(All dollar figures are unaudited and in U.S. dollars)
TORONTO, April 01, 2020 (GLOBE NEWSWIRE) — Kinross Gold Corporation (TSX:K; NYSE:KGC) (“Kinross” or the “Company”) continues to implement comprehensive and proactive measures to respond to the COVID-19 pandemic. While the Company cannot predict the future impact of the pandemic on its global operations, all Kinross mines continue to operate and have not been materially impacted to date (see Appendix A).The Company has taken preventative actions and put contingency plans in place at all sites that prioritize and protect the health and safety of employees, their families and host communities. In late January 2020, the Company created a cross-functional COVID-19 Task Force to initiate planning and preparation, following the advice of health authorities and expert medical and travel advisers. Since then, numerous initiatives have been implemented in response to the pandemic. These include:rigorous and extensive social distancing practices;remote working where possible;increased medical preparedness;banning non-essential business travel;continuous promotion of hygienic practices recommended by health authorities;increased cleaning and disinfection, and;increased support to employees and communities.Kinross continues to also work closely with host governments and local health authorities to ensure proper protocols are followed during the ongoing crisis.Business continuity plans have been prepared and implemented for each site to mitigate operational and supply chain risk. To help mitigate operational risks, the Company has implemented screening, isolation and quarantine procedures for all employees arriving at Kinross’ remote camp-based sites, adjusted rotation schedules and is limiting site access, among other measures. In the supply chain area, mitigation measures include initiating a process to increase stocks of key consumables to at least three months on hand, ordering additional critical spares, assessing potential disruptions, and identifying alternative sources of supply.Kinross continues to maintain a strong financial position and liquidity. As a precautionary measure to protect against economic and business uncertainties caused by the pandemic and subsequent government actions, Kinross drew down $750 million from its $1.5 billion revolving credit facility on March 20, 2020. The Company does not currently plan to deploy the funds given its strong financial position. As of March 31, 2020, Kinross has more than $1 billion in cash and cash equivalents, reflecting cash flow from operations in Q1 2020 offset by payments related to the Chulbatkan acquisition, a tax payment in Brazil, a semi-annual interest payment for Kinross’ senior notes, and repayment of the amount drawn on the credit facility at December 31, 2019.As previously planned, Kinross has submitted a drawdown notice for $200 million on the $300 million Tasiast project financing facility. The first funds are expected in mid-April 2020. The financing, which was signed on December 16, 2019, is an asset recourse loan with the IFC (a member of the World Bank Group), Export Development Canada, ING Bank and Société Générale.At this time, the Company has total debt of approximately $2.5 billion, and net debt1 of less than $1.5 billion. The Company has no debt maturities until September 2021. Despite the Company’s strong financial position, Kinross continues to plan for the potential impact of a wide range of outcomes on its financial position and balance sheet, including reviewing discretionary capital expenditures.Kinross has also continued to assess the potential impacts of the pandemic on its 2020 production and cost guidance. While the crisis has had no material impacts on the Company’s operations to date, Kinross has decided to withdraw its full-year 2020 guidance. The Company believes this is the prudent approach given the pandemic’s significant impact on the world economy, the implications of government-mandated constraints on financial, commercial and business activities, and the potential for further business disruptions and global health impacts. Favourable fuel prices and foreign exchange rates are expected to provide offsets to some of the incremental costs resulting from Kinross’ contingency measures. The Company will continue to target the safe delivery of its operating plans, notwithstanding the potential impacts of the global crisis.For the first quarter of 2020, the Company expects gold sales to be slightly lower than production due to the impacts of the global crisis on timing of sales and metal shipments. Kinross is actively managing its metal shipments to mitigate impacts of the suspension, or risk of suspension, of operations at several refineries. Alternate transportation channels have been secured and further contingency plans are being prepared. Kinross’ preliminary Q1 2020 production, which has been impacted in part by crisis-related contingency measures, is expected to be approximately 560,000 Au eq. oz., with sales of approximately 540,000 Au eq. oz. Preliminary cost of sales per ounce sold for Q1 2020 is expected to be at the higher end of the original annual guidance range.“During these challenging times, I would like to thank all our employees around the world who have stepped up and worked long hours under difficult circumstances to keep our people safe and our sites operating. I would also like to thank our host governments, including Mauritania and Russia, for supporting our Company as we work to manage and respond to this unprecedented global crisis,” said J. Paul Rollinson, President and CEO. “We are continuously looking at implementing more precautionary and mitigation measures across our Company to protect our employees, their families and our host communities. We are also focused on ensuring our business continuity plans are sound, and that we are as prepared as possible in this rapidly evolving crisis.”President and CEO J. Paul Rollinson will today participate in a fireside chat with Greg Barnes, Managing Director, Head of Mining Research at TD Securities Inc., to discuss Kinross’ global response to the COVID-19 crisis. The link to the fireside chat will be available at 3 p.m. ET today in the Events and COVID-19 sections at www.kinross.com.For more information on the Company’s COVID-19 response, visit: https://www.kinross.com/news-and-investors/covid-19/About Kinross Gold Corporation
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