Kinross Gold Corporation Q3 FY2025 earnings call

Key Points

• Q3 production was 504,000 ounces at $1,145 per ounce cost of sales, with strong operating margins. Record free cash flow of nearly $700 million in Q3 and over $1.7 billion YTD.
• Operational highlights: Paracatu and Tasiast delivered strong production and cash flow; La Coipa's performance improved; U.S. assets on budget; Alaska and Nevada operations on track. Sustainability efforts noted, like Paracatu's tailings facility AA classification.
• Capital allocation: Committed to strengthening balance sheet via debt repayment and returning capital to shareholders, increasing return of capital beyond initial $650 million commitment.

In Q3, Paracatu produced 150,000 ounces with cost of sales $933 per ounce. Tasiast delivered 121,000 ounces at $889 per ounce. La Coipa produced 58,000 ounces at $1,148 per ounce. U.S. assets had 175,000 ounces produced at $1,469 per ounce. Alaska and Nevada operations also contributed to production within planned parameters. Paracatu's production was in line with prior quarter with lower cost of sales, Tasiast met budgeted production, La Coipa's production improved, and U.S. assets were on track.

Guidance

• Full year production on track to be slightly above midpoint of guidance, Q4 production expected slightly lower than 500,000 ounces.
• Operating costs (AISC) on track to meet full year guidance despite higher royalty costs from higher gold prices.
• All-in sustaining cost expected within upper range of guidance due to higher sustaining capital, Q4 AISC expected above Q3.
• Total capital expenditures on track to meet $1.15 billion guidance. Higher seasonal tax payments expected in first half of 2026 due to higher gold prices in 2025.

Risks

• Permitting delays, especially at Great Bear project which could impact timeline.
• Fluctuations in gold prices affecting margins and cash flow.
• Inflation impacting costs, including labor and maintenance expenses.
• Uncertainties related to regulatory changes in host countries.

Q: On the cost side, some of your peers are focusing on cost reduction efforts. Is that something you're working on? And if so, can you provide some examples of maybe productivity improvements across the portfolio?

A: Yes, we have initiatives globally, working with contractors as business partners, labor improvements, training across sites, and focus on maintenance spares and parts.

Q: On the capital returns and the balance sheet, with the current gold price, can you give indication on balance sheet position before committing to returning all excess cash to shareholders?

A: We're in the budget cycle, directionally want to continue return of capital, but will finalize update in new year.

Q: On the permitting timeline at Great Bear, when would the 2 specific permits start to impact the overall project timeline?

A: AEX permits not on critical path for main project timeline; main project focuses on mill construction.

Q: On reserve pricing and life of mine plans, how are you approaching balancing with inflation?

A: We consider 3-year rolling average, generally expect increase in industry reserve and resource pricing, focusing on margin and cash flow for near-term production.

Q: On debt reduction after Q4 and capital returns, what's the minimum cash needed to run the business?

A: Typically minimum is about $500 million, and we aim to maintain net cash above that.