Kinross reports strong 2024 second-quarter results

Robust margins and significant free cash flow enable $200 million debt repayment
Positive progress at all growth projects including first gold produced from Manh Choh
High-grade exploration results at Great Bear, Round Mountain and Curlew

TORONTO, July 31, 2024 (GLOBE NEWSWIRE) -- Kinross Gold Corporation (TSX: K, NYSE: KGC) (“Kinross” or the “Company”) today announced its results for the second quarter ended June 30, 2024.

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 pages 30 and 31 of this release. All dollar amounts are expressed in U.S. dollars, unless otherwise noted.

2024 second-quarter highlights:

• Guidance reaffirmed: On an attributable basis, Kinross remains on track to meet its 2024 annual guidance for production, cost of sales, all-in sustaining cost and capital expenditures.
• Production of 535,338 gold equivalent ounces (Au eq. oz.).
• Production cost of sales of $1,029 per Au eq. oz. sold and all-in sustaining cost¹ of $1,387 per Au eq. oz. sold.
• Margins² increased to $1,313 per Au eq. oz. sold, outpacing the rise in the average realized gold price.
• Operating cash flow of $604.0 million and adjusted operating cash flow¹ of $478.1 million. Attributable free cash flow¹ of $345.9 million.
• Reported net earnings of $210.9 million, or $0.17 per share, with adjusted net earnings¹ of $174.7 million, or $0.14 per share¹.
• Balance sheet strength: Kinross has improved its debt metrics, with term loan repayments of $200.0 million. Total liquidity³ is approximately $2.1 billion, including cash and cash equivalents of $480.0 million.
• Kinross’ Board of Directors declared a quarterly dividend of $0.03 per common share payable on September 6, 2024, to shareholders of record at the close of business on August 22, 2024.
• Climate Report: Kinross released its 2023 Climate Report, providing a comprehensive summary of its progress in 2023.
  

Operations:

• Tasiast, Paracatu and La Coipa delivered 67% of total production, with production cost of sales of $848 per Au eq. oz. sold and margins² of $1,494 per Au eq. oz. sold.
• Sustained strong performance at Tasiast as the mine continued to be the highest-margin operation in the portfolio, generating significant free cash flow.
• Fort Knox delivered a solid quarter, increasing production substantially at lower costs compared with Q1 2024.
  

Development Projects and Exploration:

• At Great Bear, Kinross remains on track to release a Preliminary Economic Assessment (PEA) in September. During the quarter, Kinross drilled the deepest drill hole to date, which returned 3.8m at 9.52 g/t at a vertical depth of 1,575m, demonstrating robust mineralization at depth, well outside the current resource.
• Manh Choh achieved a significant milestone, on schedule, and poured its first gold bar on July 8, 2024. Full commissioning of the modifications at the Fort Knox mill is expected in the third quarter and the project remains on track to deliver its planned production this year.
• At Round Mountain Phase X, the exploration decline is progressing well with over 2,200 metres developed to date. Extension drilling has intersected mineralization with strong grades and widths outside of the primary exploration target.
  

CEO commentary:
J. Paul Rollinson, CEO, made the following comments in relation to 2024 second-quarter results:

“Kinross had another strong quarter supporting an excellent first half of the year. Our portfolio of mines performed well, delivering high-margin production, and we remain on track to meet our annual production and cost guidance for 2024.

“Quarter-over-quarter, our margins² grew by 21% to $1,313 per gold ounce sold, outpacing the rise in gold price, and attributable free cash flow¹ more than doubled to $346 million, totalling $491 million year-to-date. We are continuing to prudently manage our business with a focus on maintaining our cost profile and capital discipline while continuing to advance projects and exploration targets to drive future value. We also continue to strengthen our investment grade balance sheet and reduce debt.

“Thanks to the hard work of our team and partners in Alaska, we achieved an important milestone, on schedule, and poured the first gold bar from Manh Choh in early July. The mine remains on plan, the Fort Knox mill is performing well, and the project is expected to be fully commissioned in Q3.

“At Great Bear, the drilling campaign continued to demonstrate positive results, including intersecting high-grade mineralization in the deepest drill hole to date, outside the current resource. Permitting and engineering for both the AEX and Main Project are continuing to advance, and we are looking forward to releasing a Preliminary Economic Assessment in September.

“We are also pleased to have released our 2023 Climate Report. We are on track to achieve our target of a 30% reduction in Scope 1 and Scope 2 GHG emissions intensity by 2030.”

Summary of financial and operating results

The following operating and financial results are based on second-quarter gold equivalent production:

Production: Kinross produced 535,338 Au eq. oz. in Q2 2024, compared with 555,036 Au eq. oz. in Q2 2023. The 4% year-over-year decrease was primarily due to lower grades at Paracatu according to the planned mining sequence.

Average realized gold price⁴: The average realized gold price in Q2 2024 was $2,342 per ounce, compared with $1,976 per ounce in Q2 2023.

Revenue: During the second quarter, revenue increased to $1,219.5 million, compared with $1,092.3 million during Q2 2023.

Production cost of sales: Production cost of sales per Au eq. oz. sold increased to $1,029 for the quarter, compared with $900 in Q2 2023.

Production cost of sales per Au oz. sold on a by-product basis¹ was $989 in Q2 2024, compared with $845 in Q2 2023, based on gold sales of 505,122 ounces and silver sales of 1,267,528 ounces.

Margins²: Kinross’ margin per Au eq. oz. sold increased by 22% to $1,313 for Q2 2024, compared with the Q2 2023 margin of $1,076, outpacing the 19% increase in average realized gold price⁴.

All-in sustaining cost¹: All-in sustaining cost per Au eq. oz. sold was $1,387 in Q2 2024, compared with $1,296 in Q2 2023.

In Q2 2024, all-in sustaining cost per Au oz. sold on a by-product basis was $1,357, compared with $1,262 in Q2 2023.

Operating cash flow: Operating cash flow was $604.0 million for Q2 2024, compared with $528.6 million for Q2 2023.

Adjusted operating cash flow¹ for Q2 2024 was $478.1 million, compared with $459.1 million for Q2 2023.

Attributable free cash flow¹: Attributable free cash flow increased by 34% to $345.9 million in Q2 2024, compared with $258.3 million in Q2 2023.

Earnings: Reported net earnings increased by 40% to $210.9 million for Q2 2024, or $0.17 per share, compared with reported net earnings of $151.0 million, or $0.12 per share, for Q2 2023.

Adjusted net earnings¹ increased to $174.7 million, or $0.14 per share¹, for Q2 2024, compared with $167.6 million, or $0.14 per share¹, for Q2 2023.

Attributable capital expenditures¹: Attributable capital expenditures were $264.5 million for Q2 2024, compared with $272.3 million for Q2 2023, primarily due to a decrease in capital development at Bald Mountain and La Coipa, partially offset by capital development at Round Mountain Phase S.

Balance sheet

The Company maintained its investment grade ratings and strengthened its balance sheet during the second quarter, including repaying $200.0 million on its term loan.

Kinross had cash and cash equivalents of $480.0 million as of June 30, 2024, compared with $352.4 million at December 31, 2023.

The Company has additional available credit⁵ of $1.65 billion and total liquidity³ of approximately $2.1 billion.

Dividend

As part of its quarterly dividend program, the Board of Directors declared a dividend of $0.03 per common share payable on September 6, 2024, to shareholders of record as of August 22, 2024.

Operating results

Mine-by-mine summaries for 2024 second-quarter operating results may be found on pages 10 and 14 of this news release. Highlights include the following:

Tasiast continued its consistent and solid performance, with production increasing compared with Q1 2024 mainly due to higher grades and record mill throughput, while cost of sales per ounce sold remained largely in line. Production increased compared with Q2 2023 mainly as a result of the completion of the Tasiast 24k project in the second half of 2023, and cost of sales per ounce sold was in line.

At Paracatu, production increased quarter-over-quarter mainly due to higher grades and recoveries, while cost of sales per ounce sold decreased mainly due to the higher production. Production was lower compared with Q2 2023 mainly due to lower grades according to the planned mining sequence, and cost of sales per ounce sold was higher mainly due to the decrease in grade and production.

At La Coipa, production was lower quarter-over-quarter mainly due to a decrease in grades and recoveries, and cost of sales per ounce sold was higher mainly due to higher mill maintenance costs and timing of sales. Production was largely in line year-over-year, and cost of sales per ounce sold was higher primarily due to a lower proportion of mining activities related to capital development and higher mill maintenance costs.

In the second quarter, strong grades and recovery offset lower throughput. The operation continued to generate robust cash flow, and full-year production guidance remains on track. The Company is completing mill maintenance work aimed at increasing long-term plant reliability.

At Fort Knox, production increased significantly compared with the previous quarter mainly due to an increase in mill throughput, grades and recoveries, and was in line year-over-year. Cost of sales per ounce sold decreased compared with the previous quarter mainly due to the increase in production, and cost of sales per ounce sold increased year-over-year due to higher contractor and labour costs.

At Round Mountain, production decreased quarter-over-quarter mainly due to lower mill throughput and grades, and increased year-over-year mainly due to higher mill grades. Cost of sales per ounce sold was higher quarter-over-quarter mainly due to the decrease in production, and year-over-year as a result of higher cost ounces produced from the heap leach pads, partially offset by lower reagent and contractor costs.

At Bald Mountain, production was slightly lower compared with the previous quarter and increased year-over-year due to the timing of ounces recovered from the heap leach pads. Cost of sales per ounce sold was higher quarter-over-quarter primarily as a result of higher maintenance costs, and largely in line year-over-year.

Development Projects and Exploration

Great Bear  

At the Great Bear project, the Company’s robust exploration program continues to make excellent progress, execution planning for the Advanced Exploration (AEX) program is well underway, permitting continues to advance, and the PEA is expected to be released in September 2024.

The drilling results described below (true width) continue to support the view of a high-grade, long-life mining complex at Great Bear, with recent results showing extension of mineralization at depth across multiple zones.

At Yuma, the deepest drill hole on the property to date, BR-888C2, has intersected 3.8m @ 9.52 g/t Au, along the predicted plunge of the zone at a vertical depth of 1,575m below surface. Also at Yuma, drill hole BR-695C3A intersected 10.3m @ 23.76 g/t at 1,285m vertical depth.

At Yauro, recent successful results received follow-up drill testing this quarter. Of note, drill hole BR-770C3 intersected 22.7m @ 6.51 g/t at a vertical depth of 1,000m below surface demonstrating continuity of mineralization at depth.

Mineralization at Discovery continues to expand with recent drill results, including BR-896 and BR-898A, which intersected 5.4m @ 7.82 g/t at 700m vertical depth and 5.2m @ 3.92 g/t at 780m vertical depth, respectively.

Drilling at Hinge and Limb this quarter has returned promising results for depth extension at both zones, providing optionality to supplement LP production in the future. At Hinge, drill holes DL-132C1 and DL-132C4 crossed quartz veins containing high-grade mineralization with DL-132C1 intersecting 3.1m @ 9.33 g/t at 850m vertical depth and DL-132C4 intersecting 3.1m @ 22.65 g/t at 865m vertical depth. At Limb, drill holes DL-132C1 and DL-132C3 intersected 5.0m @ 5.52 g/t at 720m vertical depth and 2.4m @ 4.54 g/t at 800m vertical depth, directly below the existing resource indicating mineralization remains open at depth.

The 2024 drill program will continue to target mineralization below the existing mineral resource, explore for additional deposits along strike, and expand the Red Lake style mineralization at Hinge and Limb.
Notable exploration results at Great Bear in the second quarter include:

• BR-695C3A (Yuma) 10.3m @ 23.76 g/t Au at a vertical depth of 1,285m
  • including 3.6m @ 65.51 g/t Au
• BR-770C3 (Yauro) 22.7m @ 6.51 g/t Au at a vertical depth of 1,000m
  • including 3.5m @ 37.83 g/t Au
• BR-888C2 (Yuma) 10.7m @ 3.88 g/t Au at a vertical depth of 1,575m
  • including 3.8m @ 9.52 g/t Au
• BR-896 (Discovery) 5.4m @ 7.82 g/t Au at a vertical depth of 700m
• BR-898A (Discovery) 5.2m @ 3.92 g/t Au at a vertical depth of 780m
• DL-132C1 (Hinge) 3.1m @ 9.33 g/t Au at a vertical depth of 850m
  • and (Limb) 5.0m @ 5.52 g/t Au at a vertical depth of 720m
• DL-132C3 (Limb) 2.4m @ 4.54 g/t Au at a vertical depth of 800m
• DL-132C4 (Hinge) 3.1m @ 22.65 g/t Au at a vertical depth of 865m 

For the AEX program, permitting, detailed engineering, execution planning, and procurement continue to advance. Kinross is targeting the start of surface construction in the second half of 2024. Construction of the underground decline is planned to commence in mid-2025.

For the Main Project, Kinross continues to advance technical studies, including engineering and field test work campaigns. In the last quarter, metallurgical, geochemistry and backfill test work was advanced to continue building technical knowledge and provide input into engineering studies.

Kinross is on track to release its PEA in September 2024. The PEA will provide visibility into the potential production scale, construction capital, all-in sustaining cost and margins for both the open pit and the underground. The PEA will only include a subset of the ounces in the measured, indicated, and inferred resources drilled to date. 

The Draft Tailored Impact Statement Guidelines for the Main Project were received from the Impact Assessment Agency of Canada in Q2 2024, as planned, and the Federal Impact Assessment is underway. Studies are ongoing and the Company expects to file its Impact Statement in the first half of 2025.

Selected Great Bear Drill Results
See Appendix A for full results.

^{Results are preliminary in nature and are subject to on-going QA/QC. Lengths are subject to rounding.}

See Appendix B for a LP long section.

Fort Knox – Manh Choh

At the Kinross-operated, 70%-owned Manh Choh project, processing of ore at the Fort Knox mill began in early July and the first gold bar was poured on July 8, 2024, during a ceremony with the Native Village of Tetlin and Lieutenant Governor of Alaska, Nancy Dahlstrom. Ore transportation has ramped up to planned volumes, full commissioning of the mill modifications is expected to be completed in Q3, and the project remains on track to deliver planned production this year.

Round Mountain

The extension work at Round Mountain is advancing well. At Phase S, mining remains on plan. For the heap leach pad expansion, earthworks and procurement are both complete while deployment of the geomembrane and overliner is advancing.

At Phase X, development of the exploration decline is progressing well, with over 2,200 metres developed to date. Infill drilling on the primary Phase X target began during the second quarter, as planned, alongside continued opportunity drilling outside of the primary Phase X exploration target to extend zones of mineralization. The Company expects to begin receiving the results from within the target mineralization in the third quarter. 

The drilling in Q2 has shown exciting results, demonstrating strong grades and widths:

• DX-0052 (from 0m to 32.4m): 32.4m @ 29.6g/t Au Eq
• DX-0052 (from 40.5m to 63.4m): 22.9m @ 11.5 g/t Au Eq
• DX-0053: 18.9m @ 12.3g/t Au Eq
• DX-0040: 20.1m @ 6.5 g/t Au Eq
• DX-0054: 14.6m @ 5.3 g/t Au Eq
  

These results continue to indicate upside potential for expansion of the target area for mineralization and for the potential of future mining at Phase X. Watch a Round Mountain Phase X animation here.

Curlew Basin exploration

At Curlew, Kinross’ exploration program continued to show positive results at both the Stealth and Roadrunner zones.

Results at Stealth continued to show zones of wider mineralization with strong grades. Drilling is still underway and will continue through the second half of the year. Intercepts to date in 2024 include (true width):

• 1447: 18.7m @ 13.7 g/t Au, includes 4.7m @ 19.4 g/t Au, and 1.4m @ 22.2 g/t Au
• 1447: 6.1m @ 20.9 g/t Au, includes 1.5m @ 56.7 g/t Au
• 1448: 4.6m @ 14.3 g/t Au, includes 1.5m @ 20.7 g/t Au
  

Delineation drilling at the Roadrunner zone continues with drilling from both surface and underground platforms to document the geometry and continuity. The mineralization at Roadrunner was intercepted again in Q2, as highlighted below:

• 1442: 2.4m @ 12.5 g/t
  

Chile

Kinross’ activities in Chile are currently focused on La Coipa and potential opportunities to extend its mine life. The Lobo-Marte project continues to provide optionality as a potential large, low-cost mine upon the conclusion of mining at La Coipa. While the Company focuses its technical resources on La Coipa, it will continue to engage and build relationships with communities related to Lobo-Marte and government stakeholders.

Sustainability

Kinross published its 2023 Climate Report, providing comprehensive climate-related disclosures and the Company’s greenhouse gas (GHG) emissions data for 2023. The Climate Report can be accessed here: www.kinross.com/2023-Climate-Report

Kinross continued to advance its Climate Change Strategy during 2023 and is on track to achieve its goal of a 30% reduction in Scope 1 and Scope 2 GHG emissions intensity per ounce, over the 2021 baseline, by 2030. Efforts will continue to further reduce emissions intensity. The Climate Report details the Company’s progress towards the targets outlined in the United Nations Framework Convention on Climate Change (UNFCCC) Paris Agreement and our performance on Kinross’ Climate Change Strategy.

The Climate Report continues to adhere to reporting best practices and ensure that stakeholders have comprehensive information about Kinross’ global efforts to reduce emissions and address the impacts of climate change. Reporting has been in alignment with the Global Reporting Initiative (GRI) Standards since 2007, and in alignment with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) since 2020. The 2023 Climate Report begins the process of alignment with the International Sustainability Standards Board’s IFRS S2 Climate-Related Disclosures standard, which replaces the previous TCFD framework.

Across the Kinross portfolio, all sites and projects maintained a focus on managing climate risk, proactively developing solutions for energy efficiency and contributing to resiliency in host communities. An update of climate risk was completed for all sites and the Company’s renewable energy strategy progressed well, including the completion of a solar power plant at Tasiast. The Company contributed to community resiliency through continued development of solar energy solutions for Colla indigenous communities in Chile, provision of water for semi-nomadic communities near Tasiast, and ongoing engagement with communities and farmers in Paracatu, through the local watershed committee.

Climate-related opportunities are being considered in the planning for the Great Bear project, where the Company is focused on integrating best practices in energy efficiency and low-carbon emissions technologies, mining techniques and environmental stewardship. Energy considerations are being embedded in the proposed design with a focus on mine and mill process optimization, studying electrification of the underground, and energy efficient infrastructure. In the surface design, there is a strong focus on water management, water treatment and water stewardship. Additional design considerations for Great Bear will be reflected in its PEA.

Conference call details

In connection with this news release, Kinross will hold a conference call and audio webcast on Thursday, August 1, 2024, at 8:00 a.m. EDT to discuss the results, followed by a question-and-answer session. To access the call, please dial:

Canada & US toll-free – 1 (888) 596-4144; Passcode: 5766018
Outside of Canada & US – 1 (646) 968-2525; Passcode: 5766018

Replay (available up to 14 days after the call):

Canada & US toll-free – 1 (800) 770-2030; Passcode: 5766018
Outside of Canada & US – 1 (647) 362-9199; Passcode: 5766018

You may also access the conference call on a listen-only basis via webcast at our website www.kinross.com. The audio webcast will be archived on www.kinross.com.

About Kinross Gold Corporation

Kinross is a Canadian-based global senior gold mining company with operations and projects in the United States, Brazil, Mauritania, Chile and Canada. Our focus is on delivering value based on the core principles of responsible mining, operational excellence, disciplined growth, and balance sheet strength. Kinross maintains listings on the Toronto Stock Exchange (symbol: K) and the New York Stock Exchange (symbol: KGC).

Media Contact
Victoria Barrington
Senior Director, Corporate Communications
phone: 647-788-4153
victoria.barrington@kinross.com

Investor Relations Contact
Chris Lichtenheldt
Vice-President, Investor Relations
phone: 416-365-2761
chris.lichtenheldt@kinross.com

Review of operations

Interim condensed consolidated balance sheets

Interim condensed consolidated statements of operations

Interim condensed consolidated statements of cash flows

Reconciliation of non-GAAP financial measures and ratios

The Company has included certain non-GAAP financial measures and ratios in this document. These financial measures and ratios are not defined under IFRS and should not be considered in isolation. The Company believes that these financial measures and ratios, together with financial measures and ratios determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. The inclusion of these financial measures and ratios is meant to provide additional information and should not be used as a substitute for performance measures prepared in accordance with IFRS. These financial measures and ratios are not necessarily standard and therefore may not be comparable to other issuers.

Adjusted Net Earnings Attributable to Common Shareholders and Adjusted Net Earnings per Share

Adjusted net earnings attributable to common shareholders and adjusted net earnings per share are non-GAAP financial measures and ratios which determine the performance of the Company, excluding certain impacts which the Company believes are not reflective of the Company’s underlying performance for the reporting period, such as the impact of foreign exchange gains and losses, reassessment of prior year taxes and/or taxes otherwise not related to the current period, impairment charges (reversals), gains and losses and other one-time costs related to acquisitions, dispositions and other transactions, and non-hedge derivative gains and losses. Although some of the items are recurring, the Company believes that they are not reflective of the underlying operating performance of its current business and are not necessarily indicative of future operating results. Management believes that these measures and ratios, which are used internally to assess performance and in planning and forecasting future operating results, provide investors with the ability to better evaluate underlying performance, particularly since the excluded items are typically not included in public guidance. However, adjusted net earnings and adjusted net earnings per share measures and ratios are not necessarily indicative of net earnings and earnings per share measures and ratios as determined under IFRS.

The following table provides a reconciliation of net earnings to adjusted net earnings for the periods presented:

Attributable Free Cash Flow

Attributable free cash flow is a non-GAAP financial measure and is defined as net cash flow provided from operating activities less attributable capital expenditures and non-controlling interest included in net cash flows provided from operating activities. The Company believes that this measure, which is used internally to evaluate the Company’s underlying cash generation performance and the ability to repay creditors and return cash to shareholders, provides investors with the ability to better evaluate the Company’s underlying performance. However, this measure is not necessarily indicative of operating earnings or net cash flow provided from operating activities as determined under IFRS.

The following table provides a reconciliation of attributable free cash flow for the periods presented:

Adjusted Operating Cash Flow

Adjusted operating cash flow is a non-GAAP financial measure and is defined as net cash flow provided from operating activities excluding certain impacts which the Company believes are not reflective of the Company’s regular operating cash flow and excluding changes in working capital. Working capital can be volatile due to numerous factors, including the timing of tax payments. The Company uses adjusted operating cash flow internally as a measure of the underlying operating cash flow performance and future operating cash flow-generating capability of the Company. However, the adjusted operating cash flow measure is not necessarily indicative of net cash flow provided from operating activities as determined under IFRS.

The following table provides a reconciliation of adjusted operating cash flow for the periods presented:

Production Cost of Sales^(l) per Ounce Sold on a By-Product Basis

Production cost of sales per ounce sold on a by-product basis is a non-GAAP ratio which calculates the Company’s non-gold production as a credit against its per ounce production costs, rather than converting its non-gold production into gold equivalent ounces and crediting it to total production, as is the case in co-product accounting. Management believes that this ratio provides investors with the ability to better evaluate Kinross’ production cost of sales per ounce on a comparable basis with other major gold producers who routinely calculate their cost of sales per ounce using by-product accounting rather than co-product accounting.

The following table provides a reconciliation of production cost of sales per ounce sold on a by-product basis for the periods presented:

See pages 21 and 22 for details of the endnotes referenced within the table above.

All-In Sustaining Cost^(l) and Attributable All-In Cost per Ounce Sold on a By-Product Basis

All-in sustaining cost and attributable all-in cost per ounce sold on a by-product basis are non-GAAP financial measures and ratios, as applicable, calculated based on guidance published by the World Gold Council (“WGC”). The WGC is a market development organization for the gold industry and is an association whose membership comprises leading gold mining companies including Kinross. Although the WGC is not a mining industry regulatory organization, it worked closely with its member companies to develop these metrics. Adoption of the all-in sustaining cost and all-in cost metrics is voluntary and not necessarily standard, and therefore, these measures and ratios presented by the Company may not be comparable to similar measures and ratios presented by other issuers. The Company believes that the all-in sustaining cost and all-in cost measures complement existing measures and ratios reported by Kinross.

All-in sustaining cost includes both operating and capital costs required to sustain gold production on an ongoing basis. The value of silver sold is deducted from the total production cost of sales as it is considered residual production, i.e. a by-product. Sustaining operating costs represent expenditures incurred at current operations that are considered necessary to maintain current production. Sustaining capital represents capital expenditures at existing operations comprising mine development costs, including capitalized development, and ongoing replacement of mine equipment and other capital facilities, and does not include capital expenditures for major growth projects or enhancement capital for significant infrastructure improvements at existing operations.

All-in cost is comprised of all-in sustaining cost as well as operating expenditures incurred at locations with no current operation, or costs related to other non-sustaining activities, and capital expenditures for major growth projects or enhancement capital for significant infrastructure improvements at existing operations.

All-in sustaining cost and attributable all-in cost per ounce sold on a by-product basis are calculated by adjusting production cost of sales, as reported on the interim condensed consolidated statements of operations, as follows:

See pages 21 and 22 for details of the endnotes referenced within the table above.

All-In Sustaining Cost^(l) and Attributable All-In Cost per Equivalent Ounce Sold

The Company also assesses its all-in sustaining cost and attributable all-in cost on a gold equivalent ounce basis. Under these non-GAAP financial measures and ratios, the Company’s production of silver is converted into gold equivalent ounces and credited to total production.

All-in sustaining cost and attributable all-in cost per equivalent ounce sold are calculated by adjusting production cost of sales, as reported on the interim condensed consolidated statements of operations, as follows:

See pages 21 and 22 for details of the endnotes referenced within the table above.

Capital Expenditures and Attributable Capital Expenditures

Capital expenditures are classified as either sustaining capital expenditures or non-sustaining capital expenditures, depending on the nature of the expenditure. Sustaining capital expenditures typically represent capital expenditures at existing operations including capitalized exploration costs and capitalized development unless related to major projects, ongoing replacement of mine equipment and other capital facilities and other capital expenditures and is calculated as total additions to property, plant and equipment (as reported on the interim condensed consolidated statements of cash flows), less non-sustaining capital expenditures. Non-sustaining capital expenditures represent capital expenditures for major projects, including major capital development projects at existing operations that are expected to materially benefit the operation, as well as enhancement capital for significant infrastructure improvements at existing operations. Management believes the distinction between sustaining capital expenditures and non-sustaining expenditures is a useful indicator of the purpose of capital expenditures and this distinction is an input into the calculation of all-in sustaining costs per ounce and attributable all-in costs per ounce. The categorization of sustaining capital expenditures and non-sustaining capital expenditures is consistent with the definitions under the WGC all-in cost standard. Sustaining capital expenditures and non-sustaining capital expenditures are not defined under IFRS, however, the sum of these two measures total to additions to property, plant and equipment as disclosed under IFRS on the interim condensed consolidated statements of cash flows.

Additions to property, plant and equipment per the statement of cash flow includes 100% of capital expenditures for Manh Choh. Attributable capital expenditures includes Kinross' 70% share of capital expenditures for Manh Choh. Management believes this to be a useful indicator of Kinross’ cash resources utilized for capital expenditures.

The following table provides a reconciliation of the classification of capital expenditures for the periods presented:

See pages 21 and 22 for details of the endnotes referenced within the tables above.

Endnotes

(a) “Attributable” includes Kinross’ share of Manh Choh (70%) free cash flow, costs and capital expenditures.

(b) “Non-controlling interest” represents the non-controlling interest portion in Manh Choh (30%) and other subsidiaries for which the Company’s interest is less than 100% for cash flow from operating activities and capital expenditures.

(c) “Silver revenue” represents the portion of metal sales realized from the production of the secondary or by-product metal (i.e. silver). Revenue from the sale of silver, which is produced as a by-product of the process used to produce gold, effectively reduces the cost of gold production.

(d) “Production cost of sales per equivalent ounce sold” is defined as production cost of sales divided by total gold equivalent ounces sold.

(e) “General and administrative” expenses are as reported on the interim condensed consolidated statements of operations, excluding certain impacts which the Company believes are not reflective of the Company’s underlying performance for the reporting period. General and administrative expenses are considered sustaining costs as they are required to be absorbed on a continuing basis for the effective operation and governance of the Company.

(f) “Other operating expense – sustaining” is calculated as “Other operating expense” as reported on the interim condensed consolidated statements of operations, less other operating and reclamation and remediation expenses related to non-sustaining activities as well as other items not reflective of the underlying operating performance of our business. Other operating expenses are classified as either sustaining or non-sustaining based on the type and location of the expenditure incurred. The majority of other operating expenses that are incurred at existing operations are considered costs necessary to sustain operations, and are therefore classified as sustaining. Other operating expenses incurred at locations where there is no current operation or related to other non-sustaining activities are classified as non-sustaining.

(g) “Reclamation and remediation - sustaining” is calculated as current period accretion related to reclamation and remediation obligations plus current period amortization of the corresponding reclamation and remediation assets, and is intended to reflect the periodic cost of reclamation and remediation for currently operating mines. Reclamation and remediation costs for development projects or closed mines are excluded from this amount and classified as non-sustaining.

(h) “Exploration and business development – sustaining” is calculated as “Exploration and business development” expenses as reported on the interim condensed consolidated statements of operations, less non-sustaining exploration and business development expenses. Exploration expenses are classified as either sustaining or non-sustaining based on a determination of the type and location of the exploration expenditure. Exploration expenditures within the footprint of operating mines are considered costs required to sustain current operations and so are included in sustaining costs. Exploration expenditures focused on new ore bodies near existing mines (i.e. brownfield), new exploration projects (i.e. greenfield) or for other generative exploration activity not linked to existing mining operations are classified as non-sustaining. Business development expenses are classified as either sustaining or non-sustaining based on a determination of the type of expense and requirement for general or growth related operations.

(i) “Additions to property, plant and equipment – sustaining” and non-sustaining are as presented on pages 20 and 21. Non-sustaining capital expenditures included in the calculation of attributable all-in-cost includes Kinross’ share of Manh Choh (70%) costs.

(j) “Lease payments – sustaining” represents the majority of lease payments as reported on the interim condensed consolidated statements of cash flows and is made up of the principal and financing components of such cash payments, less non-sustaining lease payments. Lease payments for development projects or closed mines are classified as non-sustaining.

(k) The Fort Knox segment is composed of Fort Knox and Manh Choh for all periods presented.

(l) As production from Manh Choh commenced in July 2024, production cost of sales and attributable all-in sustaining cost figures and ratios for Manh Choh are nil for all periods presented. As a result, production cost of sales and all-in sustaining cost figures and ratios are equal to attributable production cost of sales and attributable all-in sustaining cost figures and ratios, as applicable.

APPENDIX A

Recent LP zone assay results