, which increased from the previous $100 million guidance, mainly due to costs associated with the Tasiast strike in the second quarter and COVID-19 mitigation measures.

Sustainable dividend at an attractive yield

With the robust free cash flow that is being generated from its operations, and with the Company’s strong expected cash position, Kinross is pleased to announce that its Board has declared a dividend of $0.03 per common share, payable on October 22, 2020 to shareholders of record at the close of business on October 8, 2020. The dividend qualifies as an "eligible dividend" for Canadian income tax purposes, while dividends paid to shareholders outside Canada (non-resident investors) will be subject to Canadian non-resident withholding taxes.

In addition, and in line with Kinross’ commitment to provide shareholder value, the Board has approved a plan to pay quarterly dividends of $0.03 per common share, which would amount to $0.12 per common share on an annualized basis, and represents an attractive annualized yield of approximately 1.3%, assuming a share price of $9.35 as of market close on September 17, 2020. The Company anticipates that, subject to approval of the Board, the next quarterly dividend will be declared in connection with Kinross’ third-quarter financial results. The declaration and payment of dividends is at the discretion of the Board, and will depend on the Company’s financial results, cash requirements, future prospects and other factors deemed relevant by the Board. The Company believes the regular quarterly dividend is sustainable at lower gold prices and provides opportunities for growth in a prolonged higher gold price environment.

Balance sheet strength and disciplined capital allocation

On September 15, 2020, Kinross gave notice to its lenders that it intends to repay the remaining $500 million of the $750 million previously drawn from its $1.5 billion revolving credit facility in March 2020 as a precaution against uncertainties caused by the global COVID-19 pandemic. The Company previously repaid $250 million of the credit facility on July 24, 2020 and the remaining repayment is scheduled for September 18, 2020.

Consistent with the Company’s disciplined approach to capital allocation, Kinross will continue to prioritize maintaining and strengthening its investment grade balance sheet while delivering on its commitments and generating free cash flow. The Company’s capital priorities include:
•maintaining existing operations safely and to world-class environmental standards through sustaining capital expenditures;
•investing in organic expansion projects that provide attractive returns and leverage existing infrastructure and experience in operating jurisdictions to minimize execution risk;
•capitalizing on opportunities to extend or grow production through targeted exploration activities;
•continuing to repay debt upon maturity, including $500 million in senior notes in September 2021;
•continuing to reduce net debt, which at current gold prices is expected to reach zero in 2021, and;
•returning capital to shareholders through a quarterly dividend.

Kinross also intends to maintain flexibility to make additional attractive investments and for further return of capital.

About Kinross Gold Corporation

Kinross is a Canadian-based senior gold mining company with mines and projects in the United States, Brazil, Chile, Ghana, Mauritania, and Russia. Kinross maintains listings on the Toronto Stock Exchange (symbol:K) and the New York Stock Exchange (symbol:KGC).

Media Contact
Louie Diaz
Senior Director, Corporate Communications