Kinross Gold Corporation (K) Earnings Call Transcript & Summary

I second the motion.

Motion has been moved and seconded. If you have not already done so, you may now vote your shares for the reconfirmation of the shareholders' rights plan. [Voting]

The last item of business is an advisory resolution respecting Kinross' approach to executive compensation. Details of Kinross' approach to the compensation of its executives, and the text of the proposed advisory resolution are included in the management information circular. May I have a motion to approve such resolution?

I so move.

I second the motion.

The motion has been moved and seconded. If you have not already done so, you may now put your shares on the advisory resolution in respect to executive compensation. [Voting]

I now declare the voting closed on all items of business. The scrutineers have completed their preliminary count of the votes cast and I have received the results, and I declare that all motions have passed. A report on all matters voted on at this meeting will be filed on SEDAR+. This concludes the formal business of the meeting. Before handing it over to Paul Rollinson for the CEO remarks, Kinross has had an excellent year in 2023. Board continues to be pleased with the company's performance achieving the results that generate value for shareholders to ensure a sustainable future for the company. Reliable and consistent performance is one of our defining characteristics, and I am pleased to see us carrying this momentum into this year. On behalf of the Board, thank you for your continued support and engagement and to senior management and our global team, thank you for all your hard work towards safely delivering on our shared goals. I would now like to turn the meeting over to Paul, who will provide an overview of the company.

Thank you, Catherine, and thank you, everyone, for taking the time to join us for our Annual General Meeting this morning. Before I begin, let me call your attention to our cautionary statement on forward-looking information. As a reminder, shareholders may submit questions through the messaging icon on the screen, and we will address them at the end of my remarks. I'd like to begin by introducing members of our senior leadership team, all of whom are on the call. They are Geoff Gold, President; Andrea Freeborough, Executive Vice President and Chief Financial Officer; Claude Schimper, Executive Vice President and Chief Operating Officer; Kathleen Grandy, Senior Vice President, Human Resources; and William Dunford, Senior Vice President, Technical Services. Today, I will discuss our performance in 2023, our operations and development pipeline, highlights from our first quarter results and our ongoing commitment to sustainability. 2023 was a great year for our business, underpinned by excellent operational and financial performance. We delivered at the favorable end of our production and cost guidance and met capital guidance. This, in turn, drove significant cash flow, which enabled us to continue to strengthen our investment-grade balance sheet. These accomplishments were achieved while operating at the highest safety standards and with a strong focus on mining responsibly. To sum up our performance in 2023, we delivered production of approximately 2.15 million ounces with robust margins of just over $1,000 per ounce. We generated more than $1.6 billion in operating cash flow and $560 million in attributable free cash flow, more than double the prior year. We strengthened our investment-grade balance sheet by reducing net debt after fully repaying the Tasiast loan ahead of its maturity date, and the balance on our revolving credit facility, and ending the year with a cash balance of approximately $350 million and total liquidity of $1.9 billion. We also returned approximately $150 million to shareholders through our competitive quarterly dividend and all of this contributed to the significant share price outperformance. Overall, our portfolio produced good results in 2023, led by our 3 highest margin assets. Tasiast in Mauritania, which achieved a record full year production. Paracatu in Brazil, which realized record recoveries. And La Coipa in Chile, which achieved a record production in the fourth quarter. Collectively, these sites contributed nearly 70% of our total production and were strong contributors to our significant free cash flow. In the U.S., we had a successful year with both production and costs across all operations performing well against our targets. With respect to key projects, the mill expansion and solar power plant at Tasiast and the restart of La Coipa were all completed in 2023. In addition, we continue to advance our pipeline of growth and development projects. In Alaska, the Manh Choh advanced well in 2023 and is on schedule for initial production in early Q3. At Round Mountain in Nevada, the life of mine extension strategy that we announced last year is advancing on plan. We have made significant progress at both the Phase S open pit and the Phase X underground decline. At Great Bear in Ontario, we made excellent progress with our drilling campaign driving a significant increase to the project resource. Today, the resource stands at approximately 2.8 million ounces of high-grade M&I and an incremental 3.3 million of high-grade inferred ounces representing substantial progress from just over 2 years ago when we acquired the project. Ongoing drilling continues to hit new high-grade intercepts, including at depths of more than 1 kilometer, supporting our acquisition thesis and showcasing the exciting potential that lies ahead at Great Bear. In addition to drilling success, other areas of the projects such as engagement with local communities, permitting and engineering all continue to progress well. And we remain on track to release our initial Project PEA in the second half of this year. Turning now to our first quarter results, which we announced yesterday. Our operations are continuing to perform very well following strong performance in 2023. Our first quarter performance was on plan with production of 527,000 ounces. Q1 cash cost of sales of $982 per ounce and ASIC of $1,310 per ounce resulted in strong margins and free cash flow. Our cash and liquidity position remained strong at the end of the quarter with $407 million of cash and approximately $2 billion of total liquidity. Turning now to sustainability and ESG. I am very proud of the excellent results we achieved in 2023 from a sustainability perspective. In 2022, we set new ambitions and targets with an updated ESG strategy. And in 2023, we executed on that strategy. Our long-standing annual sustainability report, which is now in its 16th edition will be published later this month. The report will provide a comprehensive update on the progress we made in 2023 and what we aim to accomplish this year and beyond. It's a great document and I would encourage everyone to read it once it's released. Some notable highlights from the report that we look forward to sharing include: on social, in 2023, we generated over $4 billion in economic benefits to host countries globally through taxes, wages, procurement and community support. We sustained high levels of local employment with 99% of our workforce and 92% of management from within host countries. And we also supported and aided local community development by making approximately $15 million of monetary and in-kind donations. Regarding governance, we were ranked among the top group of Canadian mining companies in the Globe and Mail's Annual Corporate Governance review, and we were named as a constituent of the Dow Jones Sustainability World Index. And finally, on environment, we realized a 29,000 tons CO2 reduction in greenhouse gas emissions in 2023 through 15 different energy efficiency projects. Overall, these energy efficiency projects helped to offset approximately 2% of Kinross' greenhouse gas emissions as well as provide nearly $8 million on cost savings during the year. And looking ahead, the recent completion of our 34-megawatt solar power plant at Tasiast, is one of the projects that contributes to our goal of reducing emissions intensity by 30% by 2030. The solar project is expected to provide annual fuel savings of 17 million liters of heavy fuel oil, which translates into an 18% reduction of Tasiast greenhouse gas emissions over the life of mine and has a 5-year payback. I'd like now to share a brief video outlining some of our carbon reduction initiatives across the portfolio. [Presentation]

After a successful 2023 and first quarter of 2024, we are well positioned for another solid year. Our business is in great shape, and now is an excellent time to own our shares as we expect to continue to deliver strong shareholder value this year through our commitment to operational excellence, strong cash flow outlook, continued strengthening of our investment-grade balance sheet, our attractive dividend and compelling free cash flow yield and our leadership in ESG metrics. We believe delivering on our commitments, coupled with our track valuation, will continue to support our share price performance. We'll now open it up for questions from shareholders.

There are no questions, and that will conclude the meeting for today. Thank you very much, everybody.