Carnavale Resources Ltd (CAV) is pleased to announce further outstanding results from the December drilling campaign at the McTavish East Prospect, at the Kookynie Gold Project, located only 60km south of Leonora in Western Australia.
“We are delighted with the results of the drilling which has confirmed the continuity of the bonanza grades at McTavish East. This gives the Company confidence to commission a maiden resource estimate and economic studies to evaluate potential mining scenarios. We are very excited about the additional exploration opportunities along strike and have commenced an exploration program to explore this fertile zone for additional high-grade shoots with aircore and RC.”
Carnavale identified the Kookynie-Leonora region (Figure 6) as highly prospective, with known past and current high-grade mines. Since 2021, the McTavish East Prospect trend has been defined over approximately 2km with aircore drilling and RC drilling.
Figure1, Plan of McTavish East Prospect. Gold contours over magnetic image. The highest-grade results from the recent drilling reported in yellow callouts. Historic results in blue callouts.
Extensive historic gold mining occurred between 1895 and 1922 throughout the Kookynie area, including the Cosmopolitan mine the largest gold producer, where historic high-grade gold production amounted to more than 331,000 ounces of gold1 at 15g/t.
In December 2023 CAV completed a program of RC and diamond drilling consisting of a 29 hole, 4,169m RC drilling program with an additional 7 holes with diamond tails for a further 356.6m of NQ2 core that followed up on previous RC drilling programs.
This drilling program was designed to improve the confidence of the very high-grade plunging shoots by confirming the continuity of high-grade gold and investigate the area to the south (area B in figure 2) that contained sporadic high-grade hits. The new close spaced drilling has confirmed the continuity of the high- grade mineralisation and will be used to create a maiden resource estimate.
The highest-grade zone (area A in figure 2) with bonanza grade gold mineralisation extends down dip for 250m and remains open at depth. The mineralisation is characterized by very high grade mineralised gently north plunging shoots within a mineralised southerly plunging envelope.
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Highlights
Figure 1 Selection of gold* bearing quartz vein samples collected from the sample trench over the Christmas Gift shear. *Visual estimates of mineral abundance should never be considered a proxy or substitute for laboratory analyses where concentrations or grades are the factor of principal economic interest. Visual estimates also potentially provide no information regarding impurities or deleterious physical properties relevant to valuations.
Commenting on the sampling results, Managing Director Wade Johnson said:
“The shallow excavation and sampling activities at Christmas Gift exposing the rich gold bearing quartz veinlets within the shear zone is an exciting development for the Company. The additional fieldwork has improved our knowledge of the host structure, that has advanced our understanding to further explore the Christmas Gift structure, but also provides a geological model that we can apply elsewhere in the Everleigh Well area. The strike length of the structure is open, drill sites have been prepared and we are looking forward to commencing drilling shortly to evaluate the down dip extent of the structure and rapidly advance this priority target”.
Christmas Gift Prospect
Christmas Gift is located within the Everleigh Well Target area (“Everleigh”), that is central to the 14 Mile Well Project. The Everleigh area formed part of the historic Redcastle gold mining centre, renowned for its prolific gold nugget finds, which was discovered in 1894. Everleigh also contains a number of historical prospecting pits, shafts and shallow workings in additional numerous alluvial gold workings distributed over a wide area.
The Christmas Gift Prospect is located at one of the historical workings and where sampling by the Company during 2023 confirmed the presence of the narrow high-grade quartz vein with abundant visible gold (ASX release 8 June 2023).
Recent exploration work by the Company to better expose the gold bearing lithological unit has resulted in the discovery of further spectacular narrow quartz veinlets containing visible gold, and that has greatly enhanced the understanding of controls on the gold bearing structure. This work involved the excavation of a small sampling trench (approximately 10 metres long by 1 metre deep) along the trend, which improved the visibility of the Christmas Gift structure (Figure 2) which trends approximately northwest and dips 55 degrees to the northeast.
This work has exposed the true nature and width of the gold bearing shear zone and has confirmed the prospectivity of the target. The Christmas Gift shear zone within the trench has an average width of between 0.8 metre and 1.0 metre, bounded by massive basalt.
The sheared zone is centred over the contact between basalt and a thin (<0.25m) altered sedimentary interflow. Importantly, reconnaissance mapping by the Company has highlighted small subcropping highly oxidised sedimentary rocks along strike ~75m to the northwest that provides support that the shear structure has a greater extent than previously thought.
The exposed slightly weathered basalt unit is strongly deformed (sheared) and contains the narrow (<5cm) gold bearing quartz veinlets and selvages of the pyrite altered interflow sediment. This structure contains the previous and newly discovered quartz veinlets which have had abundant gold observed within them (Figures 4, 5 & 7). The veinlets are conformable with the shear zone and are semi discontinuous along strike.
Several rock chip samples were collected from the excavated structure to test the different lithologies, including the quartz veinlets within the main Christmas Gift shear zone and the surrounding massive basalt host. The results from these samples are still pending.
Sampling work completed by prospectors over the mineralised shear zone produced approximately 9.5 oz of gold doré from ~101.3 kg of material collected from the sampling trench. This bulk sample comprised a selection of gold bearing quartz veinlets (~1.3kg) and a mixture of sheared basalt and altered interflow sediments (~100kg) that contain thin quartz gold veinlets. This bulk sample is considered a good representation of the grade of the structure.
The material was collected from along the 10m sample trench and is an estimation* (~2,912.4g/t) of the potential grade of the mineralisation. The ore bearing material from the shear zone was crushed, dollied and panned to recover gold to produce the ~9.5oz gold doré bar (Figure 6).
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Highlights:
Never Never Gold Deposit – key high-grade gold deposit – 0.95Moz @ 5.74g/t – growing!
“Pepper” Gold Prospect – recent high-grade discovery adjacent to Never Never – growing!
West Winds Gold Prospect – high-grade broad and strike extensive mineralised shoot – growing!
Exploration Drill Drive – Update
Figure 1: Long Section of the Never Never Gold Deposit, Pepper, Four Pillars and West Winds Gold Prospects looking East. New high-grade intercept assays highlighted in yellow callout boxes. Note the proposed exploration drill drive design in the foreground (western wall of Gilbey’s Open Pit).
This release contains updated assay information from recent surface drilling targeting the high-grade Never Never Gold Deposit, the immediately adjacent and growing Pepper gold prospect and the nearby West Winds gold prospect. This release also contains assays from early-stage ongoing surface exploration drilling north of Never Never.
Management Comment
Spartan Managing Director and Chief Executive Officer, Simon Lawson, said: “Our recent exploration updates show that our aggressive drilling strategy is continuing to deliver on its key objectives – growing our high-grade resource inventory while at the same time making new high-grade discoveries.
“We keep applying drill pressure to good geology – and the results continue to demonstrate the enormous potential of the broader Gilbey’s mineral system, which now contains multiple high-grade, steeply plunging deposits and emerging prospects along an 800m corridor running from north to south.
“The latest results also reinforce the compelling logic behind the proposed development of our underground exploration drill drive. This critical piece of infrastructure will be another game-changer for the Spartan team as it will significantly increase our resource growth and future reserve generation efforts by using more cost effective, more accurate and faster underground drilling methods from platforms located closer to our existing high-grade targets.
“The drill drive allows us to optimise our drilling strategy in a way that is simply unachievable from surface, while also unlocking the very real potential to make new high-grade discoveries from underground platforms where you are literally situated inside the geology.
“We are situating the drill drive in the hanging-wall of the Gilbey’s mineralised sequence to optimise the geotechnical advantages of the very competent gabbro wallrock and to optimise the drilling angles and stand-off distance to all of our main high-grade targets. Lastly, we are developing the exploration drill drive at standard underground development dimensions in order to maximise the value of the sunk capital by future-proofing its inclusion in any potential mining scenarios.
“In the two years since discovery, we have built a Mineral Resource of almost 1 million high-grade ounces at Never Never, and we can clearly see potential growth beyond 1,000m.
“The newly discovered Pepper gold prospect, situated less than 100m along-strike from Never Never, is showing better grades at depth, and we are also beginning to see some of the best high-grade intercepts to date as we drill deeper at both Four Pillars and West Winds. This trend of improving grades at depth is exactly what we saw at Never Never.
"Fresh from our recent $80 million equity raise, Spartan is in a position of unparalleled strength as we move ahead with our multi-pronged strategy to unlock the potential of the Dalgaranga Gold Project.
“Surface drilling is continuing with four rigs, preparatory work is underway for the start of the exploration decline and mine development study work is in full flight.
“The stage is well and truly set for what is shaping up to be an extremely busy and exciting 6-12 months as we deliver further resource growth, mine studies and establish the underground infrastructure required to bring this outstanding asset into production.”
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B2Gold Corp. (TSX: BTO, NYSE AMERICAN: BTG, NSX: B2G) ("B2Gold" or the "Company") announces its operational and financial results for the first quarter of 2024. All dollar figures are in United States dollars unless otherwise indicated.
2024 First Quarter Highlights
First Quarter 2024 Results
| Three months ended | ||
| March 31, | ||
| 2024 | 2023 | |
| Gold revenue ($ in thousands) | 461,444 | 473,556 |
| Net income ($ in thousands) | 48,481 | 101,904 |
| Earnings per share – basic (1) ($/ share) | 0.03 | 0.08 |
| Earnings per share – diluted (1) ($/ share) | 0.03 | 0.08 |
| Cash provided by operating activities ($ thousands) | 710,727 | 203,823 |
| Average realized gold price ($/ ounce) | 2,069 | 1,901 |
| Adjusted net income (1)(2) ($ in thousands) | 81,503 | 105,862 |
| Adjusted earnings per share (1)(2) – basic ($) | 0.06 | 0.10 |
| Consolidated operations results: | ||
| Gold sold (ounces) | 222,978 | 249,150 |
| Gold produced (ounces) | 214,339 | 250,719 |
| Production costs ($ in thousands) | 156,745 | 127,604 |
| Cash operating costs (2) ($/ gold ounce sold) | 703 | 512 |
| Cash operating costs (2) ($/ gold ounce produced) | 718 | 576 |
| Total cash costs (2) ($/ gold ounce sold) | 838 | 653 |
| All-in sustaining costs (2) ($/ gold ounce sold) | 1,346 | 1,049 |
| Operations results including equity investment in Calibre: | ||
| Gold sold (ounces) | 234,355 | 265,292 |
| Gold produced (ounces) | 225,716 | 266,856 |
| Production costs ($ in thousands) | 168,650 | 143,369 |
| Cash operating costs (2) ($/ gold ounce sold) | 720 | 540 |
| Cash operating costs (2) ($/ gold ounce produced) | 734 | 600 |
| Total cash costs (2) ($/ gold ounce sold) | 851 | 678 |
| All-in sustaining costs (2) ($/ gold ounce sold) | 1,345 | 1,060 |
(1) Attributable to the shareholders of the Company.
(2) Non-IFRS measure. For a description of how these measures are calculated and a reconciliation of these measures to the most directly comparable measures specified, defined or determined under IFRS and presented in the Company's financial statements, refer to "Non-IFRS Measures".
Liquidity and Capital Resources
B2Gold continues to maintain a strong financial position and liquidity. At March 31, 2024, the Company had cash and cash equivalents of $568 million (December 31, 2023 - $307 million) and working capital (defined as current assets less assets classified as held for sale and current liabilities) of $629 million (December 31, 2023 - $397 million). At March 31, 2024, the full amount of the Company's $700 million revolving credit facility was undrawn and available.
Second Quarter 2024 Dividend
On May 7, 2024, B2Gold's Board of Directors declared a cash dividend for the second quarter of 2024 (the "Q2 2024 Dividend") of $0.04 per common share (or an expected $0.16 per share on an annualized basis), payable on June 24, 2024, to shareholders of record as of June 11, 2024. As of March 31, 2024, the expected annual dividend rate represented an approximate 6.1% yield.
In 2023, the Company implemented a Dividend Reinvestment Plan ("DRIP"). For the purposes of the Q2 2024 Dividend, the Company is pleased to announce that a discount of 3% will be applied to calculate the Average Market Price (as defined in the DRIP) of its common shares issued from treasury. However, the Company may, from time to time, in its discretion, change or eliminate any applicable discount, which would be publicly announced, all in accordance with the terms and conditions of the DRIP. Participation in the DRIP is optional. In order to participate in the DRIP in time for the Q2 2024 Dividend, registered shareholders must deliver a properly completed enrollment form to Computershare Trust Company of Canada by no later than 4:00 p.m. (Toronto time) on June 4, 2024. Beneficial shareholders who wish to participate in the DRIP should contact their financial advisor, broker, investment dealer, bank, financial institution, or other intermediary through which they hold common shares well in advance of the above date for instructions on how to enroll in the DRIP.
As part of the long-term strategy to maximize shareholder value, B2Gold expects to declare future quarterly dividends at the same level. This dividend is designated as an "eligible dividend" for the purposes of the Income Tax Act (Canada). Dividends paid by B2Gold to shareholders outside Canada (non-resident investors) will be subject to Canadian non-resident withholding taxes.
The declaration and payment of future dividends and the amount of any such dividends will be subject to the determination of the Board, in its sole and absolute discretion, taking into account, among other things, economic conditions, business performance, financial condition, growth plans, expected capital requirements, compliance with B2Gold's constating documents, all applicable laws, including the rules and policies of any applicable stock exchange, as well as any contractual restrictions on such dividends, including any agreements entered into with lenders to the Company, and any other factors that the Board deems appropriate at the relevant time. There can be no assurance that any dividends will be paid at the intended rate or at all in the future.
For more information regarding the DRIP and enrollment in the DRIP, please refer to the Company's website at https://www.b2gold.com/investors/stock_info/ .
This news release does not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction nor will there be any sale of these securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such province, state or jurisdiction.
The Company has filed a registration statement relating to the DRIP with the U.S. Securities and Exchange Commission that may be obtained under the Company's profile on the U.S. Securities and Exchange Commission's website at http://www.sec.gov/EDGAR or by contacting the Company using the contact information at the end of this news release.
Operations
Fekola Mine - Mali
| Three months ended | ||
| March 31, | ||
| 2024 | 2023 | |
| Gold revenue ($ in thousands) | 256,318 | 314,225 |
| Gold sold (ounces) | 123,828 | 165,050 |
| Average realized gold price ($/ ounce) | 2,070 | 1,904 |
| Tonnes of ore milled | 2,462,863 | 2,271,891 |
| Grade (grams/ tonne) | 1.62 | 2.47 |
| Recovery (%) | 92.7 | 91.9 |
| Gold production (ounces) | 119,141 | 165,864 |
| Production costs ($ in thousands) | 85,105 | 77,661 |
| Cash operating costs (1) ($/ gold ounce sold) | 687 | 471 |
| Cash operating costs (1) ($/ gold ounce produced) | 698 | 483 |
| Total cash costs (1) ($/ gold ounce sold) | 852 | 632 |
| All-in sustaining costs (1) ($/ gold ounce sold) | 1,436 | 964 |
| Capital expenditures ($ in thousands) | 80,562 | 53,795 |
| Exploration ($ in thousands) | 1,302 | 1,706 |
(1) Non-IFRS measure. For a description of how these measures are calculated and a reconciliation of these measures to the most directly comparable measures specified, defined or determined under IFRS and presented in the Company's financial statements, refer to "Non-IFRS Measures".
The Fekola Mine in Mali (owned 80% by the Company and 20% by the State of Mali) had a strong start to the year with gold production for the first quarter of 2024 of 119,141 ounces, in-line with expectations. For the first quarter of 2024, mill feed grade was 1.62 grams per tonne ("g/t"), mill throughput was 2.46 million tonnes, and gold recovery averaged 92.7%.
The Fekola Mine's cash operating costs (see "Non-IFRS Measures" ) for the first quarter of 2024 were $698 per gold ounce produced ($687 per gold ounce sold). Cash operating costs per gold ounce produced for the first quarter of 2024 were lower than expected as a result of lower fuel costs, higher mill throughput, higher gold recovery and lower mining costs due to lower than anticipated mined tonnage as a result of equipment availability.
All-in sustaining costs (see "Non-IFRS Measures" ) for the first quarter of 2024 for the Fekola Mine were $1,436 per gold ounce sold. All-in sustaining costs were lower than expected as a result of lower than anticipated production costs per gold ounce sold, higher gold ounces sold and lower than expected sustaining capital expenditures, partially offset by higher gold royalties resulting from a higher than anticipated average realized gold price. The lower sustaining capital expenditures were mainly due to timing of expenditures and are expected to be incurred later in 2024.
Capital expenditures in the first quarter of 2024 totalled $81 million primarily consisting of $29 million for deferred stripping, $18 million for mobile equipment purchases and rebuilds, $13 million for the construction of a new tailings storage facility, $11 million for Fekola underground development, $3 million for solar plant expansion and $2 million for haul road construction.
The Fekola Complex is comprised of the Fekola Mine (Medinandi permit hosting the Fekola and Cardinal pits and Fekola underground) and Fekola Regional (Anaconda Area (Bantako, Menankoto, and Bakolobi permits) and the Dandoko permit). The Fekola Complex is expected to produce between 470,000 and 500,000 ounces of gold in 2024 at cash operating costs of between $835 and $895 per ounce and all-in sustaining costs of between $1,420 and $1,480 per ounce. The Fekola Complex's total 2024 gold production is anticipated to decrease relative to 2023 due to lower production as a result of the delay in receiving an exploitation license for Fekola Regional from the Government of Mali pending finalization of an implementation decree for the new 2023 Mining Code. No production is forecast from Fekola Regional in the Company's 2024 guidance with production now expected to commence at the beginning of 2025.
The Fekola Mine is expected to process 9.4 million tonnes of ore during 2024 at an average grade of 1.77 g/t gold with a process gold recovery of 90.9%. Gold production is expected to be evenly weighted between the first half of 2024 and the second half of 2024.
Masbate Mine – The Philippines
| Three months ended | ||
| March 31, | ||
| 2024 | 2023 | |
| Gold revenue ($ in thousands) | 98,967 | 56,992 |
| Gold sold (ounces) | 47,700 | 29,650 |
| Average realized gold price ($/ ounce) | 2,075 | 1,922 |
| Tonnes of ore milled | 2,169,462 | 2,069,042 |
| Grade (grams/ tonne) | 0.99 | 0.95 |
| Recovery (%) | 72.4 | 73.5 |
| Gold production (ounces) | 49,782 | 46,364 |
| Production costs ($ in thousands) | 42,771 | 24,993 |
| Cash operating costs (1) ($/ gold ounce sold) | 897 | 843 |
| Cash operating costs (1) ($/ gold ounce produced) | 835 | 883 |
| Total cash costs (1) ($/ gold ounce sold) | 1,010 | 992 |
| All-in sustaining costs (1) ($/ gold ounce sold) | 1,219 | 1,320 |
| Capital expenditures ($ in thousands) | 8,530 | 8,953 |
| Exploration ($ in thousands) | 821 | 959 |
(1) Non-IFRS measure. For a description of how these measures are calculated and a reconciliation of these measures to the most directly comparable measures specified, defined or determined under IFRS and presented in the Company's financial statements, refer to "Non-IFRS Measures".
The Masbate Mine in the Philippines had a strong start to 2024 with first quarter gold production of 49,782 ounces, above expectations due to higher mill throughput. For the first quarter of 2024, mill feed grade was 0.99 g/t gold, mill throughput was 2.17 million tonnes, and gold recovery averaged 72.4%.
The Masbate Mine's cash operating costs (see "Non-IFRS Measures" ) for the first quarter of 2024 were $835 per gold ounce produced ($897 per gold ounce sold). Cash operating costs per gold ounce produced for the first quarter of 2024 were lower than expected as a result of higher gold production and lower than anticipated mining and processing costs due to higher productivity and lower diesel and heavy fuel oil costs.
All-in sustaining costs (see "Non-IFRS Measures" ) for the first quarter of 2024 were $1,219 per gold ounce sold. All-in sustaining costs for the first quarter of 2024 were lower than expected as a result of lower than anticipated production costs per gold ounce sold and lower than expected sustaining capital expenditures. The lower sustaining capital expenditures were mainly a result of timing of expenditures and are expected to be incurred later in 2024.
Capital expenditures in the first quarter of 2024 totalled $9 million, primarily consisting of $6 million for mobile equipment purchases and rebuilds and $1 million for deferred stripping.
The Masbate Mine is expected to produce between 170,000 and 190,000 ounces of gold in 2024 at cash operating costs of between $945 and $1,005 per ounce and all-in sustaining costs of between $1,300 and $1,360 per ounce. Gold production is scheduled to be relatively consistent throughout 2024. For 2024, Masbate is expected to process 7.9 million tonnes of ore at an average grade of 0.93 g/t gold with a process gold recovery of 76.0%. Mill feed will be a blend of mined fresh ore and low-grade ore stockpiles.
Otjikoto Mine - Namibia
| Three months ended | ||
| March 31, | ||
| 2024 | 2023 | |
| Gold revenue ($ in thousands) | 106,159 | 102,339 |
| Gold sold (ounces) | 51,450 | 54,450 |
| Average realized gold price ($/ ounce) | 2,063 | 1,880 |
| Tonnes of ore milled | 826,477 | 823,952 |
| Grade (grams/ tonne) | 1.74 | 1.47 |
| Recovery (%) | 98.5 | 98.8 |
| Gold production (ounces) | 45,416 | 38,491 |
| Production costs ($ in thousands) | 28,869 | 24,950 |
| Cash operating costs (1) ($/ gold ounce sold) | 561 | 458 |
| Cash operating costs (1) ($/ gold ounce produced) | 642 | 605 |
| Total cash costs (1) ($/ gold ounce sold) | 644 | 533 |
| All-in sustaining costs (1) ($/ gold ounce sold) | 958 | 905 |
| Capital expenditures ($ in thousands) | 13,813 | 17,346 |
| Exploration ($ in thousands) | 1,789 | 494 |
(1) Non-IFRS measure. For a description of how these measures are calculated and a reconciliation of these measures to the most directly comparable measures specified, defined or determined under IFRS and presented in the Company's financial statements, refer to "Non-IFRS Measures".
The Otjikoto Mine in Namibia, in which the Company holds a 90% interest, performed well during the first quarter of 2024, producing 45,416 ounces of gold, above expectations as a result of higher than anticipated mill feed grade. For the first quarter of 2024, mill feed grade was 1.74 g/t, mill throughput was 0.83 million tonnes, and gold recovery averaged 98.5%.
Ore production from the Wolfshag underground mine for the first quarter of 2024 averaged over 1,500 tonnes per day at an average grade of 4.06 g/t gold. As of the beginning of 2024, the Probable Mineral Reserve estimate for the Wolfshag deposit includes 100,000 ounces of gold in 0.6 million tonnes of ore at an average grade of 5.02 g/t gold. Open pit mining operations at the Otjikoto Mine will continue to ramp down in 2024 and conclude in 2025, while processing operations are expected to continue until economically viable stockpiles are exhausted in 2031. Underground operations are currently projected to continue until 2026 with potential to extend underground operations if the ongoing underground exploration program is successful in identifying more underground mineral deposits.
On January 31, 2024, the Company announced positive exploration drilling results from the Antelope deposit at the Otjikoto Mine. The Antelope deposit, comprised of the Springbok Zone, the Oryx Zone, and a possible third structure, Impala, subject to further confirmatory drilling, is located approximately three km south of the Otjikoto open pit. The Antelope deposit has the potential to be developed as an underground mining operation, which could complement the expected processing of low-grade stockpiles at the Otjikoto mill from 2026 through 2031.
Cash operating costs (see "Non-IFRS Measures" ) for the first quarter of 2024 were $642 per gold ounce produced ($561 per ounce gold sold). Cash operating costs per gold ounce produced for the first quarter of 2024 were lower than expected as a result of higher production and a weaker Namibian dollar. Cash operating costs per gold ounce sold for the first quarter of 2024 were lower than the cash operating costs per ounce produced for the first quarter of 2024 as a result of the sale of lower cost inventory produced in the fourth quarter of 2023.
All-in sustaining costs (see "Non-IFRS Measures" ) for the first quarter of 2024 were $958 per gold ounce sold. All-in sustaining costs for the first quarter of 2024 were lower than expected as a result of lower than anticipated cash operating costs, higher than anticipated gold ounces sold and lower than expected sustaining capital expenditures, partially offset by higher gold royalties resulting from a higher than expected average realized gold price. The lower sustaining capital expenditures were mainly a result of timing of expenditures and are expected to be incurred later in 2024.
Capital expenditures for the first quarter of 2024 totalled $14 million, consisting of $11 million for deferred stripping in the Otjikoto pit and $3 million for Wolfshag underground mine development.
The Otjikoto Mine is expected to produce between 180,000 and 200,000 ounces of gold in 2024 at cash operating costs of between $685 and $745 per ounce and all-in sustaining costs of between $960 and $1,020 per ounce. Gold production at Otjikoto is expected to be relatively consistent throughout 2024. For 2024, Otjikoto is expected to process a total of 3.4 million tonnes of ore at an average grade of 1.77 g/t gold with a process gold recovery of 98.0%. Processed ore will be sourced from the Otjikoto pit and the Wolfshag underground mine, supplemented by existing medium and high-grade ore stockpiles.
Goose Project Development
The Back River Gold District consists of five mineral claims blocks along an 80 km belt. Construction is underway at the most advanced project in the district, the Goose Project, and has been de-risked with significant infrastructure currently in place.
B2Gold recognizes that respect and collaboration with the Kitikmeot Inuit Association ("KIA") is central to the license to operate in the Back River Gold District and will continue to prioritize developing the project in a manner that recognizes Inuit priorities, addresses concerns and brings long-term socio-economic benefits to the Kitikmeot Region. B2Gold looks forward to continuing to build on its strong collaboration with the KIA and Kitikmeot Communities.
Following the successful completion of the 2023 sealift, construction of the 162 km WIR between the MLA and the Goose Project site began in December 2023. The 2024 WIR campaign completed on April 30, 2024, and B2Gold is pleased to report that the Company has successfully delivered all necessary materials required to complete construction of the Goose Project. Materials trucked from the MLA to the Goose Project site during the 2024 WIR campaign exceeded 2,100 total loads and included 400 loads of diesel fuel. Under B2Gold management, the 2,100 loads completed during the 2024 WIR campaign is approximately double the loads completed during the 2023 WIR campaign. Key materials delivered during the 2024 WIR campaign included all modular units necessary to expand the camp to 500 person capacity; all steel and rebar necessary to complete the mill and concrete work; approximately 19 million liters of fuel that will be used between May 2024 and March 2025; all cement necessary to complete the construction project; more than 4,500m 3 of cement in one tonne bags; and all reagents necessary to commission and operate the mill starting in 2025.
Goose Project site laydown area – April 2024
Winter ice road – March 2024
As of the end of April 2024, all additional camp modules were on site and set in place. The camp will be expanded from 300 beds to 500 beds through six additional dorm wings and a small office complex wing. More than 120 new additional beds are currently ready to be occupied, with the full accommodation complex expansion expected to be complete by the end of May 2024.
Goose Project accommodation complex overview – April 2024
B2Gold is expanding the existing diesel storage tank farms at the MLA and at the Goose Project site from 25 million liter capacity to more than 80 million liters. This increase requires the addition of three more tanks at each site. All the steel required to complete the tank expansion is present at each site, and construction crews have commenced assembling the tank bases. These tanks will be complete by the end of August 2024 to receive the sealift shipment of fuel that will sustain the project through the end of construction and into production in 2025.
The mill construction remains on schedule (with certain items ahead of schedule) with work ongoing on various facilities related to concrete, steel erection and building cladding. Installation of the ball mill is progressing ahead of schedule with the installation of all shell sections, feed/discharge heads, trunnion, pinion and bearings having been completed.
The primary pond will provide contact water storage as well as store reclaimed water during the first year of processing operations. It is critical for the primary pond to receive water in 2024 for mill start-up and commissioning. The facility embankment includes a frozen core that requires a below grade cut-off trench to be constructed during the winter months. The cut-off trench was successfully completed in April 2024. Phase 2 of the embankment will be completed during summer 2024.
Development of the open pit and underground is slightly behind schedule due to equipment availability (commissioning and availability of the open pit equipment), adverse weather conditions and prioritization of critical path construction activities. The current schedule indicates that an additional three months of mining must be added to the schedule to ensure that the Umwelt open pit, underground development, and crown pillar activities align and that there is sufficient tailings storage capacity in the Echo open pit. With the schedule change, the mill is now scheduled to produce first gold in the second quarter of 2025 with ramp up to full production in the third quarter of 2025 (one quarter later than previous estimates). This does not impact the other facets of the project and staffing tables have been adjusted to ensure that capital is conserved. With the updated schedule, the Company estimates that gold production in calendar year 2025 will be between 120,000 ounces and 150,000 ounces (previously estimated to be between 220,000 ounces and 260,000 ounces). The reduction in estimated gold production in 2025 is predominantly due to the deferral of an anticipated 100,000 ounces of quarterly gold production from the fourth quarter of 2025 into the first quarter of 2026. Importantly, the updated mining schedule does not impact the total number of gold ounces the Company expects to produce over the life of mine of the Goose Project. The updated production profile has resulted in the Company now estimating that average annual gold production from 2026 to 2030 will increase to be in excess of 310,000 ounces per year (previously estimated at 300,000 ounces per year).
After completing a detailed design review of the Goose Project, B2Gold announced in January 2024 a revised construction capital estimate to C$1,050 million. In addition, before first gold production the Company estimated it will spend an additional C$200 million on underground development, deferred stripping and sustaining capital, as well as an additional C$205 million for fuels, reagents, and other working capital items necessary to build up site inventory levels due to the seasonality of the project logistics. As of December 31, 2023, approximately C$683 million had been spent on construction and mine development activities and C$44 million for the build-up of supplies inventory. In the first quarter of 2024, the Company incurred $117 million (C$158 million) for the Goose Project on construction and mine development activities and $2 million (C$3 million) on supplies inventory. As at March 31, 2024, approximately C$841 million in cash expenditures had been spent on construction and mine development activities and C$47 million on supplies inventory. Given the activities completed through March 31, 2024, the incorporation of the new mining schedule, and the successful completion of the 2024 WIR campaign, the Company is in the process of completing a new review of the total cost to be incurred before first gold production. The updated total cost estimate is anticipated to be completed in June 2024. As a result of construction activities being on schedule (and in certain areas ahead of schedule), and the updated first gold production estimate relating solely to the mining schedule change, the Company estimates that the total spend to be incurred before first gold production will not be significantly different than previous estimates.
Fekola Complex Development
Based on B2Gold's preliminary planning, the Anaconda Area could provide selective higher grade saprolite material (average annual grade of up to 2.2 g/t gold) to be trucked approximately 20 km and fed into the Fekola mill at a rate of up to 1.5 million tonnes per annum. Trucking of selective higher grade saprolite material from the Anaconda Area to the Fekola mill will increase the ore processed and has the potential to generate approximately 80,000 to 100,000 ounces of initial gold production per year from Fekola Regional sources. Receipt of a mining permit for the Fekola Regional licenses remains outstanding pending finalization of an implementation decree for the new 2023 Mining Code by the State of Mali. As a result, no production is forecast from Fekola Regional in 2024, with production now expected to commence at the beginning of 2025. In early 2024, B2Gold held meetings with the representatives of the Government of Mali regarding the 2023 Mining Code. The Government of Mali assisted the Company in clarifying the application of the 2023 Mining Code to existing and future projects in Mali, and also expressed their desire for B2Gold to rapidly progress the development of Fekola Regional and committed to assisting the Company in such development. Importantly, the haul road from Fekola Regional to the Fekola Mine is operational as construction of the haul roads and mining infrastructure (warehouse, workshop, fuel depot and offices) was completed on schedule in 2023.
Gramalote Project Development
B2Gold's in-house projects team is progressing work on various smaller scale project development plans for the Gramalote Project, with the goal of identifying a higher-return project than the previously contemplated joint venture development plan. Based on the results of the 2022 Gramalote feasibility study, the contemplated larger scale project did not meet the combined investment return thresholds for development by both B2Gold and AngloGold Ashanti Limited. In 2023, B2Gold completed a detailed review of the Gramalote Project, including the facility size and location, power supply, mining and processing options, tailings design, resettlement, potential construction sequencing and camp design to identify potential cost savings to develop a smaller scale project. The results of the review allowed the Company to determine the optimal parameters and assumptions for a formal study, which commenced in the fourth quarter of 2023, with a PEA expected to be complete by the end of the second quarter of 2024.
Outlook
Based on the positive first quarter of 2024 operating and financial results, B2Gold is on track to meet its annual gold production forecast of between 860,000 and 940,000 ounces (including 40,000 to 50,000 attributable ounces from Calibre). The Company's total consolidated gold production is expected to be relatively consistent throughout 2024, with third quarter production expected to be slightly lower. The expected decrease in gold production relative to 2023 is predominantly due to lower production at the Fekola Complex as a result of the delay in receiving an exploitation license for Fekola Regional from the Government of Mali, delaying the 80,000 to 100,000 ounces that were scheduled in the life of mine plan to be trucked to the Fekola mill and processed in 2024. The contribution of this gold production from Fekola Regional is now expected to start at the beginning of 2025. The Company's total consolidated cash operating costs for the year (including estimated attributable results for Calibre) are forecast to be between $835 and $895 per ounce and total consolidated all-in sustaining costs (including estimated attributable results for Calibre) are forecast to be between $1,360 and 1,420 per ounce. The anticipated increase in the Company's consolidated cash operating costs per ounce for 2024 reflects the processing of lower-grade ore at Fekola in 2024. The total all-in sustaining costs per ounce for 2024 reflect the final full year of spending on both the new Fekola tailings storage facility and the Fekola solar plant expansion, in addition to the ongoing substantial capitalized stripping campaign planned at Fekola for 2024.
B2Gold has successfully completed the 2024 WIR campaign and has delivered all necessary material from the MLA to complete the construction of the Goose Project in the first quarter of 2025. The mill construction remains on schedule (and in some cases ahead of schedule) with work ongoing on various facilities related to concrete, steel erection and building cladding. Additionally, installation of the ball mill is progressing ahead of schedule with installation of all shell sections, feed/discharge heads, trunnion, pinion and bearings having been completed. Development of the open pit and underground is slightly behind schedule due to equipment availability (commissioning and availability of the open pit equipment), adverse weather conditions and prioritization of critical path construction activities. The current schedule indicates that an additional three months of mining will be added to the schedule to ensure that the Umwelt open pit, underground development, and crown pillar activities align and that there is sufficient tailings storage capacity in the Echo open pit. With the schedule change, the mill is now scheduled to produce first gold in the second quarter of 2025 with ramp up to full production in the third quarter of 2025 (one quarter later than previous estimates). Importantly, the updated mining schedule does not impact the total number of gold ounces the Company expects to produce over the life of mine of the Goose Project. The updated production profile has resulted in the Company now estimating that average annual gold production from 2026 to 2030 will increase to be in excess of 310,000 ounces per year (previously estimated at 300,000 ounces per year).
The Company has completed a detailed review of the Gramalote Project, including facility size and location, power supply, mining and processing options, tailings design, resettlement, potential construction sequencing and camp design to identify potential cost savings to develop a smaller scale project. A formal study commenced in the fourth quarter of 2023, with a PEA expected to be completed by the end of the second quarter of 2024.
B2Gold expects to declare future quarterly dividends in 2024 at the same rate of $0.04 per common share (or an annualized rate of $0.16 per common share), which represents one of the highest dividend yields in the gold sector. As of March 31, 2024, the expected annual dividend rate represented an approximate 6.1% yield.
The Company's ongoing strategy is to continue to maximize profitable production from its mines, further advance its pipeline of remaining development and exploration projects, evaluate new exploration, development and production opportunities and continue to pay an industry leading dividend yield.
First Quarter 2024 Financial Results - Conference Call Details
B2Gold executives will host a conference call to discuss the results on Wednesday, May 8, 2024, at 8:00 am PT / 11:00 am ET.
Participants may register for the conference call here: registration link . Upon registering, participants will receive a calendar invitation by email with dial in details and a unique PIN. This will allow participants to bypass the operator queue and connect directly to the conference. Registration will remain open until the end of the conference call. Participants may also dial in using the numbers below:
The conference call will be available for playback for two weeks by dialing toll-free in the U.S. and Canada: +1 (855) 669-9658, replay access code 0771. All other callers: +1 (604) 674-8052, replay access code 0771.
About B2Gold
B2Gold is a low-cost international senior gold producer headquartered in Vancouver, Canada. Founded in 2007, today, B2Gold has operating gold mines in Mali, Namibia and the Philippines, a mine under construction in northern Canada and numerous development and exploration projects in various countries including Mali, Colombia and Finland. B2Gold forecasts total consolidated gold production of between 860,000 and 940,000 ounces in 2024.
Qualified Persons
Bill Lytle, Senior Vice President and Chief Operating Officer, a qualified person under NI 43-101, has approved the scientific and technical information related to operations matters contained in this news release.
Andrew Brown, P. Geo., Vice President, Exploration, a qualified person under NI 43-101, has approved the scientific and technical information related to exploration and mineral resource matters contained in this news release.
ON BEHALF OF B2GOLD CORP.
"Clive T. Johnson"
President and Chief Executive Officer
The Toronto Stock Exchange and NYSE American LLC neither approve nor disapprove the information contained in this news release.
Production results and production guidance presented in this news release reflect total production at the mines B2Gold operates on a 100% project basis. Please see our Annual Information Form dated March 14, 2024, for a discussion of our ownership interest in the mines B2Gold operates.
This news release includes certain "forward-looking information" and "forward-looking statements" (collectively "forward-looking statements") within the meaning of applicable Canadian and United States securities legislation, including: projections; outlook; guidance; forecasts; estimates; and other statements regarding future or estimated financial and operational performance, gold production and sales, revenues and cash flows, and capital costs (sustaining and non-sustaining) and operating costs, including projected cash operating costs and AISC, and budgets on a consolidated and mine by mine basis; future or estimated mine life, metal price assumptions, ore grades or sources, gold recovery rates, stripping ratios, throughput, ore processing; statements regarding anticipated exploration, drilling, development, construction, permitting and other activities or achievements of B2Gold; and including, without limitation: remaining well positioned for continued strong operational and financial performance in 2024; projected gold production, cash operating costs and AISC on a consolidated and mine by mine basis in 2024; total consolidated gold production of between 860,000 and 940,000 ounces (including 40,000 to 50,000 attributable ounces from Calibre) in 2024, with cash operating costs of between $835 and $895 per ounce and AISC of between $1,360 and $1,420 per ounce; B2Gold's continued prioritization of developing the Goose Project in a manner that recognizes Indigenous input and concerns and brings long-term socio-economic benefits to the area; the Goose Project capital cost being approximately C$1,050 million and the net cost of open pit and underground development, deferred stripping, and sustaining capital expenditures to be incurred prior to first gold production being approximately C$200 million and the cost for reagents and other working capital items being C$205 million; the Goose Project producing approximately 310,000 ounces of gold per year for the first five years; the potential for completion of the mill construction in the first quarter of 2025 and first gold production in the second quarter of 2025 from the Goose Project; the Company's consolidated gold production to be relatively consistent throughout 2024; Fekola Regional production now expected to commence at the beginning of 2025; the potential receipt of a mining permit for Fekola Regional licenses later in 2024; the impact of the 2023 Mining Code in Mali; the potential for the Antelope deposit to be developed as an underground operation and contribute gold during the low-grade stockpile processing in 2026 through 2031; the timing and results of a PEA for the Gramalote Project; and B2Gold's attributable share of Calibre's production. All statements in this news release that address events or developments that we expect to occur in the future are forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, although not always, identified by words such as "expect", "plan", "anticipate", "project", "target", "potential", "schedule", "forecast", "budget", "estimate", "intend" or "believe" and similar expressions or their negative connotations, or that events or conditions "will", "would", "may", "could", "should" or "might" occur. All such forward-looking statements are based on the opinions and estimates of management as of the date such statements are made.
Forward-looking statements necessarily involve assumptions, risks and uncertainties, certain of which are beyond B2Gold's control, including risks associated with or related to: the volatility of metal prices and B2Gold's common shares; changes in tax laws; the dangers inherent in exploration, development and mining activities; the uncertainty of reserve and resource estimates; not achieving production, cost or other estimates; actual production, development plans and costs differing materially from the estimates in B2Gold's feasibility and other studies; the ability to obtain and maintain any necessary permits, consents or authorizations required for mining activities; environmental regulations or hazards and compliance with complex regulations associated with mining activities; climate change and climate change regulations; the ability to replace mineral reserves and identify acquisition opportunities; the unknown liabilities of companies acquired by B2Gold; the ability to successfully integrate new acquisitions; fluctuations in exchange rates; the availability of financing; financing and debt activities, including potential restrictions imposed on B2Gold's operations as a result thereof and the ability to generate sufficient cash flows; operations in foreign and developing countries and the compliance with foreign laws, including those associated with operations in Mali, Namibia, the Philippines and Colombia and including risks related to changes in foreign laws and changing policies related to mining and local ownership requirements or resource nationalization generally; remote operations and the availability of adequate infrastructure; fluctuations in price and availability of energy and other inputs necessary for mining operations; shortages or cost increases in necessary equipment, supplies and labour; regulatory, political and country risks, including local instability or acts of terrorism and the effects thereof; the reliance upon contractors, third parties and joint venture partners; the lack of sole decision-making authority related to Filminera Resources Corporation, which owns the Masbate Project; challenges to title or surface rights; the dependence on key personnel and the ability to attract and retain skilled personnel; the risk of an uninsurable or uninsured loss; adverse climate and weather conditions; litigation risk; competition with other mining companies; community support for B2Gold's operations, including risks related to strikes and the halting of such operations from time to time; conflicts with small scale miners; failures of information systems or information security threats; the ability to maintain adequate internal controls over financial reporting as required by law, including Section 404 of the Sarbanes-Oxley Act; compliance with anti-corruption laws, and sanctions or other similar measures; social media and B2Gold's reputation; risks affecting Calibre having an impact on the value of the Company's investment in Calibre, and potential dilution of our equity interest in Calibre; as well as other factors identified and as described in more detail under the heading "Risk Factors" in B2Gold's most recent Annual Information Form, B2Gold's current Form 40-F Annual Report and B2Gold's other filings with Canadian securities regulators and the U.S. Securities and Exchange Commission (the "SEC"), which may be viewed at www.sedar.com and www.sec.gov, respectively (the "Websites"). The list is not exhaustive of the factors that may affect B2Gold's forward-looking statements.
B2Gold's forward-looking statements are based on the applicable assumptions and factors management considers reasonable as of the date hereof, based on the information available to management at such time. These assumptions and factors include, but are not limited to, assumptions and factors related to B2Gold's ability to carry on current and future operations, including: development and exploration activities; the timing, extent, duration and economic viability of such operations, including any mineral resources or reserves identified thereby; the accuracy and reliability of estimates, projections, forecasts, studies and assessments; B2Gold's ability to meet or achieve estimates, projections and forecasts; the availability and cost of inputs; the price and market for outputs, including gold; foreign exchange rates; taxation levels; the timely receipt of necessary approvals or permits; the ability to meet current and future obligations; the ability to obtain timely financing on reasonable terms when required; the current and future social, economic and political conditions; and other assumptions and factors generally associated with the mining industry.
B2Gold's forward-looking statements are based on the opinions and estimates of management and reflect their current expectations regarding future events and operating performance and speak only as of the date hereof. B2Gold does not assume any obligation to update forward-looking statements if circumstances or management's beliefs, expectations or opinions should change other than as required by applicable law. There can be no assurance that forward-looking statements will prove to be accurate, and actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements. Accordingly, no assurance can be given that any events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what benefits or liabilities B2Gold will derive therefrom. For the reasons set forth above, undue reliance should not be placed on forward-looking statements.
Non-IFRS Measures
This news release includes certain terms or performance measures commonly used in the mining industry that are not defined under International Financial Reporting Standards ("IFRS"), including "cash operating costs" and "all-in sustaining costs" (or "AISC"). Non-IFRS measures do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data presented is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS and should be read in conjunction with B2Gold's consolidated financial statements. Readers should refer to B2Gold's Management Discussion and Analysis, available on the Websites, under the heading "Non-IFRS Measures" for a more detailed discussion of how B2Gold calculates certain of such measures and a reconciliation of certain measures to IFRS terms.
Cautionary Statement Regarding Mineral Reserve and Resource Estimates
The disclosure in this news release was prepared in accordance with Canadian National Instrument 43-101, which differs significantly from the requirements of the United States Securities and Exchange Commission ("SEC"), and resource and reserve information contained or referenced in this news release may not be comparable to similar information disclosed by public companies subject to the technical disclosure requirements of the SEC. Historical results or feasibility models presented herein are not guarantees or expectations of future performance.
B2GOLD CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31
(Expressed in thousands of United States dollars, except per share amounts)
(Unaudited)
| 2024 | 2023 | ||||||
| Gold revenue | $ | 461,444 | $ | 473,556 | |||
| Cost of sales | |||||||
| Production costs | (156,745 | ) | (127,604 | ) | |||
| Depreciation and depletion | (90,446 | ) | (97,158 | ) | |||
| Royalties and production taxes | (30,027 | ) | (35,161 | ) | |||
| Total cost of sales | (277,218 | ) | (259,923 | ) | |||
| Gross profit | 184,226 | 213,633 | |||||
| General and administrative | (14,138 | ) | (14,185 | ) | |||
| Share-based payments | (4,954 | ) | (6,854 | ) | |||
| Non-recoverable input taxes | (4,304 | ) | (1,907 | ) | |||
| Share of net income of associates | 2,097 | 4,979 | |||||
| Foreign exchange losses | (2,379 | ) | (596 | ) | |||
| Community relations | (489 | ) | (1,003 | ) | |||
| Write-down of mining interests | — | (16,457 | ) | ||||
| Other expense | (5,432 | ) | (1,691 | ) | |||
| Operating income | 154,627 | 175,919 | |||||
| Interest and financing expense | (9,571 | ) | (2,926 | ) | |||
| Interest income | 5,455 | 5,819 | |||||
| Change in fair value of gold stream | (10,852 | ) | — | ||||
| Dilution loss on associate | (9,982 | ) | — | ||||
| Gains (losses) on derivative instruments | 275 | (357 | ) | ||||
| Other income (expense) | 143 | (1,600 | ) | ||||
| Income from operations before taxes | 130,095 | 176,855 | |||||
| Current income tax, withholding and other taxes | (61,584 | ) | (76,740 | ) | |||
| Deferred income tax (expense) recovery | (20,030 | ) | 1,789 | ||||
| Net income for the period | $ | 48,481 | $ | 101,904 | |||
| Attributable to: | |||||||
| Shareholders of the Company | $ | 39,751 | $ | 85,973 | |||
| Non-controlling interests | 8,730 | 15,931 | |||||
| Net income for the period | $ | 48,481 | $ | 101,904 | |||
| Earnings per share (attributable to shareholders of the Company) | |||||||
| Basic | $ | 0.03 | $ | 0.08 | |||
| Diluted | $ | 0.03 | $ | 0.08 | |||
| Weighted average number of common shares outstanding (in thousands) | |||||||
| Basic | 1,303,191 | 1,075,402 | |||||
| Diluted | 1,307,674 | 1,081,084 | |||||
B2GOLD CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31
(Expressed in thousands of United States dollars)
(Unaudited)
| 2024 | 2023 | ||||||
| Operating activities | |||||||
| Net income for the period | $ | 48,481 | $ | 101,904 | |||
| Mine restoration provisions settled | (291 | ) | — | ||||
| Non-cash charges, net | 151,322 | 121,532 | |||||
| Proceeds from prepaid sales | 500,023 | — | |||||
| Changes in non-cash working capital | 21,985 | 6,226 | |||||
| Changes in long-term supplies inventory | 4,152 | — | |||||
| Changes in long-term value added tax receivables | (14,945 | ) | (25,839 | ) | |||
| Cash provided by operating activities | 710,727 | 203,823 | |||||
| Financing activities | |||||||
| Repayment of revolving credit facility | (150,000 | ) | — | ||||
| Repayment of equipment loan facilities | (2,387 | ) | (3,578 | ) | |||
| Interest and commitment fees paid | (3,579 | ) | (1,002 | ) | |||
| Cash proceeds from stock option exercises | 1,088 | 2,444 | |||||
| Dividends paid | (45,989 | ) | (42,976 | ) | |||
| Principal payments on lease arrangements | (1,448 | ) | (1,443 | ) | |||
| Distributions to non-controlling interests | (4,580 | ) | (2,082 | ) | |||
| Other | 271 | 817 | |||||
| Cash used by financing activities | (206,624 | ) | (47,820 | ) | |||
| Investing activities | |||||||
| Expenditures on mining interests: | |||||||
| Fekola Mine | (80,562 | ) | (53,795 | ) | |||
| Masbate Mine | (8,530 | ) | (8,953 | ) | |||
| Otjikoto Mine | (13,813 | ) | (17,346 | ) | |||
| Goose Project | (117,451 | ) | — | ||||
| Fekola Regional Properties | (4,501 | ) | (14,775 | ) | |||
| Gramalote Project | (3,310 | ) | (510 | ) | |||
| Other exploration | (8,840 | ) | (15,991 | ) | |||
| Loan to associate | (1,496 | ) | — | ||||
| Funding of reclamation accounts | (1,029 | ) | (1,289 | ) | |||
| Purchase of long-term investment | — | (15,116 | ) | ||||
| Cash paid for purchase of non-controlling interest | — | (6,704 | ) | ||||
| Deferred consideration received | — | 3,850 | |||||
| Other | (45 | ) | (459 | ) | |||
| Cash used by investing activities | (239,577 | ) | (131,088 | ) | |||
| Increase in cash and cash equivalents | 264,526 | 24,915 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (3,607 | ) | (3,121 | ) | |||
| Cash and cash equivalents, beginning of period | 306,895 | 651,946 | |||||
| Cash and cash equivalents, end of period | $ | 567,814 | $ | 673,740 | |||
B2GOLD CORP.
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States dollars)
(Unaudited)
| As at March 31, 2024 | As at December 31, 2023 | ||||||
| Assets | |||||||
| Current | |||||||
| Cash and cash equivalents | $ | 567,814 | $ | 306,895 | |||
| Accounts receivable, prepaids and other | 26,087 | 27,491 | |||||
| Value-added and other tax receivables | 29,046 | 29,848 | |||||
| Inventories | 339,351 | 346,495 | |||||
| Assets classified as held for sale | 34,347 | — | |||||
| 996,645 | 710,729 | ||||||
| Long-term investments | 101,497 | 86,007 | |||||
| Value-added tax receivables | 216,663 | 199,671 | |||||
| Mining interests | 3,682,923 | 3,563,490 | |||||
| Investment in associates | 126,207 | 134,092 | |||||
| Long-term stockpile | 58,941 | 56,497 | |||||
| Long-term supplies inventory | 33,259 | 43,571 | |||||
| Other assets | 71,865 | 63,635 | |||||
| Deferred income taxes | 8,272 | 16,927 | |||||
| $ | 5,296,272 | $ | 4,874,619 | ||||
| Liabilities | |||||||
| Current | |||||||
| Accounts payable and accrued liabilities | $ | 175,892 | $ | 167,117 | |||
| Current income and other taxes payable | 132,418 | 120,679 | |||||
| Current portion of long-term debt | 16,414 | 16,256 | |||||
| Current portion of mine restoration provisions | 2,759 | 3,050 | |||||
| Other current liabilities | 6,157 | 6,369 | |||||
| 333,640 | 313,471 | ||||||
| Long-term debt | 28,804 | 175,869 | |||||
| Gold stream obligation | 150,452 | 139,600 | |||||
| Prepaid gold sales | 507,640 | — | |||||
| Mine restoration provisions | 101,570 | 104,607 | |||||
| Deferred income taxes | 200,004 | 188,106 | |||||
| Employee benefits obligation | 19,916 | 19,171 | |||||
| Other long-term liabilities | 24,390 | 23,820 | |||||
| 1,366,416 | 964,644 | ||||||
| Equity | |||||||
| Shareholders' equity | |||||||
| Share capital | 3,463,392 | 3,454,811 | |||||
| Contributed surplus | 88,745 | 84,970 | |||||
| Accumulated other comprehensive loss | (110,285 | ) | (125,256 | ) | |||
| Retained earnings | 384,539 | 395,854 | |||||
| 3,826,391 | 3,810,379 | ||||||
| Non-controlling interests | 103,465 | 99,596 | |||||
| 3,929,856 | 3,909,975 | ||||||
| $ | 5,296,272 | $ | 4,874,619 | ||||
NON-IFRS MEASURES
Cash operating costs per gold ounce sold and total cash costs per gold ounce sold
‘‘Cash operating costs per gold ounce'' and "total cash costs per gold ounce" are common financial performance measures in the gold mining industry but, as non-IFRS measures, they do not have a standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. Management believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate our performance and ability to generate cash flow. Accordingly, these measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The measures, along with sales, are considered to be a key indicator of the Company's ability to generate earnings and cash flow from its mining operations.
Cash cost figures are calculated on a sales basis in accordance with a standard developed by The Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading North American gold producers. The Gold Institute ceased operations in 2002, but the standard is the accepted standard of reporting cash cost of production in North America. Adoption of the standard is voluntary and the cost measures presented may not be comparable to other similarly titled measures of other companies. Other companies may calculate these measures differently. Cash operating costs and total cash costs per gold ounce sold are derived from amounts included in the statement of operations and include mine site operating costs such as mining, processing, smelting, refining, transportation costs, royalties and production taxes, less silver by-product credits. The tables below show a reconciliation of cash operating costs per gold ounce sold and total cash costs per gold ounce sold to production costs as extracted from the unaudited condensed interim consolidated financial statements on a consolidated and a mine-by-mine basis (dollars in thousands):
| For the three months ended March 31, 2024 | ||||||
| Fekola Mine | Masbate Mine | Otjikoto Mine | Total | Calibre equity investment | Grand Total | |
| $ | $ | $ | $ | $ | $ | |
| Production costs | 85,105 | 42,771 | 28,869 | 156,745 | 11,905 | 168,650 |
| Royalties and production taxes | 20,395 | 5,390 | 4,242 | 30,027 | 854 | 30,881 |
| Total cash costs | 105,500 | 48,161 | 33,111 | 186,772 | 12,759 | 199,531 |
| Gold sold (ounces) | 123,828 | 47,700 | 51,450 | 222,978 | 11,377 | 234,355 |
| Cash operating costs per ounce ($/ gold ounce sold) | 687 | 897 | 561 | 703 | 1,046 | 720 |
| Total cash costs per ounce ($/ gold ounce sold) | 852 | 1,010 | 644 | 838 | 1,121 | 851 |
| For the three months ended March 31, 2023 | ||||||
| Fekola Mine | Masbate Mine | Otjikoto Mine | Total | Calibre equity investment | Grand Total | |
| $ | $ | $ | $ | $ | $ | |
| Production costs | 77,661 | 24,993 | 24,950 | 127,604 | 15,765 | 143,369 |
| Royalties and production taxes | 26,666 | 4,413 | 4,082 | 35,161 | 1,254 | 36,415 |
| Total cash costs | 104,327 | 29,406 | 29,032 | 162,765 | 17,019 | 179,784 |
| Gold sold (ounces) | 165,050 | 29,650 | 54,450 | 249,150 | 16,142 | 265,292 |
| Cash operating costs per ounce ($/ gold ounce sold) | 471 | 843 | 458 | 512 | 977 | 540 |
| Total cash costs per ounce ($/ gold ounce sold) | 632 | 992 | 533 | 653 | 1,054 | 678 |
Cash operating costs per gold ounce produced
In addition to cash operating costs on a per gold ounce sold basis, the Company also presents cash operating costs on a per gold ounce produced basis. Cash operating costs per gold ounce produced is derived from amounts included in the statement of operations and include mine site operating costs such as mining, processing, smelting, refining, transportation costs, less silver by-product credits. The tables below show a reconciliation of cash operating costs per gold ounce produced to production costs as extracted from the unaudited condensed interim consolidated financial statements on a consolidated and a mine-by-mine basis (dollars in thousands):
| For the three months ended March 31, 2024 | ||||||||||
| Fekola Mine | Masbate Mine | Otjikoto Mine | Total | Calibre equity investment | Grand Total | |||||
| $ | $ | $ | $ | $ | $ | |||||
| Production costs | 85,105 | 42,771 | 28,869 | 156,745 | 11,905 | 168,650 | ||||
| Inventory sales adjustment | (1,922 | ) | (1,224 | ) | 272 | (2,874 | ) | — | (2,874 | ) |
| Cash operating costs | 83,183 | 41,547 | 29,141 | 153,871 | 11,905 | 165,776 | ||||
| Gold produced (ounces) | 119,141 | 49,782 | 45,416 | 214,339 | 11,377 | 225,716 | ||||
| Cash operating costs per ounce ($/ gold ounce produced) | 698 | 835 | 642 | 718 | 1,046 | 734 | ||||
| For the three months ended March 31, 2023 | |||||||
| Fekola Mine | Masbate Mine | Otjikoto Mine | Total | Calibre equity investment | Grand Total | ||
| $ | $ | $ | $ | $ | $ | ||
| Production costs | 77,661 | 24,993 | 24,950 | 127,604 | 15,765 | 143,369 | |
| Inventory sales adjustment | 2,518 | 15,937 | (1,649 | ) | 16,806 | — | 16,806 |
| Cash operating costs | 80,179 | 40,930 | 23,301 | 144,410 | 15,765 | 160,175 | |
| Gold produced (ounces) | 165,864 | 46,364 | 38,491 | 250,719 | 16,137 | 266,856 | |
| Cash operating costs per ounce ($/ gold ounce produced) | 483 | 883 | 605 | 576 | 977 | 600 | |
All-in sustaining costs per gold ounce
In June 2013, the World Gold Council, a non-regulatory association of the world's leading gold mining companies established to promote the use of gold to industry, consumers and investors, provided guidance for the calculation of the measure "all-in sustaining costs per gold ounce", but as a non-IFRS measure, it does not have a standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. The original World Gold Council standard became effective January 1, 2014 with further updates announced on November 16, 2018 which were effective starting January 1, 2019.
Management believes that the all-in sustaining costs per gold ounce measure provides additional insight into the costs of producing gold by capturing all of the expenditures required for the discovery, development and sustaining of gold production and allows the Company to assess its ability to support capital expenditures to sustain future production from the generation of operating cash flows. Management believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company's performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Adoption of the standard is voluntary and the cost measures presented may not be comparable to other similarly titled measures of other companies. The Company has applied the principles of the World Gold Council recommendations and has reported all-in sustaining costs on a sales basis. Other companies may calculate these measures differently.
B2Gold defines all-in sustaining costs per ounce as the sum of cash operating costs, royalties and production taxes, capital expenditures and exploration costs that are sustaining in nature, sustaining lease expenditures, corporate general and administrative costs, share-based payment expenses related to restricted share units/deferred share units/performance share units/restricted phantom units ("RSUs/DSUs/PSUs/RPUs"), community relations expenditures, reclamation liability accretion and realized (gains) losses on fuel derivative contracts, all divided by the total gold ounces sold to arrive at a per ounce figure.
The tables below show a reconciliation of all-in sustaining costs per ounce to production costs as extracted from the unaudited condensed interim consolidated financial statements on a consolidated and a mine-by-mine basis for the three months ended March 31, 2024 (dollars in thousands):
| For the three months ended March 31, 2024 | ||||||||||||
| Fekola Mine | Masbate Mine | Otjikoto Mine | Corporate | Total | Calibre equity investment | Grand Total | ||||||
| $ | $ | $ | $ | $ | $ | $ | ||||||
| Production costs | 85,105 | 42,771 | 28,869 | — | 156,745 | 11,905 | 168,650 | |||||
| Royalties and production taxes | 20,395 | 5,390 | 4,242 | — | 30,027 | 854 | 30,881 | |||||
| Corporate administration | 2,727 | 514 | 1,480 | 9,417 | 14,138 | 561 | 14,699 | |||||
| Share-based payments – RSUs/DSUs/PSUs/RPUs (1) | 33 | — | — | 4,973 | 5,006 | — | 5,006 | |||||
| Community relations | 145 | 13 | 331 | — | 489 | — | 489 | |||||
| Reclamation liability accretion | 435 | 301 | 238 | — | 974 | — | 974 | |||||
| Realized gains on derivative contracts | (218 | ) | (144 | ) | (31 | ) | — | (393 | ) | — | (393 | ) |
| Sustaining lease expenditures | 84 | 318 | 554 | 492 | 1,448 | — | 1,448 | |||||
| Sustaining capital expenditures (2) | 67,870 | 8,249 | 12,898 | — | 89,017 | 1,755 | 90,772 | |||||
| Sustaining mine exploration (2) | 1,302 | 734 | 702 | — | 2,738 | — | 2,738 | |||||
| Total all-in sustaining costs | 177,878 | 58,146 | 49,283 | 14,882 | 300,189 | 15,075 | 315,264 | |||||
| Gold sold (ounces) | 123,828 | 47,700 | 51,450 | — | 222,978 | 11,377 | 234,355 | |||||
| All-in sustaining cost per ounce ($/ gold ounce sold) | 1,436 | 1,219 | 958 | — | 1,346 | 1,325 | 1,345 | |||||
(1) Included as a component of Share-based payments on the Statement of operations.
(2) Refer to Sustaining capital expenditures and Sustaining mine exploration reconciliations below.
The table below shows a reconciliation of sustaining capital expenditures to operating mine capital expenditures as extracted from the unaudited condensed interim consolidated financial statements for the three months ended March 31, 2024 (dollars in thousands):
| For the three months ended March 31, 2024 | |||||||||||
| Fekola Mine | Masbate Mine | Otjikoto Mine | Total | Calibre equity investment | Grand Total | ||||||
| $ | $ | $ | $ | $ | $ | ||||||
| Operating mine capital expenditures | 80,562 | 8,530 | 13,813 | 102,905 | 1,755 | 104,660 | |||||
| Fekola underground | (11,104 | ) | — | — | (11,104 | ) | — | (11,104 | ) | ||
| Road construction | (1,588 | ) | — | — | (1,588 | ) | — | (1,588 | ) | ||
| Land acquisition | — | (71 | ) | — | (71 | ) | — | (71 | ) | ||
| Other | — | (210 | ) | (915 | ) | (1,125 | ) | — | (1,125 | ) | |
| Sustaining capital expenditures | 67,870 | 8,249 | 12,898 | 89,017 | 1,755 | 90,772 | |||||
The table below shows a reconciliation of sustaining mine exploration to operating mine exploration as extracted from the unaudited condensed interim consolidated financial statements for the three months ended March 31, 2024 (dollars in thousands):
| For the three months ended March 31, 2024 | ||||||||||
| Fekola Mine | Masbate Mine | Otjikoto Mine | Total | Calibre equity investment | Grand Total | |||||
| $ | $ | $ | $ | $ | $ | |||||
| Operating mine exploration | 1,302 | 821 | 1,789 | 3,912 | — | 3,912 | ||||
| Regional exploration | — | (87 | ) | (1,087 | ) | (1,174 | ) | — | (1,174 | ) |
| Sustaining mine exploration | 1,302 | 734 | 702 | 2,738 | — | 2,738 | ||||
The tables below show a reconciliation of all-in sustaining costs per ounce to production costs as extracted from the unaudited condensed interim consolidated financial statements on a consolidated and a mine-by-mine basis for the three months ended March 31, 2023 (dollars in thousands):
| For the three months ended March 31, 2023 | ||||||||||||
| Fekola Mine | Masbate Mine | Otjikoto Mine | Corporate | Total | Calibre equity investment | Grand Total | ||||||
| $ | $ | $ | $ | $ | $ | $ | ||||||
| Production costs | 77,661 | 24,993 | 24,950 | — | 127,604 | 15,765 | 143,369 | |||||
| Royalties and production taxes | 26,666 | 4,413 | 4,082 | — | 35,161 | 1,254 | 36,415 | |||||
| Corporate administration | 2,961 | 499 | 1,704 | 9,021 | 14,185 | 749 | 14,934 | |||||
| Share-based payments – RSUs/DSUs/PSUs/RPUs (1) | — | — | — | 4,319 | 4,319 | — | 4,319 | |||||
| Community relations | 674 | 58 | 271 | — | 1,003 | — | 1,003 | |||||
| Reclamation liability accretion | 381 | 291 | 294 | — | 966 | — | 966 | |||||
| Realized gains on derivative contracts | (771 | ) | (1,172 | ) | (488 | ) | — | (2,431 | ) | — | (2,431 | ) |
| Sustaining lease expenditures | 64 | 307 | 623 | 449 | 1,443 | — | 1,443 | |||||
| Sustaining capital expenditures (2) | 49,776 | 8,776 | 17,346 | — | 75,898 | 2,006 | 77,904 | |||||
| Sustaining mine exploration (2) | 1,706 | 959 | 494 | — | 3,159 | — | 3,159 | |||||
| Total all-in sustaining costs | 159,118 | 39,124 | 49,276 | 13,789 | 261,307 | 19,774 | 281,081 | |||||
| Gold sold (ounces) | 165,050 | 29,650 | 54,450 | — | 249,150 | 16,142 | 265,292 | |||||
| All-in sustaining cost per ounce ($/ gold ounce sold) | 964 | 1,320 | 905 | — | 1,049 | 1,225 | 1,060 | |||||
(1) Included as a component of Share-based payments on the Statement of operations.
(2) Refer to Sustaining capital expenditures and Sustaining mine exploration reconciliations below
The table below shows a reconciliation of sustaining capital expenditures to operating mine capital expenditures as extracted from the unaudited condensed interim consolidated financial statements for the three months ended March 31, 2023 (dollars in thousands):
| For the three months ended March 31, 2023 | ||||||||||
| Fekola Mine | Masbate Mine | Otjikoto Mine | Total | Calibre equity investment | Grand Total | |||||
| $ | $ | $ | $ | $ | $ | |||||
| Operating mine capital expenditures | 53,795 | 8,953 | 17,346 | 80,094 | 2,006 | 82,100 | ||||
| Road construction | (2,410 | ) | — | — | (2,410 | ) | — | (2,410 | ) | |
| Fekola underground study | (1,609 | ) | — | — | (1,609 | ) | — | (1,609 | ) | |
| Other | — | (177 | ) | — | (177 | ) | — | (177 | ) | |
| Sustaining capital expenditures | 49,776 | 8,776 | 17,346 | 75,898 | 2,006 | 77,904 | ||||
The table below shows a reconciliation of sustaining mine exploration to operating mine exploration as extracted from the unaudited condensed interim consolidated financial statements for the three months ended March 31, 2023 (dollars in thousands):
| For the three months ended March 31, 2023 | ||||||
| Fekola Mine | Masbate Mine | Otjikoto Mine | Total | Calibre equity investment | Grand Total | |
| $ | $ | $ | $ | $ | $ | |
| Operating mine exploration | 1,706 | 959 | 494 | 3,159 | — | 3,159 |
| Regional exploration | — | — | — | — | — | — |
| Sustaining mine exploration | 1,706 | 959 | 494 | 3,159 | — | 3,159 |
Adjusted net income and adjusted earnings per share - basic
Adjusted net income and adjusted earnings per share – basic are non-IFRS measures that do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company defines adjusted net income as net income attributable to shareholders of the Company adjusted for non-recurring items and also significant recurring non-cash items. The Company defines adjusted earnings per share – basic as adjusted net income divided by the basic weighted number of common shares outstanding.
Management believes that the presentation of adjusted net income and adjusted earnings per share - basic is appropriate to provide additional information to investors regarding items that we do not expect to continue at the same level in the future or that management does not believe to be a reflection of the Company's ongoing operating performance. Management further believes that its presentation of these non-IFRS financial measures provide information that is useful to investors because they are important indicators of the strength of our operations and the performance of our core business. Accordingly, it is intended to provide additional information and should not be considered in isolation as a substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate this measure differently.
A reconciliation of net income to adjusted net income as extracted from the unaudited condensed interim consolidated financial statements is set out in the table below:
| Three months ended | |||
| March 31, | |||
| 2024 | 2023 | ||
| $ | $ | ||
| (000's) | (000's) | ||
| Net income attributable to shareholders of the Company for the period: | 39,751 | 85,973 | |
| Adjustments for non-recurring and significant recurring non-cash items: | |||
| Write-down of mining interests | — | 16,419 | |
| Unrealized losses on derivative instruments | 118 | 2,788 | |
| Office lease termination costs | — | 1,946 | |
| Change in fair value of gold stream | 10,852 | — | |
| Dilution loss on investment in associate | 9,982 | — | |
| Deferred income tax expense (recovery) | 20,800 | (1,264 | ) |
| Adjusted net income attributable to shareholders of the Company for the period | 81,503 | 105,862 | |
| Basic weighted average number of common shares outstanding (in thousands) | 1,303,191 | 1,075,402 | |
| Adjusted net earnings attributable to shareholders of the Company per share–basic ($/share) | 0.06 | 0.10 | |
Photos accompanying this announcement are available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/ce2da3cf-7d1b-4493-8014-083e63a0db04
https://www.globenewswire.com/NewsRoom/AttachmentNg/0a263180-53cb-42f0-a4ca-73432b9c6f8b
https://www.globenewswire.com/NewsRoom/AttachmentNg/0b1d46f9-559e-4326-a165-5a977ebef483
https://www.globenewswire.com/NewsRoom/AttachmentNg/3bd762a8-0cb0-4ce1-95a1-7526aee96ff2
For more information on B2Gold please visit the Company website at www.b2gold.com or contact: Michael McDonald VP, Investor Relations & Corporate Development +1 604-681-8371 investor@b2gold.com Cherry De Geer Director, Corporate Communications +1 604-681-8371 investor@b2gold.com
News Provided by GlobeNewswire via QuoteMedia
Strong start to the year with robust margins driving strong free cash flow
Development projects on track
Well positioned to meet annual guidance
Kinross Gold Corporation (TSX: K, NYSE: KGC) ("Kinross" or the "Company") today announced its results for the first quarter ended March 31, 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 27 and 28 of this release. All dollar amounts are expressed in U.S. dollars, unless otherwise noted.
2024 first-quarter highlights:
CEO commentary:
J. Paul Rollinson, CEO, made the following comments in relation to 2024 first-quarter results:
"We have had a strong start to the year and are well positioned to meet our annual guidance. Our portfolio of mines performed well, driven by strong operational performance, disciplined cost management and higher gold prices. The Company delivered a 20% increase in margins to $1,088 per ounce sold, which is approximately double the percentage increase in the gold price over the same period. As a result, free cash flow more than tripled over Q1 2023.
"With the strong sustained gold price, we will continue to prioritize our financial discipline and operational excellence. We will focus on maintaining our margins and cost profile, prudent capital allocation and debt reduction.
"Our development projects are all proceeding as planned. At Great Bear, we made excellent progress on our 2024 drilling campaign, which continued to successfully target extensions of the resource at depth, and we remain on track to release a preliminary economic assessment( PEA) in the second half of the year. At Round Mountain, Phase S and Phase X are advancing well. We are also looking forward to first production at Manh Choh early in the third quarter. At Tasiast, our solar power plant is complete and generating power at full capacity.
"Kinross' commitment to Sustainability is deeply rooted in our values and culture, and we are proud of our consistent high rankings in our industry. We are looking forward to publishing our 2023 Sustainability Report later this month, marking our 16 th year of reporting in this important area."
Summary of financial and operating results
| Three months ended | |||||
| March 31, | |||||
| (unaudited, in millions of U.S. dollars, except ounces, per share amounts, and per ounce amounts) | 2024 | 2023 | |||
| Operating Highlights | |||||
| Total gold equivalent ounces (a) | |||||
| Produced | 527,399 | 466,022 | |||
| Sold | 522,400 | 490,330 | |||
| Financial Highlights | |||||
| Metal sales | $ | 1,081.5 | $ | 929.3 | |
| Production cost of sales | $ | 512.9 | $ | 483.9 | |
| Depreciation, depletion and amortization | $ | 270.7 | $ | 211.9 | |
| Operating earnings | $ | 193.2 | $ | 143.9 | |
| Net earnings attributable to common shareholders | $ | 107.0 | $ | 90.2 | |
| Basic earnings per share attributable to common shareholders | $ | 0.09 | $ | 0.07 | |
| Diluted earnings per share attributable to common shareholders | $ | 0.09 | $ | 0.07 | |
| Adjusted net earnings attributable to common shareholders (b) | $ | 124.9 | $ | 87.6 | |
| Adjusted net earnings per share (b) | $ | 0.10 | $ | 0.07 | |
| Net cash flow provided from operating activities | $ | 374.4 | $ | 259.0 | |
| Adjusted operating cash flow (b) | $ | 424.9 | $ | 358.2 | |
| Capital expenditures (c) | $ | 241.9 | $ | 221.2 | |
| Attributable (d) capital expenditures (b) | $ | 232.1 | $ | 211.8 | |
| Attributable (d) free cash flow (b) | $ | 145.3 | $ | 47.8 | |
| Average realized gold price per ounce (e) | $ | 2,070 | $ | 1,894 | |
| Production cost of sales per equivalent ounce (a) sold (f)(g) | $ | 982 | $ | 987 | |
| Production cost of sales per ounce sold on a by-product basis (b)(g) | $ | 941 | $ | 929 | |
| All-in sustaining cost per ounce sold on a by-product basis (b)(g) | $ | 1,281 | $ | 1,284 | |
| All-in sustaining cost per equivalent ounce (a) sold (b)(g) | $ | 1,310 | $ | 1,321 | |
| Attributable (d) all-in cost per ounce sold on a by-product basis (b) | $ | 1,613 | $ | 1,616 | |
| Attributable (d) all-in cost per equivalent ounce (a) sold (b) | $ | 1,630 | $ | 1,634 | |
| (a) | "Gold equivalent ounces" include silver ounces produced and sold converted to a gold equivalent based on a ratio of the average spot market prices for the commodities for each period. The ratio for the first quarter of 2024 was 88.70:1 (first quarter of 2023 – 83.82:1). | |
| (b) | The definition and reconciliation of these non-GAAP financial measures and ratios is included on pages 16 to 21 of this news release. Non-GAAP financial measures and ratios have no standardized meaning under IFRS and therefore, may not be comparable to similar measures presented by other issuers. | |
| (c) | "Capital expenditures" is as reported as "Additions to property, plant and equipment" on the interim condensed consolidated statements of cash flows. | |
| (d) | "Attributable" includes Kinross' 70% share of Manh Choh costs, capital expenditures and cash flow, as appropriate. | |
| (e) | "Average realized gold price per ounce" is defined as gold metal sales divided by total gold ounces sold. | |
| (f) | "Production cost of sales per equivalent ounce sold" is defined as production cost of sales divided by total gold equivalent ounces sold. | |
| (g) | As production from Manh Choh is expected to commence in the third quarter of 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. | |
The following operating and financial results are based on first-quarter gold equivalent production:
Production : Kinross produced 527,399 Au eq. oz. in Q1 2024, compared with 466,022 Au eq. oz. in Q1 2023. The 13% year-over-year increase was primarily due to higher throughput at Tasiast, higher grades at La Coipa, and higher production at Bald Mountain due to timing of ounces recovered from the heap leach pads.
Average realized gold price 10 : The average realized gold price in Q1 2024 was $2,070 per ounce, compared with $1,894 per ounce in Q1 2023.
Revenue : During the first quarter, revenue increased to $1,081.5 million, compared with $929.3 million during Q1 2023. The 16% year-over-year increase is primarily due to increases in gold equivalent ounces sold and average metal prices realized.
Production cost of sales : Production cost of sales per Au eq. oz. sold 1 , 2 decreased slightly to $982 for the quarter, compared with $987 in Q1 2023.
Production cost of sales per Au oz. sold on a by-product basis 2 , 3 was $941 in Q1 2024, compared with $929 in Q1 2023, based on gold sales of 503,604 ounces and silver sales of 1,667,248 ounces.
Margins 4 : Kinross' margin per Au eq. oz. sold increased by 20% to $1,088 for Q1 2024, compared with the Q1 2023 margin of $907, outpacing the 9% increase in average realized gold price 10 .
All-in sustaining cost 2 , 3 : All-in sustaining cost per Au eq. oz. sold was $1,310 in Q1 2024, compared with $1,321 in Q1 2023.
In Q1 2024, all-in sustaining cost per Au oz. sold on a by-product basis was $1,281, compared with $1,284 in Q1 2023.
Operating cash flow 5 : Operating cash flow was $374.4 million for Q1 2024, compared with $259.0 million for Q1 2023.
Adjusted operating cash flow 3 for Q1 2024 was $424.9 million, compared with $358.2 million for Q1 2023.
Attributable 6 free cash flow 3 : Attributable free cash flow more than tripled to $145.3 million in Q1 2024, compared with $47.8 million in Q1 2023.
Earnings : Reported net earnings 7 increased by 19% to $107.0 million for Q1 2024, or $0.09 per share, compared with reported net earnings of $90.2 million, or $0.07 per share, for Q1 2023.
Adjusted net earnings 3 , 8 increased by 43% to $124.9 million, or $0.10 per share, for Q1 2024, compared with $87.6 million, or $0.07 per share, for Q1 2023.
Attributable 6 capital expenditures 3 : Attributable capital expenditures increased to $232.1 million for Q1 2024, compared with $211.8 million for Q1 2023, primarily due to an increase in capital stripping at Tasiast and Fort Knox 11 , as well as the start of Phase S capital development at Round Mountain, partially offset by a decrease in capital stripping at La Coipa.
Balance sheet
Kinross had cash and cash equivalents of $406.9 million as of March 31, 2024, compared with $352.4 million at December 31, 2023. The increase was primarily due to the increase in operating cash flow.
Kinross has improved its debt metrics and continues to prioritize maintaining and strengthening its investment grade balance sheet. Kinross plans to further reduce debt during the year by allocating excess free cash generated towards the term loan due in 2025.
The Company had additional available credit 12 of $1.6 billion and total liquidity 9 of approximately $2 billion as of March 31, 2024.
Dividend
As part of its continuing quarterly dividend program, the Company declared a dividend of $0.03 per common share payable on June 13, 2024, to shareholders of record as of May 30, 2024.
Operating results
Mine-by-mine summaries for 2024 first-quarter operating results may be found on pages 10 and 14 of this news release. Highlights include the following:
At Tasiast , production was in line with the previous quarter, and was higher year-over-year mainly due to record quarterly throughput following the completion of the Tasiast 24k project in the second half of 2023, partly offset by lower grades, as planned. Cost of sales per ounce sold was largely in line quarter-over-quarter, and lower year-over-year mainly due to the higher ounces sold.
Paracatu delivered according to plan, with production largely in line with the previous quarter, and higher year-over-year mainly due to an increase in throughput, partly offset by lower grades as a result of planned mine sequencing. Cost of sales per ounce sold decreased quarter-over-quarter primarily due to lower maintenance, labour and contractor costs. Year-over-year, cost of sales per ounce sold increased mainly due to an increase in labour, drilling, blasting and fuel costs related to an increase in tonnes mined.
At La Coipa , production was slightly lower than the previous quarter mainly as a result of a decrease in throughput, which was offset by higher grades and recoveries. Production increased compared with the same period last year primarily due to an increase in gold grades, and an increase in mill throughput. Cost of sales per ounce sold was largely in line with both comparable periods.
At Fort Knox 1 1 , production was lower quarter-over-quarter due to lower mill grade, throughput and recovery, and the seasonal effect of fewer ounces recovered from the heap leach pads. Year-over-year, production was lower due to lower mill grade, throughput and recovery. In both comparable periods, cost of sales per ounce sold was higher primarily due to lower production.
Round Mountain performed well, with production increasing quarter-over-quarter due to higher mill throughput, grade, and recoveries, partially offset by fewer ounces recovered from the heap leach pads. The increase in production compared to Q1 2023 was primarily due to higher mill grade and throughput, partially offset by lower mill recovery and fewer ounces recovered from the heap leach pads. In both comparable periods, cost of sales per ounce sold was lower due to the increase in production as well as an increase in capital development related to the start of stripping Phase S.
At Bald Mountain , production increased in both comparable periods mainly due to an increase in ounces recovered from the heap leach pads. Cost of sales per ounce sold was lower quarter-over-quarter mainly as a result of a higher proportion of capital development, and similarly, lower year-over-year due to a higher proportion of capital development as well as higher production.
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 program is well underway, and permitting continues to advance on plan.
The drilling results below (at 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, results continue to intersect higher grade mineralization at depth in close proximity to the current resource, with holes BR-843AC3 and BR-695C1A intersecting 10.2m @ 18.59 g/t at 975m vertical depth and 6.2m @ 6.24 g/t at 1,085m vertical depth, respectively.
At Yauro, BR-708AC1B intersected 2.0m @ 11.41 g/t at a vertical depth of 1,095m well below the current resources, showing the potential for Yauro to continue to expand at depth with high grade mineralization, similar to how depth extensions progressed with continued drilling at Yuma.
At Auro, recent drilling also intersected high grade mineralization with a minable width below the current resources with hole BR-882 intersecting 6.1m @ 25.71 g/t at a vertical depth of 720m.
At Discovery to the northwest, hole BR-847 has intersected 2.4m @ 5.53 g/t at 870m in the under-tested area beneath the current resource, demonstrating continuity of mineralization between previously reported drill holes. The 2024 drill program will continue to target mineralization below the existing mineral resource, explore for additional deposits along strike, and expand our Red Lake style mineralization at Hinge and Limb.
For the Advanced Exploration (AEX) program, Kinross is progressing provincial permitting, engineering, and execution planning activities that would establish an underground decline to obtain a bulk sample and allow for definition and infill drilling in the LP zone. Kinross has the necessary surface rights to develop the AEX project, subject to obtaining the required provincial permits.
Detailed engineering, execution planning, and procurement continue to progress well. Some required infrastructure such as the camp and water treatment plant have now been purchased.
Kinross is targeting a start of the surface construction for the AEX program in the second half of 2024, subject to receipt of permits, with start of the underground decline planned in mid-2025.
For the Main Project, Kinross continues to advance technical studies, including engineering and field test work campaigns. In the last quarter, substantial geotechnical field work was conducted to help de-risk project construction through strong early technical studies.
Kinross remains on track to release a PEA in the second half of 2024. Kinross has opted to pursue a PEA as it enables the inclusion of a portion of the inferred underground resource. This provides 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 Detailed Project Description for the Main Project was submitted to the Impact Assessment Agency of Canada in Q1 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.
| Hole ID | From (m) | To (m) | Width (m) | True Width (m) | Au (g/t) | Target | |
| BR-695C1A | 1,324.7 | 1,333.0 | 8.3 | 7.3 | 5.35 | Yuma | |
| BR-695C1A | Including | 1,324.7 | 1,331.7 | 7.0 | 6.2 | 6.24 | |
| BR-695C1A | 1,441.2 | 1,444.2 | 3.0 | 2.6 | 0.58 | ||
| BR-695C1A | 1,469.0 | 1,517.5 | 48.5 | 42.7 | 0.86 | ||
| BR-695C1A | Including | 1,502.6 | 1,506.3 | 3.7 | 2.8 | 4.49 | |
| BR-695C1A | 1,524.5 | 1,537.8 | 13.3 | 11.3 | 0.81 | ||
| BR-708AC1B | 1,271.7 | 1,276.7 | 5.0 | 4.5 | 0.64 | Yauro | |
| BR-708AC1B | 1,319.9 | 1,323.7 | 3.8 | 3.4 | 0.50 | ||
| BR-708AC1B | 1,376.2 | 1,441.7 | 65.5 | 59.0 | 0.96 | ||
| BR-708AC1B | Including | 1,438.7 | 1,441.1 | 2.4 | 2.0 | 11.41 | |
| BR-843AC3 | 1,256.3 | 1,259.8 | 3.5 | 2.7 | 0.68 | Yuma | |
| BR-843AC3 | 1,354.7 | 1,395.0 | 40.3 | 36.3 | 5.65 | ||
| BR-843AC3 | 1,377.4 | 1,388.8 | 11.3 | 10.2 | 18.59 | ||
| BR-843AC3 | 1,509.7 | 1,513.7 | 4.0 | 3.5 | 3.39 | ||
| BR-847 | 934.7 | 950.0 | 15.3 | 13.0 | 2.08 | Discovery | |
| BR-847 | Including | 934.7 | 937.5 | 2.8 | 2.4 | 5.21 | |
| BR-847 | 975.0 | 992.5 | 17.5 | 14.9 | 0.85 | ||
| BR-847 | 998.8 | 1,001.8 | 3.0 | 2.6 | 0.48 | ||
| BR-847 | 1,027.2 | 1,036.1 | 8.9 | 7.8 | 1.54 | ||
| BR-847 | 1,048.5 | 1,051.5 | 3.0 | 2.7 | 0.35 | ||
| BR-847 | 1,052.9 | 1,080.0 | 27.1 | 24.4 | 1.38 | ||
| BR-847 | Including | 1,063.6 | 1,066.3 | 2.7 | 2.4 | 5.53 | |
| BR-882 | 953.0 | 957.5 | 4.5 | 3.7 | 0.45 | Auro | |
| BR-882 | 1,015.2 | 1,022.4 | 7.2 | 6.1 | 25.71 | ||
| BR-882 | Including | 1,017.5 | 1,019.4 | 1.9 | 1.6 | 95.27 |
Results are preliminary in nature and are subject to on-going QA/QC. Lengths are subject to rounding.
See Appendix B for a LP zone long section.
Fort Knox
At the Kinross-operated, 70%-owned Manh Choh project, the Company is on track for first production in early Q3 2024. Ore and waste mining are ongoing with the full mining fleet now in operation as planned. Following several months of orientation runs, transportation of ore to Fort Knox, where the ore will be processed, continues to ramp up with all contracted trucks received, the majority of the drivers onboarded, and trailer manufacturing now complete.
At Fort Knox, mill modifications and site preparation remain on plan, including the completion of the ore delivery road and tie-ins for the pebble recycle conveyor. Building construction is advancing well, along with interior piping and electrical works.
Round Mountain
The extension strategy at Round Mountain is advancing well. At Phase S , mining is on plan. For the heap leach pad expansion, earthworks began during the quarter, procurement is advancing as expected and construction activities remain on track.
At Phase X , development of the exploration decline is progressing well, with over 1,800 metres developed to date. The decline has now progressed to the point that infill drilling of the primary Phase X target can commence in Q2 2024, as planned.
The Company also took the opportunity, as the decline was advancing, to perform exploration drilling in between the open pit and the underground target. This drilling 13 has intersected high-grade mineralization with significant widths in this area outside of the primary Phase X target, which is also an area that did not have significant historic drilling, as highlighted below:
These results show potential for expansion of the target area for mineralization and for potential future mining at Phase X (see Appendix C).
At Gold Hill , infill drilling of the underground targets is being completed from the bottom of the historical pit and exploration drilling is being completed from surface, testing continuity and extensions at depth and on strike.
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.
Curlew Basin exploration
At Curlew, Kinross is working on optimizing the potential mine design with a focus on improving the efficiency and margin of potential underground mining. The Company continues to progress underground drilling to follow up on recent high-grade intersections at the Roadrunner and Stealth vein zones, and has intersected multiple zones of stockwork veining with assays pending.
Conference call details
In connection with this news release, Kinross will hold a conference call and audio webcast on Wednesday, May 8, 2024, at 7:45 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) 330-2446; Passcode: 4915537
Outside of Canada & US – 1 (240) 789-2732; Passcode: 4915537
Replay (available up to 14 days after the call):
Canada & US toll-free – 1 (800) 770-2030; Passcode: 4915537
Outside of Canada & US – 1 (647) 362-9199; Passcode: 4915537
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 .
Virtual Annual Meeting of Shareholders
Kinross' virtual Annual Meeting of Shareholders will be held on Wednesday, May 8, 2024, at 10:00 a.m. EDT.
The virtual meeting will be accessible online at: web.lumiagm.com/#/429018094 . The link to the virtual meeting will also be accessible at www.kinross.com and will be archived for later use.
Voting and participation instructions for eligible shareholders are provided in the Company's Notice of Annual Meeting of Shareholders and Management Information Circular .
This release should be read in conjunction with Kinross' 2024 first-quarter unaudited Financial Statements and Management's Discussion and Analysis report at www.kinross.com. Kinross' 2024 first-quarter Financial Statements and Management's Discussion and Analysis have been filed with Canadian securities regulators (available at www.sedarplus.ca ) and furnished with the U.S. Securities and Exchange Commission (available at www.sec.gov ). Kinross shareholders may obtain a copy of the financial statements free of charge upon request to the Company.
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
| Three months ended March 31, (unaudited) | Gold equivalent ounces | ||||||||||
| Produced | Sold | Production cost of sales ($millions) | Production cost of sales/equivalent ounce sold | ||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||
| Tasiast | 159,199 | 131,045 | 151,014 | 128,479 | 99.7 | 88.4 | 660 | 688 | |||
| Paracatu | 128,273 | 123,334 | 128,110 | 128,344 | 135.7 | 118.0 | 1,059 | 919 | |||
| La Coipa | 71,245 | 53,596 | 71,125 | 61,780 | 52.1 | 44.9 | 733 | 727 | |||
| Fort Knox | 53,350 | 65,387 | 56,292 | 65,404 | 82.5 | 77.6 | 1,466 | 1,186 | |||
| Round Mountain | 68,352 | 58,832 | 68,169 | 58,226 | 90.6 | 96.5 | 1,329 | 1,657 | |||
| Bald Mountain | 46,980 | 33,828 | 47,241 | 47,283 | 52.1 | 58.0 | 1,103 | 1,227 | |||
| United States Total | 168,682 | 158,047 | 171,702 | 170,913 | 225.2 | 232.1 | 1,312 | 1,358 | |||
| Maricunga | - | - | 449 | 814 | 0.2 | 0.5 | 445 | 614 | |||
| Operations Total | 527,399 | 466,022 | 522,400 | 490,330 | 512.9 | 483.9 | 982 | 987 | |||
Interim condensed consolidated balance sheets
| (unaudited, expressed in millions of U.S. dollars, except share amounts) | |||||||||
| As at | |||||||||
| March 31, | December 31, | ||||||||
| 2024 | 2023 | ||||||||
| Assets | |||||||||
| Current assets | |||||||||
| Cash and cash equivalents | $ | 406.9 | $ | 352.4 | |||||
| Restricted cash | 10.3 | 9.8 | |||||||
| Accounts receivable and other assets | 283.2 | 268.7 | |||||||
| Current income tax recoverable | 2.7 | 3.4 | |||||||
| Inventories | 1,117.7 | 1,153.0 | |||||||
| Unrealized fair value of derivative assets | 10.9 | 15.0 | |||||||
| 1,831.7 | 1,802.3 | ||||||||
| Non-current assets | |||||||||
| Property, plant and equipment | 7,942.4 | 7,963.2 | |||||||
| Long-term investments | 49.4 | 54.7 | |||||||
| Other long-term assets | 716.8 | 710.6 | |||||||
| Deferred tax assets | 12.6 | 12.5 | |||||||
| Total assets | $ | 10,552.9 | $ | 10,543.3 | |||||
| Liabilities | |||||||||
| Current liabilities | |||||||||
| Accounts payable and accrued liabilities | $ | 466.8 | $ | 531.5 | |||||
| Current income tax payable | 68.6 | 92.9 | |||||||
| Current portion of long-term debt and credit facilities | 999.3 | - | |||||||
| Current portion of provisions | 47.0 | 48.8 | |||||||
| Other current liabilities | 12.1 | 12.3 | |||||||
| 1,593.8 | 685.5 | ||||||||
| Non-current liabilities | |||||||||
| Long-term debt and credit facilities | 1,234.0 | 2,232.6 | |||||||
| Provisions | 893.9 | 889.9 | |||||||
| Long-term lease liabilities | 16.4 | 17.5 | |||||||
| Other long-term liabilities | 86.8 | 82.4 | |||||||
| Deferred tax liabilities | 458.6 | 449.7 | |||||||
| Total liabilities | $ | 4,283.5 | $ | 4,357.6 | |||||
| Equity | |||||||||
| Common shareholders' equity | |||||||||
| Common share capital | $ | 4,486.5 | $ | 4,481.6 | |||||
| Contributed surplus | 10,640.3 | 10,646.0 | |||||||
| Accumulated deficit | (8,912.5 | ) | (8,982.6 | ) | |||||
| Accumulated other comprehensive loss | (62.4 | ) | (61.3 | ) | |||||
| Total common shareholders' equity | 6,151.9 | 6,083.7 | |||||||
| Non-controlling interests | 117.5 | 102.0 | |||||||
| Total equity | 6,269.4 | 6,185.7 | |||||||
| Total liabilities and equity | $ | 10,552.9 | $ | 10,543.3 | |||||
| Common shares | |||||||||
| Authorized | Unlimited | Unlimited | |||||||
| Issued and outstanding | 1,228,982,701 | 1,227,837,974 | |||||||
Interim condensed consolidated statements of operations
| (unaudited, expressed in millions of U.S. dollars, except per share amounts) | |||||||||
| Three months ended | |||||||||
| March 31, | March 31, | ||||||||
| 2024 | 2023 | ||||||||
| Revenue | |||||||||
| Metal sales | $ | 1,081.5 | $ | 929.3 | |||||
| Cost of sales | |||||||||
| Production cost of sales | 512.9 | 483.9 | |||||||
| Depreciation, depletion and amortization | 270.7 | 211.9 | |||||||
| Total cost of sales | 783.6 | 695.8 | |||||||
| Gross profit | 297.9 | 233.5 | |||||||
| Other operating expense | 27.6 | 31.2 | |||||||
| Exploration and business development | 41.7 | 34.0 | |||||||
| General and administrative | 35.4 | 24.4 | |||||||
| Operating earnings | 193.2 | 143.9 | |||||||
| Other income - net | 0.1 | 4.4 | |||||||
| Finance income | 3.9 | 9.4 | |||||||
| Finance expense | (21.5 | ) | (27.5 | ) | |||||
| Earnings before tax | 175.7 | 130.2 | |||||||
| Income tax expense - net | (69.1 | ) | (39.8 | ) | |||||
| Net earnings | $ | 106.6 | $ | 90.4 | |||||
| Net earnings (loss) attributable to: | |||||||||
| Non-controlling interests | $ | (0.4 | ) | $ | 0.2 | ||||
| Common shareholders | $ | 107.0 | $ | 90.2 | |||||
| Earnings per share attributable to common shareholders | |||||||||
| Basic | $ | 0.09 | $ | 0.07 | |||||
| Diluted | $ | 0.09 | $ | 0.07 | |||||
Interim condensed consolidated statements of cash flows
| (unaudited, expressed in millions of U.S. dollars) | ||||||||||
| Three months ended | ||||||||||
| March 31, | March 31, | |||||||||
| 2024 | 2023 | |||||||||
| Net inflow (outflow) of cash related to the following activities: | ||||||||||
| Operating: | ||||||||||
| Net earnings | $ | 106.6 | $ | 90.4 | ||||||
| Adjustments to reconcile net earnings to net cash provided from operating activities: | ||||||||||
| Depreciation, depletion and amortization | 270.7 | 211.9 | ||||||||
| Finance expense | 21.5 | 27.5 | ||||||||
| Deferred tax expense | 8.6 | 9.0 | ||||||||
| Foreign exchange losses and other | 17.5 | 15.4 | ||||||||
| Reclamation expense | - | 4.0 | ||||||||
| Changes in operating assets and liabilities: | ||||||||||
| Accounts receivable and other assets | 10.3 | 20.0 | ||||||||
| Inventories | 5.9 | (43.2 | ) | |||||||
| Accounts payable and accrued liabilities | 12.1 | (5.8 | ) | |||||||
| Cash flow provided from operating activities | 453.2 | 329.2 | ||||||||
| Income taxes paid | (78.8 | ) | (70.2 | ) | ||||||
| Net cash flow provided from operating activities | 374.4 | 259.0 | ||||||||
| Investing: | ||||||||||
| Additions to property, plant and equipment | (241.9 | ) | (221.2 | ) | ||||||
| Interest paid capitalized to property, plant and equipment | (34.9 | ) | (38.3 | ) | ||||||
| Net (additions) disposals to long-term investments and other assets | (3.1 | ) | 15.3 | |||||||
| Increase in restricted cash - net | (0.5 | ) | (0.8 | ) | ||||||
| Interest received and other - net | 3.9 | 2.7 | ||||||||
| Net cash flow of continuing operations used in investing activities | (276.5 | ) | (242.3 | ) | ||||||
| Net cash flow of discontinued operations provided from investing activities | - | 5.0 | ||||||||
| Financing: | ||||||||||
| Proceeds from drawdown of debt | - | 100.0 | ||||||||
| Interest paid | (18.5 | ) | (24.2 | ) | ||||||
| Payment of lease liabilities | (3.4 | ) | (15.5 | ) | ||||||
| Funding from non-controlling interest | 15.5 | 5.1 | ||||||||
| Dividends paid to common shareholders | (36.9 | ) | (36.8 | ) | ||||||
| Other - net | 0.3 | 2.1 | ||||||||
| Net cash flow (used in) provided from financing activities | (43.0 | ) | 30.7 | |||||||
| Effect of exchange rate changes on cash and cash equivalents | (0.4 | ) | 0.5 | |||||||
| Increase in cash and cash equivalents | 54.5 | 52.9 | ||||||||
| Cash and cash equivalents, beginning of period | 352.4 | 418.1 | ||||||||
| Cash and cash equivalents, end of period | $ | 406.9 | $ | 471.0 | ||||||
| Operating Summary | ||||||||||||||||||||
| Mine | Period | Tonnes Ore Mined | Ore Processed (Milled) | Ore Processed (Heap Leach) | Grade (Mill) | Grade (Heap Leach) | Recovery (a)(b) | Gold Eq Production (c) | Gold Eq Sales (c) | Production cost of sales | Production cost of sales/oz (d) | Cap Ex - sustaining (e) | Total Cap Ex (e) | DD&A | ||||||
| ('000 tonnes) | ('000 tonnes) | ('000 tonnes) | (g/t) | (g/t) | (%) | (ounces) | (ounces) | ($ millions) | ($/ounce) | ($ millions) | ($ millions) | ($ millions) | ||||||||
| West Africa | Tasiast | Q1 2024 | 2,044 | 2,073 | - | 2.46 | - | 91 % | 159,199 | 151,014 | $ | 99.7 | $ | 660 | $ | 10.1 | $ | 79.5 | $ | 77.9 |
| Q4 2023 | 2,937 | 2,056 | - | 3.04 | - | 93% | 160,764 | 171,199 | $ | 110.4 | $ | 645 | $ | 9.7 | $ | 85.2 | $ | 70.6 | ||
| Q3 2023 | 3,486 | 1,796 | - | 3.10 | - | 92% | 171,140 | 162,823 | $ | 108.5 | $ | 666 | $ | 12.2 | $ | 77.3 | $ | 69.0 | ||
| Q2 2023 | 1,688 | 1,663 | - | 3.25 | - | 93% | 157,844 | 152,564 | $ | 99.5 | $ | 652 | $ | 9.1 | $ | 81.9 | $ | 58.6 | ||
| Q1 2023 | 1,690 | 1,208 | - | 3.49 | - | 91% | 131,045 | 128,479 | $ | 88.4 | $ | 688 | $ | 14.6 | $ | 64.6 | $ | 46.2 | ||
| Americas | Paracatu | Q1 2024 | 14,078 | 15,609 | - | 0.31 | - | 79 % | 128,273 | 128,110 | $ | 135.7 | $ | 1,059 | $ | 19.6 | $ | 19.6 | $ | 46.7 |
| Q4 2023 | 16,865 | 15,279 | - | 0.35 | - | 79% | 127,940 | 132,886 | $ | 144.2 | $ | 1,085 | $ | 41.6 | $ | 41.6 | $ | 43.3 | ||
| Q3 2023 | 14,725 | 14,669 | - | 0.41 | - | 79% | 172,482 | 167,105 | $ | 141.2 | $ | 845 | $ | 58.4 | $ | 58.4 | $ | 53.1 | ||
| Q2 2023 | 14,199 | 15,104 | - | 0.42 | - | 80% | 164,243 | 163,889 | $ | 135.2 | $ | 825 | $ | 39.7 | $ | 39.7 | $ | 49.8 | ||
| Q1 2023 | 8,056 | 15,130 | - | 0.37 | - | 79% | 123,334 | 128,344 | $ | 118.0 | $ | 919 | $ | 27.8 | $ | 27.8 | $ | 40.4 | ||
| La Coipa (f) | Q1 2024 | 1,035 | 827 | - | 2.09 | - | 87 % | 71,245 | 71,125 | $ | 52.1 | $ | 733 | $ | 7.2 | $ | 7.2 | $ | 50.0 | |
| Q4 2023 | 1,591 | 1,188 | - | 1.92 | - | 78% | 73,823 | 73,477 | $ | 52.9 | $ | 720 | $ | 7.0 | $ | 10.9 | $ | 54.8 | ||
| Q3 2023 | 1,137 | 1,017 | - | 1.69 | - | 81% | 65,975 | 65,856 | $ | 41.4 | $ | 629 | $ | 7.5 | $ | 15.2 | $ | 48.3 | ||
| Q2 2023 | 869 | 971 | - | 1.62 | - | 81% | 66,744 | 67,378 | $ | 43.6 | $ | 647 | $ | 19.9 | $ | 23.3 | $ | 48.3 | ||
| Q1 2023 | 748 | 691 | - | 1.68 | - | 88% | 53,596 | 61,780 | $ | 44.9 | $ | 727 | $ | 1.6 | $ | 25.4 | $ | 36.4 | ||
| Fort Knox (100%) ( g) | Q1 2024 | 10,037 | 1,850 | 8,778 | 0.67 | 0.24 | 76 % | 53,350 | 56,292 | $ | 82.5 | $ | 1,466 | $ | 37.7 | $ | 78.6 | $ | 20.5 | |
| Q4 2023 | 11,018 | 2,173 | 9,930 | 0.69 | 0.22 | 78% | 84,215 | 81,306 | $ | 104.3 | $ | 1,283 | $ | 50.6 | $ | 114.3 | $ | 31.5 | ||
| Q3 2023 | 6,667 | 1,912 | 5,961 | 0.81 | 0.21 | 78% | 71,611 | 71,616 | $ | 82.3 | $ | 1,149 | $ | 52.1 | $ | 96.0 | $ | 24.6 | ||
| Q2 2023 | 7,624 | 2,075 | 6,837 | 0.82 | 0.24 | 82% | 69,438 | 69,206 | $ | 79.3 | $ | 1,146 | $ | 52.1 | $ | 90.3 | $ | 22.1 | ||
| Q1 2023 | 7,412 | 1,966 | 5,972 | 0.78 | 0.22 | 82% | 65,387 | 65,404 | $ | 77.6 | $ | 1,186 | $ | 38.6 | $ | 67.8 | $ | 18.6 | ||
| Fort Knox (attributable) (g) | Q1 2024 | 10,009 | 1,850 | 8,778 | 0.67 | 0.24 | 76 % | 53,350 | 56,292 | $ | 82.5 | $ | 1,466 | $ | 37.7 | $ | 68.8 | $ | 20.5 | |
| Q4 2023 | 11,014 | 2,173 | 9,930 | 0.69 | 0.22 | 78% | 84,215 | 81,306 | $ | 104.3 | $ | 1,283 | $ | 50.6 | $ | 100.7 | $ | 31.5 | ||
| Q3 2023 | 6,667 | 1,912 | 5,961 | 0.81 | 0.21 | 78% | 71,611 | 71,616 | $ | 82.3 | $ | 1,149 | $ | 52.1 | $ | 84.5 | $ | 24.6 | ||
| Q2 2023 | 7,624 | 2,075 | 6,837 | 0.82 | 0.24 | 82% | 69,438 | 69,206 | $ | 79.3 | $ | 1,146 | $ | 52.1 | $ | 81.5 | $ | 22.1 | ||
| Q1 2023 | 7,412 | 1,966 | 5,972 | 0.78 | 0.22 | 82% | 65,387 | 65,404 | $ | 77.6 | $ | 1,186 | $ | 38.6 | $ | 58.4 | $ | 18.6 | ||
| Round Mountain | Q1 2024 | 4,246 | 960 | 3,257 | 1.32 | 0.37 | 73 % | 68,352 | 68,169 | $ | 90.6 | $ | 1,329 | $ | 3.7 | $ | 19.3 | $ | 47.3 | |
| Q4 2023 | 4,666 | 884 | 2,729 | 0.91 | 0.48 | 68% | 55,764 | 56,495 | $ | 82.6 | $ | 1,462 | $ | 4.6 | $ | 4.8 | $ | 45.0 | ||
| Q3 2023 | 8,474 | 911 | 7,644 | 0.75 | 0.38 | 75% | 63,648 | 61,931 | $ | 93.1 | $ | 1,503 | $ | 7.7 | $ | 7.8 | $ | 44.1 | ||
| Q2 2023 | 10,496 | 1,021 | 10,028 | 0.67 | 0.35 | 76% | 57,446 | 57,412 | $ | 85.5 | $ | 1,489 | $ | 10.5 | $ | 10.5 | $ | 33.5 | ||
| Q1 2023 | 5,019 | 878 | 4,367 | 0.81 | 0.44 | 79% | 58,832 | 58,226 | $ | 96.5 | $ | 1,657 | $ | 7.4 | $ | 7.4 | $ | 34.6 | ||
| Bald Mountain | Q1 2024 | 1,480 | - | 1,480 | - | 0.42 | nm | 46,980 | 47,241 | $ | 52.1 | $ | 1,103 | $ | 32.4 | $ | 32.4 | $ | 27.0 | |
| Q4 2023 | 3,894 | - | 3,918 | - | 0.47 | nm | 44,007 | 49,375 | $ | 57.1 | $ | 1,156 | $ | 36.3 | $ | 38.8 | $ | 25.0 | ||
| Q3 2023 | 7,412 | - | 7,412 | - | 0.39 | nm | 40,593 | 41,300 | $ | 53.9 | $ | 1,305 | $ | 20.6 | $ | 24.9 | $ | 23.3 | ||
| Q2 2023 | 4,142 | - | 4,119 | - | 0.42 | nm | 39,321 | 42,181 | $ | 54.5 | $ | 1,292 | $ | 16.5 | $ | 31.4 | $ | 25.6 | ||
| Q1 2023 | 1,864 | - | 1,857 | - | 0.47 | nm | 33,828 | 47,283 | $ | 58.0 | $ | 1,227 | $ | 6.1 | $ | 25.2 | $ | 33.9 | ||
| (a) | Due to the nature of heap leach operations, recovery rates at Bald Mountain cannot be accurately measured on a quarterly basis. Recovery rates at Fort Knox and Round Mountain represent mill recovery only. | |
| (b) | "nm" means not meaningful. | |
| (c) | Gold equivalent ounces include silver ounces produced and sold converted to a gold equivalent based on the ratio of the average spot market prices for the commodities for each period. The ratios for the quarters presented are as follows: Q1 2024: 88.70:1; Q4 2023: 85.00:1; Q3 2023: 81.82:1; Q2 2023: 81.88:1; Q1 2023: 83.82:1. | |
| (d) | "Production cost of sales per equivalent ounce sold" is defined as production cost of sales divided by total gold equivalent ounces sold. | |
| (e) | "Total Cap Ex" is as reported as "Additions to property, plant and equipment" on the interim condensed consolidated statements of cash flows. "Cap Ex - sustaining" is a non-GAAP financial measure. The definition and reconciliation of this non-GAAP financial measure is included on pages 20 and 21 of this news release. | |
| (f) | La Coipa silver grade and recovery were as follows: Q1 2024: 87.20 g/t, 58%; Q4 2023: 96.24 g/t, 44%; Q3 2023: 106.70 g/t, 63%; Q2 2023: 109.84 g/t, 56%; Q1 2023: 125.77 g/t, 70%. | |
| (g) | The Fort Knox segment is composed of Fort Knox and Manh Choh, and comparative results shown are presented in accordance with the current year's presentation. Manh Choh tonnes of ore processed and grade were nil for all periods presented as production is expected to commence in the third quarter of 2024. The attributable results for Fort Knox include 100% of Fort Knox and 70% of Manh Choh. | |
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:
| (unaudited, expressed in millions of U.S. dollars, except per share amounts) | Three months ended | ||||||
| March 31, | |||||||
| 2024 | 2023 | ||||||
| Net earnings attributable to common shareholders - as reported | $ | 107.0 | $ | 90.2 | |||
| Adjusting items: | |||||||
| Foreign exchange gains | (3.5 | ) | (3.8 | ) | |||
| Foreign exchange losses (gains) on translation of tax basis and foreign exchange on deferred income taxes within income tax expense | 4.0 | (13.2 | ) | ||||
| Taxes in respect of prior periods | 8.0 | 12.0 | |||||
| Other (a) | 10.5 | 2.8 | |||||
| Tax effects of the above adjustments | (1.1 | ) | (0.4 | ) | |||
| 17.9 | (2.6 | ) | |||||
| Adjusted net earnings attributable to common shareholders | $ | 124.9 | $ | 87.6 | |||
| Weighted average number of common shares outstanding - Basic | 1,228.3 | 1,225.0 | |||||
| Adjusted net earnings per share | $ | 0.10 | $ | 0.07 | |||
| Basic earnings per share attributable to common shareholders - as reported | $ | 0.09 | $ | 0.07 | |||
| (a) | Other includes various impacts, such as one-time costs at sites, restructuring costs, and gains and losses on hedges and the sale of assets, which the Company believes are not reflective of the Company's underlying performance for the reporting period. | |
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 free cash flow for the periods presented:
| (unaudited, expressed in millions of U.S. dollars) | Three months ended | ||||||
| March 31, | |||||||
| 2024 | 2023 | ||||||
| Net cash flow provided from operating activities - as reported | $ | 374.4 | $ | 259.0 | |||
| Adjusting items: | |||||||
| Attributable (a) capital expenditures | (232.1 | ) | (211.8 | ) | |||
| Non-controlling interest (b) cash flow used in operating activities | 3.0 | 0.6 | |||||
| Attributable (a) free cash flow | $ | 145.3 | $ | 47.8 | |||
See page 21 for details of the endnotes referenced within the table above.
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:
| (unaudited, expressed in millions of U.S. dollars) | Three months ended | ||||||
| March 31, | |||||||
| 2024 | 2023 | ||||||
| Net cash flow provided from operating activities - as reported | $ | 374.4 | $ | 259.0 | |||
| Adjusting items: | |||||||
| Working capital changes: | |||||||
| Accounts receivable and other assets | (10.3 | ) | (20.0 | ) | |||
| Inventories | (5.9 | ) | 43.2 | ||||
| Accounts payable and other liabilities, including income taxes paid | 66.7 | 76.0 | |||||
| Total working capital changes | 50.5 | 99.2 | |||||
| Adjusted operating cash flow | $ | 424.9 | $ | 358.2 | |||
See page 21 for details of the endnotes referenced within the table above.
Production Cost of Sales per Ounce Sold on a By-Product Basis (l)
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:
| (unaudited, expressed in millions of U.S. dollars, except ounces and production cost of sales per equivalent ounce) | Three months ended | ||||||
| March 31, | |||||||
| 2024 | 2023 | ||||||
| Production cost of sales - as reported | $ | 512.9 | $ | 483.9 | |||
| Less: silver revenue (c) | (39.1 | ) | (54.9 | ) | |||
| Production cost of sales net of silver by-product revenue | $ | 473.8 | $ | 429.0 | |||
| Gold ounces sold | 503,604 | 461,696 | |||||
| Total gold equivalent ounces sold | 522,400 | 490,330 | |||||
| Production cost of sales per equivalent ounce sold (d) | $ | 982 | $ | 987 | |||
| Production cost of sales per ounce sold on a by-product basis | $ | 941 | $ | 929 | |||
See page 21 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 stripping, 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:
| (unaudited, expressed in millions of U.S. dollars, except ounces and costs per ounce) | Three months ended | ||||||
| March 31, | |||||||
| 2024 | 2023 | ||||||
| Production cost of sales - as reported | $ | 512.9 | $ | 483.9 | |||
| Less: silver revenue (c) | (39.1 | ) | (54.9 | ) | |||
| Production cost of sales net of silver by-product revenue | $ | 473.8 | $ | 429.0 | |||
| Adjusting items: | |||||||
| General and administrative (e) | 30.7 | 24.4 | |||||
| Other operating expense - sustaining (f) | 0.8 | 6.5 | |||||
| Reclamation and remediation - sustaining (g) | 18.3 | 14.3 | |||||
| Exploration and business development - sustaining (h) | 8.7 | 6.6 | |||||
| Additions to property, plant and equipment - sustaining (i) | 109.3 | 96.6 | |||||
| Lease payments - sustaining (j) | 3.4 | 15.2 | |||||
| All-in Sustaining Cost on a by-product basis | $ | 645.0 | $ | 592.6 | |||
| Adjusting items on an attributable (a) basis: | |||||||
| Other operating expense - non-sustaining (f) | 10.1 | 8.7 | |||||
| Reclamation and remediation - non-sustaining (g) | 1.7 | 1.9 | |||||
| Exploration and business development - non-sustaining (h) | 32.9 | 27.6 | |||||
| Additions to property, plant and equipment - non-sustaining (i) | 122.8 | 115.2 | |||||
| Lease payments - non-sustaining (j) | - | 0.3 | |||||
| All-in Cost on a by-product basis - attributable (a) | $ | 812.5 | $ | 746.3 | |||
| Gold ounces sold | 503,604 | 461,696 | |||||
| Production cost of sales per equivalent ounce sold (d) | $ | 982 | $ | 987 | |||
| All-in sustaining cost per ounce sold on a by-product basis | $ | 1,281 | $ | 1,284 | |||
| Attributable (a) all-in cost per ounce sold on a by-product basis | $ | 1,613 | $ | 1,616 | |||
See page 21 for details of the endnotes referenced within the table above.
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 (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:
| (unaudited, expressed in millions of U.S. dollars, except ounces and costs per ounce) | Three months ended | ||||
| March 31, | |||||
| 2024 | 2023 | ||||
| Production cost of sales - as reported | $ | 512.9 | $ | 483.9 | |
| Adjusting items: | |||||
| General and administrative (e) | 30.7 | 24.4 | |||
| Other operating expense - sustaining (f) | 0.8 | 6.5 | |||
| Reclamation and remediation - sustaining (g) | 18.3 | 14.3 | |||
| Exploration and business development - sustaining (h) | 8.7 | 6.6 | |||
| Additions to property, plant and equipment - sustaining (i) | 109.3 | 96.6 | |||
| Lease payments - sustaining (j) | 3.4 | 15.2 | |||
| All-in Sustaining Cost | $ | 684.1 | $ | 647.5 | |
| Adjusting items on an attributable (a) basis: | |||||
| Other operating expense - non-sustaining (f) | 10.1 | 8.7 | |||
| Reclamation and remediation - non-sustaining (g) | 1.7 | 1.9 | |||
| Exploration and business development - non-sustaining (h) | 32.9 | 27.6 | |||
| Additions to property, plant and equipment - non-sustaining (i) | 122.8 | 115.2 | |||
| Lease payments - non-sustaining (j) | - | 0.3 | |||
| All-in Cost - attributable (a) | $ | 851.6 | $ | 801.2 | |
| Gold equivalent ounces sold | 522,400 | 490,330 | |||
| Production cost of sales per equivalent ounce sold (d) | $ | 982 | $ | 987 | |
| All-in sustaining cost per equivalent ounce sold | $ | 1,310 | $ | 1,321 | |
| Attributable (a) all-in cost per equivalent ounce sold | $ | 1,630 | $ | 1,634 | |
See page 21 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 stripping 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 stripping 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:
| (unaudited, expressed in millions of U.S. dollars) | |||||||||||||||||||||||
| Three months ended March 31, 2024 | Tasiast (Mauritania) | Paracatu (Brazil) | La Coipa (Chile) | Fort Knox (k) (USA) | Round Mountain (USA) | Bald Mountain (USA) | Total USA | Other | Total | ||||||||||||||
| Sustaining capital expenditures | $ | 10.1 | $ | 19.6 | $ | 7.2 | $ | 37.7 | $ | 3.7 | $ | 32.4 | $ | 73.8 | $ | (1.4 | ) | $ | 109.3 | ||||
| Non-sustaining capital expenditures | 69.4 | - | - | 40.9 | 15.6 | - | 56.5 | 6.7 | 132.6 | ||||||||||||||
| Additions to property, plant and equipment - per cash flow | $ | 79.5 | $ | 19.6 | $ | 7.2 | $ | 78.6 | $ | 19.3 | $ | 32.4 | $ | 130.3 | $ | 5.3 | $ | 241.9 | |||||
| Less: Non-controlling interest (b) | $ | - | $ | - | $ | - | $ | (9.8 | ) | $ | - | $ | - | $ | (9.8 | ) | $ | - | $ | (9.8 | ) | ||
| Attributable (a) capital expenditures | $ | 79.5 | $ | 19.6 | $ | 7.2 | $ | 68.8 | $ | 19.3 | $ | 32.4 | $ | 120.5 | $ | 5.3 | $ | 232.1 | |||||
| Three months ended March 31, 2023 | |||||||||||||||||||||||
| Sustaining capital expenditures | $ | 14.6 | $ | 27.8 | $ | 1.6 | $ | 38.6 | $ | 7.4 | $ | 6.1 | $ | 52.1 | $ | 0.4 | $ | 96.5 | |||||
| Non-sustaining capital expenditures | 50.0 | - | 23.8 | 29.2 | - | 19.1 | 48.3 | 2.6 | 124.7 | ||||||||||||||
| Additions to property, plant and equipment - per cash flow | $ | 64.6 | $ | 27.8 | $ | 25.4 | $ | 67.8 | $ | 7.4 | $ | 25.2 | $ | 100.4 | $ | 3.0 | $ | 221.2 | |||||
| Less: Non-controlling interest (b) | $ | - | $ | - | $ | - | $ | (9.4 | ) | $ | - | $ | - | $ | (9.4 | ) | $ | - | $ | (9.4 | ) | ||
| Attributable (a) capital expenditures | $ | 64.6 | $ | 27.8 | $ | 25.4 | $ | 58.4 | $ | 7.4 | $ | 25.2 | $ | 91.0 | $ | 3.0 | $ | 211.8 | |||||
See page 21 for details of the endnotes referenced within the table 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. 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 is expected to commence in the third quarter of 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
| Hole ID | From (m) | To (m) | Width (m) | True Width (m) | Au (g/t) | Target | |
| BR-695C1A | 1,324.7 | 1,333.0 | 8.3 | 7.3 | 5.35 | Yuma | |
| BR-695C1A | Including | 1,324.7 | 1,331.7 | 7.0 | 6.2 | 6.24 | |
| BR-695C1A | 1,441.2 | 1,444.2 | 3.0 | 2.6 | 0.58 | ||
| BR-695C1A | 1,469.0 | 1,517.5 | 48.5 | 42.7 | 0.86 | ||
| BR-695C1A | Including | 1,502.6 | 1,506.3 | 3.7 | 2.8 | 4.49 | |
| BR-695C1A | 1,524.5 | 1,537.8 | 13.3 | 11.3 | 0.81 | ||
| BR-695C2 | 1,460.3 | 1,463.3 | 3.0 | 2.7 | 0.61 | Yuma | |
| BR-695C2 | 1,477.9 | 1,482.6 | 4.7 | 4.2 | 0.58 | ||
| BR-695C2 | 1,509.0 | 1,521.4 | 12.4 | 11.2 | 0.82 | ||
| BR-695C2 | 1,532.5 | 1,536.1 | 3.6 | 3.2 | 1.08 | ||
| BR-695C3 | No Significant Intersections | Yuma | |||||
| BR-708AC1B | 1,271.7 | 1,276.7 | 5.0 | 4.5 | 0.64 | Yauro | |
| BR-708AC1B | 1,319.9 | 1,323.7 | 3.8 | 3.4 | 0.50 | ||
| BR-708AC1B | 1,376.2 | 1,441.7 | 65.5 | 59.0 | 0.96 | ||
| BR-708AC1B | Including | 1,438.7 | 1,441.1 | 2.4 | 2.0 | 11.41 | |
| BR-708AC2 | No Significant Intersections | Yauro | |||||
| BR-770C1 | 541.3 | 544.9 | 3.6 | 3.0 | 2.13 | Yauro | |
| BR-770C1 | 1,229.9 | 1,236.9 | 6.9 | 5.8 | 1.60 | ||
| BR-770C1 | 1,293.5 | 1,297.1 | 3.6 | 3.0 | 1.13 | ||
| BR-770C1 | 1,304.0 | 1,307.0 | 3.0 | 2.5 | 1.88 | ||
| BR-770C2B | No Significant Intersections | Yauro | |||||
| BR-799DC1 | 1,566.7 | 1,573.7 | 7.0 | 5.2 | 0.91 | Bruma | |
| BR-799DC1 | 1,584.5 | 1,591.9 | 7.5 | 5.6 | 0.61 | ||
| BR-843AC2 | 1,189.5 | 1,192.5 | 3.0 | 2.3 | 1.19 | Yuma | |
| BR-843AC2 | 1,245.0 | 1,248.0 | 3.0 | 2.3 | 0.33 | ||
| BR-843AC2 | 1,316.4 | 1,319.4 | 3.0 | 2.6 | 0.48 | ||
| BR-843AC2 | 1,321.7 | 1,325.3 | 3.5 | 2.7 | 0.39 | ||
| BR-843AC2 | 1,335.5 | 1,347.3 | 11.8 | 8.9 | 2.91 | ||
| BR-843AC2 | Including | 1,337.8 | 1,340.5 | 2.7 | 2.4 | 9.66 | |
| BR-843AC2 | 1,365.5 | 1,373.1 | 7.6 | 6.7 | 0.91 | ||
| BR-843AC2 | 1,376.5 | 1,379.5 | 3.0 | 2.7 | 0.55 | ||
| BR-843AC3 | 1,256.3 | 1,259.8 | 3.5 | 2.7 | 0.68 | Yuma | |
| BR-843AC3 | 1,354.7 | 1,395.0 | 40.3 | 36.3 | 5.65 | ||
| BR-843AC3 | 1,377.4 | 1,388.8 | 11.3 | 10.2 | 18.59 | ||
| BR-843AC3 | 1,509.7 | 1,513.7 | 4.0 | 3.5 | 3.39 | ||
| BR-844C2B | 1,444.1 | 1,450.2 | 6.1 | 5.4 | 0.81 | Bruma | |
| BR-844C2B | 1,500.9 | 1,527.0 | 26.2 | 23.0 | 0.52 | ||
| BR-844C3A | 1,436.8 | 1,440.0 | 3.2 | 2.8 | 1.08 | Bruma | |
| BR-844C3A | 1,502.0 | 1,509.1 | 7.1 | 6.1 | 0.95 | ||
| BR-844C3A | 1,518.0 | 1,530.0 | 12.0 | 10.2 | 0.65 | ||
| BR-847 | 934.7 | 950.0 | 15.3 | 13.0 | 2.08 | Discovery | |
| BR-847 | Including | 934.7 | 937.5 | 2.8 | 2.4 | 5.21 | |
| BR-847 | 975.0 | 992.5 | 17.5 | 14.9 | 0.85 | ||
| BR-847 | 998.8 | 1,001.8 | 3.0 | 2.6 | 0.48 | ||
| BR-847 | 1,027.2 | 1,036.1 | 8.9 | 7.8 | 1.54 | ||
| BR-847 | 1,048.5 | 1,051.5 | 3.0 | 2.7 | 0.35 | ||
| BR-847 | 1,052.9 | 1,080.0 | 27.1 | 24.4 | 1.38 | ||
| BR-847 | Including | 1,063.6 | 1,066.3 | 2.7 | 2.4 | 5.53 | |
| BR-848 | 1,015.3 | 1,024.8 | 9.5 | 7.9 | 0.70 | Bruma | |
| BR-848 | 1,031.2 | 1,054.3 | 23.1 | 19.4 | 0.51 | ||
| BR-848 | 1,095.4 | 1,113.7 | 18.3 | 15.3 | 0.61 | ||
| BR-849 | 867.0 | 872.4 | 5.4 | 4.3 | 0.91 | Bruma | |
| BR-849 | 884.5 | 897.5 | 13.1 | 10.4 | 0.70 | ||
| BR-849 | 916.0 | 920.9 | 4.9 | 4.0 | 0.95 | ||
| BR-851 | No Significant Intersections | Viggo | |||||
| BR-853 | 469.9 | 474.5 | 4.6 | 3.8 | 1.34 | Auro | |
| BR-853 | 665.5 | 668.5 | 3.0 | 2.3 | 0.42 | ||
| BR-854A | 701.5 | 706.0 | 4.5 | 4.0 | 1.13 | Auro | |
| BR-854A | 874.0 | 880.1 | 6.0 | 5.3 | 4.79 | ||
| BR-854A | Including | 878.5 | 880.1 | 1.5 | 1.4 | 17.73 | |
| BR-855 | 810.2 | 814.5 | 4.4 | 3.8 | 1.63 | Discovery | |
| BR-856A | No Significant Intersections | Discovery | |||||
| BR-870C5B | 1,229.0 | 1,232.0 | 3.0 | 2.6 | 0.39 | Yuma | |
| BR-870C5B | 1,313.5 | 1,319.0 | 5.5 | 4.7 | 0.68 | ||
| BR-870C5B | 1,349.2 | 1,353.0 | 3.8 | 3.3 | 0.51 | ||
| BR-870C5B | 1,366.3 | 1,380.5 | 14.2 | 12.2 | 1.53 | ||
| BR-871 | 1,173.5 | 1,194.7 | 21.3 | 18.3 | 0.36 | Yuma | |
| BR-872 | 990.6 | 997.4 | 6.8 | 6.1 | 0.42 | Yuma | |
| BR-872 | 1,005.8 | 1,010.3 | 4.5 | 3.7 | 0.80 | ||
| BR-872 | 1,017.2 | 1,033.5 | 16.3 | 12.9 | 0.54 | ||
| BR-882 | 953.0 | 957.5 | 4.5 | 3.7 | 0.45 | Auro | |
| BR-882 | 1,015.2 | 1,022.4 | 7.2 | 6.1 | 25.71 | ||
| BR-882 | Including | 1,017.5 | 1,019.4 | 1.9 | 1.6 | 95.27 | |
| BR-884 | 716.9 | 722.8 | 5.9 | 4.9 | 2.56 | Auro | |
| BR-884 | Including | 720.1 | 722.8 | 2.6 | 2.3 | 4.55 | |
| BR-884 | 801.4 | 805.9 | 4.5 | 3.9 | 0.83 | ||
| BR-885 | 714.1 | 715.5 | 1.4 | 1.1 | 26.60 | Yuma | |
| BR-885 | 871.4 | 883.2 | 11.9 | 9.4 | 1.36 | ||
| BR-885 | 914.1 | 922.7 | 8.5 | 6.8 | 0.73 | ||
| BR-886 | 1,060.5 | 1,070.7 | 10.2 | 8.0 | 0.39 | Yuma | |
| BR-886 | 1,078.2 | 1,085.4 | 7.3 | 5.7 | 2.80 | ||
| BR-886 | Including | 1,082.4 | 1,084.5 | 2.2 | 1.7 | 7.86 | |
| BR-886 | 1,131.1 | 1,134.2 | 3.1 | 2.7 | 1.26 | ||
| BR-886 | 1,141.7 | 1,160.7 | 19.0 | 16.9 | 0.76 | ||
| BR-886 | 1,170.0 | 1,175.8 | 5.8 | 4.8 | 1.33 | ||
| BR-886 | 1,184.7 | 1,188.0 | 3.3 | 2.7 | 0.49 | ||
| BR-886 | 1,231.2 | 1,231.7 | 0.5 | 0.4 | 44.80 | ||
| BR-891 | 432.0 | 435.0 | 3.0 | 2.5 | 1.07 | Discovery | |
| BR-891 | 1,096.0 | 1,111.0 | 15.1 | 12.3 | 1.44 | ||
| BR-891 | Including | 1,096.6 | 1,100.1 | 3.5 | 2.9 | 3.00 | |
| BR-891 | 1,117.5 | 1,125.0 | 7.5 | 6.2 | 0.82 | ||
| BR-891 | 1,137.0 | 1,141.0 | 4.0 | 3.3 | 0.52 | ||
| BR-891 | 1,194.0 | 1,197.0 | 3.0 | 2.5 | 0.40 | ||
| BR-891 | 1,242.3 | 1,308.4 | 66.1 | 54.2 | 0.42 | ||
| BR-900B | 1,214.6 | 1,223.6 | 9.0 | 7.4 | 0.73 | Yauro | |
| DL-131C4 | 929.2 | 934.3 | 5.1 | 4.3 | 1.24 | Hinge | |
| DL-131C5 | No Significant Intersections | Hinge | |||||
| DL-131C6 | No Significant Intersections | Hinge | |||||
| DL-131C6W | No Significant Intersections | Hinge | |||||
APPENDIX B
Great Bear: LP long section demonstrating potential for extension of a high-grade underground resource.
An infographic accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/12d656a2-96da-42d9-ac04-3da030e75ce6
Composites generated from drill intersections received since the February 14, 2024, news release includes assays from 29 fully assayed drill holes at the LP zone and 4 fully assayed drill holes at the Hinge and Limb zone. Composites are generated using 0.3 g/t minimum grade, maximum linear internal dilution of 5.0 m, and allows short high-grade intervals greater than 8 GXM to be retained. Results are preliminary in nature and are subject to on-going QA/QC. For full list of significant, composited assay results, see Appendix A.
APPENDIX C
Round Mountain Phase X drilling: High-grade zones encountered between portals and targeted mineralization.
An infographic accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/bc9fd7a8-a1f1-45cc-bea5-8119f4ee672c
Cautionary statement on forward-looking information
All statements, other than statements of historical fact, contained or incorporated by reference in this news release including, but not limited to, any information as to the future financial or operating performance of Kinross, constitute "forward-looking information" or "forward-looking statements" within the meaning of certain securities laws, including the provisions of the Securities Act (Ontario) and the provisions for "safe harbor" under the United States Private Securities Litigation Reform Act of 1995 and are based on expectations, estimates and projections as of the date of this news release. Forward-looking statements contained in this news release, include, but are not limited to, those under the headings (or headings that include) "2024 first-quarter highlights", "CEO commentary", "Balance Sheet", and "Development Projects and Exploration", as well as statements with respect to our guidance for production, cost guidance, including production costs of sales, all-in sustaining cost of sales, and capital expenditures; statements with respect to our guidance for cash flow and free cash flow; the declaration, payment and sustainability of the Company's dividends; identification of additional resources and reserves or the conversion of resources to reserves; the Company's liquidity; the Company's plan to reduce debt; the schedules budgets, and forecast economics for the Company's development projects; budgets for and future prospects for exploration, development and operation at the Company's operations and projects, including the Great Bear project; potential mine life extensions at the Company's operations; the Company's balance sheet and liquidity outlook, as well as references to other possible events including, the future price of gold and silver, costs of production, operating costs; price inflation; capital expenditures, costs and timing of the development of projects and new deposits, estimates and the realization of such estimates (such as mineral or gold reserves and resources or mine life), success of exploration, development and mining, currency fluctuations, capital requirements, project studies, government regulation, permit applications, environmental risks and proceedings, and resolution of pending litigation. The words "advance", "continue", "expects", "focus", "forecast", "guidance", "on plan", "on track", "opportunity", "plan", "potential", "priority", "prospect", "target" or variations of or similar such words and phrases or statements that certain actions, events or results may, could, should or will be achieved, received or taken, or will occur or result and similar such expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Kinross as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The estimates, models and assumptions of Kinross referenced, contained or incorporated by reference in this news release, which may prove to be incorrect, include, but are not limited to, the various assumptions set forth herein and in our Management's Discussion and Analysis ("MD&A") for the year ended December 31, 2023, and the Annual Information Form dated March 27, 2024 as well as: (1) there being no significant disruptions affecting the operations of the Company, whether due to extreme weather events (including, without limitation, excessive snowfall, excessive or lack of rainfall, in particular, the potential for further production curtailments at Paracatu resulting from insufficient rainfall and the operational challenges at Fort Knox and Bald Mountain resulting from excessive rainfall or snowfall, which can impact costs and/or production) and other or related natural disasters, labour disruptions (including but not limited to strikes or workforce reductions), supply disruptions, power disruptions, damage to equipment, pit wall slides or otherwise; (2) permitting, development, operations and production from the Company's operations and development projects being consistent with Kinross' current expectations including, without limitation: the maintenance of existing permits and approvals and the timely receipt of all permits and authorizations necessary for the operation of Tasiast; water and power supply and continued operation of the tailings reprocessing facility at Paracatu; permitting of the Great Bear project (including the consultation process with Indigenous groups), permitting and development of the Lobo-Marte project; in each case in a manner consistent with the Company's expectations; and the successful completion of exploration consistent with the Company's expectations at the Company's projects; (3) political and legal developments in any jurisdiction in which the Company operates being consistent with its current expectations including, without limitation, restrictions or penalties imposed, or actions taken, by any government, including but not limited to amendments to the mining laws, and potential power rationing and tailings facility regulations in Brazil (including those related to financial assurance requirements), potential amendments to water laws and/or other water use restrictions and regulatory actions in Chile, new dam safety regulations, potential amendments to minerals and mining laws and energy levies laws, new regulations relating to work permits, potential amendments to customs and mining laws (including but not limited to amendments to the VAT) and the potential application of the tax code in Mauritania, potential amendments to and enforcement of tax laws in Mauritania (including, but not limited to, the interpretation, implementation, application and enforcement of any such laws and amendments thereto), potential third party legal challenges to existing permits, and the impact of any trade tariffs being consistent with Kinross' current expectations; (4) the completion of studies, including scoping studies, preliminary economic assessments, pre-feasibility or feasibility studies, on the timelines currently expected and the results of those studies being consistent with Kinross' current expectations; (5) the exchange rate between the Canadian dollar, Brazilian real, Chilean peso, Mauritanian ouguiya and the U.S. dollar being approximately consistent with current levels; (6) certain price assumptions for gold and silver; (7) prices for diesel, natural gas, fuel oil, electricity and other key supplies being approximately consistent with the Company's expectations; (8) attributable production and cost of sales forecasts for the Company meeting expectations; (9) the accuracy of the current mineral reserve and mineral resource estimates of the Company and Kinross' analysis thereof being consistent with expectations (including but not limited to ore tonnage and ore grade estimates), future mineral resource and mineral reserve estimates being consistent with preliminary work undertaken by the Company, mine plans for the Company's current and future mining operations, and the Company's internal models; (10) labour and materials costs increasing on a basis consistent with Kinross' current expectations; (11) the terms and conditions of the legal and fiscal stability agreements for Tasiast being interpreted and applied in a manner consistent with their intent and Kinross' expectations and without material amendment or formal dispute (including without limitation the application of tax, customs and duties exemptions and royalties); (12) asset impairment potential; (13) the regulatory and legislative regime regarding mining, electricity production and transmission (including rules related to power tariffs) in Brazil being consistent with Kinross' current expectations; (14) access to capital markets, including but not limited to maintaining our current credit ratings consistent with the Company's current expectations; (15) potential direct or indirect operational impacts resulting from infectious diseases or pandemics; (16) changes in national and local government legislation or other government actions, including the Canadian federal impact assessment regime; (17) litigation, regulatory proceedings and audits, and the potential ramifications thereof, being concluded in a manner consistent with the Corporation's expectations (including without limitation litigation in Chile relating to the alleged damage of wetlands and the scope of any remediation plan or other environmental obligations arising therefrom); (18) the Company's financial results, cash flows and future prospects being consistent with Company expectations in amounts sufficient to permit sustained dividend payments; and (19) the impacts of detected pit wall instability at Round Mountain and Bald Mountain being consistent with the Company's expectations. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: the inaccuracy of any of the foregoing assumptions; fluctuations in the currency markets; fluctuations in the spot and forward price of gold or certain other commodities (such as fuel and electricity); price inflation of goods and services; changes in the discount rates applied to calculate the present value of net future cash flows based on country-specific real weighted average cost of capital; changes in the market valuations of peer group gold producers and the Company, and the resulting impact on market price to net asset value multiples; changes in various market variables, such as interest rates, foreign exchange rates, gold or silver prices and lease rates, or global fuel prices, that could impact the mark-to-market value of outstanding derivative instruments and ongoing payments/receipts under any financial obligations; risks arising from holding derivative instruments (such as credit risk, market liquidity risk and mark-to-market risk); changes in national and local government legislation, taxation (including but not limited to income tax, advance income tax, stamp tax, withholding tax, capital tax, tariffs, value-added or sales tax, capital outflow tax, capital gains tax, windfall or windfall profits tax, production royalties, excise tax, customs/import or export taxes/duties, asset taxes, asset transfer tax, property use or other real estate tax, together with any related fine, penalty, surcharge, or interest imposed in connection with such taxes), controls, policies and regulations; the security of personnel and assets; political or economic developments in Canada, the United States, Chile, Brazil, Mauritania or other countries in which Kinross does business or may carry on business; business opportunities that may be presented to, or pursued by, us; our ability to successfully integrate acquisitions and complete divestitures; operating or technical difficulties in connection with mining, development or refining activities; employee relations; litigation or other claims against, or regulatory investigations and/or any enforcement actions, administrative orders or sanctions in respect of the Company (and/or its directors, officers, or employees) including, but not limited to, securities class action litigation in Canada and/or the United States, environmental litigation or regulatory proceedings or any investigations, enforcement actions and/or sanctions under any applicable anti-corruption, international sanctions and/or anti-money laundering laws and regulations in Canada, the United States or any other applicable jurisdiction; the speculative nature of gold exploration and development including, but not limited to, the risks of obtaining and maintaining necessary licenses and permits; diminishing quantities or grades of reserves; adverse changes in our credit ratings; and contests over title to properties, particularly title to undeveloped properties. In addition, there are risks and hazards associated with the business of gold exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance, or the inability to obtain insurance, to cover these risks). Many of these uncertainties and contingencies can directly or indirectly affect, and could cause, Kinross' actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Kinross, including but not limited to resulting in an impairment charge on goodwill and/or assets. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management's expectations and plans relating to the future. All of the forward-looking statements made in this news release are qualified by this cautionary statement and those made in our other filings with the securities regulators of Canada and the United States including, but not limited to, the cautionary statements made in the "Risk Analysis" section of our MD&A for the year ended December 31, 2023, and the "Risk Factors" set forth in the Company's Annual Information Form dated March 27, 2024. These factors are not intended to represent a complete list of the factors that could affect Kinross. Kinross disclaims any intention or obligation to update or revise any forward-looking statements or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law.
Key Sensitivities
Approximately 70%-80% of the Company's costs are denominated in U.S. dollars.
A 10% change in foreign currency exchange rates would be expected to result in an approximate $20 impact on production cost of sales per equivalent ounce sold 14 .
Specific to the Brazilian real, a 10% change in the exchange rate would be expected to result in an approximate $40 impact on Brazilian production cost of sales per equivalent ounce sold.
Specific to the Chilean peso, a 10% change in the exchange rate would be expected to result in an approximate $30 impact on Chilean production cost of sales per equivalent ounce sold.
A $10 per barrel change in the price of oil would be expected to result in an approximate $3 impact on production cost of sales per equivalent ounce sold.
A $100 change in the price of gold would be expected to result in an approximate $4 impact on production cost of sales per equivalent ounce sold as a result of a change in royalties.
Other information
Where we say "we", "us", "our", the "Company", or "Kinross" in this news release, we mean Kinross Gold Corporation and/or one or more or all of its subsidiaries, as may be applicable.
The technical information about the Company's mineral properties contained in this news release has been prepared under the supervision of Mr. Nicos Pfeiffer, an officer of the Company who is a "qualified person" within the meaning of National Instrument 43-101.
Source: Kinross Gold Corporation
HIGHLIGHTS:
Heliostar Metals Ltd. (TSXV: HSTR) (OTCQX: HSTXF) (FSE: RGG1) ("Heliostar" or the "Company") is pleased to report it has entered into a non-binding letter of intent in respect of a senior secured debt facility (the "Facility") for the aggregate principal amount of US$20 million (the "Loan Amount") with an expected fixed 10% rate of interest with a syndicate of lenders led by a New York based Financial Institution (together, the "Lenders").
The net proceeds of the Facility will be used to advance the underground decline and complete test mining to process a bulk sample from the Ana Paula deposit in Guerrero, Mexico ("Test Mining").
The Facility is expected to have a 30-month term and is subject to an annual interest rate of 10%, payable semi-annually. The Facility is expected to be assured by customary security commitments, including over the Ana Paula Project. The facility allows for the early repayment of the Facility at any time, and upon the sale of gold ounces. The facility calls for Heliostar to make repayments equal to the number of ounces of gold sold multiplied by US$1,850 per ounce (the "Reference Price") after deducting operating expenses.
Heliostar CEO, Charles Funk, commented, "Finding a self-funded solution that diminishes the amount of equity dilution to advance the development of the Ana Paula Project and undertake a Test Mining program has been the Company's focus in 2024. Today's announcement puts Heliostar on the front foot to continue to de-risk the Ana Paula project and accelerate its path to commercial production. Funding from the financing will be used to complete the decline and undertake test mining. It will additionally, permit drilling to add more ounces to the high-grade core of the Ana Paula deposit. Funds from the sale of gold produced from the bulk sample are anticipated to repay the principal and interest of the loan and the floor price for a portion of the test mining ounces minimizes completion risk. We are excited to advance towards our goal of mining the first gold ounces from the Ana Paula Project in 2025!"
Test Mining
The Company considers Test Mining to be a compelling development approach at Ana Paula as it provides several advantages, including:
Ana Paula's current infrastructure, including its open pit mine permit, partially completed decline and connection to grid power should allow for this bulk sample plan to proceed quickly. Engineering undertaken in Q1, 2024 has been completed to ensure the design for Test Mining maximizes the long-term mine plan at Ana Paula.
Financing Details
Interest Payment: The Facility is expected to bear a 10% per annum coupon, calculated and payable semi-annually, and will mature after a 30-month term.
Gold Price Linked Premium: Heliostar is expected to enter into gold swaps with the Lenders at closing of the Financing (the "Closing") tied to a gold price equal to the Reference Price of US$1,850 (the "Gold Premium"). At certain dates in the future tied to Heliostar's production and sale of gold from Test Mining, if the spot price of gold is greater than the Reference Price, Heliostar will pay the Lenders the difference between the spot price and the Reference Price, multiplied by the "Payment Swap Ounces". Payment Swap Ounces is the lesser of: (i) the ounces sold by Heliostar that triggered the mandatory revenue prepayment and (ii) the difference between the Total Swap Ounces and the sum of all previous Payment Swap Ounces sold by Heliostar. If the spot price of gold is less than the Reference Price, the Lenders will pay Heliostar the difference between the spot price and the Reference Price, multiplied by the Payment Swap Ounces.
Warrants: In connection with the Facility, the Company will issue to the Lenders an aggregate of 17,239,668 share purchase warrants (the "Warrants"). Each Warrant will entitle the Lenders to acquire one common share within 30 months of closing at an exercise price of (i) as to 8,619,834 of the Warrants, $0.40 per share, and (ii) as to 8,619,834 of the Warrants, $0.55 per share.
Use of Proceeds: The net proceeds of the Facility are expected to be used to fund (i) development of the decline and Test Mining of a bulk sample, (ii) drilling at the Ana Paula deposit, and (ii) facility interest until production has commenced.
Closing: Closing is subject to the execution of definitive documents, receipt of all necessary approvals and the completion of the Lenders' technical due diligence. There is no assurance that the Facility will be completed on the terms set forth above or at all. Closing is anticipated in Q3, 2024.
There can be no assurance that a definitive agreement with respect to the Facility will be executed or, if executed, whether the funding will be consummated.
The Company intends to pay a qualified non-related party a finder's fee (the "Finder's Fee") equal to 2% of the Loan Amount. Subject to approval by the TSX Venture Exchange, the Company intends to pay the Finders' Fee half in cash and half in common shares at a deemed price of $0.30 per share.
Statement of Qualified Person
Stewart Harris, P.Geo., a Qualified Person, as such term is defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects, has reviewed the scientific and technical information that forms the basis for this news release and has approved the disclosure herein. Historical information contained in this news release cannot be relied upon as Stewart Harris has not prepared nor verified such information.
About Heliostar Metals Ltd.
Heliostar is a junior mining company with a portfolio of high-grade gold projects in Mexico and Alaska.
The Company is focused on developing the 100% owned Ana Paula Project in Guerrero, Mexico. In addition, Heliostar is working with the Mexican government to permit the San Antonio Gold Project in Baja Sur, Mexico. The Company continues efforts to explore the Unga Gold Project in Alaska, United States of America.
Ana Paula hosts measured and indicated resources of 710,920 ounces of gold (320,204 measured and 390,716 indicated ounces) at 6.60 g/t gold and an inferred resource of 447,512 ounces of gold at 4.24 g/t gold. The asset is permitted for open-pit mining and contains significant existing infrastructure including a portal and a 412 long decline.
References
FOR ADDITIONAL INFORMATION PLEASE CONTACT:
Charles Funk
Chief Executive Officer
Heliostar Metals Limited
Email: charles.funk@heliostarmetals.com
Phone: +1 844-753-0045
Rob Grey
Investor Relations Manager
Heliostar Metals Limited
Email: rob.grey@heliostarmetals.com
Phone: +1 844-753-0045
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release includes certain "Forward-Looking Statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" under applicable Canadian securities laws. When used in this news release, the words "anticipate", "believe", "estimate", "expect", "target", "plan", "forecast", "may", "would", "could", "schedule" and similar words or expressions, identify forward-looking statements or information. These forward-looking statements or information relate to, among other things: the intended use of the net proceeds of the Facility; the expected terms of the Facility; completion of the Test Mining program; drilling activities intended to expand the resources base at the Ana Paula project; the expected advantages of Test Mining; and the exploration, development, and production at the Company's properties.
Forward-looking statements and forward-looking information relating to the terms and completion of the Facility, any future mineral production, liquidity, and future exploration plans are based on management's reasonable assumptions, estimates, expectations, analyses and opinions, which are based on management's experience and perception of trends, current conditions and expected developments, and other factors that management believes are relevant and reasonable in the circumstances, but which may prove to be incorrect. Assumptions have been made regarding, among other things, the negotiation of definitive documentation and the receipt of necessary approvals, price of metals; no escalation in the severity of public health crises or ongoing military conflicts; costs of exploration and development; the estimated costs of development of exploration projects; and the Company's ability to operate in a safe and effective manner and its ability to obtain financing on reasonable terms.
These statements reflect the Company's respective current views with respect to future events and are necessarily based upon a number of other assumptions and estimates that, while considered reasonable by management, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors, both known and unknown, could cause actual results, performance, or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements or forward-looking information and the Company has made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: precious metals price volatility; risks associated with the conduct of the Company's mining activities in foreign jurisdictions; regulatory, consent or permitting delays; risks relating to reliance on the Company's management team and outside contractors; risks regarding exploration and mining activities; the Company's inability to obtain insurance to cover all risks, on a commercially reasonable basis or at all; currency fluctuations; risks regarding the failure to generate sufficient cash flow from operations; risks relating to project financing and equity issuances; risks and unknowns inherent in all mining projects, including the inaccuracy of reserves and resources, metallurgical recoveries and capital and operating costs of such projects; contests over title to properties, particularly title to undeveloped properties; laws and regulations governing the environment, health and safety; the ability of the communities in which the Company operates to manage and cope with the implications of public health crises; the economic and financial implications of public health crises, ongoing military conflicts and general economic factors to the Company; operating or technical difficulties in connection with mining or development activities; employee relations, labour unrest or unavailability; the Company's interactions with surrounding communities; the Company's ability to successfully integrate acquired assets; the speculative nature of exploration and development, including the risks of diminishing quantities or grades of reserves; stock market volatility; conflicts of interest among certain directors and officers; lack of liquidity for shareholders of the Company; litigation risk; and the factors identified under the caption "Risk Factors" in the Company's public disclosure documents. Readers are cautioned against attributing undue certainty to forward-looking statements or forward-looking information. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update these forward-looking statements or forward-looking information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements or information, other than as required by applicable law.
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