Kinross Gold reported record revenues and Production

 Toronto, On - Kinross Gold Corporation reported its unaudited results for the first quarter ended March 31, 2009. Gold equivalent production was 526,888 gold equivalent ounces in the first quarter of 2009, compared with 331,784 ounces for the same period last year, an increase of 59%. Consistent with previously stated guidance, the Company remains on track to produce 2.4 - 2.5 million gold equivalent ounces in 2009.  Revenue was $532.7 million in the first quarter, an increase of 61% over the same period last year.

  At the Fort Knox mine in Alaska, tonnes of ore mined were higher for the first quarter of 2009 compared with 2008 due to the addition of mining equipment and stockpiling of lower grade heap leach ore. Gold equivalent ounces produced were lower than the same period in 2008, due to lower mill throughput resulting from a breakdown of the primary crusher during the quarter, and lower grades resulting from mining transition ore, which led to lower recoveries. Cost of sales decreased due to lower electricity, diesel fuel and consumable costs; however, cost of sales per ounce increased due to lower production. Metal sales decreased primarily due to lower ounces sold. In the month of April, grades, throughput and recovery were back to previous levels.

  With the onset of spring in Alaska, Kinross is gearing up construction activities on the heap leach project. Approximately 78%of the initial phase of the leach pad was completed during the 2008 construction season. The carbon-in-column circuit to recover gold from the pregnant solution from the heap leach operation will be completed and commissioned during the second quarter of 2009. Start-up of ore placement on the leach pads is scheduled for the third quarter of 2009, with first gold production in the fourth quarter. As previously disclosed, the Fort Knox project is expected to extend the life of the mine to 2018, and to double life-of mine. production to 2.9 million gold ounces.

   Fort Knox is undertaking an aggressive 29,000-metre drilling program in 2009 aimed at further expanding reserves and extending mine life, including drilling in support of a potential Phase 8 pit expansion. Two core rigs began drilling in the pit late in the quarter completing a modest total of 336 metres. Over 29,000 metres of drilling are planned at Fort Knox in 2009. This work is targeting additional reserve ounces in the northwest sector of the pit (Phase 8), in deep Phase 6/7 extensions on the southwest side of the pit, and in the South Wall.

  At the Round Mountain mine in Nevada, tonnes of ore mined were 14% higher compared with the first quarter of 2008, but gold equivalent production, while on plan, was lower than the same period last year. The lower production was due to lower mill tonnage resulting from harder ore, which was partially offset by higher grades, and to fewer tonnes of heap leach ore placed on the pads. The reduction in tonnes placed on the leach pads was due to the planned move of the primary crusher in Q4 2008, which interrupted placing of material to the reusable pad for 10 weeks, until January 2009. Cost of sales was in line with the prior year and cost of sales per ounce was higher due to a decrease in production.

  Production ramped up as planned at the Kettle River-Buckhorn mine in Washington,  as the mine completed its first full quarter of operations, producing and selling 27,899 and 35,161 gold equivalent ounces respectively. Ounces sold were higher than ounces produced in the quarter due to the timing of shipments, as production in inventory at the end of 2008 was sold at the beginning of 2009.

  Final results received from the 21-hole 2008 Buckhorn exploration program continue to support the presence of a separate mineralized skarn unit underneath the SWZ ore body. Work is continuing to target deeper repeats of the Buckhorn deposits and these recent results are considered highly encouraging.

  At the Kupol mine in the Russian Federation, tonnes mined and processed were as planned for the first quarter of 2009. For the quarter, KinrossÕ share of production was 192,842 gold equivalent ounces, including 169,292 ounces of gold and 1,697,485 ounces of silver. Gold equivalent ounces sold were lower than ounces produced due to timing of shipments.

  At the Paracatu mine in Brazil, tonnes of ore mined and processed were significantly higher than the prior year due to the ramp-up of the expansion project. Gold equivalent ounces produced were higher in the first quarter of 2009 compared with 2008 due to a combination of increased throughput and a 14% increase in grades. Revenue from metal sales increased 66% due to higher production. Cost of sales increased due to higher operating costs associated with the ramp-up of the expansion plant. Production for the quarter was below plan, which resulted in a higher cost of sales per ounce.

  At the Crix’s joint venture mine in Brazil, lower grade areas were mined, consistent with the mine plan for the quarter. As a result, gold equivalent ounces produced and sold, as well as metal sales, decreased in the first quarter of 2009 compared with 2008. Cost of sales was in line with the previous year, but cost of sales per ounce was higher due to lower production.

  At the La Coipa mine in Chile, tonnes of ore mined and gold grades were higher in the first quarter of 2009 compared with 2008. Gold equivalent ounces produced were higher as a result of higher throughput and higher grades, but ounces sold were lower compared with prior year due to the timing of shipments. Cost of sales decreased primarily due to the 2008 impact of the fair value of the cost of inventory acquired in the asset swap with Goldcorp, and the benefit of a weaker Chilean peso.

  At the Maricunga mine in Chile, tonnes of ore mined were lower for the first quarter of 2009 compared with the same period last year due to a decrease in plant availability. Gold equivalent ounces produced were also lower, reflecting the increasingly refractory nature of the ore. Metal sales decreased as a result of lower volume, while cost of sales decreased due to lower costs of energy. Pre-stripping at the new Pancho pit is now underway, and development of the pit will continue throughout 2009. Pancho is expected to provide approximately one-quarter of the total feed to the Maricunga mill in 2009, which will gradually increase to 100% by 2012.

  Tye Burt, Kinross President and CEO said, Òwe continue to deliver on our strategy of disciplined growth, as costs are trending down and margins are increasing. New ounces from Kupol, Buckhorn, and Paracatu drove our first quarter production up 59% year-over-year, while our cost of sales per ounce declined by 11%. The result was record revenue and margins, and, despite a slightly lower gold price in the quarter, a doubling in cash flow per share before changes in working capital. Operating earnings jumped by 72% year-over-year.

  At Paracatu, the expansion plant process has stabilized, and we are seeing continuous improvement in throughput and recovery. We expect the Paracatu expansion to reach full production in the second quarter, which is expected to lower our cost of sales per ounce in the second half of the year.

  We continue to advance the gold projects that will provide Kinross next wave of high-quality growth, including expansions at two of our existing operations and new development projects at Lobo-Marte, Fruta del Norte, and Cerro Casale. Meanwhile, our aggressive exploration work at La Coipa and Kupol is yielding promising results and is expected to generate new opportunities and extend mine life.

  Amid continued global economic uncertainty, our liquidity and financial position remains strong, with cash, short-term investment balances and available credit in excess of $900 million as of the end of the first quarter. 

 The company’s address 40 King Street West, 52nd Floor, Toronto, ON M5H 3Y2, (416) 365-5123, fax: (416) 363-6622, email: [email protected].