Kinross Gold Corp. Q3 FY2026 earnings call

• Safety Priority: Management expressed deep sadness over the tragic loss of two business partner employees at Bald Mountain, Nevada, reaffirming that safety is the highest priority and committing to reinforced risk management programs.
• Operational Stability: Tasiast and Paracatu performed exceptionally well, driving significant free cash flow. La Coipa and Round Mountain faced near-term headwinds due to winter weather and mill recovery issues but have since stabilized.
• Growth Projects: Significant progress was noted on US growth projects (Phase X, Redbird, Curlew), with Redbird 1 achieving first production in early October. Great Bear’s underground development advanced over 500 meters, with detailed engineering at 55% completion.
• Sustainability: Key highlights included waterway restoration in Alaska via Trout Unlimited, emergency support during the Tok Well fire, and receiving the Mining Foundation of Chile award for education commitments.
• Financial Strength: The company ended the quarter with $2.6 billion in cash and upgraded its credit rating to BBB flat. Shareholder returns increased, with buybacks accelerating to return over $950 million year-to-date.

The company reported strong operational performance across its portfolio, with total Q3 production of 425,000 ounces. Tasiast contributed 146,000 ounces at a cost of sales of $1,200/oz, and Paracatu delivered 120,000 ounces at $1,070/oz; together, these two top-tier assets accounted for more than half of total production. La Coipa produced 29,000 ounces at $2,190/oz, impacted by weather and copper grade variability, while U.S. operations (Fort Knox, Bald Mountain, Round Mountain) combined for 129,000 ounces at an average cost of sales of $2,000/oz. Overall, all-in sustaining costs were $1,950/oz, and operating margins were strong at approximately $2,750/oz.

• Production: Maintained updated full-year guidance of 1.84–1.86 million ounces. Q4 production is expected to be 415,000–425,000 ounces (implied from annual total minus H1/H3 actuals, though explicitly stated as part of the path to 1.84-1.86M).
• Costs: On track for full-year Cost of Sales of $1,420–$1,460/oz and All-In Sustaining Costs of $1,850–$1,900/oz.
• Capital Expenditure: Maintained original capital guidance range of $1.5 billion (+/- 5%), noting it is subject to inflation and incremental project additions.
• 2027 Outlook: Expected production remains 1.84–1.86 million ounces. Detailed 2027 production, cost, and capital guidance will be provided at year-end results.
• 2028 Outlook: Grade enhancement strategy is expected to drive higher production relative to 2027, providing an organic offset to inflation.

• Safety Incidents: Tragic loss of personnel at Bald Mountain highlights ongoing safety risks, requiring intensified focus on fatality prevention.
• Weather and Geology: La Coipa faced disruptions from unprecedented winter weather and unexpected high-copper grades in sulfide ore, causing blending complexity and reduced throughput.
• Inflationary Pressures: Rising costs in labor, energy, and consumables pose risks to margin stability, particularly in tight labor markets like Nevada.
• Permitting and Regulatory: Delays or appeals in permitting processes, such as those affecting Great Bear’s AEX program by First Nations groups, could impact timelines.
• Execution Risk: Large-scale projects like Great Bear and Lobo Marte carry execution risks related to scope changes, inflation adjustments, and complex engineering requirements.

Q: Analyst asked about CapEx trajectory, specifically if Q4 would hit the upper end of guidance and what to expect for 2027 given inflation.

A: Andrea Freeborough confirmed Q4 likely sees increased sustaining and growth CapEx, placing the year at the midpoint to upper end of the $1.5B guidance. For 2027, the $1.5B range remains subject to inflation and potential approvals for projects like Fort Knox Phase 11, with detailed budgeting underway.

Q: Analyst questioned the improvement metrics at Round Mountain (recovery rates, throughput) versus the September update which cited lower-than-plan performance.

A: Bernard Wessels explained that while operations are improving significantly—with recoveries up to 60% from 44%—the mine still needs to reach ~80% recovery to meet original plans. Improvements in mill grades and recovery initiatives are stabilizing operations, though they remain below the initial mine plan expectations.

Q: Analyst sought clarity on Great Bear permitting risks, specifically regarding First Nations pushback on the AEX program and its impact on the main project timeline.

A: Geoffrey Gold clarified that AEX and the main project have separate permitting processes. While AEX permits are appealed by Grassy Narrows First Nation, this does not delay the main project. Progress on the Impact Benefits Agreement (IBA) with Lac Seul and Wabauskang First Nations is advancing, which is viewed as a key catalyst for finalizing remaining permits.

Q: Analyst asked about unit cost trajectory into 2027, citing external cost pressures like energy, and whether costs would rise by $50-$100/oz.

A: Andrea Freeborough and Paul Rollinson noted that 2027 production is similar to 2026, with inflation assumed at ~5%. However, the 'grade enhancement strategy' starting in 2028 (from Phase X, Curlew, and Tasiast) provides an organic offset to inflation through higher-grade ounces, mitigating long-term cost pressure.

Q: Analyst inquired about the company's M&A stance given declining asset values and strong balance sheet, asking if acquisitions look attractive.

A: Paul Rollinson stated Kinross remains disciplined and focused on internal optionality, having moved significant resources to reserves. While they monitor the market, they feel no pressure to acquire, preferring to leverage their strong cash flow and resource base for organic growth unless clear value-creation opportunities arise.