Bringing Home The Gold

“Going for the Gold” will be the battle cry heard around the world next year as two major sporting events, Canada’s 2010 Winter Olympics and South Africa’s FIFA World Cup of Soccer, attract players from around the globe in their quest for the coveted gold medal or in the case of FIFA, the cherished 18-karat-gold World Cup Trophy.

In the world of mining, however, there too is a competition but unlike sporting events held every four years, going for the gold is an on-going competition involving players (miners) committed to providing the world with its most valued prize.

Gold, unlike any other element known to mankind, is universally accepted as the commodity on which one’s worth is measured. It has no boundaries, it’s known worldwide and regardless of the language spoken or where it’s found, it’s the world’s most revered resource.

Finding it, however, is another story and that’s why companies like Kinross Gold Corporation of Toronto are so interesting and worthy of a behind-the-scenes look at what it takes to deliver the goods. In other words, bringing home the gold.

First of all, like m ost other precious minerals, gold is usually not easily reachable, nor accessible and as you will see on the following pages, it’s actually found in some of the more remote and environmentally hostile places in the world. It takes guts and determination to go to many of those places but for gold mining companies like Kinross, it’s what they do and Kinross is one of the best at it.

Since its inception just 16 years ago in 1993, Kinross Gold Corporation has accepted the challenge and reality that finding and processing gold is no easy task and what makes the company even more newsworthy and deserving of this recognition is that fact that the company has left the relative comfort and safety of its own country to work exclusively in foreign lands where social and political conditions are often uncertain.

Kinross is, in fact, somewhat of an anomaly in the world of mining because it’s one of the few companies with no operations in its own country. This, by no means, suggests that Kinross has rejected Canada; it just says that it’s found its calling elsewhere.

From its frigid and remote Kupol site in Russia, to the tropical region at its Paracatu mine in Brazil, to the forests of the Kettle River-Buckhorn in Washington State, the company knows few boundaries but regardless of where it’s working, Canada still remains its home.

From its 52th floor head office in the heart of Toronto’s financial district, the company’s management teams oversee projects far away in other places around the world and we trust the following reports will also give you a glimpse at what Kinross Gold Corporation sees in its future and why the company is so deserving of this recognition by the Canadian Mining Journal.

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A Message From President And CEO Tye Burt

While we hear much speculation about “peak oil,” few people know that “peak gold” has already arrived.

Global gold supply from mine production peaked in 2001 at about 85 million ounces and has been declining ever since, to 78 million ounces in 2008. All signs point to this trend continuing: quality deposits are scarce, mine grades are declining, project permitting times are getting longer, and mine development costs have mushroomed.

The resulting supply constraints are one reason — among others — why many industry observers remain bullish on gold and see the strong market continuing in the future.

Given the challenges of new mine development, I’m extremely proud of our project teams at Kinross for successfully bringing three new major gold developments on stream last year — Kupol in Russia, Paracatu in Brazil, and Kettle River-Buckhorn in Washington State.

These new mines have not only brought Kinross record levels of production, revenue, and cash flow, but they are also lowering our cost of sales per ounce. These projects moved Kinross to the best quartile for industry-wide cash costs in 2008, and helped to double our cash flow per share from Q1 2008 to Q1 2009. For 2009, Kinross forecasts production of 2.4 to 2.5 million ounces at an average cost of sales per ounce of $390-420 from our eight operating mines in Chile, Brazil, the United States and Russia.

Our teams are now working to advance the next projects in our pipeline, including Lobo- Marte and Cerro Casale in Chile, and the exciting Fruta del Norte deposit in Ecuador. Together, these three projects could add another 1.5 million ounces of new low-cost production. Meanwhile, our Fort Knox heap leach project in Alaska starts up later this year, and we are aggressively exploring new opportunities to add production at our Maricunga, La Coipa, and Paracatu mines.

Corporate responsibility remains a critical key to our success and growth. Being a good neighbour and a responsible operator is not only good for our communities, but it is also good for our business, and is a vital factor in gaining the trust of governments and communities as we enter new jurisdictions, such as Ecuador.

“Peak gold” may have already arrived, but with a five-year compound annual growth rate in reserves of 11 per cent, Kinross plans to continue bucking the industry trend by bringing on new mines and new gold production. Our thanks to Canadian Mining Journal for helping to share our story.