Kinross Reports Record 2008 Production and Revenue

Kinross Reports Record 2008 Production and Revenue

TORONTO, ON – Kinross Gold Corporation reported its unaudited results for the fourth quarter and year ended December 31, 2008.
Gold equivalent production was 550,221 gold equivalent ounces in the fourth quarter 2008, an increase of 43% over the fourth quarter 2007. For full-year 2008, gold equivalent production was in line with previously-announced guidance at 1,838,038 gold equivalent ounces, an increase of 16% over 2007.
Revenue was $484.4 million in the fourth quarter, an increase of 72% over the same period last year, with an average realized gold price of $794 per ounce sold compared to $796 per ounce sold in the fourth quarter of 2007. Full-year 2008 revenue was a record $1,617.0 million, a 48% increase over full-year 2007 revenue. The average realized gold price for the full year was $857 per ounce sold.
Cost of sales per gold equivalent ounce was $375 in the fourth quarter, a decrease of 11% compared to the same period last year, on sales of 534,945 gold equivalent ounces. Cost of sales per ounce for full-year 2008 was slightly below previously stated guidance at $421, on sales of 1,756,056 gold equivalent ounces. Fourth quarter cost of sales per gold equivalent ounce decreased 8% over the third quarter of 2008.
Kinross’ attributable margin per ounce sold was $419 in the fourth quarter, an increase of 11% year-over-year. For full-year 2008, the attributable margin per ounce sold was $436, an increase of 33% over full-year 2007.
Kinross recorded a net loss of $968.8 million, or $1.47 per share, for the fourth quarter 2008, and a net loss of $807.2 million, or $1.28 per share, for full-year 2008. Net earnings for the fourth quarter and full-year were reduced by a net $1,025.6 million ($1.56 per share) and $1,056.0 million ($1.68 per share) respectively, by a goodwill impairment accounting charge of $994.1 million primarily related to goodwill recorded in the 2007 Bema acquisition, plus additional items detailed on page three of this news release. Excluding these items, fourth quarter earnings would have been $56.8 million, or $0.09 per share, and full-year earnings would have been $248.8 million, or $0.40 per share.
The Paracatu expansion and Kettle River-Buckhorn commenced production in the fourth quarter of 2008. On January 8, 2009 Kinross completed its acquisition of the Lobo-Marte project in Chile. The Company will undertake a drilling, design, engineering, and metallurgical testing program with the expectation of upgrading the resource base to an NI 43-101 compliant reserve.On January 29, 2009 a new mining law officially came into effect in Ecuador, allowing Kinross to begin the permitting process to recommence advanced exploration work on its Fruta del Norte (FDN) project.
Tye Burt, Kinross President and CEO, made the following comments in relation to the fourth quarter and year-end 2008 results:
“We are proud of what Kinross employees achieved in 2008. Our operations delivered strong performance while our project teams successfully brought three new growth projects into production. The result was record production of 1.8 million ounces, a 48% increase in revenue, and a 33% increase in margins over 2007. As expected, our costs also declined as our new projects came into production, with fourth quarter cost of sales per ounce 8% lower than the previous quarter, and 11% lower than fourth quarter 2007. Our higher margins translated into cash flow of $222.4 million before changes in working capita. In the fourth quarter of 2008, an increase of 240% in cash flow per share over the fourth quarter of 2007.
“With increased production from our growth projects in 2009, we expect to grow production to 2.4 to 2.5 million ounces in 2009. At the same time, we are setting the stage for our next wave of growth. Lobo-Marte remains at the forefront of our project pipeline, with the project expected to benefit from previous mining activity at the site and our own extensive resources and technical experience in the area. The project team has laid out a detailed work program to apply for drilling permits, gather baseline environmental data, and begin a pre-feasibility study which we expect to complete by year-end. In Ecuador, with the new mining law now in effect, we are working closely with government and the local community to advance work on our Fruta del Norte project. We are working to obtain the necessary permits to advance our exploration program, and will commence an 8,000-meter infill drilling program once we have obtained the necessary permits.
The company’s address is 40 King Street West, 52nd Floor, Toronto, ON M5H 3Y2, (416) 365-5123, fax: (416) 363-6622, email: info@kinross.com.