Kinross On Track To Meet Annual Guidance For Production

TORONTO, ON - Kinross Gold Corporation started the year with a strong quarter, as our portfolio of mines generated solid cash flow. With our sharp focus on delivering consistent results, we are again on track to meet our annual guidance for production and costs.

J. Paul Rollinson, President and CEO said, ”During the quarter, we further strengthened our balance sheet with the divestment of Cerro Casale in Chile, a non-core asset in our portfolio. With the sale, our pro forma cash position is approximately $1.1 billion, with total liquidity of approximately $2.5 billion. Our strong balance sheet gives us the financial flexibility to fund our organic development projects in each of our operating regions, which are all progressing well.

"We are making excellent progress with the Tasiast Phase One expansion in Mauritania, which is on schedule, on budget and expected to reach full production in approximately one year. We are continuing to develop Bald Mountain's significant long-term potential, while the mine is on track to double production in 2017 compared with 2016. The feasibility studies for Tasiast Phase Two and Round Mountain Phase W are on schedule to be finalized in Q3 2017, when we expect to make a development decision for both projects. Russia's development projects remain on track to support mine life extension at Kupol-Dvoinoye. We are excited about our pipeline of projects that we expect to deliver strong production with a lower cost profile in the years ahead."

At Fort Knox, production increased compared with Q1 2016 mainly as a result of higher mill grades and timing of ounces processed through the mill, but decreased compared with Q4 2016 largely as a result of lower mill throughput and the seasonal reduction in production from the heap. Cost of sales per ounce decreased compared with Q1 2016 primarily due to lower labour and contractor costs, and more ore mined relative to operating waste, which also contributed to lower cost of sales per ounce compared with Q4 2016.

At Round Mountain, performance was strong during the quarter as production increased year-over-year mainly due to more ounces recovered from the heap leach pads as a result of higher tonnes places on the pads. The strong performance from the heap leach, along with higher mill and heap leach grades, contributed to increased production quarter-over-quarter. Cost of sales per ounce increased compared with Q1 2016 largely due to an increase in operating waste mined, and decreased compared with Q4 2016 primarily due to increased grades and lower contractor costs.

At Bald Mountain, production increased year-over-year and quarter-over-quarter mainly as a result of higher grade material placed on the pads in the fourth quarter of 2016. Cost of sales per ounce decreased year-over-year and quarter-over-quarter as a result of more ore being mined relative to operating waste. Production at the mine is expected to be higher in the second half of the year, particularly in the fourth quarter, due to mine sequencing and timing from the heap leach, and the mine is on track to double production in 2017 compared with 2016.

Kettle River-Buckhorn continued to perform well, as higher grades and lower labour costs helped to decrease cost of sales per ounce compared with Q1 2016. Kettle River-Buckhorn is now expected to reach the end of its mine life by the end of Q2 2017.

Attributable margin per equivalent ounce sold is a non-GAAP measure defined as "average realized gold price per ounce" less "attributable production cost of sales per gold equivalent ounce sold."

At Paracatu in Brazil, production decreased compared with Q1 2016 and Q4 2016 mainly due to lower mill grades. Cost of sales per ounce increased compared with Q1 2016 and Q4 2016 due to higher operating waste mined and maintenance costs. Unfavourable foreign exchange movements also contributed to higher costs during the quarter compared with Q1 2016. During the quarter, the region received lower than average rainfall and, as a result, Paracatu is expected to temporarily curtail operations early in the third quarter. The potential for curtailment was factored into the Company's annual production guidance and the site has continued to take further mitigation measures, including drilling more ground water wells and acquiring more water rights. 

At Maricunga, gold production from the rinsing of heap materials placed on the pads prior to the suspension of mining activities continued during the quarter. Cost of sales per ounce continued to decrease as a result of higher than expected ounces recovered. Gold equivalent ounces sold were lower than production during the quarter due to timing of sales.