1. | DESCRIPTION OF THE BUSINESS |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
(in millions, except ounces, per share amounts and per ounce amounts) | 2019 | 2018 | Change | % Change(d) | 2019 | 2018 | Change | % Change | ||||||||||||||||||||||||
Operating Highlights | ||||||||||||||||||||||||||||||||
Total gold equivalent ounces(a) | ||||||||||||||||||||||||||||||||
Produced(c) | 653,586 | 607,906 | 45,680 | 8% | 1,264,849 | 1,267,861 | (3,012 | ) | 0% | |||||||||||||||||||||||
Sold(c) | 641,149 | 593,296 | 47,853 | 8% | 1,244,206 | 1,267,957 | (23,751 | ) | (2%) | |||||||||||||||||||||||
Attributable gold equivalent ounces(a) | ||||||||||||||||||||||||||||||||
Produced(c) | 648,251 | 602,049 | 46,202 | 8% | 1,254,282 | 1,255,986 | (1,704 | ) | 0% | |||||||||||||||||||||||
Sold(c) | 636,035 | 587,556 | 48,479 | 8% | 1,233,684 | 1,255,773 | (22,089 | ) | (2%) | |||||||||||||||||||||||
Financial Highlights | ||||||||||||||||||||||||||||||||
Metal sales | $ | 837.8 | $ | 775.0 | $ | 62.8 | 8% | $ | 1,624.0 | $ | 1,672.2 | $ | (48.2 | ) | (3%) | |||||||||||||||||
Production cost of sales | $ | 426.1 | $ | 454.9 | $ | (28.8 | ) | (6%) | $ | 837.8 | $ | 899.5 | $ | (61.7 | ) | (7%) | ||||||||||||||||
Depreciation, depletion and amortization | $ | 179.9 | $ | 190.3 | $ | (10.4 | ) | (5%) | $ | 344.0 | $ | 383.4 | $ | (39.4 | ) | (10%) | ||||||||||||||||
Operating earnings | $ | 144.3 | $ | 46.3 | $ | 98.0 | nm | $ | 259.7 | $ | 224.2 | $ | 35.5 | 16% | ||||||||||||||||||
Net earnings attributable to common shareholders | $ | 71.5 | $ | 2.4 | $ | 69.1 | nm | $ | 136.2 | $ | 108.5 | $ | 27.7 | 26% | ||||||||||||||||||
Basic earnings per share attributable to common shareholders | $ | 0.06 | $ | 0.00 | $ | 0.06 | nm | $ | 0.11 | $ | 0.09 | $ | 0.02 | 22% | ||||||||||||||||||
Diluted earnings per share attributable to common shareholders | $ | 0.06 | $ | 0.00 | $ | 0.06 | nm | $ | 0.11 | $ | 0.09 | $ | 0.02 | 22% | ||||||||||||||||||
Adjusted net earnings attributable to common shareholders(b) | $ | 79.6 | $ | 37.8 | $ | 41.8 | 111% | $ | 162.9 | $ | 163.0 | $ | (0.1 | ) | 0% | |||||||||||||||||
Adjusted net earnings per share(b) | $ | 0.06 | $ | 0.03 | $ | 0.03 | 100% | $ | 0.13 | $ | 0.13 | $ | - | 0% | ||||||||||||||||||
Net cash flow provided from operating activities | $ | 333.0 | $ | 184.5 | $ | 148.5 | 80% | $ | 584.6 | $ | 478.0 | $ | 106.6 | 22% | ||||||||||||||||||
Adjusted operating cash flow(b) | $ | 287.7 | $ | 231.5 | $ | 56.2 | 24% | $ | 518.5 | $ | 595.2 | $ | (76.7 | ) | (13%) | |||||||||||||||||
Capital expenditures | $ | 276.7 | $ | 247.1 | $ | 29.6 | 12% | $ | 541.5 | $ | 494.0 | $ | 47.5 | 10% | ||||||||||||||||||
Average realized gold price per ounce(b) | $ | 1,307 | $ | 1,306 | $ | 1 | 0% | $ | 1,305 | $ | 1,319 | $ | (14 | ) | (1%) | |||||||||||||||||
Consolidated production cost of sales per equivalent ounce(c) sold(b) | $ | 665 | $ | 767 | $ | (102 | ) | (13%) | $ | 673 | $ | 709 | $ | (36 | ) | (5%) | ||||||||||||||||
Attributable(a) production cost of sales per equivalent ounce(c) sold(b) | $ | 663 | $ | 767 | $ | (104 | ) | (14%) | $ | 672 | $ | 709 | $ | (37 | ) | (5%) | ||||||||||||||||
Attributable(a) production cost of sales per ounce sold on a by-product basis(b) | $ | 650 | $ | 754 | $ | (104 | ) | (14%) | $ | 659 | $ | 696 | $ | (37 | ) | (5%) | ||||||||||||||||
Attributable(a) all-in sustaining cost per ounce sold on a by-product basis(b) | $ | 918 | $ | 1,011 | $ | (93 | ) | (9%) | $ | 917 | $ | 918 | $ | (1 | ) | 0% | ||||||||||||||||
Attributable(a) all-in sustaining cost per equivalent ounce(c) sold(b) | $ | 925 | $ | 1,018 | $ | (93 | ) | (9%) | $ | 925 | $ | 926 | $ | (1 | ) | 0% | ||||||||||||||||
Attributable(a) all-in cost per ounce sold on a by-product basis(b) | $ | 1,242 | $ | 1,343 | $ | (101 | ) | (8%) | $ | 1,240 | $ | 1,226 | $ | 14 | 1% | |||||||||||||||||
Attributable(a) all-in cost per equivalent ounce(c) sold(b) | $ | 1,243 | $ | 1,342 | $ | (99 | ) | (7%) | $ | 1,242 | $ | 1,228 | $ | 14 | 1% |
(a) | “Total” includes 100% of Chirano production. "Attributable" includes Kinross' share of Chirano (90%) production. |
(b) | The definition and reconciliation of these non-GAAP financial measures is included in Section 11. |
(c) | “Gold equivalent ounces” include silver ounces produced and sold converted to a gold equivalent based on a ratio of the average spot market prices for the commodities for each period. The ratio for the second quarter of 2019 was 87.98:1 (second quarter of 2018 - 79.00:1). The ratio for the first six months of 2019 was 85.78:1 (first six months of 2018 - 79.12:1). |
(d) | “nm” means not meaningful. |
2. | IMPACT OF KEY ECONOMIC TRENDS |
3. | OUTLOOK |
4. | PROJECT UPDATES AND NEW DEVELOPMENTS |
Tasiast Phased Expansion
The Company is on schedule to complete the $300 million project financing for Tasiast from the International Finance Corporation (“IFC”), Export Development Canada (“EDC”), and two commercial banks later this year. While the financing remains subject to final approval by all lenders, final due diligence activities are advancing well, with work now focused on completing the details of the loan documentation.
Mauritania held Presidential elections on June 22, 2019. Former Minister of Defense, Mohammed Ghazouni, won and is expected to be inaugurated in early August 2019. The incoming President is expected to appoint a new cabinet in the weeks following the inauguration. The Company looks forward to engaging with the new government on a range of matters, as soon as practicable. Ongoing matters for discussion include fuel tax exemptions and the Tasiast Sud license conversion discussed more fully in the MD&A for the year ended December 31, 2018.
Round Mountain Phase W
The Round Mountain Phase W project continues to be on budget and on schedule. The processing circuit was commissioned ahead of schedule and is now in production, with the first gold bar from the completed vertical carbon-in-column (“VCIC”) plant poured in late May. Mine infrastructure, including the truck shop, warehouse, wash bay and fuel island, is now approximately 95% complete and are expected to be fully commissioned in the third quarter of 2019. Stripping activities are making excellent progress and are expected to continue until late 2020 as planned, with initial near-surface Phase W ore now encountered.
Bald Mountain Vantage Complex
The Bald Mountain Vantage Complex project also commenced production, and the first gold bar from the project was poured in late June. Weather-related challenges, higher than anticipated labour rates and issues with supply for some of the fabricated components continued to challenge the project budget and ramp up of production. Despite these challenges, commissioning for the project is well-advanced, with the VCIC plant and heap leach pads now substantially complete and in production, and construction of support infrastructure, such as the truck shop, warehouse and wash bay, close to completion.
Fort Knox Gilmore
The Fort Knox Gilmore project is progressing on schedule and on budget, with initial ore now expected later in the year. Construction of the new heap leach pad is underway and proceeding well, with half the impermeable liner now laid. Dewatering for the Gilmore pit expansion is proceeding according to plan and stripping for the initial Gilmore pushback is on target to begin late in the third quarter of 2019.
La Coipa Restart and Lobo-Marte
On February 2, 2018, Compania Minera Mantos de Oro (“MDO”), a subsidiary of the Company, agreed to purchase the remaining 50% interest in the Phase 7 concessions surrounding Kinross’ La Coipa mine that it did not already own from Salmones de Chile Alimentos S.A. On March 19, 2018, the Company closed the acquisition. The purchase price of $65.1 million was comprised of $65.0 million in cash and transaction costs of $0.1 million, of which an initial payment of $35.1 million was paid on closing and the balance of $30.0 million was paid on January 30, 2019. The Company now has the Phase 7 mining rights contemplated in the project pre-feasibility study completed in 2015 and fully owns the Phase 7 deposit.
The La Coipa Restart project feasibility study is proceeding well and is on schedule to be completed in the third quarter of 2019. At the Lobo-Marte project, the Company is following up the positive scoping study completed last quarter with a pre-feasibility study that is expected to be completed in mid-2020. The studies are evaluating the potential for a return to long-term production in Chile based on the concept of commencing Lobo-Marte production following the end of La Coipa’s mine life. Both studies are evaluating the degree to which resources such as personnel, water, energy and capital equipment can be shared and leveraged for synergies and efficiencies between the two potential projects.
5. | CONSOLIDATED RESULTS OF OPERATIONS |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
(in millions, except ounces and per ounce amounts) | 2019 | 2018 | Change | % Change(d) | 2019 | 2018 | Change | % Change | ||||||||||||||||||||||||
Operating Statistics | ||||||||||||||||||||||||||||||||
Total gold equivalent ounces(a) | ||||||||||||||||||||||||||||||||
Produced(b) | 653,586 | 607,906 | 45,680 | 8% | 1,264,849 | 1,267,861 | (3,012 | ) | 0% | |||||||||||||||||||||||
Sold(b) | 641,149 | 593,296 | 47,853 | 8% | 1,244,206 | 1,267,957 | (23,751 | ) | (2%) | |||||||||||||||||||||||
Attributable gold equivalent ounces(a) | ||||||||||||||||||||||||||||||||
Produced(b) | 648,251 | 602,049 | 46,202 | 8% | 1,254,282 | 1,255,986 | (1,704 | ) | 0% | |||||||||||||||||||||||
Sold(b) | 636,035 | 587,556 | 48,479 | 8% | 1,233,684 | 1,255,773 | (22,089 | ) | (2%) | |||||||||||||||||||||||
Gold ounces - sold | 629,206 | 580,173 | 49,033 | 8% | 1,219,031 | 1,241,057 | (22,026 | ) | (2%) | |||||||||||||||||||||||
Silver ounces - sold (000's) | 1,051 | 1,036 | 15 | 1% | 2,159 | 2,128 | 31 | 1% | ||||||||||||||||||||||||
Average realized gold price per ounce(c) | $ | 1,307 | $ | 1,306 | $ | 1 | 0% | $ | 1,305 | $ | 1,319 | $ | (14 | ) | (1%) | |||||||||||||||||
Financial data | ||||||||||||||||||||||||||||||||
Metal sales | $ | 837.8 | $ | 775.0 | $ | 62.8 | 8% | $ | 1,624.0 | $ | 1,672.2 | $ | (48.2 | ) | (3%) | |||||||||||||||||
Production cost of sales | $ | 426.1 | $ | 454.9 | $ | (28.8 | ) | (6%) | $ | 837.8 | $ | 899.5 | $ | (61.7 | ) | (7%) | ||||||||||||||||
Depreciation, depletion and amortization | $ | 179.9 | $ | 190.3 | $ | (10.4 | ) | (5%) | $ | 344.0 | $ | 383.4 | $ | (39.4 | ) | (10%) | ||||||||||||||||
Operating earnings | $ | 144.3 | $ | 46.3 | $ | 98.0 | nm | $ | 259.7 | $ | 224.2 | $ | 35.5 | 16% | ||||||||||||||||||
Net earnings attributable to common shareholders | $ | 71.5 | $ | 2.4 | $ | 69.1 | nm | $ | 136.2 | $ | 108.5 | $ | 27.7 | 26% |
(a) | “Total" includes 100% of Chirano production. "Attributable" includes Kinross' share of Chirano (90%) production. |
(b) | "Gold equivalent ounces" include silver ounces produced and sold converted to a gold equivalent based on a ratio of the average spot market prices for the commodities for each period. The ratio for the second quarter of 2019 was 87.98:1 (second quarter of 2018 - 79.00:1). The ratio for the first six months of 2019 was 85.78:1 (first six months of 2018 - 79.12:1). |
(c) | “Average realized gold price per ounce" is a non-GAAP financial measure and is defined in Section 11. |
(d) | “nm” means not meaningful. |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
(in millions) | 2019 | 2018 | Change | % Change(c) | 2019 | 2018 | Change | % Change(c) | ||||||||||||||||||||||||
Operating segments | ||||||||||||||||||||||||||||||||
Fort Knox | $ | (6.4 | ) | $ | (15.9 | ) | $ | 9.5 | 60% | $ | (20.4 | ) | $ | 24.3 | $ | (44.7 | ) | (184%) | ||||||||||||||
Round Mountain | 44.1 | 38.3 | 5.8 | 15% | 89.1 | 87.0 | 2.1 | 2% | ||||||||||||||||||||||||
Bald Mountain | (3.2 | ) | 28.8 | (32.0 | ) | (111%) | 5.4 | 84.7 | (79.3 | ) | (94%) | |||||||||||||||||||||
Paracatu | 88.0 | 18.8 | 69.2 | nm | 146.9 | 38.6 | 108.3 | nm | ||||||||||||||||||||||||
Maricunga | (1.2 | ) | 9.1 | (10.3 | ) | (113%) | (2.9 | ) | 21.0 | (23.9 | ) | (114%) | ||||||||||||||||||||
Kupol(a) | 57.1 | 50.9 | 6.2 | 12% | 117.9 | 106.5 | 11.4 | 11% | ||||||||||||||||||||||||
Tasiast | 22.1 | (25.5 | ) | 47.6 | 187% | 45.3 | (28.2 | ) | 73.5 | nm | ||||||||||||||||||||||
Chirano | (4.7 | ) | (2.0 | ) | (2.7 | ) | (135%) | (4.7 | ) | 2.4 | (7.1 | ) | nm | |||||||||||||||||||
Non-operating segment | ||||||||||||||||||||||||||||||||
Corporate and other(b) | (51.5 | ) | (56.2 | ) | 4.7 | 8% | (116.9 | ) | (112.1 | ) | (4.8 | ) | (4%) | |||||||||||||||||||
Total | $ | 144.3 | $ | 46.3 | $ | 98.0 | nm | $ | 259.7 | $ | 224.2 | $ | 35.5 | 16% |
(a) | The Kupol segment includes the Kupol and Dvoinoye mines. |
(b) | “Corporate and other" includes operating costs which are not directly related to individual mining properties such as overhead expenses, gains and losses on disposal of assets and investments, and other costs relating to corporate, shutdown, and other non-operating assets (including Kettle River-Buckhorn, La Coipa, and Lobo-Marte). |
(c) | “nm” means not meaningful. |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
2019 | 2018 | Change | % Change(c) | 2019 | 2018 | Change | % Change(c) | |||||||||||||||||||||||||
Operating Statistics | ||||||||||||||||||||||||||||||||
Tonnes ore mined (000's) | 4,829 | 4,620 | 209 | 5% | 10,625 | 13,695 | (3,070 | ) | (22%) | |||||||||||||||||||||||
Tonnes processed (000's)(a) | 5,251 | 7,385 | (2,134 | ) | (29%) | 11,102 | 16,334 | (5,232 | ) | (32%) | ||||||||||||||||||||||
Grade (grams/tonne)(b) | 0.59 | 0.44 | 0.15 | 34% | 0.65 | 0.57 | 0.08 | 14% | ||||||||||||||||||||||||
Recovery(b) | 81.1% | 79.5% | 1.6% | 2% | 82.3% | 80.9% | 1.4% | 2% | ||||||||||||||||||||||||
Gold equivalent ounces: | ||||||||||||||||||||||||||||||||
Produced | 55,440 | 71,463 | (16,023 | ) | (22%) | 93,053 | 151,391 | (58,338 | ) | (39%) | ||||||||||||||||||||||
Sold | 55,740 | 72,340 | (16,600 | ) | (23%) | 93,677 | 151,951 | (58,274 | ) | (38%) | ||||||||||||||||||||||
Financial Data (in millions) | ||||||||||||||||||||||||||||||||
Metal sales | $ | 72.7 | $ | 94.5 | $ | (21.8 | ) | (23%) | $ | 122.2 | $ | 200.5 | $ | (78.3 | ) | (39%) | ||||||||||||||||
Production cost of sales | 50.7 | 70.1 | (19.4 | ) | (28%) | 89.5 | 112.3 | (22.8 | ) | (20%) | ||||||||||||||||||||||
Depreciation, depletion and amortization | 22.6 | 38.8 | (16.2 | ) | (42%) | 40.6 | 61.8 | (21.2 | ) | (34%) | ||||||||||||||||||||||
(0.6 | ) | (14.4 | ) | 13.8 | 96% | (7.9 | ) | 26.4 | (34.3 | ) | (130%) | |||||||||||||||||||||
Other operating expense | 4.9 | 0.1 | 4.8 | nm | 11.4 | 0.1 | 11.3 | nm | ||||||||||||||||||||||||
Exploration and business development | 0.9 | 1.4 | (0.5 | ) | (36%) | 1.1 | 2.0 | (0.9 | ) | (45%) | ||||||||||||||||||||||
Segment operating (loss) earnings | $ | (6.4 | ) | $ | (15.9 | ) | $ | 9.5 | 60% | $ | (20.4 | ) | $ | 24.3 | $ | (44.7 | ) | (184%) |
(a) | Includes 3,440,000 and 7,735,000 tonnes placed on the heap leach pads during the second quarter and first six months of 2019, respectively (second quarter and first six months of 2018 - 4,279,000 and 10,118,000 tonnes, respectively). |
(b) | Amount represents mill grade and recovery only. Ore placed on the heap leach pads had an average grade of 0.20 and 0.21 grams per tonne during the second quarter and first six months of 2019, respectively (second quarter and first six months of 2018 - 0.18 and 0.19 grams per tonne, respectively). Due to the nature of heap leach operations, point-in-time recovery rates are not meaningful. |
(c) | "nm" means not meaningful. |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
2019 | 2018 | Change | % Change | 2019 | 2018 | Change | % Change | |||||||||||||||||||||||||
Operating Statistics | ||||||||||||||||||||||||||||||||
Tonnes ore mined (000's) | 4,074 | 4,721 | (647 | ) | (14%) | 7,978 | 12,614 | (4,636 | ) | (37%) | ||||||||||||||||||||||
Tonnes processed (000's)(a) | 4,819 | 5,214 | (395 | ) | (8%) | 9,221 | 14,221 | (5,000 | ) | (35%) | ||||||||||||||||||||||
Grade (grams/tonne)(b) | 1.17 | 1.44 | (0.27 | ) | (19%) | 1.24 | 1.53 | (0.29 | ) | (19%) | ||||||||||||||||||||||
Recovery(b) | 86.1% | 85.6% | 0.5% | 1% | 86.2% | 85.7% | 0.5% | 1% | ||||||||||||||||||||||||
Gold equivalent ounces: | ||||||||||||||||||||||||||||||||
Produced | 90,833 | 97,650 | (6,817 | ) | (7%) | 175,968 | 194,733 | (18,765 | ) | (10%) | ||||||||||||||||||||||
Sold | 87,106 | 95,432 | (8,326 | ) | (9%) | 170,720 | 193,213 | (22,493 | ) | (12%) | ||||||||||||||||||||||
Financial Data (in millions) | ||||||||||||||||||||||||||||||||
Metal sales | $ | 113.7 | $ | 124.9 | $ | (11.2 | ) | (9%) | $ | 222.6 | $ | 255.1 | $ | (32.5 | ) | (13%) | ||||||||||||||||
Production cost of sales | 57.8 | 72.0 | (14.2 | ) | (20%) | 113.8 | 138.6 | (24.8 | ) | (18%) | ||||||||||||||||||||||
Depreciation, depletion and amortization | 10.2 | 13.9 | (3.7 | ) | (27%) | 18.1 | 28.7 | (10.6 | ) | (37%) | ||||||||||||||||||||||
45.7 | 39.0 | 6.7 | 17% | 90.7 | 87.8 | 2.9 | 3% | |||||||||||||||||||||||||
Exploration and business development | 1.6 | 0.7 | 0.9 | 129% | 1.6 | 0.8 | 0.8 | 100% | ||||||||||||||||||||||||
Segment operating earnings | $ | 44.1 | $ | 38.3 | $ | 5.8 | 15% | $ | 89.1 | $ | 87.0 | $ | 2.1 | 2% |
(a) | Includes 3,910,000 and 7,467,000 tonnes placed on the heap leach pads during the second quarter and first six months of 2019 (second quarter and first six months of 2018 - 4,361,000 and 12,536,000 tonnes, respectively). |
(b) | Amount represents mill grade and recovery only. Ore placed on the heap leach pads had an average grade of 0.33 and 0.35 grams per tonne during the second quarter and first six months of 2019 (second quarter and first six months of 2018 - 0.37 and 0.31 grams per tonne, respectively). Due to the nature of heap leach operations, point-in-time recovery rates are not meaningful. |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
2019 | 2018 | Change | % Change | 2019 | 2018 | Change | % Change | |||||||||||||||||||||||||
Operating Statistics(a) | ||||||||||||||||||||||||||||||||
Tonnes ore mined (000's) | 3,725 | 7,109 | (3,384 | ) | (48%) | 6,384 | 12,442 | (6,058 | ) | (49%) | ||||||||||||||||||||||
Tonnes processed (000's) | 4,138 | 7,109 | (2,971 | ) | (42%) | 6,974 | 12,442 | (5,468 | ) | (44%) | ||||||||||||||||||||||
Grade (grams/tonne) | 0.36 | 0.48 | (0.12 | ) | (25%) | 0.41 | 0.44 | (0.03 | ) | (7%) | ||||||||||||||||||||||
Gold equivalent ounces: | ||||||||||||||||||||||||||||||||
Produced | 40,564 | 71,435 | (30,871 | ) | (43%) | 87,819 | 164,875 | (77,056 | ) | (47%) | ||||||||||||||||||||||
Sold | 31,547 | 60,730 | (29,183 | ) | (48%) | 74,777 | 158,872 | (84,095 | ) | (53%) | ||||||||||||||||||||||
Financial Data (in millions) | ||||||||||||||||||||||||||||||||
Metal sales | $ | 41.2 | $ | 79.5 | $ | (38.3 | ) | (48%) | $ | 97.6 | $ | 210.1 | $ | (112.5 | ) | (54%) | ||||||||||||||||
Production cost of sales | 27.0 | 27.7 | (0.7 | ) | (3%) | 56.2 | 73.8 | (17.6 | ) | (24%) | ||||||||||||||||||||||
Depreciation, depletion and amortization | 12.2 | 20.8 | (8.6 | ) | (41%) | 28.4 | 48.0 | (19.6 | ) | (41%) | ||||||||||||||||||||||
2.0 | 31.0 | (29.0 | ) | (94%) | 13.0 | 88.3 | (75.3 | ) | (85%) | |||||||||||||||||||||||
Other operating expense | 1.0 | 0.7 | 0.3 | 43% | 1.8 | 0.8 | 1.0 | 125% | ||||||||||||||||||||||||
Exploration and business development | 4.2 | 1.5 | 2.7 | 180% | 5.8 | 2.8 | 3.0 | 107% | ||||||||||||||||||||||||
Segment operating (loss) earnings | $ | (3.2 | ) | $ | 28.8 | $ | (32.0 | ) | (111%) | $ | 5.4 | $ | 84.7 | $ | (79.3 | ) | (94%) |
(a) | Due to the nature of heap leach operations, point-in-time recovery rates are not meaningful. |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
2019 | 2018 | Change | % Change(a) | 2019 | 2018 | Change | % Change(a) | |||||||||||||||||||||||||
Operating Statistics | ||||||||||||||||||||||||||||||||
Tonnes ore mined (000's) | 12,307 | 11,677 | 630 | 5% | 24,700 | 23,665 | 1,035 | 4% | ||||||||||||||||||||||||
Tonnes processed (000's) | 14,439 | 14,074 | 365 | 3% | 28,722 | 27,115 | 1,607 | 6% | ||||||||||||||||||||||||
Grade (grams/tonne) | 0.48 | 0.37 | 0.11 | 30% | 0.43 | 0.37 | 0.06 | 16% | ||||||||||||||||||||||||
Recovery | 80.4% | 75.4% | 5.0% | 7% | 80.2% | 76.3% | 3.9% | 5% | ||||||||||||||||||||||||
Gold equivalent ounces: | ||||||||||||||||||||||||||||||||
Produced | 186,167 | 121,226 | 64,941 | 54% | 332,943 | 249,426 | 83,517 | 33% | ||||||||||||||||||||||||
Sold | 186,520 | 117,043 | 69,477 | 59% | 332,917 | 245,322 | 87,595 | 36% | ||||||||||||||||||||||||
Financial Data (in millions) | ||||||||||||||||||||||||||||||||
Metal sales | $ | 242.8 | $ | 153.3 | $ | 89.5 | 58% | $ | 433.5 | $ | 323.7 | $ | 109.8 | 34% | ||||||||||||||||||
Production cost of sales | 106.8 | 100.4 | 6.4 | 6% | 201.7 | 216.3 | (14.6 | ) | (7%) | |||||||||||||||||||||||
Depreciation, depletion and amortization | 45.2 | 30.8 | 14.4 | 47% | 81.1 | 65.0 | 16.1 | 25% | ||||||||||||||||||||||||
90.8 | 22.1 | 68.7 | nm | 150.7 | 42.4 | 108.3 | nm | |||||||||||||||||||||||||
Other operating expense | 2.8 | 3.3 | (0.5 | ) | (15%) | 3.8 | 3.8 | - | 0% | |||||||||||||||||||||||
Segment operating earnings | $ | 88.0 | $ | 18.8 | $ | 69.2 | nm | $ | 146.9 | $ | 38.6 | $ | 108.3 | nm |
(a) | "nm" means not meaningful. |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
2019 | 2018 | Change | % Change(b) | 2019 | 2018 | Change | % Change(b) | |||||||||||||||||||||||||
Operating Statistics(a) | ||||||||||||||||||||||||||||||||
Tonnes ore mined (000's) | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Tonnes processed (000's) | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Grade (grams/tonne) | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Gold equivalent ounces: | ||||||||||||||||||||||||||||||||
Produced | 6,648 | 19,866 | (13,218 | ) | (67%) | 17,364 | 42,032 | (24,668 | ) | (59%) | ||||||||||||||||||||||
Sold | 9,474 | 17,764 | (8,290 | ) | (47%) | 17,098 | 40,118 | (23,020 | ) | (57%) | ||||||||||||||||||||||
Financial Data (in millions) | ||||||||||||||||||||||||||||||||
Metal sales | $ | 12.3 | $ | 23.1 | $ | (10.8 | ) | (47%) | $ | 22.2 | $ | 52.8 | $ | (30.6 | ) | (58%) | ||||||||||||||||
Production cost of sales | 8.0 | 11.7 | (3.7 | ) | (32%) | 12.8 | 27.2 | (14.4 | ) | (53%) | ||||||||||||||||||||||
Depreciation, depletion and amortization | 0.5 | 0.8 | (0.3 | ) | (38%) | 0.9 | 2.3 | (1.4 | ) | (61%) | ||||||||||||||||||||||
3.8 | 10.6 | (6.8 | ) | (64%) | 8.5 | 23.3 | (14.8 | ) | (64%) | |||||||||||||||||||||||
Other operating expense | 5.0 | 1.5 | 3.5 | nm | 11.4 | 2.3 | 9.1 | nm | ||||||||||||||||||||||||
Segment operating (loss) earnings | $ | (1.2 | ) | $ | 9.1 | $ | (10.3 | ) | (113%) | $ | (2.9 | ) | $ | 21.0 | $ | (23.9 | ) | (114%) |
(a) | Due to the nature of heap leach operations, point-in-time recovery rates are not meaningful. |
(b) | "nm" means not meaningful. |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
2019 | 2018 | Change | % Change | 2019 | 2018 | Change | % Change | |||||||||||||||||||||||||
Operating Statistics | ||||||||||||||||||||||||||||||||
Tonnes ore mined (000's)(b) | 431 | 412 | 19 | 5% | 793 | 824 | (31 | ) | (4%) | |||||||||||||||||||||||
Tonnes processed (000's) | 432 | 430 | 2 | 0% | 857 | 857 | - | 0% | ||||||||||||||||||||||||
Grade (grams/tonne): | ||||||||||||||||||||||||||||||||
Gold | 9.23 | 8.42 | 0.81 | 10% | 9.42 | 8.50 | 0.92 | 11% | ||||||||||||||||||||||||
Silver | 75.29 | 68.65 | 6.64 | 10% | 72.47 | 69.00 | 3.47 | 5% | ||||||||||||||||||||||||
Recovery: | ||||||||||||||||||||||||||||||||
Gold | 93.5% | 94.7% | (1.2%) | (1%) | 93.3% | 94.7% | (1.4%) | (1%) | ||||||||||||||||||||||||
Silver | 84.9% | 84.0% | 0.9% | 1% | 83.5% | 82.5% | 1.0% | 1% | ||||||||||||||||||||||||
Gold equivalent ounces:(c) | ||||||||||||||||||||||||||||||||
Produced | 127,684 | 120,418 | 7,266 | 6% | 257,772 | 240,599 | 17,173 | 7% | ||||||||||||||||||||||||
Sold | 124,873 | 124,179 | 694 | 1% | 255,287 | 246,803 | 8,484 | 3% | ||||||||||||||||||||||||
Silver ounces: | ||||||||||||||||||||||||||||||||
Produced (000's) | 836 | 774 | 62 | 8% | 1,608 | 1,614 | (6 | ) | 0% | |||||||||||||||||||||||
Sold (000's) | 733 | 798 | (65 | ) | (8%) | 1,558 | 1,624 | (66 | ) | (4%) | ||||||||||||||||||||||
Financial Data (in millions) | ||||||||||||||||||||||||||||||||
Metal sales | $ | 163.4 | $ | 161.9 | $ | 1.5 | 1% | $ | 333.3 | $ | 324.8 | $ | 8.5 | 3% | ||||||||||||||||||
Production cost of sales | 70.2 | 73.6 | (3.4 | ) | (5%) | 148.2 | 138.2 | 10.0 | 7% | |||||||||||||||||||||||
Depreciation, depletion and amortization | 30.7 | 33.0 | (2.3 | ) | (7%) | 58.1 | 71.4 | (13.3 | ) | (19%) | ||||||||||||||||||||||
62.5 | 55.3 | 7.2 | 13% | 127.0 | 115.2 | 11.8 | 10% | |||||||||||||||||||||||||
Other | (0.5 | ) | (0.2 | ) | (0.3 | ) | (150%) | (0.5 | ) | (0.2 | ) | (0.3 | ) | (150%) | ||||||||||||||||||
Exploration and business development | 5.9 | 4.6 | 1.3 | 28% | 9.6 | 8.9 | 0.7 | 8% | ||||||||||||||||||||||||
Segment operating earnings | $ | 57.1 | $ | 50.9 | $ | 6.2 | 12% | $ | 117.9 | $ | 106.5 | $ | 11.4 | 11% |
(a) | The Kupol segment includes the Kupol and Dvoinoye mines. |
(b) | Includes 121,000 and 191,000 tonnes of ore mined from Dvoinoye during the second quarter and first six months of 2019, respectively (second quarter and six months of 2018 - 121,000 and 258,000 tonnes, respectively). |
(c) | "Gold equivalent ounces" include silver ounces produced and sold converted to a gold equivalent based on a ratio of the average spot market prices for the commodities for each period. The ratio for the second quarter of 2019 was 87.98:1 (second quarter of 2018 - 79.00:1). The ratio for the first six months of 2019 was 85.78:1 (first six months of 2018 - 79.12:1). |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
2019 | 2018 | Change | % Change(c) | 2019 | 2018 | Change | % Change(c) | |||||||||||||||||||||||||
Operating Statistics | ||||||||||||||||||||||||||||||||
Tonnes ore mined (000's) | 819 | 966 | (147 | ) | (15%) | 2,781 | 2,752 | 29 | 1% | |||||||||||||||||||||||
Tonnes processed (000's)(a) | 1,281 | 1,505 | (224 | ) | (15%) | 2,550 | 2,520 | 30 | 1% | |||||||||||||||||||||||
Grade (grams/tonne)(b) | 2.19 | 1.88 | 0.31 | 16% | 2.28 | 2.07 | 0.21 | 10% | ||||||||||||||||||||||||
Recovery(b) | 97.1% | 91.4% | 5.7% | 6% | 97.1% | 92.2% | 4.9% | 5% | ||||||||||||||||||||||||
Gold equivalent ounces: | ||||||||||||||||||||||||||||||||
Produced | 92,901 | 47,276 | 45,625 | 97% | 194,259 | 106,054 | 88,205 | 83% | ||||||||||||||||||||||||
Sold | 94,748 | 48,409 | 46,339 | 96% | 194,506 | 108,912 | 85,594 | 79% | ||||||||||||||||||||||||
Financial Data (in millions) | ||||||||||||||||||||||||||||||||
Metal sales | $ | 123.6 | $ | 63.2 | $ | 60.4 | 96% | $ | 253.9 | $ | 143.5 | $ | 110.4 | 77% | ||||||||||||||||||
Production cost of sales | 58.9 | 54.8 | 4.1 | 7% | 124.9 | 101.6 | 23.3 | 23% | ||||||||||||||||||||||||
Depreciation, depletion and amortization | 32.2 | 18.9 | 13.3 | 70% | 63.2 | 37.9 | 25.3 | 67% | ||||||||||||||||||||||||
32.5 | (10.5 | ) | 43.0 | nm | 65.8 | 4.0 | 61.8 | nm | ||||||||||||||||||||||||
Other operating expense | 10.0 | 13.6 | (3.6 | ) | (26%) | 19.7 | 29.6 | (9.9 | ) | (33%) | ||||||||||||||||||||||
Exploration and business development | 0.4 | 1.4 | (1.0 | ) | (71%) | 0.8 | 2.6 | (1.8 | ) | (69%) | ||||||||||||||||||||||
Segment operating earnings (loss) | $ | 22.1 | $ | (25.5 | ) | $ | 47.6 | 187% | $ | 45.3 | $ | (28.2 | ) | $ | 73.5 | nm |
(a) | No ore was placed on the dump leach pads during the first six months of 2019 (second quarter and first six months of 2018 - 755,000 and 1,034,000 tonnes, respectively). |
(b) | Amount represents mill grade and recovery only. Ore placed on the dump leach pads had an average grade of 0.29 and 0.31 grams per tonne during the second quarter and first six months of 2018, respectively. Due to the nature of dump leach operations, point-in-time recovery rates are not meaningful. |
(c) | "nm" means not meaningful. |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
2019 | 2018 | Change | % Change | 2019 | 2018 | Change | % Change(b) | |||||||||||||||||||||||||
Operating Statistics | ||||||||||||||||||||||||||||||||
Tonnes ore mined (000's) | 619 | 458 | 161 | 35% | 1,118 | 981 | 137 | 14% | ||||||||||||||||||||||||
Tonnes processed (000's) | 904 | 873 | 31 | 4% | 1,812 | 1,758 | 54 | 3% | ||||||||||||||||||||||||
Grade (grams/tonne) | 1.95 | 2.23 | (0.28 | ) | (13%) | 1.96 | 2.28 | (0.32 | ) | (14%) | ||||||||||||||||||||||
Recovery | 92.1% | 92.3% | (0.2%) | 0% | 91.9% | 92.3% | (0.4%) | 0% | ||||||||||||||||||||||||
Gold equivalent ounces: | ||||||||||||||||||||||||||||||||
Produced | 53,349 | 58,572 | (5,223 | ) | (9%) | 105,671 | 118,751 | (13,080 | ) | (11%) | ||||||||||||||||||||||
Sold | 51,141 | 57,399 | (6,258 | ) | (11%) | 105,224 | 121,839 | (16,615 | ) | (14%) | ||||||||||||||||||||||
Financial Data (in millions) | ||||||||||||||||||||||||||||||||
Metal sales | $ | 68.1 | $ | 74.6 | $ | (6.5 | ) | (9%) | $ | 138.7 | $ | 160.6 | $ | (21.9 | ) | (14%) | ||||||||||||||||
Production cost of sales | 46.7 | 44.6 | 2.1 | 5% | 90.7 | 91.5 | (0.8 | ) | (1%) | |||||||||||||||||||||||
Depreciation, depletion and amortization | 23.8 | 31.4 | (7.6 | ) | (24%) | 49.2 | 64.7 | (15.5 | ) | (24%) | ||||||||||||||||||||||
(2.4 | ) | (1.4 | ) | (1.0 | ) | (71%) | (1.2 | ) | 4.4 | (5.6 | ) | (127%) | ||||||||||||||||||||
Other operating expense | - | (0.5 | ) | 0.5 | nm | - | (0.1 | ) | 0.1 | nm | ||||||||||||||||||||||
Exploration and business development | 2.3 | 1.1 | 1.2 | 109% | 3.5 | 2.1 | 1.4 | 67% | ||||||||||||||||||||||||
Segment operating (loss) earnings | $ | (4.7 | ) | $ | (2.0 | ) | $ | (2.7 | ) | (135%) | $ | (4.7 | ) | $ | 2.4 | $ | (7.1 | ) | nm |
(a) | Operating and financial data are at 100% for all periods. |
(b) | "nm" means not meaningful. |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
(in millions) | 2019 | 2018 | Change | % Change | 2019 | 2018 | Change | % Change | ||||||||||||||||||||||||
Exploration and business development | $ | 28.4 | $ | 23.8 | $ | 4.6 | 19% | $ | 47.9 | $ | 44.3 | $ | 3.6 | 8% |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
(in millions) | 2019 | 2018 | Change | % Change | 2019 | 2018 | Change | % Change | ||||||||||||||||||||||||
General and administrative | $ | 29.6 | $ | 30.3 | $ | (0.7 | ) | (2%) | $ | 72.2 | $ | 66.0 | $ | 6.2 | 9% |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
(in millions) | 2019 | 2018 | Change | % Change(a) | 2019 | 2018 | Change | % Change(a) | ||||||||||||||||||||||||
Gains (loss) on dispositions of other assets - net | $ | 0.8 | $ | (0.9 | ) | $ | 1.7 | 189% | $ | 1.6 | $ | (0.1 | ) | $ | 1.7 | nm | ||||||||||||||||
Foreign exchange gains (losses) - net | (4.1 | ) | 3.4 | (7.5 | ) | nm | (2.0 | ) | 3.9 | (5.9 | ) | (151%) | ||||||||||||||||||||
Non-hedge derivative gains (losses) - net | 0.7 | (0.6 | ) | 1.3 | nm | 1.1 | (0.9 | ) | 2.0 | nm | ||||||||||||||||||||||
Other | - | (0.1 | ) | 0.1 | nm | (0.6 | ) | 4.8 | (5.4 | ) | (113%) | |||||||||||||||||||||
Other income (expense) - net | $ | (2.6 | ) | $ | 1.8 | $ | (4.4 | ) | nm | $ | 0.1 | $ | 7.7 | $ | (7.6 | ) | (99%) |
(a) | "nm" means not meaningful. |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
(in millions) | 2019 | 2018 | Change | % Change | 2019 | 2018 | Change | % Change | ||||||||||||||||||||||||
Accretion of reclamation and remediation obligations | $ | 7.8 | $ | 7.3 | $ | 0.5 | 7% | $ | 15.5 | $ | 14.5 | $ | 1.0 | 7% | ||||||||||||||||||
Interest expense, including accretion of debt and lease liabilities | 18.3 | 17.4 | 0.9 | 5% | 38.1 | 37.1 | 1.0 | 3% | ||||||||||||||||||||||||
Finance expense | $ | 26.1 | $ | 24.7 | $ | 1.4 | 6% | $ | 53.6 | $ | 51.6 | $ | 2.0 | 4% |
6. | LIQUIDITY AND CAPITAL RESOURCES |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
(in millions) | 2019 | 2018 | Change | % Change(a) | 2019 | 2018 | Change | % Change(a) | ||||||||||||||||||||||||
Cash Flow: | ||||||||||||||||||||||||||||||||
Provided from operating activities | $ | 333.0 | $ | 184.5 | $ | 148.5 | 80% | $ | 584.6 | $ | 478.0 | $ | 106.6 | 22% | ||||||||||||||||||
Used in investing activities | (280.4 | ) | (259.0 | ) | (21.4 | ) | (8%) | (580.4 | ) | (550.4 | ) | (30.0 | ) | (5%) | ||||||||||||||||||
Provided from (used in) financing activities | 14.6 | - | 14.6 | nm | 119.2 | (29.6 | ) | 148.8 | nm | |||||||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 1.3 | (4.7 | ) | 6.0 | nm | 3.0 | (5.1 | ) | 8.1 | 159% | ||||||||||||||||||||||
Increase (decrease) in cash and cash equivalents | 68.5 | (79.2 | ) | 147.7 | nm | 126.4 | (107.1 | ) | 233.5 | nm | ||||||||||||||||||||||
Cash and cash equivalents, beginning of period | 406.9 | 997.9 | (591.0 | ) | (59%) | 349.0 | 1,025.8 | (676.8 | ) | (66%) | ||||||||||||||||||||||
Cash and cash equivalents, end of period | $ | 475.4 | $ | 918.7 | $ | (443.3 | ) | (48%) | $ | 475.4 | $ | 918.7 | $ | (443.3 | ) | (48%) |
(a) | “nm” means not meaningful. |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
(in millions) | 2019 | 2018 | Change | % Change(c) | 2019 | 2018 | Change | % Change(c) | ||||||||||||||||||||||||
Operating segments | ||||||||||||||||||||||||||||||||
Fort Knox | $ | 35.0 | $ | 16.8 | $ | 18.2 | 108% | $ | 63.9 | $ | 26.4 | $ | 37.5 | 142% | ||||||||||||||||||
Round Mountain | 58.9 | 43.6 | 15.3 | 35% | 123.1 | 70.0 | 53.1 | 76% | ||||||||||||||||||||||||
Bald Mountain | 57.5 | 44.9 | 12.6 | 28% | 122.1 | 65.3 | 56.8 | 87% | ||||||||||||||||||||||||
Paracatu | 34.6 | 23.7 | 10.9 | 46% | 51.1 | 39.2 | 11.9 | 30% | ||||||||||||||||||||||||
Maricunga | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Kupol(a) | 8.2 | 11.2 | (3.0 | ) | (27%) | 16.4 | 22.0 | (5.6 | ) | (25%) | ||||||||||||||||||||||
Tasiast | 75.2 | 101.4 | (26.2 | ) | (26%) | 150.9 | 259.2 | (108.3 | ) | (42%) | ||||||||||||||||||||||
Chirano | 2.7 | 5.0 | (2.3 | ) | (46%) | 6.0 | 11.4 | (5.4 | ) | (47%) | ||||||||||||||||||||||
Non-operating segment | ||||||||||||||||||||||||||||||||
Corporate and other(b) | 4.6 | 0.5 | 4.1 | nm | 8.0 | 0.5 | 7.5 | nm | ||||||||||||||||||||||||
Total | $ | 276.7 | $ | 247.1 | $ | 29.6 | 12% | $ | 541.5 | $ | 494.0 | $ | 47.5 | 10% |
(a) | Includes $2.2 million and $4.7 million of capital expenditures at Dvoinoye during the second quarter and first six months of 2019, respectively (second quarter and first six months of 2018 - $2.9 million and $5.5 million, respectively). |
(b) | "Corporate and other” includes corporate and other non-operating assets (including Kettle River-Buckhorn, La Coipa and Lobo-Marte). |
(c) | "nm" means not meaningful. |
As at, | ||||||||
June 30, | December 31, | |||||||
(in millions) | 2019 | 2018 | ||||||
Cash and cash equivalents | $ | 475.4 | $ | 349.0 | ||||
Current assets | $ | 1,661.5 | $ | 1,597.9 | ||||
Total assets | $ | 8,407.3 | $ | 8,063.8 | ||||
Current liabilities | $ | 576.5 | $ | 612.4 | ||||
Total long-term financial liabilities(a) | $ | 2,766.4 | $ | 2,551.4 | ||||
Total debt | $ | 1,891.2 | $ | 1,735.0 | ||||
Total liabilities | $ | 3,687.5 | $ | 3,536.5 | ||||
Common shareholders' equity | $ | 4,699.7 | $ | 4,506.7 | ||||
Non-controlling interest | $ | 20.1 | $ | 20.6 | ||||
Statistics | ||||||||
Working capital(b) | $ | 1,085.0 | $ | 985.5 | ||||
Working capital ratio(c) | 2.88:1 | 2.61:1 |
(a) | Includes long-term debt and credit facilities, provisions, and long-term lease liabilities. |
(b) | Calculated as current assets less current liabilities. |
(c) | Calculated as current assets divided by current liabilities. |
Type of credit | |
Dollar based LIBOR loan: | |
Revolving credit facility | LIBOR plus 1.70% |
Letters of credit | 1.13-1.70% |
Standby fee applicable to unused availability | 0.34% |
As at, | ||||||||
June 30, | December 31, | |||||||
(in millions) | 2019 | 2018 | ||||||
Utilization of revolving credit facility | $ | (175.0 | ) | $ | (19.7 | ) | ||
Utilization of EDC facility | (227.8 | ) | (227.4 | ) | ||||
Borrowings | $ | (402.8 | ) | $ | (247.1 | ) | ||
Available under revolving credit facility | $ | 1,325.0 | $ | 1,480.3 | ||||
Available under EDC credit facility | 72.2 | 72.6 | ||||||
Available credit | $ | 1,397.2 | $ | 1,552.9 |
Foreign currency | 2019 | 2020 | 2021 | 2022 | ||||||||||||
Brazilian real forward buy contracts (in millions of U.S. dollars) | $ | 18.0 | $ | - | $ | - | $ | - | ||||||||
Average price (Brazilian reais) | 3.69 | - | - | - | ||||||||||||
Brazilian real zero cost collars (in millions of U.S. dollars) | $ | 67.2 | $ | 116.0 | $ | 52.0 | $ | 6.6 | ||||||||
Average put strike (Brazilian reais) | 3.46 | 3.76 | 4.13 | 4.20 | ||||||||||||
Average call strike (Brazilian reais) | 3.86 | 4.23 | 4.72 | 4.85 | ||||||||||||
Canadian dollar forward buy contracts (in millions of U.S. dollars) | $ | 28.5 | $ | 14.4 | $ | - | $ | - | ||||||||
Average rate (Canadian dollars) | 1.28 | 1.31 | - | - | ||||||||||||
Russian rouble zero cost collars (in millions of U.S. dollars) | $ | 27.0 | $ | 27.3 | $ | 15.6 | $ | - | ||||||||
Average put strike (Russian roubles) | 58.9 | 65.0 | 65.0 | - | ||||||||||||
Average call strike (Russian roubles) | 71.6 | 78.2 | 84.0 | - | ||||||||||||
Energy | ||||||||||||||||
WTI oil swap contracts (barrels) | 414,600 | 590,400 | 279,000 | 26,100 | ||||||||||||
Average price | $ | 52.03 | $ | 56.21 | $ | 55.89 | $ | 50.95 |
· | $66.6 million of Brazilian real zero cost collars, maturing from 2020 to 2022, with average put and call strikes of 4.07 and 4.60, respectively; |
· | $29.4 million of Russian rouble zero cost collars, maturing from 2020 to 2021, with average put and call strikes of 65.0 and 81.2, respectively; and |
· | 131,100 barrels of WTI oil swap contracts at an average rate of $50.99 per barrel maturing from 2021 to 2022. |
As at, | ||||||||
June 30, | December 31, | |||||||
(in millions) | 2019 | 2018 | ||||||
Asset (liability) | ||||||||
Foreign currency forward and collar contracts | $ | (1.2 | ) | $ | (21.8 | ) | ||
Energy swap contracts | 1.7 | (8.6 | ) | |||||
Total return swap contracts | 2.3 | 3.2 | ||||||
$ | 2.8 | $ | (27.2 | ) |
7. | SUMMARY OF QUARTERLY INFORMATION |
2019 | 2018 | 2017 | ||||||||||||||||||||||||||||||
(in millions, except per share amounts) | Q2 | �� | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | |||||||||||||||||||||||
Metal sales | $ | 837.8 | $ | 786.2 | $ | 786.5 | $ | 753.9 | $ | 775.0 | $ | 897.2 | $ | 810.3 | $ | 828.0 | ||||||||||||||||
Net earnings (loss) attributable to common shareholders | $ | 71.5 | $ | 64.7 | $ | (27.7 | ) | $ | (104.4 | ) | $ | 2.4 | $ | 106.1 | $ | 217.6 | $ | 60.1 | ||||||||||||||
Basic earnings (loss) per share attributable to common shareholders | $ | 0.06 | $ | 0.05 | $ | (0.02 | ) | $ | (0.08 | ) | $ | 0.00 | $ | 0.09 | $ | 0.17 | $ | 0.05 | ||||||||||||||
Diluted earnings (loss) per share attributable to common shareholders | $ | 0.06 | $ | 0.05 | $ | (0.02 | ) | $ | (0.08 | ) | $ | 0.00 | $ | 0.08 | $ | 0.17 | $ | 0.05 | ||||||||||||||
Net cash flow provided from operating activities | $ | 333.0 | $ | 251.6 | $ | 183.5 | $ | 127.2 | $ | 184.5 | $ | 293.5 | $ | 366.4 | $ | 197.7 |
8. | DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING |
9. | CRITICAL ACCOUNTING POLICIES, ESTIMATES AND ACCOUNTING CHANGES |
10. | RISK ANALYSIS |
11. | SUPPLEMENTAL INFORMATION |
(in millions, except per share amounts) | Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net earnings attributable to common shareholders - as reported | $ | 71.5 | $ | 2.4 | $ | 136.2 | $ | 108.5 | ||||||||
Adjusting items: | ||||||||||||||||
Foreign exchange losses (gains) | 4.1 | (3.4 | ) | 2.0 | (3.9 | ) | ||||||||||
Foreign exchange (gains) losses on translation of tax basis and foreign exchange on deferred income taxes within income tax expense | (5.6 | ) | 28.1 | (6.8 | ) | 28.3 | ||||||||||
Taxes in respect of prior periods | 5.7 | (0.1 | ) | 11.4 | 20.0 | |||||||||||
Reclamation and remediation expense | - | 4.5 | - | 4.5 | ||||||||||||
Tasiast Phase One commissioning costs | - | 6.4 | - | 6.4 | ||||||||||||
Fort Knox pit wall slide related costs | 4.9 | - | 11.4 | - | ||||||||||||
Restructuring costs | - | - | 9.2 | - | ||||||||||||
Other | 0.3 | 1.5 | 2.2 | 1.0 | ||||||||||||
Tax effect of the above adjustments | (1.3 | ) | (1.6 | ) | (2.7 | ) | (1.8 | ) | ||||||||
8.1 | 35.4 | 26.7 | 54.5 | |||||||||||||
Adjusted net earnings attributable to common shareholders | $ | 79.6 | $ | 37.8 | $ | 162.9 | $ | 163.0 | ||||||||
Weighted average number of common shares outstanding - Basic | 1,252.3 | 1,250.2 | 1,251.5 | 1,248.7 | ||||||||||||
Adjusted net earnings per share | $ | 0.06 | $ | 0.03 | $ | 0.13 | $ | 0.13 | ||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Net cash flow provided from operating activities - as reported | $ | 333.0 | $ | 184.5 | $ | 584.6 | $ | 478.0 | ||||||||
Adjusting items: | ||||||||||||||||
Working capital changes: | ||||||||||||||||
Accounts receivable and other assets | 40.3 | 41.7 | 25.7 | 44.1 | ||||||||||||
Inventories | (12.6 | ) | (21.2 | ) | (50.0 | ) | 1.8 | |||||||||
Accounts payable and other liabilities, including income taxes paid | (73.0 | ) | 26.5 | (41.8 | ) | 71.3 | ||||||||||
(45.3 | ) | 47.0 | (66.1 | ) | 117.2 | |||||||||||
Adjusted operating cash flow | $ | 287.7 | $ | 231.5 | $ | 518.5 | $ | 595.2 | ||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
(in millions, except ounces and production cost of sales per equivalent ounce) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Production cost of sales - as reported | $ | 426.1 | $ | 454.9 | $ | 837.8 | $ | 899.5 | ||||||||
Less: portion attributable to Chirano non-controlling interest(a) | (4.7 | ) | (4.5 | ) | (9.1 | ) | (9.2 | ) | ||||||||
Attributable(b) production cost of sales | $ | 421.4 | $ | 450.4 | $ | 828.7 | $ | 890.3 | ||||||||
Gold equivalent ounces sold | 641,149 | 593,296 | 1,244,206 | 1,267,957 | ||||||||||||
Less: portion attributable to Chirano non-controlling interest(j) | (5,114 | ) | (5,740 | ) | (10,522 | ) | (12,184 | ) | ||||||||
Attributable(b) gold equivalent ounces sold | 636,035 | 587,556 | 1,233,684 | 1,255,773 | ||||||||||||
Consolidated production cost of sales per equivalent ounce sold | $ | 665 | $ | 767 | $ | 673 | $ | 709 | ||||||||
Attributable(b) production cost of sales per equivalent ounce sold | $ | 663 | $ | 767 | $ | 672 | $ | 709 | ||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
(in millions, except ounces and production cost of sales per ounce) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Production cost of sales - as reported | $ | 426.1 | $ | 454.9 | $ | 837.8 | $ | 899.5 | ||||||||
Less: portion attributable to Chirano non-controlling interest(a) | (4.7 | ) | (4.5 | ) | (9.1 | ) | (9.2 | ) | ||||||||
Less: attributable(b) silver revenue(c) | (15.5 | ) | (17.2 | ) | (32.6 | ) | (35.5 | ) | ||||||||
Attributable(b) production cost of sales net of silver by-product revenue | $ | 405.9 | $ | 433.2 | $ | 796.1 | $ | 854.8 | ||||||||
Gold ounces sold | 629,206 | 580,173 | 1,219,031 | 1,241,057 | ||||||||||||
Less: portion attributable to Chirano non-controlling interest(j) | (5,108 | ) | (5,729 | ) | (10,506 | ) | (12,162 | ) | ||||||||
Attributable(b) gold ounces sold | 624,098 | 574,444 | 1,208,525 | 1,228,895 | ||||||||||||
Attributable(b) production cost of sales per ounce sold on a by-product basis | $ | 650 | $ | 754 | $ | 659 | $ | 696 | ||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
(in millions, except ounces and costs per ounce) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Production cost of sales - as reported | $ | 426.1 | $ | 454.9 | $ | 837.8 | $ | 899.5 | ||||||||
Less: portion attributable to Chirano non-controlling interest(a) | (4.7 | ) | (4.5 | ) | (9.1 | ) | (9.2 | ) | ||||||||
Less: attributable(b) silver revenue(c) | (15.5 | ) | (17.2 | ) | (32.6 | ) | (35.5 | ) | ||||||||
Attributable(b) production cost of sales net of silver by-product revenue | $ | 405.9 | $ | 433.2 | $ | 796.1 | $ | 854.8 | ||||||||
Adjusting items on an attributable(b) basis: | ||||||||||||||||
General and administrative(d) | 29.6 | 30.3 | 63.0 | 66.0 | ||||||||||||
Other operating expense - sustaining(e) | 6.0 | 9.6 | 11.5 | 16.4 | ||||||||||||
Reclamation and remediation - sustaining(f) | 11.9 | 13.6 | 23.3 | 28.8 | ||||||||||||
Exploration and business development - sustaining(g) | 18.2 | 13.6 | 32.1 | 25.9 | ||||||||||||
Additions to property, plant and equipment - sustaining(h) | 97.8 | 80.6 | 176.2 | 135.7 | ||||||||||||
Lease payments - sustaining(i) | 3.5 | - | 6.4 | - | ||||||||||||
All-in Sustaining Cost on a by-product basis - attributable(b) | $ | 572.9 | $ | 580.9 | $ | 1,108.6 | $ | 1,127.6 | ||||||||
Other operating expense - non-sustaining(e) | 12.0 | 13.5 | 28.2 | 21.6 | ||||||||||||
Reclamation and remediation - non-sustaining(f) | 1.8 | 1.4 | 3.5 | 2.7 | ||||||||||||
Exploration - non-sustaining(g) | 10.0 | 10.1 | 15.5 | 18.2 | ||||||||||||
Additions to property, plant and equipment - non-sustaining(h) | 177.8 | 165.3 | 342.5 | 336.8 | ||||||||||||
Lease payments - non-sustaining(i) | 0.4 | - | 0.8 | - | ||||||||||||
All-in Cost on a by-product basis - attributable(b) | $ | 774.9 | $ | 771.2 | $ | 1,499.1 | $ | 1,506.9 | ||||||||
Gold ounces sold | 629,206 | 580,173 | 1,219,031 | 1,241,057 | ||||||||||||
Less: portion attributable to Chirano non-controlling interest(j) | (5,108 | ) | (5,729 | ) | (10,506 | ) | (12,162 | ) | ||||||||
Attributable(b) gold ounces sold | 624,098 | 574,444 | 1,208,525 | 1,228,895 | ||||||||||||
Attributable(b) all-in sustaining cost per ounce sold on a by-product basis | $ | 918 | $ | 1,011 | $ | 917 | $ | 918 | ||||||||
Attributable(b) all-in cost per ounce sold on a by-product basis | $ | 1,242 | $ | 1,343 | $ | 1,240 | $ | 1,226 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
(in millions, except ounces and costs per equivalent ounce) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Production cost of sales - as reported | $ | 426.1 | $ | 454.9 | $ | 837.8 | $ | 899.5 | ||||||||
Less: portion attributable to Chirano non-controlling interest(a) | (4.7 | ) | (4.5 | ) | (9.1 | ) | (9.2 | ) | ||||||||
Attributable(b) production cost of sales | $ | 421.4 | $ | 450.4 | $ | 828.7 | $ | 890.3 | ||||||||
Adjusting items on an attributable(b) basis: | ||||||||||||||||
General and administrative(d) | 29.6 | 30.3 | 63.0 | 66.0 | ||||||||||||
Other operating expense - sustaining(e) | 6.0 | 9.6 | 11.5 | 16.4 | ||||||||||||
Reclamation and remediation - sustaining(f) | 11.9 | 13.6 | 23.3 | 28.8 | ||||||||||||
Exploration and business development - sustaining(g) | 18.2 | 13.6 | 32.1 | 25.9 | ||||||||||||
Additions to property, plant and equipment - sustaining(h) | 97.8 | 80.6 | 176.2 | 135.7 | ||||||||||||
Lease payments - sustaining(i) | 3.5 | - | 6.4 | - | ||||||||||||
All-in Sustaining Cost - attributable(b) | $ | 588.4 | $ | 598.1 | $ | 1,141.2 | $ | 1,163.1 | ||||||||
Other operating expense - non-sustaining(e) | 12.0 | 13.5 | 28.2 | 21.6 | ||||||||||||
Reclamation and remediation - non-sustaining(f) | 1.8 | 1.4 | 3.5 | 2.7 | ||||||||||||
Exploration - non-sustaining(g) | 10.0 | 10.1 | 15.5 | 18.2 | ||||||||||||
Additions to property, plant and equipment - non-sustaining(h) | 177.8 | 165.3 | 342.5 | 336.8 | ||||||||||||
Lease payments - non-sustaining(i) | 0.4 | - | 0.8 | - | ||||||||||||
All-in Cost - attributable(b) | $ | 790.4 | $ | 788.4 | $ | 1,531.7 | $ | 1,542.4 | ||||||||
Gold equivalent ounces sold | 641,149 | 593,296 | 1,244,206 | 1,267,957 | ||||||||||||
Less: portion attributable to Chirano non-controlling interest(j) | (5,114 | ) | (5,740 | ) | (10,522 | ) | (12,184 | ) | ||||||||
Attributable(b) gold equivalent ounces sold | 636,035 | 587,556 | 1,233,684 | 1,255,773 | ||||||||||||
Attributable(b) all-in sustaining cost per equivalent ounce sold | $ | 925 | $ | 1,018 | $ | 925 | $ | 926 | ||||||||
Attributable(b) all-in cost per equivalent ounce sold | $ | 1,243 | $ | 1,342 | $ | 1,242 | $ | 1,228 |
(a) | The portion attributable to Chirano non-controlling interest represents the non-controlling interest (10%) in the production cost of sales for the Chirano mine. |
(b) | “Attributable” includes Kinross' share of Chirano (90%) production. |
(c) | “Attributable silver revenue” represents the attributable portion of metal sales realized from the production of the secondary or by-product metal (i.e. silver). Revenue from the sale of silver, which is produced as a by-product of the process used to produce gold, effectively reduces the cost of gold production. |
(d) | “General and administrative” expenses is as reported on the interim condensed consolidated statement of operations, net of certain restructuring expenses. General and administrative expenses are considered sustaining costs as they are required to be absorbed on a continuing basis for the effective operation and governance of the Company. |
(e) | “Other operating expense – sustaining” is calculated as “Other operating expense” as reported on the interim condensed consolidated statement of operations, less other operating and reclamation and remediation expenses related to non-sustaining activities as well as other items not reflective of the underlying operating performance of our business. Other operating expenses are classified as either sustaining or non-sustaining based on the type and location of the expenditure incurred. The majority of other operating expenses that are incurred at existing operations are considered costs necessary to sustain operations, and are therefore classified as sustaining. Other operating expenses incurred at locations where there is no current operation or related to other non-sustaining activities are classified as non-sustaining. |
(f) | “Reclamation and remediation - sustaining” is calculated as current period accretion related to reclamation and remediation obligations plus current period amortization of the corresponding reclamation and remediation assets, and is intended to reflect the periodic cost of reclamation and remediation for currently operating mines. Reclamation and remediation costs for development projects or closed mines are excluded from this amount and classified as non-sustaining. |
(g) | “Exploration and business development – sustaining” is calculated as “Exploration and business development” expenses as reported on the interim condensed consolidated statement of operations, less non-sustaining exploration expenses. Exploration expenses are classified as either sustaining or non-sustaining based on a determination of the type and location of the exploration expenditure. Exploration expenditures within the footprint of operating mines are considered costs required to sustain current operations and so are included in sustaining costs. Exploration expenditures focused on new ore bodies near existing mines (i.e. brownfield), new exploration projects (i.e. greenfield) or for other generative exploration activity not linked to existing mining operations are classified as non-sustaining. Business development expenses are considered sustaining costs as they are required for general operations. |
(h) | “Additions to property, plant and equipment – sustaining” represents the majority of capital expenditures at existing operations including capitalized exploration costs, capitalized stripping and underground mine development costs, ongoing replacement of mine equipment and other capital facilities and other capital expenditures and is calculated as total additions to property, plant and equipment (as reported on the interim condensed consolidated statements of cash flows), less capitalized interest and non-sustaining capital. Non-sustaining capital represents capital expenditures for major growth projects as well as enhancement capital for significant infrastructure improvements at existing operations. Non-sustaining capital expenditures during the three and six months ended June 30, 2019, primarily relate to projects at Tasiast, Round Mountain, Bald Mountain, and Fort Knox. Non-sustaining capital expenditures during the three and six months ended June 30, 2018, primarily related to projects at Tasiast, Round Mountain, and Bald Mountain. |
(i) | “Lease payments – sustaining” represents the majority of lease payments as reported on the interim condensed consolidated statements of cash flows and is made up of the principal and financing components of such cash payments, less non-sustaining lease payments. Lease payments for development projects or closed mines are classified as non-sustaining. |
(j) | “Portion attributable to Chirano non-controlling interest” represents the non-controlling interest (10%) in the ounces sold from the Chirano mine. |
(k) | “Average realized gold price per ounce” is a non-GAAP financial measure and is defined as gold metal sales divided by the total number of gold ounces sold. This measure is intended to enable Management to better understand the price realized in each reporting period. The realized price measure does not have any standardized definition under IFRS and should not be considered a substitute for measure of performance prepared in accordance with IFRS. |
All statements, other than statements of historical fact, contained or incorporated by reference in this MD&A including, but not limited to, any information as to the future financial or operating performance of Kinross, constitute ‘‘forward-looking information’’ or ‘‘forward-looking statements’’ within the meaning of certain securities laws, including the provisions of the Securities Act (Ontario) and the provisions for ‘‘safe harbor’’ under the United States Private Securities Litigation Reform Act of 1995 and are based on expectations, estimates and projections as of the date of this MD&A. Forward-looking statements contained in this MD&A, include, but are not limited to, those under the headings (or headings that include) “Project Updates and New Developments” and “Outlook”, as well as statements with respect to our guidance for production, production costs of sales, all-in sustaining cost and capital expenditures; the schedules and budgets for the Company’s development projects; mine life; and continuous improvement initiatives, as well as references to other possible events, the future price of gold and silver, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of projects and new deposits, estimates and the realization of such estimates (such as mineral or gold reserves and resources or mine life), success of exploration, development and mining, currency fluctuations, capital requirements, project studies, mine life extensions, government regulation permit applications and conversions, restarting suspended or disrupted operations; environmental risks and proceedings; and resolution of pending litigation. The words “advance”, “anticipate”, “believe”, “budget”, “continue”, “develop”, “encouraging”, “enhancement”, “estimates”, “expects”, “explore”, “forecast”, “focus”, “future”, “goal”, “guidance”, “intend”, “measures”, “on budget”, “on schedule”, “on target”, “on track”, “opportunity”, “optimize”, “outlook”, “phased”, “plan”, “potential”, “progress”, “project”, “promising”, “schedule”, “seek”, “study”, “target”, or variations of or similar such words and phrases or statements that certain actions, events or results may, could, should or will be achieved, received or taken, or will occur or result and similar such expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Kinross as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The estimates, models and assumptions of Kinross referenced, contained or incorporated by reference in this MD&A, which may prove to be incorrect, include, but are not limited to, the various assumptions set forth herein and in our MD&A for the year ended December 31, 2018 and the quarter ended June 30, 2019, and the Annual Information Form dated March 29, 2019 as well as: (1) there being no significant disruptions affecting the operations of the Company, whether due to extreme weather events (including, without limitation, excessive or lack of rainfall, in particular, the potential for further production curtailments at Paracatu resulting from insufficient rainfall and the operational challenges at Fort Knox and Bald Mountain resulting from excessive rainfall, which can impact costs and/or production) and other or related natural disasters, labour disruptions (including but not limited to workforce reductions), supply disruptions, power disruptions, damage to equipment, pit wall slides (in particular that the effects of the pit wall slides at Fort Knox and Round Mountain are consistent with the Company’s expectations) or otherwise; (2) permitting, development, operations and production from the Company’s operations and development projects being consistent with Kinross’ current expectations including, without limitation: the maintenance of existing permits and approvals and the timely receipt of all permits and authorizations necessary for the development and operation of the Tasiast Phase One expansion, Phase Two expansion or any such alternate expansion that the Company decides to pursue and the Round Mountain Phase W expansion including, without limitation, work permits, necessary import authorizations for goods and equipment; operation of the SAG mill at Tasiast; land acquisitions and permitting for the construction and operation of the new tailings facility, water and power supply and continued operation of the tailings reprocessing facility at Paracatu; implementation of fire permitting upgrades required at Paracatu; and the renewal of the Chirano mining permit in a manner consistent with the Company’s expectations; (3) political and legal developments in any jurisdiction in which the Company operates being consistent with its current expectations including, without limitation, the impact of any political tensions and uncertainty in the Russian Federation and Ukraine or any related sanctions and any other similar restrictions or penalties imposed, or actions taken, by any government, including but not limited to amendments to the mining laws, and potential power rationing and tailings facility regulations in Brazil, potential amendments to water laws and/or other water use restrictions and regulatory actions in Chile, new dam safety regulations, and potential amendments to minerals and mining laws and energy levies laws, and the enforcement of labour laws in Ghana, new regulations relating to work permits, potential amendments to customs and mining laws (including but not limited to amendments to the VAT) and the pending implementation of revisions to the tax code in Mauritania, and satisfactory resolution of the discussions with the Mauritanian government regarding the Company’s activities in Mauritania including those related to Tasiast Sud, the potential passing of Environmental Protection Agency regulations in the U.S. relating to the provision of financial assurances under the Comprehensive Environmental Response, Compensation and Liability Act, the European Union’s General Data Protection Regulation or similar legislation in other jurisdictions and potential amendments to and enforcement of tax laws in Russia (including, but not limited to, the interpretation, implementation, application and enforcement of any such laws and amendments thereto), and the impact of any trade tariffs being consistent with Kinross’ current expectations; (4) the completion of studies, including optimization studies, scoping studies and prefeasibility and feasibility studies, on the timelines currently expected and the results of those studies being consistent with Kinross’ current expectations; (5) the exchange rate between the Canadian dollar, Brazilian real, Chilean peso, Russian rouble, Mauritanian ouguiya, Ghanaian cedi and the U.S. dollar being approximately consistent with current levels; (6) certain price assumptions for gold and silver; (7) prices for diesel, natural gas, fuel oil, electricity and other key supplies being approximately consistent with current levels; (8) production and cost of sales forecasts for the Company meeting expectations; (9) the accuracy of the current mineral reserve and mineral resource estimates of the Company (including but not limited to ore tonnage and ore grade estimates), mine plans for the Company’s mining operations, and the Company’s internal models; (10) labour and materials costs increasing on a basis consistent with Kinross’ current expectations; (11) the terms and conditions of the legal and fiscal stability agreements for the Tasiast and Chirano operations being interpreted and applied in a manner consistent with their intent and Kinross’ expectations and without amendment or formal dispute (including without limitation the application of tax, customs and duties exemptions); (12) goodwill and/or asset impairment potential; (13) the regulatory and legislative regime regarding mining, electricity production and transmission (including rules related to power tariffs) in Brazil being consistent with Kinross’ current expectations; (14) access to capital markets, including but not limited to maintaining our current credit ratings consistent with the Company’s current expectations; (15) that the Brazilian power plants will operate in a manner consistent with our current expectations; (16) that the Tasiast project financing will proceed in a manner consistent with our current expectations; (17) litigation and regulatory proceedings and the potential ramifications thereof being concluded in a manner consistent with the Company’s expectations (including without limitation the ongoing litigation in Chile relating to the alleged damage of wetlands and the scope of any remediation plan or other environmental obligations arising therefrom); and (18) the Chulbatkan acquisition will be completed in accordance with, and on the timeline contemplated by, the terms and conditions of the relevant agreements, on a basis consistent with our expectations. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: sanctions (any other similar restrictions or penalties) now or subsequently imposed, other actions taken, by, against, in respect of or otherwise impacting any jurisdiction in which the Company is domiciled or operates (including but not limited to the Russian Federation, Canada, the European Union and the United States), or any government or citizens of, persons or companies domiciled in, or the Company’s business, operations or other activities in, any such jurisdiction; fluctuations in the currency markets; fluctuations in the spot and forward price of gold or certain other commodities (such as fuel and electricity); changes in the discount rates applied to calculate the present value of net future cash flows based on country-specific real weighted average cost of capital; changes in the market valuations of peer group gold producers and the Company, and the resulting impact on market price to net asset value multiples; changes in various market variables, such as interest rates, foreign exchange rates, gold or silver prices and lease rates, or global fuel prices, that could impact the mark-to-market value of outstanding derivative instruments and ongoing payments/receipts under any financial obligations; risks arising from holding derivative instruments (such as credit risk, market liquidity risk and mark-to-market risk); changes in national and local government legislation, taxation (including but not limited to income tax, advance income tax, stamp tax, withholding tax, capital tax, tariffs, value-added or sales tax, capital outflow tax, capital gains tax, windfall or windfall profits tax, royalty, excise tax, customs/import or export taxes/duties, asset taxes, asset transfer tax, property use or other real estate tax, together with any related fine, penalty, surcharge, or interest imposed in connection with such taxes), controls, policies and regulations; the security of personnel and assets; political or economic developments in Canada, the United States, Chile, Brazil, Russia, Mauritania, Ghana, or other countries in which Kinross does business or may carry on business; business opportunities that may be presented to, or pursued by, us; our ability to successfully integrate acquisitions and complete divestitures; operating or technical difficulties in connection with mining or development activities; employee relations; litigation or other claims against, or regulatory investigations and/or any enforcement actions, administrative orders or sanctions in respect of the Company (and/or its directors, officers, or employees) including, but not limited to, securities class action litigation in Canada and/or the United States, environmental litigation or regulatory proceedings or any investigations, enforcement actions and/or sanctions under any applicable anti-corruption, international sanctions and/or anti-money laundering laws and regulations in Canada, the United States or any other applicable jurisdiction; the speculative nature of gold exploration and development including, but not limited to, the risks of obtaining necessary licenses and permits; diminishing quantities or grades of reserves; adverse changes in our credit ratings; and contests over title to properties, particularly title to undeveloped properties. In addition, there are risks and hazards associated with the business of gold exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance, or the inability to obtain insurance, to cover these risks). Many of these uncertainties and contingencies can directly or indirectly affect, and could cause, Kinross’ actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Kinross, including but not limited to resulting in an impairment charge on goodwill and/or assets. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management’s expectations and plans relating to the future. All of the forward-looking statements made in this MD&A are qualified by this cautionary statement and those made in our other filings with the securities regulators of Canada and the United States including, but not limited to, the cautionary statements made in the “Risk Analysis” section of our MD&A for the year ended December 31, 2018 and the Annual Information Form dated March 29, 2019. Please also refer to the cautionary statement on forward looking information from the July 31, 2019 press release related to the Company's acquisition of the Chulbatkan project. These factors are not intended to represent a complete list of the factors that could affect Kinross. Kinross disclaims any intention or obligation to update or revise any forward-looking statements or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law.
As at | |||||||||
June 30, | December 31, | ||||||||
2019 | 2018 | ||||||||
Assets | |||||||||
Current assets | |||||||||
Cash and cash equivalents | Note 6 | $ | 475.4 | $ | 349.0 | ||||
Restricted cash | Note 6 | 13.5 | 12.7 | ||||||
Accounts receivable and other assets | Note 6 | 129.8 | 101.4 | ||||||
Current income tax recoverable | 44.8 | 79.0 | |||||||
Inventories | Note 6 | 991.3 | 1,052.0 | ||||||
Unrealized fair value of derivative assets | Note 7 | 6.7 | 3.8 | ||||||
1,661.5 | 1,597.9 | ||||||||
Non-current assets | |||||||||
Property, plant and equipment | Note 6 | 5,769.6 | 5,519.1 | ||||||
Goodwill | 158.8 | 162.7 | |||||||
Long-term investments | Note 6 | 182.4 | 155.9 | ||||||
Investments in joint ventures | 18.4 | 18.3 | |||||||
Unrealized fair value of derivative assets | Note 7 | 3.9 | 0.8 | ||||||
Other long-term assets | Note 6 | 577.1 | 564.1 | ||||||
Deferred tax assets | 35.6 | 45.0 | |||||||
Total assets | $ | 8,407.3 | $ | 8,063.8 | |||||
Liabilities | |||||||||
Current liabilities | |||||||||
Accounts payable and accrued liabilities | Note 6 | $ | 441.1 | $ | 465.9 | ||||
Current income tax payable | 69.2 | 21.7 | |||||||
Current portion of provisions | Note 9 | 49.9 | 72.6 | ||||||
Other current liabilities | Note 6 | 16.3 | 52.2 | ||||||
576.5 | 612.4 | ||||||||
Non-current liabilities | |||||||||
Long-term debt and credit facilities | Note 8 | 1,891.2 | 1,735.0 | ||||||
Provisions | Note 9 | 836.0 | 816.4 | ||||||
Long-term lease liabilities | 39.2 | - | |||||||
Unrealized fair value of derivative liabilities | Note 7 | 2.3 | 9.6 | ||||||
Other long-term liabilities | 107.0 | 97.9 | |||||||
Deferred tax liabilities | 235.3 | 265.2 | |||||||
Total liabilities | $ | 3,687.5 | $ | 3,536.5 | |||||
Equity | |||||||||
Common shareholders' equity | |||||||||
Common share capital | Note 10 | $ | 14,919.9 | $ | 14,913.4 | ||||
Contributed surplus | 237.6 | 239.8 | |||||||
Accumulated deficit | (10,411.8 | ) | (10,548.0 | ) | |||||
Accumulated other comprehensive income (loss) | Note 6 | (46.0 | ) | (98.5 | ) | ||||
Total common shareholders' equity | 4,699.7 | 4,506.7 | |||||||
Non-controlling interest | 20.1 | 20.6 | |||||||
Total equity | $ | 4,719.8 | $ | 4,527.3 | |||||
Commitments and contingencies | Note 14 | ||||||||
Subsequent events | Notes 5i and 8 | ||||||||
Total liabilities and equity | $ | 8,407.3 | $ | 8,063.8 | |||||
Common shares | |||||||||
Authorized | Unlimited | Unlimited | |||||||
Issued and outstanding | Note 10 | 1,252,468,491 | 1,250,228,821 | ||||||
Three months ended | Six months ended | ||||||||||||||||
June 30, | June 30, | June 30, | June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||
Revenue | |||||||||||||||||
Metal sales | $ | 837.8 | $ | 775.0 | $ | 1,624.0 | $ | 1,672.2 | |||||||||
Cost of sales | |||||||||||||||||
Production cost of sales | 426.1 | 454.9 | 837.8 | 899.5 | |||||||||||||
Depreciation, depletion and amortization | 179.9 | 190.3 | 344.0 | 383.4 | |||||||||||||
Total cost of sales | 606.0 | 645.2 | 1,181.8 | 1,282.9 | |||||||||||||
Gross profit | 231.8 | 129.8 | 442.2 | 389.3 | |||||||||||||
Other operating expense | 29.5 | 29.4 | 62.4 | 54.8 | |||||||||||||
Exploration and business development | 28.4 | 23.8 | 47.9 | 44.3 | |||||||||||||
General and administrative | 29.6 | 30.3 | 72.2 | 66.0 | |||||||||||||
Operating earnings | 144.3 | 46.3 | 259.7 | 224.2 | |||||||||||||
Other income (expense) - net | Note 6 | (2.6 | ) | 1.8 | 0.1 | 7.7 | |||||||||||
Equity in earnings (losses) of joint ventures | 0.1 | (0.1 | ) | 0.1 | (0.2 | ) | |||||||||||
Finance income | 1.9 | 3.2 | 4.0 | 6.6 | |||||||||||||
Finance expense | Note 6 | (26.1 | ) | (24.7 | ) | (53.6 | ) | (51.6 | ) | ||||||||
Earnings before tax | 117.6 | 26.5 | 210.3 | 186.7 | |||||||||||||
Income tax expense - net | (46.5 | ) | (24.4 | ) | (74.6 | ) | (78.4 | ) | |||||||||
Net earnings | $ | 71.1 | $ | 2.1 | $ | 135.7 | $ | 108.3 | |||||||||
Net earnings (loss) attributable to: | |||||||||||||||||
Non-controlling interest | $ | (0.4 | ) | $ | (0.3 | ) | $ | (0.5 | ) | $ | (0.2 | ) | |||||
Common shareholders | $ | 71.5 | $ | 2.4 | $ | 136.2 | $ | 108.5 | |||||||||
Earnings per share attributable to common shareholders | |||||||||||||||||
Basic | $ | 0.06 | $ | 0.00 | $ | 0.11 | $ | 0.09 | |||||||||
Diluted | $ | 0.06 | $ | 0.00 | $ | 0.11 | $ | 0.09 | |||||||||
Weighted average number of common shares outstanding (millions) | Note 12 | ||||||||||||||||
Basic | 1,252.3 | 1,250.2 | 1,251.5 | 1,248.7 | |||||||||||||
Diluted | 1,261.2 | 1,259.3 | 1,260.3 | 1,258.3 |
Three months ended | Six months ended | ||||||||||||||||
June 30, | June 30, | June 30, | June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||
Net earnings | $ | 71.1 | $ | 2.1 | $ | 135.7 | $ | 108.3 | |||||||||
Other comprehensive income (loss), net of tax: | Note 6 | ||||||||||||||||
Items that will not be reclassified to profit or loss: | |||||||||||||||||
Equity investments at fair value through other comprehensive income ("FVOCI") - net change in fair value (a) | 29.6 | (16.7 | ) | 28.6 | (38.6 | ) | |||||||||||
Items that are or may be reclassified to profit or loss in subsequent periods: | |||||||||||||||||
Cash flow hedges - effective portion of changes in fair value (b) | 3.4 | (38.9 | ) | 21.5 | (35.2 | ) | |||||||||||
Cash flow hedges - reclassified to profit or loss (c) | 1.1 | (3.3 | ) | 2.4 | (7.5 | ) | |||||||||||
34.1 | (58.9 | ) | 52.5 | (81.3 | ) | ||||||||||||
Total comprehensive income (loss) | $ | 105.2 | $ | (56.8 | ) | $ | 188.2 | $ | 27.0 | ||||||||
Attributable to non-controlling interest | $ | (0.4 | ) | $ | (0.3 | ) | $ | (0.5 | ) | $ | (0.2 | ) | |||||
Attributable to common shareholders | $ | 105.6 | $ | (56.5 | ) | $ | 188.7 | $ | 27.2 | ||||||||
(a) | Net of tax expense (recovery) of $nil, 3 months; $nil, 6 months (2018 - $(0.2) million, 3 months; $(0.3) million; 6 months). |
(b) | Net of tax expense (recovery) of $1.7 million, 3 months; $4.3 million, 6 months (2018 - $(21.2) million, 3 months; $(19.9) million; 6 months). |
(c) | Net of tax expense (recovery) of $0.9 million, 3 months; $1.6 million, 6 months (2018 - $(0.9) million, 3 months; $(2.5) million; 6 months). |
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net inflow (outflow) of cash related to the following activities: | ||||||||||||||||
Operating: | ||||||||||||||||
Net earnings | $ | 71.1 | $ | 2.1 | $ | 135.7 | $ | 108.3 | ||||||||
Adjustments to reconcile net earnings to net cash provided from operating activities: | ||||||||||||||||
Depreciation, depletion and amortization | 179.9 | 190.3 | 344.0 | 383.4 | ||||||||||||
Equity in (earnings) losses of joint ventures | (0.1 | ) | 0.1 | (0.1 | ) | 0.2 | ||||||||||
Share-based compensation expense | 3.0 | 3.5 | 7.6 | 7.5 | ||||||||||||
Finance expense | 26.1 | 24.7 | 53.6 | 51.6 | ||||||||||||
Deferred tax expense (recovery) | 5.8 | 15.9 | (31.4 | ) | 27.3 | |||||||||||
Foreign exchange losses (gains) and other | 1.9 | (5.1 | ) | 9.1 | 16.9 | |||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable and other assets | (40.3 | ) | (41.7 | ) | (25.7 | ) | (44.1 | ) | ||||||||
Inventories | 12.6 | 21.2 | 50.0 | (1.8 | ) | |||||||||||
Accounts payable and accrued liabilities | 56.6 | 7.2 | 42.4 | (16.0 | ) | |||||||||||
Cash flow provided from operating activities | 316.6 | 218.2 | 585.2 | 533.3 | ||||||||||||
Income taxes recovered (paid) | 16.4 | (33.7 | ) | (0.6 | ) | (55.3 | ) | |||||||||
Net cash flow provided from operating activities | 333.0 | 184.5 | 584.6 | 478.0 | ||||||||||||
Investing: | ||||||||||||||||
Additions to property, plant and equipment | (276.7 | ) | (247.1 | ) | (541.5 | ) | (494.0 | ) | ||||||||
Acquisition of La Coipa Phase 7 mining concessions | - | - | (30.0 | ) | (35.1 | ) | ||||||||||
Net additions to long-term investments and other assets | (5.9 | ) | (15.9 | ) | (12.3 | ) | (30.2 | ) | ||||||||
Net proceeds from the sale of property, plant and equipment | 1.2 | 1.0 | 2.1 | 4.0 | ||||||||||||
(Increase) decrease in restricted cash | (0.2 | ) | 0.6 | (0.8 | ) | (0.1 | ) | |||||||||
Interest received and other | 1.2 | 2.4 | 2.1 | 5.0 | ||||||||||||
Net cash flow used in investing activities | (280.4 | ) | (259.0 | ) | (580.4 | ) | (550.4 | ) | ||||||||
Financing: | ||||||||||||||||
Net proceeds from issuance/drawdown of debt | 100.0 | - | 260.0 | - | ||||||||||||
Repayment of debt | (80.0 | ) | - | (105.0 | ) | - | ||||||||||
Payment of lease liabilities | (3.9 | ) | - | (7.2 | ) | - | ||||||||||
Interest paid | (1.1 | ) | - | (28.4 | ) | (30.0 | ) | |||||||||
Other | (0.4 | ) | - | (0.2 | ) | 0.4 | ||||||||||
Net cash flow provided from (used in) financing activities | 14.6 | - | 119.2 | (29.6 | ) | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | 1.3 | (4.7 | ) | 3.0 | (5.1 | ) | ||||||||||
Increase (decrease) in cash and cash equivalents | 68.5 | (79.2 | ) | 126.4 | (107.1 | ) | ||||||||||
Cash and cash equivalents, beginning of period | 406.9 | 997.9 | 349.0 | 1,025.8 | ||||||||||||
Cash and cash equivalents, end of period | $ | 475.4 | $ | 918.7 | $ | 475.4 | $ | 918.7 | ||||||||
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | June 30, | June 30, | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Common share capital | ||||||||||||||||
Balance at the beginning of the period | $ | 14,919.2 | $ | 14,912.5 | $ | 14,913.4 | $ | 14,902.5 | ||||||||
Transfer from contributed surplus on exercise of restricted shares | (0.1 | ) | 0.7 | 5.2 | 10.0 | |||||||||||
Options exercised, including cash | 0.8 | 0.2 | 1.3 | 0.9 | ||||||||||||
Balance at the end of the period | $ | 14,919.9 | $ | 14,913.4 | $ | 14,919.9 | $ | 14,913.4 | ||||||||
Contributed surplus | ||||||||||||||||
Balance at the beginning of the period | $ | 234.6 | $ | 230.6 | $ | 239.8 | $ | 240.7 | ||||||||
Share-based compensation | 3.0 | 3.5 | 7.6 | 7.5 | ||||||||||||
Transfer of fair value of exercised options and restricted shares | - | (1.3 | ) | (9.8 | ) | (15.4 | ) | |||||||||
Balance at the end of the period | $ | 237.6 | $ | 232.8 | $ | 237.6 | $ | 232.8 | ||||||||
Accumulated deficit | ||||||||||||||||
Balance at the beginning of the period | $ | (10,483.3 | ) | $ | (10,418.3 | ) | $ | (10,548.0 | ) | $ | (10,580.7 | ) | ||||
Adjustment on initial application of IFRS 9 | - | - | - | 56.3 | ||||||||||||
Adjusted balance at the beginning of the period | $ | (10,483.3 | ) | $ | (10,418.3 | ) | $ | (10,548.0 | ) | $ | (10,524.4 | ) | ||||
Net earnings attributable to common shareholders | 71.5 | 2.4 | 136.2 | 108.5 | ||||||||||||
Balance at the end of the period | $ | (10,411.8 | ) | $ | (10,415.9 | ) | $ | (10,411.8 | ) | $ | (10,415.9 | ) | ||||
Accumulated other comprehensive income (loss) | ||||||||||||||||
Balance at the beginning of the period | $ | (80.1 | ) | $ | (57.6 | ) | $ | (98.5 | ) | $ | 21.1 | |||||
Adjustment on initial application of IFRS 9 | - | - | - | (56.3 | ) | |||||||||||
Adjusted balance at the beginning of the period | $ | (80.1 | ) | $ | (57.6 | ) | $ | (98.5 | ) | $ | (35.2 | ) | ||||
Other comprehensive income (loss), net of tax | 34.1 | (58.9 | ) | 52.5 | (81.3 | ) | ||||||||||
Balance at the end of the period | $ | (46.0 | ) | $ | (116.5 | ) | $ | (46.0 | ) | $ | (116.5 | ) | ||||
Total accumulated deficit and accumulated other comprehensive income (loss) | $ | (10,457.8 | ) | $ | (10,532.4 | ) | $ | (10,457.8 | ) | $ | (10,532.4 | ) | ||||
Total common shareholders' equity | $ | 4,699.7 | $ | 4,613.8 | $ | 4,699.7 | $ | 4,613.8 | ||||||||
Non-controlling interest | ||||||||||||||||
Balance at the beginning of the period | $ | 20.5 | $ | 35.7 | $ | 20.6 | $ | 35.6 | ||||||||
Net loss attributable to non-controlling interest | (0.4 | ) | (0.3 | ) | (0.5 | ) | (0.2 | ) | ||||||||
Balance at the end of the period | $ | 20.1 | $ | 35.4 | $ | 20.1 | $ | 35.4 | ||||||||
Total equity | $ | 4,719.8 | $ | 4,649.2 | $ | 4,719.8 | $ | 4,649.2 | ||||||||
1. | DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS |
2. | BASIS OF PRESENTATION |
3. | SIGNIFICANT ESTIMATES AND ASSUMPTIONS |
4. | CHANGES IN SIGNIFICANT ACCOUNTING POLICIES |
As at December 31, 2018 | IFRS 16 Adjustments | As at January 1, 2019 | ||||||||||
Property, plant and equipment | $ | 5,519.1 | $ | 42.9 | $ | 5,562.0 | ||||||
Current portion of lease liabilities (a) | $ | - | $ | 7.3 | $ | 7.3 | ||||||
Long-term lease liabilities | $ | - | $ | 35.6 | $ | 35.6 |
(a) | Current portion of lease liabilities is included in other current liabilities on the consolidated balance sheet. See Note 6viii. |
Operating lease commitments as at December 31, 2018 | $ | 70.3 | ||
Discounted as at January 1, 2019 (a) | $ | 53.7 | ||
IFRS 16 recognition exemption for short-term leases | (4.3 | ) | ||
Leases with extension options reasonably certain to be exercised | 2.1 | |||
Leases with variable lease payments | (15.2 | ) | ||
Other adjusting items | 6.6 | |||
Total lease liabilities recognized as at January 1, 2019 | $ | 42.9 |
(a) | The weighted-average incremental borrowing rate applied to the measurement of lease liabilities as at January 1, 2019 was 7.04%. |
5. | ACQUISITIONS |
i. | Acquisition of Chulbatkan development |
ii. | Acquisition of La Coipa Phase 7 mining concessions |
iii. | Acquisition of power plants in Brazil |
Preliminary | Adjustments | Final | ||||||||||
Property, plant and equipment | $ | 253.7 | $ | (26.6 | ) | $ | 227.1 | |||||
Intangible assets | - | 27.0 | 27.0 | |||||||||
Environmental provisions | - | (0.4 | ) | (0.4 | ) | |||||||
Total purchase price | $ | 253.7 | $ | - | $ | 253.7 |
6. | INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT DETAILS |
i. | Cash and cash equivalents: |
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
Cash on hand and balances with banks | $ | 323.0 | $ | 207.9 | ||||
Short-term deposits | 152.4 | 141.1 | ||||||
$ | 475.4 | $ | 349.0 |
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
Restricted cash (a) | $ | 13.5 | $ | 12.7 |
(a) | Restricted cash relates to loan escrow judicial deposits and environmental indemnity deposits. |
ii. | Accounts receivable and other assets: |
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
Trade receivables | $ | 11.1 | $ | 3.6 | ||||
Prepaid expenses | 17.3 | 21.3 | ||||||
VAT receivable | 29.2 | 48.4 | ||||||
Deposits | 53.5 | 8.5 | ||||||
Other | 18.7 | 19.6 | ||||||
$ | 129.8 | $ | 101.4 |
iii. | Inventories: |
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
Ore in stockpiles (a) | $ | 308.1 | $ | 299.9 | ||||
Ore on leach pads (b) | 375.6 | 375.0 | ||||||
In-process | 99.4 | 113.5 | ||||||
Finished metal | 62.9 | 50.5 | ||||||
Materials and supplies | 489.4 | 540.7 | ||||||
1,335.4 | 1,379.6 | |||||||
Long-term portion of ore in stockpiles and ore on leach pads (a),(b) | (344.1 | ) | (327.6 | ) | ||||
$ | 991.3 | $ | 1,052.0 |
(a) | Ore in stockpiles relates to the Company’s operating mines. Low-grade material not scheduled for processing within the next 12 months is included in other long-term assets on the interim condensed consolidated balance sheets. See Note 6vi. |
(b) | Ore on leach pads relates to the Company's Tasiast, Fort Knox, Round Mountain and Bald Mountain mines. Based on current mine plans, the Company expects to place the last tonne of ore on its leach pads at Tasiast in 2020, Bald Mountain in 2023, Round Mountain in 2026 and Fort Knox in 2028. Material not scheduled for processing within the next 12 months is included in other long-term assets on the interim condensed consolidated balance sheets. See Note 6vi. |
iv. | Property, plant and equipment: |
Mineral Interests | ||||||||||||||||
Land, plant and equipment (a) | Development and operating properties (b) | Pre-development properties | Total | |||||||||||||
Cost | ||||||||||||||||
Balance at January 1, 2019 | $ | 9,184.2 | $ | 8,816.6 | $ | 13.4 | $ | 18,014.2 | ||||||||
Additions | 316.0 | 311.4 | - | 627.4 | ||||||||||||
Capitalized interest | 7.7 | 13.0 | - | 20.7 | ||||||||||||
Disposals | (21.2 | ) | - | - | (21.2 | ) | ||||||||||
Other | (21.8 | ) | 23.9 | - | 2.1 | |||||||||||
Balance at June 30, 2019 | 9,464.9 | 9,164.9 | 13.4 | 18,643.2 | ||||||||||||
Accumulated depreciation, depletion and amortization | ||||||||||||||||
Balance at January 1, 2019 | $ | (5,702.1 | ) | $ | (6,793.0 | ) | $ | - | $ | (12,495.1 | ) | |||||
Depreciation, depletion and amortization | (265.3 | ) | (131.6 | ) | - | (396.9 | ) | |||||||||
Disposals | 20.7 | - | - | 20.7 | ||||||||||||
Other | (1.6 | ) | (0.7 | ) | - | (2.3 | ) | |||||||||
Balance at June 30, 2019 | (5,948.3 | ) | (6,925.3 | ) | - | (12,873.6 | ) | |||||||||
Net book value | $ | 3,516.6 | $ | 2,239.6 | $ | 13.4 | $ | 5,769.6 | ||||||||
Amount included above as at June 30, 2019: | ||||||||||||||||
Assets under construction | $ | 520.7 | $ | 410.0 | $ | - | $ | 930.7 | ||||||||
Assets not being depreciated (c) | $ | 747.3 | $ | 695.5 | $ | 13.4 | $ | 1,456.2 | ||||||||
(a) | Additions includes $42.9 million of transitional adjustments for the recognition of leased right-of use assets upon the Company’s adoption of IFRS 16 on January 1, 2019 (See Note 4), as well as $11.8 million of right-of-use assets for lease arrangements entered into during the six months ended June 30, 2019. Depreciation, depletion and amortization includes depreciation for leased right-of-use assets of $5.5 million during the six months ended June 30, 2019. The net book value of property, plant and equipment includes leased right-of use assets with an aggregate net book value of $49.2 million as at June 30, 2019. |
(b) | At June 30, 2019, the significant development and operating properties include projects at Fort Knox, Round Mountain, Bald Mountain, Paracatu, Kupol, Tasiast, Chirano, La Coipa and Lobo-Marte. |
(c) | Assets not being depreciated relate to land, capitalized exploration and evaluation (“E&E”) costs, assets under construction, which relate to expansion projects, and other assets that are in various stages of being readied for use. |
Mineral Interests | ||||||||||||||||
Land, plant and equipment | Development and operating properties (a) | Pre-development properties | Total | |||||||||||||
Cost | ||||||||||||||||
Balance at January 1, 2018 | $ | 8,374.7 | $ | 8,311.5 | $ | 15.5 | $ | 16,701.7 | ||||||||
Additions | 629.4 | 457.1 | - | 1,086.5 | ||||||||||||
Acquisitions (b) | 274.8 | 65.1 | - | 339.9 | ||||||||||||
Capitalized interest | 23.8 | 17.7 | - | 41.5 | ||||||||||||
Disposals | (115.7 | ) | (39.9 | ) | (2.1 | ) | (157.7 | ) | ||||||||
Other | (2.8 | ) | 5.1 | - | 2.3 | |||||||||||
Balance at December 31, 2018 | 9,184.2 | 8,816.6 | 13.4 | 18,014.2 | ||||||||||||
Accumulated depreciation, depletion and amortization | ||||||||||||||||
Balance at January 1, 2018 | $ | (5,308.4 | ) | $ | (6,506.1 | ) | $ | - | $ | (11,814.5 | ) | |||||
Depreciation, depletion and amortization | (508.5 | ) | (317.0 | ) | - | (825.5 | ) | |||||||||
Disposals | 106.5 | 39.9 | - | 146.4 | ||||||||||||
Other | 8.3 | (9.8 | ) | - | (1.5 | ) | ||||||||||
Balance at December 31, 2018 | (5,702.1 | ) | (6,793.0 | ) | - | (12,495.1 | ) | |||||||||
Net book value | $ | 3,482.1 | $ | 2,023.6 | $ | 13.4 | $ | 5,519.1 | ||||||||
Amount included above as at December 31, 2018: | ||||||||||||||||
Assets under construction | $ | 495.0 | $ | 288.5 | $ | - | $ | 783.5 | ||||||||
Assets not being depreciated (c) | $ | 719.1 | $ | 584.3 | $ | 13.4 | $ | 1,316.8 | ||||||||
(a) | At December 31, 2018, the significant development and operating properties include projects at Fort Knox, Round Mountain, Bald Mountain, Paracatu, Kupol, Tasiast, Chirano, La Coipa and Lobo-Marte. |
(b) | During the year ended December 31, 2018, the Company completed the acquisitions of the remaining 50% interest in the La Coipa Phase 7 mining concessions that it did not already own, two hydroelectric power plants in Brazil and the remaining 50% interest in the Bald Mountain exploration joint venture. |
(c) | Assets not being depreciated relate to land, capitalized E&E costs, assets under construction, which relate to expansion projects, and other assets that are in various stages of being readied for use. |
v. | Long-term investments: |
June 30, 2019 | December 31, 2018 | |||||||||||||||
Fair value | Gains (losses) in AOCI (a) | Fair value | Gains (losses) in AOCI (a) | |||||||||||||
Investments in an accumulated gain position | $ | 116.2 | $ | 33.3 | $ | 76.1 | $ | 5.1 | ||||||||
Investments in an accumulated loss position | 66.2 | (79.9 | ) | 79.8 | (80.3 | ) | ||||||||||
$ | 182.4 | $ | (46.6 | ) | $ | 155.9 | $ | (75.2 | ) |
(a) | See the interim condensed consolidated statements of comprehensive income (loss) for details of changes in fair value recognized in other comprehensive income during the six months ended June 30, 2019 and 2018. |
vi. | Other long-term assets: |
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
Long-term portion of ore in stockpiles and ore on leach pads (a) | $ | 344.1 | $ | 327.6 | ||||
Deferred charges, net of amortization | 10.1 | 9.7 | ||||||
Long-term receivables (b) | 171.3 | 182.5 | ||||||
Advances for the purchase of capital equipment | 10.3 | 3.0 | ||||||
Other | 41.3 | 41.3 | ||||||
$ | 577.1 | $ | 564.1 |
(a) | Long-term portion of ore in stockpiles and ore on leach pads represents low-grade material not scheduled for processing within the next twelve months. As at June 30, 2019, long-term ore in stockpiles was at the Company’s Fort Knox, Kupol, Tasiast, Chirano and Paracatu mines, and long-term ore on leach pads was at the Company’s Fort Knox, Round Mountain, and Tasiast mines. |
(b) | As at June 30, 2019, long-term receivables includes an estimated benefit of $36.0 million (December 31, 2018 - $66.1 million) related to the enactment of U.S Tax Reform legislation in December 2017. |
vii. | Accounts payable and accrued liabilities: |
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
Trade payables | $ | 97.4 | $ | 89.1 | ||||
Accrued liabilities | 246.0 | 260.6 | ||||||
Employee related accrued liabilities | 97.7 | 116.2 | ||||||
$ | 441.1 | $ | 465.9 |
viii. | Other current liabilities: |
June 30, | December 31, | |||||||
2019 | 2018 | |||||||
Current portion of lease liabilities | $ | 10.8 | $ | - | ||||
Current portion of unrealized fair value of derivative liabilities (a) | 5.5 | 22.2 | ||||||
Deferred payment obligation (b) | - | 30.0 | ||||||
$ | 16.3 | $ | 52.2 |
(a) | See Note 7 for details of the current portion of unrealized fair value of derivative liabilities. |
(b) | On January 30, 2019 Kinross paid the deferred payment obligation of $30.0 million relating to the purchase of the remaining 50% interest in the Phase 7 concessions of the La Coipa mine. See Note 5ii. |
ix. | Accumulated other comprehensive income (loss): |
Long-term Investments | Derivative Contracts | Total | ||||||||||
Balance at December 31, 2017 | $ | 6.9 | $ | 14.2 | $ | 21.1 | ||||||
Adjustment on initial application of IFRS 9 | (56.3 | ) | - | (56.3 | ) | |||||||
Other comprehensive loss before tax | (26.1 | ) | (77.7 | ) | (103.8 | ) | ||||||
Tax | 0.3 | 20.7 | 21.0 | |||||||||
Losses on cash flow hedges transferred to cost of non-financial assets (a) | - | 19.5 | 19.5 | |||||||||
Balance at December 31, 2018 | $ | (75.2 | ) | $ | (23.3 | ) | $ | (98.5 | ) | |||
Other comprehensive income before tax | 28.6 | 29.8 | 58.4 | |||||||||
Tax | - | (5.9 | ) | (5.9 | ) | |||||||
Balance at June 30, 2019 | $ | (46.6 | ) | $ | 0.6 | $ | (46.0 | ) |
(a) | Net of tax recovery of $10.0 million. |
x. | Other income (expense) – net: |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Gains (losses) on dispositions of other assets - net | 0.8 | (0.9 | ) | $ | 1.6 | $ | (0.1 | ) | ||||||||
Foreign exchange (losses) gains - net | (4.1 | ) | 3.4 | (2.0 | ) | 3.9 | ||||||||||
Net non-hedge derivative gains (losses) | 0.7 | (0.6 | ) | 1.1 | (0.9 | ) | ||||||||||
Other | - | (0.1 | ) | (0.6 | ) | 4.8 | ||||||||||
$ | (2.6 | ) | $ | 1.8 | $ | 0.1 | $ | 7.7 |
xi. | Finance expense: |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Accretion of reclamation and remediation obligations | $ | (7.8 | ) | $ | (7.3 | ) | $ | (15.5 | ) | $ | (14.5 | ) | ||||
Interest expense, including accretion of debt and lease liabilities (a), (b) | (18.3 | ) | (17.4 | ) | (38.1 | ) | (37.1 | ) | ||||||||
$ | (26.1 | ) | $ | (24.7 | ) | $ | (53.6 | ) | $ | (51.6 | ) |
(a) | During the three and six months ended June 30, 2019, $11.3 million and $20.7 million, respectively (three and six months ended June 30, 2018 - $9.8 million and $18.0 million, respectively) of interest was capitalized to property, plant and equipment. See Note 6iv. |
(b) | During the three and six months ended June 30, 2019, accretion of lease liabilities was $0.8 million and $1.6 million (three and six months ended June 30, 2018 - $nil). |
7. | FAIR VALUE MEASUREMENT |
(a) | Recurring fair value measurement |
Level 1 | Level 2 | Level 3 | Aggregate Fair Value | |||||||||||||
Equity investments at FVOCI | $ | 182.4 | $ | - | $ | - | $ | 182.4 | ||||||||
Derivative contracts: | ||||||||||||||||
Foreign currency forward and collar contracts | - | (1.2 | ) | - | (1.2 | ) | ||||||||||
Energy swap contracts | - | 1.7 | - | 1.7 | ||||||||||||
Total return swap contracts | - | 2.3 | - | 2.3 | ||||||||||||
$ | 182.4 | $ | 2.8 | $ | - | $ | 185.2 |
June 30, 2019 | December 31, 2018 | |||||||||||||||
Asset / (Liability) | Asset / (Liability) | |||||||||||||||
Fair Value | AOCI | Fair Value | AOCI | |||||||||||||
Currency contracts | ||||||||||||||||
Foreign currency forward and collar contracts (a) | $ | (1.2 | ) | $ | (0.8 | ) | $ | (21.8 | ) | $ | (15.8 | ) | ||||
Commodity contracts | ||||||||||||||||
Energy swap contracts (b) | 1.7 | 1.4 | (8.6 | ) | (7.5 | ) | ||||||||||
Other contracts | ||||||||||||||||
Total return swap contracts | 2.3 | - | 3.2 | - | ||||||||||||
Total all contracts | $ | 2.8 | $ | 0.6 | $ | (27.2 | ) | $ | (23.3 | ) | ||||||
Unrealized fair value of derivative assets | ||||||||||||||||
Current | $ | 6.7 | $ | 3.8 | ||||||||||||
Non-current | 3.9 | 0.8 | ||||||||||||||
$ | 10.6 | $ | 4.6 | |||||||||||||
Unrealized fair value of derivative liabilities | ||||||||||||||||
Current | $ | (5.5 | ) | $ | (22.2 | ) | ||||||||||
Non-current | (2.3 | ) | (9.6 | ) | ||||||||||||
$ | (7.8 | ) | $ | (31.8 | ) | |||||||||||
Total net fair value | $ | 2.8 | $ | (27.2 | ) |
(a) | Of the total amount recorded in AOCI at June 30, 2019, $(2.2) million will be reclassified to net earnings within the next twelve months as a result of settling the contracts. |
(b) | Of the total amount recorded in AOCI at June 30, 2019, $1.8 million will be reclassified to net earnings within the next twelve months as a result of settling the contracts. |
(b) | Fair value of financial assets and liabilities not measured and recognized at fair value |
8. | LONG-TERM DEBT AND CREDIT FACILITIES |
June 30, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||
Interest Rates | Nominal Amount | Deferred Financing Costs | Carrying Amount (a) | Fair Value (b) | Carrying Amount (a) | Fair Value (b) | |||||||||||||||||||||||
Senior notes | (ii) | 4.50%-6.875% | $ | 1,746.7 | $ | (10.5 | ) | $ | 1,736.2 | $ | 1,844.9 | $ | 1,735.0 | $ | 1,668.8 | ||||||||||||||
Revolving credit facility | (i) | LIBOR plus 1.70% | 155.0 | - | 155.0 | 155.0 | - | - | |||||||||||||||||||||
Long-term debt and credit facility | $ | 1,901.7 | $ | (10.5 | ) | $ | 1,891.2 | $ | 1,999.9 | $ | 1,735.0 | $ | 1,668.8 |
(a) | Includes transaction costs on senior notes financings. |
(b) | The fair value of senior notes is primarily determined using quoted market determined variables. See Note 7 (b). |
(i) | Corporate revolving credit facility |
Type of credit | |
Dollar based LIBOR loan: | |
Revolving credit facility | LIBOR plus 1.70% |
Letters of credit | 1.13-1.70% |
Standby fee applicable to unused availability | 0.34% |
(ii) | Senior notes |
(iii) | Other |
(iv) | Changes in liabilities arising from financing activities |
Six months ended June 30, 2019 | ||||||||||||||||||||||||||||||||||||||||
Changes from financing cash flows | Other changes | |||||||||||||||||||||||||||||||||||||||
Balance as at January 1, 2019 | Debt issued | Debt repayments | Interest paid | Interest expense | Capitalized interest | Capitalized interest paid | Other cash changes | Other non-cash changes | Balance as at June 30, 2019 | |||||||||||||||||||||||||||||||
Long-term debt and credit facilities | $ | 1,735.0 | $ | 260.0 | $ | (105.0 | ) | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 1.2 | $ | 1,891.2 | |||||||||||||||||||
Accrued interest payable (a) | 33.3 | - | - | (28.4 | ) | 36.5 | 20.7 | (21.8 | ) | (5.1 | ) | (1.9 | ) | 33.3 | ||||||||||||||||||||||||||
$ | 1,768.3 | $ | 260.0 | $ | (105.0 | ) | $ | (28.4 | ) | $ | 36.5 | $ | 20.7 | $ | (21.8 | ) | $ | (5.1 | ) | $ | (0.7 | ) | $ | 1,924.5 |
(a) | Included in Accounts payable and accrued liabilities. |
Year ended December 31, 2018 | ||||||||||||||||||||||||||||||||||||||||
Changes from financing cash flows | Other changes | |||||||||||||||||||||||||||||||||||||||
Balance as at January 1, 2018 | Debt issued | Debt repayments | Interest paid | Interest expense | Capitalized interest | Capitalized interest paid | Other cash changes | Other non-cash changes | Balance as at December 31, 2018 | |||||||||||||||||||||||||||||||
Long-term debt | $ | 1,732.6 | $ | 80.0 | $ | (80.0 | ) | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 2.4 | $ | 1,735.0 | |||||||||||||||||||
Accrued interest payable (a) | 33.8 | - | - | (57.9 | ) | 72.1 | 41.5 | (38.2 | ) | (9.9 | ) | (8.1 | ) | 33.3 | ||||||||||||||||||||||||||
$ | 1,766.4 | $ | 80.0 | $ | (80.0 | ) | $ | (57.9 | ) | $ | 72.1 | $ | 41.5 | $ | (38.2 | ) | $ | (9.9 | ) | $ | (5.7 | ) | $ | 1,768.3 |
(a) | Included in Accounts payable and accrued liabilities. |
9. | PROVISIONS |
Reclamation and remediation obligations (i) | Other | Total | ||||||||||
Balance at January 1, 2019 | $ | 854.1 | $ | 34.9 | $ | 889.0 | ||||||
Additions | 6.6 | 4.5 | 11.1 | |||||||||
Reductions | - | (3.7 | ) | (3.7 | ) | |||||||
Reclamation spending | (26.0 | ) | - | (26.0 | ) | |||||||
Accretion | 15.5 | - | 15.5 | |||||||||
Balance at June 30, 2019 | $ | 850.2 | $ | 35.7 | $ | 885.9 | ||||||
Current portion | 41.4 | 8.5 | 49.9 | |||||||||
Non-current portion | 808.8 | 27.2 | 836.0 | |||||||||
$ | 850.2 | $ | 35.7 | $ | 885.9 |
(i) | Reclamation and remediation obligations |
10. | COMMON SHARE CAPITAL |
Six months ended June 30, 2019 | Year ended December 31, 2018 | |||||||||||||||
Number of shares | Amount | Number of shares | Amount | |||||||||||||
(000's) | (000's) | |||||||||||||||
Common shares | ||||||||||||||||
Balance at January 1, | 1,250,229 | $ | 14,913.4 | 1,247,004 | $ | 14,902.5 | ||||||||||
Issued under share option and restricted share plans | 2,239 | 6.5 | 3,225 | 10.9 | ||||||||||||
Balance at end of period | 1,252,468 | $ | 14,919.9 | 1,250,229 | $ | 14,913.4 | ||||||||||
Total common share capital | $ | 14,919.9 | $ | 14,913.4 |
11. | SHARE-BASED PAYMENTS |
i. | Share option plan |
Six months ended June 30, 2019 | ||||||||
Number of options (000's) | Weighted average exercise price (CDN$) | |||||||
Outstanding at January 1, 2019 | 12,344 | $ | 5.77 | |||||
Granted | 2,042 | 4.59 | ||||||
Exercised | (302 | ) | 3.93 | |||||
Forfeited | (355 | ) | 4.24 | |||||
Expired | (870 | ) | 10.39 | |||||
Outstanding at end of period | 12,859 | $ | 5.36 | |||||
Exercisable at end of period | 9,141 | $ | 5.59 |
Weighted average share price (CDN$) | $ | 4.59 | ||
Expected dividend yield | 0.0% | |||
Expected volatility | 44.8% | |||
Risk-free interest rate | 1.8% | |||
Expected option life (in years) | 4.5 | |||
Weighted average fair value per share option granted (CDN$) | $ | 1.79 |
ii. | Restricted share unit plans |
Six months ended June 30, 2019 | ||||||||
Number of units (000's) | Weighted average fair value (CDN$/unit) | |||||||
Outstanding at January 1, 2019 | 7,626 | $ | 4.88 | |||||
Granted | 5,540 | 4.51 | ||||||
Redeemed | (3,160 | ) | 4.85 | |||||
Forfeited | (594 | ) | 4.85 | |||||
Outstanding at end of period | 9,412 | $ | 4.67 |
Six months ended June 30, 2019 | ||||||||
Number of units (000's) | Weighted average fair value (CDN$/unit) | |||||||
Outstanding at January 1, 2019 | 4,990 | $ | 5.14 | |||||
Granted | 2,263 | 4.54 | ||||||
Redeemed | (1,685 | ) | 4.45 | |||||
Forfeited | (563 | ) | 4.69 | |||||
Outstanding at end of period | 5,005 | $ | 5.15 |
iii. | Deferred share unit (“DSU”) plan |
iv. | Employee share purchase plan (“SPP”) |
12. | EARNINGS PER SHARE |
(Number of common shares in thousands) | Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Basic weighted average shares outstanding: | 1,252,293 | 1,250,229 | 1,251,462 | 1,248,748 | ||||||||||||
Weighted average shares dilution adjustments: | ||||||||||||||||
Stock options | 452 | 874 | 444 | 955 | ||||||||||||
Restricted shares | 3,173 | 3,024 | 2,962 | 3,096 | ||||||||||||
Restricted performance shares | 5,234 | 5,187 | 5,407 | 5,459 | ||||||||||||
Diluted weighted average shares outstanding | 1,261,152 | 1,259,314 | 1,260,275 | 1,258,258 | ||||||||||||
Weighted average shares dilution adjustments - exclusions: (a) | ||||||||||||||||
Stock options (b) | 9,734 | 8,623 | 9,472 | 8,506 | ||||||||||||
Restricted shares | - | - | - | - | ||||||||||||
Restricted performance shares | - | - | - | - |
(a) | These adjustments were excluded as they are anti-dilutive. |
(b) | Dilutive stock options were determined using the Company’s average share price for the periods. For the three and six months ended June 30, 2019, the average share price used was $3.37 and $3.35, respectively (three and six months ended June 30, 2018 - $3.76 and $3.87, respectively). |
13. | SEGMENTED INFORMATION |
Operating segments | Non-operating segments (a) | |||||||||||||||||||||||||||||||||||||||
Three months ended June 30, 2019: | Fort Knox | Round Mountain | Bald Mountain | Paracatu | Maricunga | Kupol | Tasiast | Chirano | Corporate and other (b) | Total | ||||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||||||||||||
Metal sales | $ | 72.7 | 113.7 | 41.2 | 242.8 | 12.3 | 163.4 | 123.6 | 68.1 | - | $ | 837.8 | ||||||||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||||||||||||||||
Production cost of sales | 50.7 | 57.8 | 27.0 | 106.8 | 8.0 | 70.2 | 58.9 | 46.7 | - | 426.1 | ||||||||||||||||||||||||||||||
Depreciation, depletion and amortization | 22.6 | 10.2 | 12.2 | 45.2 | 0.5 | 30.7 | 32.2 | 23.8 | 2.5 | 179.9 | ||||||||||||||||||||||||||||||
Total cost of sales | 73.3 | 68.0 | 39.2 | 152.0 | 8.5 | 100.9 | 91.1 | 70.5 | 2.5 | 606.0 | ||||||||||||||||||||||||||||||
Gross profit (loss) | $ | (0.6 | ) | 45.7 | 2.0 | 90.8 | 3.8 | 62.5 | 32.5 | (2.4 | ) | (2.5 | ) | $ | 231.8 | |||||||||||||||||||||||||
Other operating expense (income) | 4.9 | - | 1.0 | 2.8 | 5.0 | (0.5 | ) | 10.0 | - | 6.3 | 29.5 | |||||||||||||||||||||||||||||
Exploration and business development | 0.9 | 1.6 | 4.2 | - | - | 5.9 | 0.4 | 2.3 | 13.1 | 28.4 | ||||||||||||||||||||||||||||||
General and administrative | - | - | - | - | - | - | - | - | 29.6 | 29.6 | ||||||||||||||||||||||||||||||
Operating earnings (loss) | $ | (6.4 | ) | 44.1 | (3.2 | ) | 88.0 | (1.2 | ) | 57.1 | 22.1 | (4.7 | ) | (51.5 | ) | $ | 144.3 | |||||||||||||||||||||||
Other income (expense) - net | (2.6 | ) | ||||||||||||||||||||||||||||||||||||||
Equity in earnings of joint ventures | 0.1 | |||||||||||||||||||||||||||||||||||||||
Finance income | 1.9 | |||||||||||||||||||||||||||||||||||||||
Finance expense | (26.1 | ) | ||||||||||||||||||||||||||||||||||||||
Earnings before tax | $ | 117.6 |
Operating segments | Non-operating segments (a) | |||||||||||||||||||||||||||||||||||||||
Three months ended June 30, 2018: | Fort Knox | Round Mountain | Bald Mountain | Paracatu | Maricunga | Kupol | Tasiast | Chirano | Corporate and other (b), (c) | Total | ||||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||||||||||||
Metal sales | $ | 94.5 | 124.9 | 79.5 | 153.3 | 23.1 | 161.9 | 63.2 | 74.6 | - | $ | 775.0 | ||||||||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||||||||||||||||
Production cost of sales | 70.1 | 72.0 | 27.7 | 100.4 | 11.7 | 73.6 | 54.8 | 44.6 | - | 454.9 | ||||||||||||||||||||||||||||||
Depreciation, depletion and amortization | 38.8 | 13.9 | 20.8 | 30.8 | 0.8 | 33.0 | 18.9 | 31.4 | 1.9 | 190.3 | ||||||||||||||||||||||||||||||
Total cost of sales | 108.9 | 85.9 | 48.5 | 131.2 | 12.5 | 106.6 | 73.7 | 76.0 | 1.9 | 645.2 | ||||||||||||||||||||||||||||||
Gross profit (loss) | $ | (14.4 | ) | 39.0 | 31.0 | 22.1 | 10.6 | 55.3 | (10.5 | ) | (1.4 | ) | (1.9 | ) | $ | 129.8 | ||||||||||||||||||||||||
Other operating expense (income) | 0.1 | - | 0.7 | 3.3 | 1.5 | (0.2 | ) | 13.6 | (0.5 | ) | 10.9 | 29.4 | ||||||||||||||||||||||||||||
Exploration and business development | 1.4 | 0.7 | 1.5 | - | - | 4.6 | 1.4 | 1.1 | 13.1 | 23.8 | ||||||||||||||||||||||||||||||
General and administrative | - | - | - | - | - | - | - | - | 30.3 | 30.3 | ||||||||||||||||||||||||||||||
Operating earnings (loss) | $ | (15.9 | ) | 38.3 | 28.8 | 18.8 | 9.1 | 50.9 | (25.5 | ) | (2.0 | ) | (56.2 | ) | $ | 46.3 | ||||||||||||||||||||||||
Other income (expense) - net | 1.8 | |||||||||||||||||||||||||||||||||||||||
Equity in losses of joint ventures | (0.1 | ) | ||||||||||||||||||||||||||||||||||||||
Finance income | 3.2 | |||||||||||||||||||||||||||||||||||||||
Finance expense | (24.7 | ) | ||||||||||||||||||||||||||||||||||||||
Earnings before tax | $ | 26.5 |
Operating segments | Non-operating segments (a) | |||||||||||||||||||||||||||||||||||||||
Six months ended June 30, 2019: | Fort Knox | Round Mountain | Bald Mountain | Paracatu | Maricunga | Kupol | Tasiast | Chirano | Corporate and other (b) | Total | ||||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||||||||||||
Metal sales | $ | 122.2 | 222.6 | 97.6 | 433.5 | 22.2 | 333.3 | 253.9 | 138.7 | - | $ | 1,624.0 | ||||||||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||||||||||||||||
Production cost of sales | 89.5 | 113.8 | 56.2 | 201.7 | 12.8 | 148.2 | 124.9 | 90.7 | - | 837.8 | ||||||||||||||||||||||||||||||
Depreciation, depletion and amortization | 40.6 | 18.1 | 28.4 | 81.1 | 0.9 | 58.1 | 63.2 | 49.2 | 4.4 | 344.0 | ||||||||||||||||||||||||||||||
Total cost of sales | 130.1 | 131.9 | 84.6 | 282.8 | 13.7 | 206.3 | 188.1 | 139.9 | 4.4 | 1,181.8 | ||||||||||||||||||||||||||||||
Gross profit (loss) | $ | (7.9 | ) | 90.7 | 13.0 | 150.7 | 8.5 | 127.0 | 65.8 | (1.2 | ) | (4.4 | ) | $ | 442.2 | |||||||||||||||||||||||||
Other operating expense (income) | 11.4 | - | 1.8 | 3.8 | 11.4 | (0.5 | ) | 19.7 | - | 14.8 | 62.4 | |||||||||||||||||||||||||||||
Exploration and business development | 1.1 | 1.6 | 5.8 | - | - | 9.6 | 0.8 | 3.5 | 25.5 | 47.9 | ||||||||||||||||||||||||||||||
General and administrative | - | - | - | - | - | - | - | - | 72.2 | 72.2 | ||||||||||||||||||||||||||||||
Operating earnings (loss) | $ | (20.4 | ) | 89.1 | 5.4 | 146.9 | (2.9 | ) | 117.9 | 45.3 | (4.7 | ) | (116.9 | ) | $ | 259.7 | ||||||||||||||||||||||||
Other income (expense) - net | 0.1 | |||||||||||||||||||||||||||||||||||||||
Equity in earnings of joint ventures | 0.1 | |||||||||||||||||||||||||||||||||||||||
Finance income | 4.0 | |||||||||||||||||||||||||||||||||||||||
Finance expense | (53.6 | ) | ||||||||||||||||||||||||||||||||||||||
Earnings before tax | $ | 210.3 |
Operating segments | Non-operating segments (a) | |||||||||||||||||||||||||||||||||||||||
Six months ended June 30, 2018: | Fort Knox | Round Mountain | Bald Mountain | Paracatu | Maricunga | Kupol | Tasiast | Chirano | Corporate and other (b), (c) | Total | ||||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||||||||||||
Metal sales | $ | 200.5 | 255.1 | 210.1 | 323.7 | 52.8 | 324.8 | 143.5 | 160.6 | 1.1 | $ | 1,672.2 | ||||||||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||||||||||||||||
Production cost of sales | 112.3 | 138.6 | 73.8 | 216.3 | 27.2 | 138.2 | 101.6 | 91.5 | - | 899.5 | ||||||||||||||||||||||||||||||
Depreciation, depletion and amortization | 61.8 | 28.7 | 48.0 | 65.0 | 2.3 | 71.4 | 37.9 | 64.7 | 3.6 | 383.4 | ||||||||||||||||||||||||||||||
Total cost of sales | 174.1 | 167.3 | 121.8 | 281.3 | 29.5 | 209.6 | 139.5 | 156.2 | 3.6 | 1,282.9 | ||||||||||||||||||||||||||||||
Gross profit (loss) | $ | 26.4 | 87.8 | 88.3 | 42.4 | 23.3 | 115.2 | 4.0 | 4.4 | (2.5 | ) | $ | 389.3 | |||||||||||||||||||||||||||
Other operating expense (income) | 0.1 | - | 0.8 | 3.8 | 2.3 | (0.2 | ) | 29.6 | (0.1 | ) | 18.5 | 54.8 | ||||||||||||||||||||||||||||
Exploration and business development | 2.0 | 0.8 | 2.8 | - | - | 8.9 | 2.6 | 2.1 | 25.1 | 44.3 | ||||||||||||||||||||||||||||||
General and administrative | - | - | - | - | - | - | - | - | 66.0 | 66.0 | ||||||||||||||||||||||||||||||
Operating earnings (loss) | $ | 24.3 | 87.0 | 84.7 | 38.6 | 21.0 | 106.5 | (28.2 | ) | 2.4 | (112.1 | ) | $ | 224.2 | ||||||||||||||||||||||||||
Other income (expense) - net | 7.7 | |||||||||||||||||||||||||||||||||||||||
Equity in losses of joint ventures | (0.2 | ) | ||||||||||||||||||||||||||||||||||||||
Finance income | 6.6 | |||||||||||||||||||||||||||||||||||||||
Finance expense | (51.6 | ) | ||||||||||||||||||||||||||||||||||||||
Earnings before tax | $ | 186.7 |
Operating segments | Non-operating segments (a) | |||||||||||||||||||||||||||||||||||||||
Fort Knox | Round Mountain | Bald Mountain | Paracatu | Maricunga | Kupol | Tasiast | Chirano | Corporate and other (b) | Total | |||||||||||||||||||||||||||||||
Property, plant and equipment at: | ||||||||||||||||||||||||||||||||||||||||
June 30, 2019 | $ | 387.2 | 544.7 | 634.2 | 1,555.9 | 41.2 | 376.8 | 1,673.0 | 188.9 | 367.7 | $ | 5,769.6 | ||||||||||||||||||||||||||||
Total assets at: | ||||||||||||||||||||||||||||||||||||||||
June 30, 2019 | $ | 617.4 | 711.3 | 802.5 | 1,831.8 | 70.2 | 1,097.4 | 2,038.2 | 325.4 | 913.1 | $ | 8,407.3 | ||||||||||||||||||||||||||||
Capital expenditures for three months ended June 30, 2019 (d) | $ | 38.2 | 63.4 | 67.6 | 34.3 | - | 8.2 | 93.0 | 3.0 | 4.7 | $ | 312.4 | ||||||||||||||||||||||||||||
Capital expenditures for six months ended June 30, 2019 (d) | $ | 67.2 | 125.8 | 138.5 | 46.2 | - | 16.1 | 179.6 | 5.3 | 8.1 | $ | 586.8 |
Operating segments | Non-operating segments (a) | |||||||||||||||||||||||||||||||||||||||
Fort Knox | Round Mountain | Bald Mountain | Paracatu | Maricunga | Kupol | Tasiast | Chirano | Corporate and other (b) | Total | |||||||||||||||||||||||||||||||
Property, plant and equipment at: | ||||||||||||||||||||||||||||||||||||||||
December 31, 2018 | $ | 363.3 | 433.9 | 513.5 | 1,585.8 | 39.5 | 418.4 | 1,591.6 | 232.2 | 340.9 | $ | 5,519.1 | ||||||||||||||||||||||||||||
Total assets at: | ||||||||||||||||||||||||||||||||||||||||
December 31, 2018 | $ | 590.1 | 583.9 | 686.1 | 1,832.8 | 126.6 | 1,054.9 | 1,940.6 | 334.0 | 914.8 | $ | 8,063.8 | ||||||||||||||||||||||||||||
Capital expenditures for three months ended June 30, 2018 (d) | $ | 20.0 | 48.0 | 49.2 | 23.7 | - | 11.5 | 120.5 | 5.3 | 0.6 | $ | 278.8 | ||||||||||||||||||||||||||||
Capital expenditures for six months ended June 30, 2018 (d) | $ | 27.6 | 73.5 | 72.0 | 36.3 | - | 22.0 | 276.4 | 12.0 | 0.6 | $ | 520.4 |
(a) | Non-operating segments include development properties. |
(b) | Corporate and other includes corporate, shutdown and other non-operating assets (including Kettle River-Buckhorn, La Coipa and Lobo-Marte). |
(c) | In 2017, the Kettle River-Buckhorn mine came to the end of its life and mining activities were completed. The Kettle River-Buckhorn segment was reclassified to Corporate and other in 2018. Accordingly, Corporate and other includes metal sales and operating losses of Kettle River-Buckhorn of $nil and $(1.6) million and $1.1 million and $(2.5) million, respectively, for the three and six months ended June 30, 2018. |
(d) | Segment capital expenditures are presented on an accrual basis. Additions to property, plant and equipment in the interim condensed consolidated statements of cash flows are presented on a cash basis. |
14. | COMMITMENTS AND CONTINGENCIES |
i. | Commitments |
ii. | Contingencies |
The Sunnyside Mine is an inactive mine situated in the so-called Bonita Peak Mining District (“District”) near Silverton, Colorado. A subsidiary of Kinross, Sunnyside Gold Corporation ("SGC"), was involved in operations at the mine from 1985 through 1991 and subsequently conducted various reclamation and closure activities at the mine and in the surrounding area. On August 5, 2015, while working in another mine in the District known as the Gold King, the Environmental Protection Agency (the “EPA”) caused a release of approximately three million gallons of contaminated water into a tributary of the Animas River. In the third quarter of 2016, the EPA listed the District, including areas impacted by SGC’s operations and closure activities, on the National Priorities List pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”). SGC challenged portions of the CERCLA listing in the United States Court of Appeals for District of Columbia Circuit, but SGC’s petition for review was denied, as was its subsequent petition for rehearing. The EPA has notified SGC that SGC is a potentially responsible party under CERCLA and may be jointly and severally liable for cleanup of the District or cleanup costs incurred by the EPA in the District. The EPA may in the future provide similar notification to Kinross, as the EPA contends that Kinross has liability in the District under CERCLA and other statutes. In the second quarter of 2018, the EPA issued to SGC a modified Unilateral Administrative Order for Remedial Investigation (“the Order”). In the second quarter of 2019, pursuant to the original Order, the EPA issued to SGC a Modified Statement of Work, Work Plan and Field Sampling Plan (together with the Order, the “Modified Order”). The Modified Order significantly altered and expanded upon the work set out under the original Order. In the third quarter of 2019, after consulting with external legal counsel, SGC provided notice to the EPA that the Modified Order is legally indefensible, does not address any imminent hazard and SGC does not intend to comply with the Modified Order. On July 26, 2019, the EPA acknowledged receipt of SGC’s notice of its intention not to comply with the Modified Order. The EPA indicated that it would undertake to complete the work ordered under the Modified Order. While SGC believes that it has good cause not to comply with the Modified Order, failure to comply with the Modified Order may subject SGC to significant penalties, damages and/or potential reimbursement of the cost of remediation work undertaken by the EPA.
In the second quarter of 2016, the State of New Mexico filed a complaint naming the EPA, SGC, Kinross and others alleging violations of CERCLA, the Resource Conservation and Recovery Act (“RCRA”), and the Clean Water Act (“CWA”) and claiming negligence, gross negligence, public nuisance and trespass. The New Mexico complaint seeks cost recovery, damages, injunctive relief, and attorney’s fees. In the third quarter of 2016, the Navajo Nation initiated litigation against the EPA, SGC and Kinross, alleging entitlement to cost recovery under CERCLA for past and future costs incurred, negligence, gross negligence, trespass, and public and private nuisance, and seeking reimbursement of past and future costs, compensatory, consequential and punitive damages, injunctive relief and attorneys’ fees. In the third quarter of 2017, the State of Utah filed a complaint, which has been amended to name the EPA, SGC, Kinross and others, alleging negligence, gross negligence, public nuisance, trespass, and violation of the Utah Water Quality Act and the Utah Solid and Hazardous Waste Act. The Utah complaint seeks cost recovery, compensatory, consequential and punitive damages, penalties, disgorgement of profits, declaratory, injunctive and other relief under CERCLA, attorney’s fees, and costs. In the third quarter of 2018, numerous members of the Navajo Nation initiated litigation against the EPA, SGC and Kinross, alleging negligence, gross negligence and injury, including great spiritual and emotional distress. The complaint of the Navajo members seeks compensatory and consequential damages, interest, punitive damages, attorneys’ fees and expenses. The New Mexico, Navajo Nation, Utah and Navajo member cases have been centralized for coordinated or consolidated pretrial proceedings in the United States District Court for the District of New Mexico. In the third quarter of 2019, the EPA filed a cross claim against SGC and Kinross seeking contribution, including contribution under CERCLA, for any damages awarded to New Mexico, the Navajo Nation, or Utah as well as cost-recovery for the EPA’s response costs and remedial expenses incurred by the EPA in the District pursuant to CERCLA or other laws. SGC contemporaneously filed a cross claim against the United States and certain contractors of the United States seeking contribution and equitable indemnity. It is expected that additional claims will be made against SGC and Kinross in the course of the centralized proceeding.
15. | CONSOLIDATING FINANCIAL STATEMENTS |
Guarantors | ||||||||||||||||||||||||||||
Kinross Gold Corp. | Guarantor Subsidiaries | Guarantor Adjustments | Total Guarantors | Non-guarantors | Eliminations | Consolidated | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 19.0 | $ | 116.7 | $ | - | $ | 135.7 | $ | 339.7 | $ | - | $ | 475.4 | ||||||||||||||
Restricted cash | - | 7.0 | - | 7.0 | 6.5 | - | 13.5 | |||||||||||||||||||||
Accounts receivable and other assets | 12.5 | 28.4 | - | 40.9 | 88.9 | - | 129.8 | |||||||||||||||||||||
Intercompany receivables | 568.5 | 1,074.7 | (295.0 | ) | 1,348.2 | 4,363.6 | (5,711.8 | ) | - | |||||||||||||||||||
Current income tax recoverable | - | 1.1 | - | 1.1 | 43.7 | - | 44.8 | |||||||||||||||||||||
Inventories | 2.3 | 473.4 | - | 475.7 | 515.6 | - | 991.3 | |||||||||||||||||||||
Unrealized fair value of derivative assets | 4.0 | 1.0 | - | 5.0 | 1.7 | - | 6.7 | |||||||||||||||||||||
606.3 | 1,702.3 | (295.0 | ) | 2,013.6 | 5,359.7 | (5,711.8 | ) | $ | 1,661.5 | |||||||||||||||||||
Non-current assets | ||||||||||||||||||||||||||||
Property, plant and equipment | 74.4 | 3,111.6 | - | 3,186.0 | 2,583.6 | - | 5,769.6 | |||||||||||||||||||||
Goodwill | - | 158.8 | - | 158.8 | - | - | 158.8 | |||||||||||||||||||||
Long-term investments | 173.9 | - | - | 173.9 | 8.5 | - | 182.4 | |||||||||||||||||||||
Investments in joint ventures | - | - | - | - | 18.4 | - | 18.4 | |||||||||||||||||||||
Intercompany investments | 3,750.5 | 4,233.2 | (6,580.5 | ) | 1,403.2 | 15,312.0 | (16,715.2 | ) | - | |||||||||||||||||||
Unrealized fair value of derivative assets | 0.6 | 2.9 | - | 3.5 | 0.4 | - | 3.9 | |||||||||||||||||||||
Other long-term assets | 11.0 | 210.1 | - | 221.1 | 356.0 | - | 577.1 | |||||||||||||||||||||
Long-term intercompany receivables | 3,217.1 | 2,234.1 | (1,854.6 | ) | 3,596.6 | 3,394.5 | (6,991.1 | ) | - | |||||||||||||||||||
Deferred tax assets | - | - | - | - | 35.6 | - | 35.6 | |||||||||||||||||||||
Total assets | $ | 7,833.8 | $ | 11,653.0 | $ | (8,730.1 | ) | $ | 10,756.7 | $ | 27,068.7 | $ | (29,418.1 | ) | $ | 8,407.3 | ||||||||||||
Liabilities | ||||||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||||||
Accounts payable and accrued liabilities | $ | 75.6 | $ | 202.4 | $ | - | $ | 278.0 | $ | 163.1 | $ | - | $ | 441.1 | ||||||||||||||
Intercompany payables | 134.7 | 771.2 | (295.0 | ) | 610.9 | 5,100.9 | (5,711.8 | ) | - | |||||||||||||||||||
Current income tax payable | - | 48.9 | - | 48.9 | 20.3 | - | 69.2 | |||||||||||||||||||||
Current portion of provisions | - | 15.3 | - | 15.3 | 34.6 | - | 49.9 | |||||||||||||||||||||
Other current liabilities | 2.2 | 11.2 | - | 13.4 | 2.9 | - | 16.3 | |||||||||||||||||||||
212.5 | 1,049.0 | (295.0 | ) | 966.5 | 5,321.8 | (5,711.8 | ) | 576.5 | ||||||||||||||||||||
Non-current liabilities | ||||||||||||||||||||||||||||
Long-term debt and credit facilities | 1,891.2 | - | - | 1,891.2 | - | - | 1,891.2 | |||||||||||||||||||||
Provisions | 10.5 | 417.6 | - | 428.1 | 407.9 | - | 836.0 | |||||||||||||||||||||
Long-term lease liabilities | 18.2 | 15.8 | - | 34.0 | 5.2 | - | 39.2 | |||||||||||||||||||||
Unrealized fair value of derivative liabilities | 0.9 | 0.9 | - | 1.8 | 0.5 | - | 2.3 | |||||||||||||||||||||
Other long-term liabilities | - | 56.5 | - | 56.5 | 50.5 | - | 107.0 | |||||||||||||||||||||
Long-term intercompany payables | 1,000.8 | 3,353.0 | (1,854.6 | ) | 2,499.2 | 4,491.9 | (6,991.1 | ) | - | |||||||||||||||||||
Deferred tax liabilities | - | 179.7 | - | 179.7 | 55.6 | - | 235.3 | |||||||||||||||||||||
Total liabilities | 3,134.1 | 5,072.5 | (2,149.6 | ) | 6,057.0 | 10,333.4 | (12,702.9 | ) | 3,687.5 | |||||||||||||||||||
Equity | ||||||||||||||||||||||||||||
Common shareholders' equity | ||||||||||||||||||||||||||||
Common share capital | $ | 14,919.9 | $ | 1,795.3 | $ | (1,795.3 | ) | $ | 14,919.9 | $ | 19,301.2 | $ | (19,301.2 | ) | $ | 14,919.9 | ||||||||||||
Contributed surplus | 237.6 | 3,464.4 | (3,464.4 | ) | 237.6 | 6,525.2 | (6,525.2 | ) | 237.6 | |||||||||||||||||||
Accumulated deficit | (10,411.8 | ) | 1,340.6 | (1,340.6 | ) | (10,411.8 | ) | (9,054.9 | ) | 9,054.9 | (10,411.8 | ) | ||||||||||||||||
Accumulated other comprehensive income (loss) | (46.0 | ) | (19.8 | ) | 19.8 | (46.0 | ) | (56.3 | ) | 56.3 | (46.0 | ) | ||||||||||||||||
Total common shareholders' equity | 4,699.7 | 6,580.5 | (6,580.5 | ) | 4,699.7 | 16,715.2 | (16,715.2 | ) | 4,699.7 | |||||||||||||||||||
Non-controlling interest | - | - | - | - | 20.1 | - | 20.1 | |||||||||||||||||||||
Total equity | 4,699.7 | 6,580.5 | (6,580.5 | ) | 4,699.7 | 16,735.3 | (16,715.2 | ) | 4,719.8 | |||||||||||||||||||
Total liabilities and equity | $ | 7,833.8 | $ | 11,653.0 | $ | (8,730.1 | ) | $ | 10,756.7 | $ | 27,068.7 | $ | (29,418.1 | ) | $ | 8,407.3 | ||||||||||||
Guarantors | ||||||||||||||||||||||||||||
Kinross Gold Corp. | Guarantor Subsidiaries | Guarantor Adjustments | Total Guarantors | Non-guarantors | Eliminations | Consolidated | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 29.7 | $ | 103.8 | $ | - | $ | 133.5 | $ | 215.5 | $ | - | $ | 349.0 | ||||||||||||||
Restricted cash | - | 6.2 | - | 6.2 | 6.5 | - | 12.7 | |||||||||||||||||||||
Accounts receivable and other assets | 9.7 | 30.4 | - | 40.1 | 61.3 | - | 101.4 | |||||||||||||||||||||
Intercompany receivables | 558.9 | 1,098.0 | (275.8 | ) | 1,381.1 | 4,283.2 | (5,664.3 | ) | - | |||||||||||||||||||
Current income tax recoverable | - | 2.3 | - | 2.3 | 76.7 | - | 79.0 | |||||||||||||||||||||
Inventories | 2.6 | 478.3 | - | 480.9 | 571.1 | - | 1,052.0 | |||||||||||||||||||||
Unrealized fair value of derivative assets | 3.3 | 0.5 | - | 3.8 | - | - | 3.8 | |||||||||||||||||||||
604.2 | 1,719.5 | (275.8 | ) | 2,047.9 | 5,214.3 | (5,664.3 | ) | 1,597.9 | ||||||||||||||||||||
Non-current assets | ||||||||||||||||||||||||||||
Property, plant and equipment | 31.5 | 2,931.4 | - | 2,962.9 | 2,556.2 | - | 5,519.1 | |||||||||||||||||||||
Goodwill | - | 158.8 | - | 158.8 | 3.9 | - | 162.7 | |||||||||||||||||||||
Long-term investments | 145.9 | - | - | 145.9 | 10.0 | - | 155.9 | |||||||||||||||||||||
Investments in joint ventures | - | - | - | - | 18.3 | - | 18.3 | |||||||||||||||||||||
Intercompany investments | 3,557.8 | 3,983.5 | (6,213.0 | ) | 1,328.3 | 15,167.0 | (16,495.3 | ) | - | |||||||||||||||||||
Unrealized fair value of derivative assets | - | 0.8 | - | 0.8 | - | - | 0.8 | |||||||||||||||||||||
Other long-term assets | 11.7 | 187.3 | - | 199.0 | 365.1 | - | 564.1 | |||||||||||||||||||||
Long-term intercompany receivables | 3,215.3 | 2,421.7 | (1,981.0 | ) | 3,656.0 | 3,576.0 | (7,232.0 | ) | - | |||||||||||||||||||
Deferred tax assets | - | - | - | - | 45.0 | - | 45.0 | |||||||||||||||||||||
Total assets | $ | 7,566.4 | $ | 11,403.0 | $ | (8,469.8 | ) | $ | 10,499.6 | $ | 26,955.8 | $ | (29,391.6 | ) | $ | 8,063.8 | ||||||||||||
Liabilities | ||||||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||||||
Accounts payable and accrued liabilities | $ | 74.5 | $ | 207.9 | $ | - | $ | 282.4 | $ | 183.5 | $ | - | $ | 465.9 | ||||||||||||||
Intercompany payables | 131.0 | 687.3 | (275.8 | ) | 542.5 | 5,121.8 | (5,664.3 | ) | - | |||||||||||||||||||
Current income tax payable | - | 14.1 | - | 14.1 | 7.6 | - | 21.7 | |||||||||||||||||||||
Current portion of provisions | - | 23.6 | - | 23.6 | 49.0 | - | 72.6 | |||||||||||||||||||||
Other current liabilities | 7.1 | 12.3 | - | 19.4 | 32.8 | - | 52.2 | |||||||||||||||||||||
212.6 | 945.2 | (275.8 | ) | 882.0 | 5,394.7 | (5,664.3 | ) | 612.4 | ||||||||||||||||||||
Non-current liabilities | ||||||||||||||||||||||||||||
Long-term debt and credit facilities | 1,735.0 | - | - | 1,735.0 | - | - | 1,735.0 | |||||||||||||||||||||
Provisions | 10.9 | 403.0 | - | 413.9 | 402.5 | - | 816.4 | |||||||||||||||||||||
Long-term lease liabilities | - | - | - | - | - | - | - | |||||||||||||||||||||
Unrealized fair value of derivative liabilities | 3.9 | 3.6 | - | 7.5 | 2.1 | - | 9.6 | |||||||||||||||||||||
Other long-term liabilities | - | 54.7 | - | 54.7 | 43.2 | - | 97.9 | |||||||||||||||||||||
Long-term intercompany payables | 1,097.3 | 3,589.4 | (1,981.0 | ) | 2,705.7 | 4,526.3 | (7,232.0 | ) | - | |||||||||||||||||||
Deferred tax liabilities | - | 194.1 | - | 194.1 | 71.1 | - | 265.2 | |||||||||||||||||||||
Total liabilities | 3,059.7 | 5,190.0 | (2,256.8 | ) | 5,992.9 | 10,439.9 | (12,896.3 | ) | 3,536.5 | |||||||||||||||||||
Equity | ||||||||||||||||||||||||||||
Common shareholders' equity | ||||||||||||||||||||||||||||
Common share capital | $ | 14,913.4 | $ | 1,795.3 | $ | (1,795.3 | ) | $ | 14,913.4 | $ | 19,217.6 | $ | (19,217.6 | ) | $ | 14,913.4 | ||||||||||||
Contributed surplus | 239.8 | 3,442.6 | (3,442.6 | ) | 239.8 | 6,415.6 | (6,415.6 | ) | 239.8 | |||||||||||||||||||
Accumulated deficit | (10,548.0 | ) | 1,001.6 | (1,001.6 | ) | (10,548.0 | ) | (9,078.2 | ) | 9,078.2 | (10,548.0 | ) | ||||||||||||||||
Accumulated other comprehensive income (loss) | (98.5 | ) | (26.5 | ) | 26.5 | (98.5 | ) | (59.7 | ) | 59.7 | (98.5 | ) | ||||||||||||||||
Total common shareholders' equity | 4,506.7 | 6,213.0 | (6,213.0 | ) | 4,506.7 | 16,495.3 | (16,495.3 | ) | 4,506.7 | |||||||||||||||||||
Non-controlling interest | - | - | - | - | 20.6 | - | 20.6 | |||||||||||||||||||||
Total equity | 4,506.7 | 6,213.0 | (6,213.0 | ) | 4,506.7 | 16,515.9 | (16,495.3 | ) | 4,527.3 | |||||||||||||||||||
Total liabilities and equity | $ | 7,566.4 | $ | 11,403.0 | $ | (8,469.8 | ) | $ | 10,499.6 | $ | 26,955.8 | $ | (29,391.6 | ) | $ | 8,063.8 | ||||||||||||
Guarantors | ||||||||||||||||||||||||||||
Kinross Gold Corp. | Guarantor Subsidiaries | Guarantor Adjustments | Total Guarantors | Non-guarantors | Eliminations | Consolidated | ||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||
Metal sales | $ | 854.9 | $ | 856.9 | $ | (816.9 | ) | $ | 894.9 | $ | 729.1 | $ | - | $ | 1,624.0 | |||||||||||||
Cost of sales | ||||||||||||||||||||||||||||
Production cost of sales | 838.8 | 459.9 | (816.9 | ) | 481.8 | 356.0 | - | 837.8 | ||||||||||||||||||||
Depreciation, depletion and amortization | 1.7 | 168.3 | - | 170.0 | 174.0 | - | 344.0 | |||||||||||||||||||||
Total cost of sales | 840.5 | 628.2 | (816.9 | ) | 651.8 | 530.0 | - | 1,181.8 | ||||||||||||||||||||
Gross profit | 14.4 | 228.7 | - | 243.1 | 199.1 | - | 442.2 | |||||||||||||||||||||
Other operating expense | 9.5 | 17.0 | - | 26.5 | 35.9 | - | 62.4 | |||||||||||||||||||||
Exploration and business development | 13.6 | 8.5 | - | 22.1 | 25.8 | - | 47.9 | |||||||||||||||||||||
General and administrative | 48.0 | 2.3 | - | 50.3 | 21.9 | - | 72.2 | |||||||||||||||||||||
Operating earnings (loss) | (56.7 | ) | 200.9 | - | 144.2 | 115.5 | - | 259.7 | ||||||||||||||||||||
Other income (expense) - net | 12.9 | (1.1 | ) | - | 11.8 | 23.3 | (35.0 | ) | 0.1 | |||||||||||||||||||
Equity in earnings (losses) of joint ventures and intercompany investments | 173.4 | 81.5 | (222.3 | ) | 32.6 | 0.1 | (32.6 | ) | 0.1 | |||||||||||||||||||
Finance income | 41.5 | 31.0 | (5.8 | ) | 66.7 | 42.6 | (105.3 | ) | 4.0 | |||||||||||||||||||
Finance expense | (34.9 | ) | (38.7 | ) | 5.8 | (67.8 | ) | (91.1 | ) | 105.3 | (53.6 | ) | ||||||||||||||||
Earnings (loss) before tax | 136.2 | 273.6 | (222.3 | ) | 187.5 | 90.4 | (67.6 | ) | 210.3 | |||||||||||||||||||
Income tax expense - net | - | (51.3 | ) | - | (51.3 | ) | (23.3 | ) | - | (74.6 | ) | |||||||||||||||||
Net earnings (loss) | $ | 136.2 | $ | 222.3 | $ | (222.3 | ) | $ | 136.2 | $ | 67.1 | $ | (67.6 | ) | $ | 135.7 | ||||||||||||
Net earnings (loss) attributable to: | ||||||||||||||||||||||||||||
Non-controlling interest | $ | - | $ | - | $ | - | $ | - | $ | (0.5 | ) | $ | - | $ | (0.5 | ) | ||||||||||||
Common shareholders | $ | 136.2 | $ | 222.3 | $ | (222.3 | ) | $ | 136.2 | $ | 67.6 | $ | (67.6 | ) | $ | 136.2 | ||||||||||||
Guarantors | ||||||||||||||||||||||||||||
Kinross Gold Corp. | Guarantor Subsidiaries | Guarantor Adjustments | Total Guarantors | Non-guarantors | Eliminations | Consolidated | ||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||
Metal sales | $ | 1,026.3 | $ | 967.4 | $ | (952.5 | ) | $ | 1,041.2 | $ | 631.0 | $ | - | $ | 1,672.2 | |||||||||||||
Cost of sales | ||||||||||||||||||||||||||||
Production cost of sales | 1,003.5 | 540.0 | (952.3 | ) | 591.2 | 308.3 | - | 899.5 | ||||||||||||||||||||
Depreciation, depletion and amortization | 2.4 | 203.7 | (0.2 | ) | 205.9 | 177.5 | - | 383.4 | ||||||||||||||||||||
Total cost of sales | 1,005.9 | 743.7 | (952.5 | ) | 797.1 | 485.8 | - | 1,282.9 | ||||||||||||||||||||
Gross profit | 20.4 | 223.7 | - | 244.1 | 145.2 | - | 389.3 | |||||||||||||||||||||
Other operating expense | 3.9 | 4.7 | - | 8.6 | 46.2 | - | 54.8 | |||||||||||||||||||||
Exploration and business development | 12.5 | 5.7 | - | 18.2 | 26.1 | - | 44.3 | |||||||||||||||||||||
General and administrative | 34.7 | 2.1 | - | 36.8 | 29.2 | - | 66.0 | |||||||||||||||||||||
Operating earnings (loss) | (30.7 | ) | 211.2 | - | 180.5 | 43.7 | - | 224.2 | ||||||||||||||||||||
Other income (expense) - net | 6.2 | (5.1 | ) | - | 1.1 | 89.6 | (83.0 | ) | 7.7 | |||||||||||||||||||
Equity in earnings (losses) of joint ventures and intercompany investments | 143.4 | 23.0 | (194.4 | ) | (28.0 | ) | - | 27.8 | (0.2 | ) | ||||||||||||||||||
Finance income | 25.9 | 25.3 | (1.7 | ) | 49.5 | 34.9 | (77.8 | ) | 6.6 | |||||||||||||||||||
Finance expense | (35.1 | ) | (23.3 | ) | 1.7 | (56.7 | ) | (72.7 | ) | 77.8 | (51.6 | ) | ||||||||||||||||
Earnings (loss) before tax | 109.7 | 231.1 | (194.4 | ) | 146.4 | 95.5 | (55.2 | ) | 186.7 | |||||||||||||||||||
Income tax expense - net | (1.2 | ) | (36.7 | ) | - | (37.9 | ) | (40.5 | ) | - | (78.4 | ) | ||||||||||||||||
Net earnings (loss) | $ | 108.5 | $ | 194.4 | $ | (194.4 | ) | $ | 108.5 | $ | 55.0 | $ | (55.2 | ) | $ | 108.3 | ||||||||||||
Net earnings (loss) attributable to: | ||||||||||||||||||||||||||||
Non-controlling interest | $ | - | $ | - | $ | - | $ | - | $ | (0.2 | ) | $ | - | $ | (0.2 | ) | ||||||||||||
Common shareholders | $ | 108.5 | $ | 194.4 | $ | (194.4 | ) | $ | 108.5 | $ | 55.2 | $ | (55.2 | ) | $ | 108.5 | ||||||||||||
Guarantors | ||||||||||||||||||||||||||||
Kinross Gold Corp. | Guarantor Subsidiaries | Guarantor Adjustments | Total Guarantors | Non-guarantors | Eliminations | Consolidated | ||||||||||||||||||||||
Net earnings (loss) | $ | 136.2 | $ | 222.3 | $ | (222.3 | ) | $ | 136.2 | $ | 67.1 | $ | (67.6 | ) | $ | 135.7 | ||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||||
Items that will not be reclassified to profit or loss: | ||||||||||||||||||||||||||||
Equity investments at fair value through other comprehensive income ("FVOCI") - net change in fair value (a) | 30.0 | - | - | 30.0 | (1.4 | ) | - | 28.6 | ||||||||||||||||||||
Items that are or may be reclassified to profit or loss in subsequent periods: | ||||||||||||||||||||||||||||
Cash flow hedges - effective portion of changes in fair value (b) | 10.7 | 10.8 | - | 21.5 | - | - | 21.5 | |||||||||||||||||||||
Cash flow hedges - reclassified to profit or loss (c) | (0.1 | ) | 2.5 | - | 2.4 | - | - | 2.4 | ||||||||||||||||||||
40.6 | 13.3 | - | 53.9 | (1.4 | ) | - | 52.5 | |||||||||||||||||||||
Equity in other comprehensive income (loss) of intercompany investments | 11.9 | - | (13.3 | ) | (1.4 | ) | - | 1.4 | - | |||||||||||||||||||
Total comprehensive income (loss) | $ | 188.7 | $ | 235.6 | $ | (235.6 | ) | $ | 188.7 | $ | 65.7 | $ | (66.2 | ) | $ | 188.2 | ||||||||||||
Attributable to non-controlling interest | $ | - | $ | - | $ | - | $ | - | $ | (0.5 | ) | $ | - | $ | (0.5 | ) | ||||||||||||
Attributable to common shareholders | $ | 188.7 | $ | 235.6 | $ | (235.6 | ) | $ | 188.7 | $ | 66.2 | $ | (66.2 | ) | $ | 188.7 | ||||||||||||
(a) Net of tax of | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||
(b) Net of tax of | $ | 0.1 | $ | 4.2 | $ | - | $ | 4.3 | $ | - | $ | - | $ | 4.3 | ||||||||||||||
(c) Net of tax of | $ | - | $ | 1.6 | $ | - | $ | 1.6 | $ | - | $ | - | $ | 1.6 |
Guarantors | ||||||||||||||||||||||||||||
Kinross Gold Corp. | Guarantor Subsidiaries | Guarantor Adjustments | Total Guarantors | Non-guarantors | Eliminations | Consolidated | ||||||||||||||||||||||
Net earnings (loss) | $ | 108.5 | 194.4 | (194.4 | ) | 108.5 | 55.0 | (55.2 | ) | 108.3 | ||||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||||
Items that will not be reclassified to profit or loss: | ||||||||||||||||||||||||||||
Equity investments at fair value through other comprehensive income ("FVOCI") - net change in fair value (a) | (37.0 | ) | - | - | (37.0 | ) | (1.6 | ) | - | (38.6 | ) | |||||||||||||||||
Items that are or may be reclassified to profit or loss in subsequent periods: | ||||||||||||||||||||||||||||
Cash flow hedges - effective portion of changes in fair value (b) | 0.6 | (35.8 | ) | - | (35.2 | ) | - | - | (35.2 | ) | ||||||||||||||||||
Cash flow hedges - reclassified to profit or loss (c) | (4.0 | ) | (3.5 | ) | - | (7.5 | ) | - | - | (7.5 | ) | |||||||||||||||||
(40.4 | ) | (39.3 | ) | - | (79.7 | ) | (1.6 | ) | - | (81.3 | ) | |||||||||||||||||
Equity in other comprehensive income (loss) of intercompany investments | (40.9 | ) | - | 39.3 | (1.6 | ) | - | 1.6 | - | |||||||||||||||||||
Total comprehensive income (loss) | $ | 27.2 | $ | 155.1 | $ | (155.1 | ) | $ | 27.2 | $ | 53.4 | $ | (53.6 | ) | $ | 27.0 | ||||||||||||
Attributable to non-controlling interest | $ | - | $ | - | $ | - | $ | - | $ | (0.2 | ) | $ | - | $ | (0.2 | ) | ||||||||||||
Attributable to common shareholders | $ | 27.2 | $ | 155.1 | $ | (155.1 | ) | $ | 27.2 | $ | 53.6 | $ | (53.6 | ) | $ | 27.2 | ||||||||||||
(a) Net of tax of | $ | - | $ | - | $ | - | $ | - | $ | (0.3 | ) | $ | - | $ | (0.3 | ) | ||||||||||||
(b) Net of tax of | $ | 0.2 | $ | (20.1 | ) | $ | - | $ | (19.9 | ) | $ | - | $ | - | $ | (19.9 | ) | |||||||||||
(c) Net of tax of | $ | (1.5 | ) | $ | (1.0 | ) | $ | - | $ | (2.5 | ) | $ | - | $ | - | $ | (2.5 | ) |
Guarantors | ||||||||||||||||||||||||||||
Kinross Gold Corp. | Guarantor Subsidiaries | Guarantor Adjustments | Total Guarantors | Non-guarantors | Eliminations | Consolidated | ||||||||||||||||||||||
Net inflow (outflow) of cash related to the following activities: | ||||||||||||||||||||||||||||
Operating: | ||||||||||||||||||||||||||||
Net earnings (loss) | $ | 136.2 | $ | 222.3 | $ | (222.3 | ) | $ | 136.2 | $ | 67.1 | $ | (67.6 | ) | $ | 135.7 | ||||||||||||
Adjustments to reconcile net earnings (loss) to net cash provided from (used in) operating activities: | ||||||||||||||||||||||||||||
Depreciation, depletion and amortization | 1.7 | 168.3 | - | 170.0 | 174.0 | - | 344.0 | |||||||||||||||||||||
Equity in (earnings) losses of joint ventures and intercompany investments | (173.4 | ) | (81.5 | ) | 222.3 | (32.6 | ) | (0.1 | ) | 32.6 | (0.1 | ) | ||||||||||||||||
Share-based compensation expense | 7.6 | - | - | 7.6 | - | - | 7.6 | |||||||||||||||||||||
Finance expense | 34.9 | 38.7 | (5.8 | ) | 67.8 | 91.1 | (105.3 | ) | 53.6 | |||||||||||||||||||
Deferred tax expense (recovery) | - | (21.0 | ) | - | (21.0 | ) | (10.4 | ) | - | (31.4 | ) | |||||||||||||||||
Foreign exchange losses (gains) and other | 0.6 | 1.8 | - | 2.4 | 6.7 | - | 9.1 | |||||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||||||
Accounts receivable and other assets | (3.0 | ) | 6.2 | - | 3.2 | (28.9 | ) | - | (25.7 | ) | ||||||||||||||||||
Inventories | 0.4 | (13.5 | ) | - | (13.1 | ) | 63.1 | - | 50.0 | |||||||||||||||||||
Accounts payable and accrued liabilities | (5.7 | ) | 49.0 | - | 43.3 | (0.9 | ) | - | 42.4 | |||||||||||||||||||
Cash flow provided from (used in) operating activities | (0.7 | ) | 370.3 | (5.8 | ) | 363.8 | 361.7 | (140.3 | ) | 585.2 | ||||||||||||||||||
Income taxes recovered (paid) | - | (31.1 | ) | - | (31.1 | ) | 30.5 | - | (0.6 | ) | ||||||||||||||||||
Net cash flow provided from (used in) operating activities | (0.7 | ) | 339.2 | (5.8 | ) | 332.7 | 392.2 | (140.3 | ) | 584.6 | ||||||||||||||||||
Investing: | ||||||||||||||||||||||||||||
Additions to property, plant and equipment | (25.8 | ) | (348.2 | ) | - | (374.0 | ) | (167.5 | ) | - | (541.5 | ) | ||||||||||||||||
Settlement of deferred payment obligation and initial acquisition | - | - | - | - | (30.0 | ) | - | (30.0 | ) | |||||||||||||||||||
Net additions to long-term investments and other assets | 2.1 | (6.1 | ) | - | (4.0 | ) | (8.3 | ) | - | (12.3 | ) | |||||||||||||||||
Net proceeds from the sale of property, plant and equipment | - | 0.3 | - | 0.3 | 1.8 | - | 2.1 | |||||||||||||||||||||
Increase in restricted cash | - | (0.8 | ) | - | (0.8 | ) | - | - | (0.8 | ) | ||||||||||||||||||
Interest received and other | 0.2 | 1.0 | - | 1.2 | 0.9 | - | 2.1 | |||||||||||||||||||||
Net cash flow used in investing activities | (23.5 | ) | (353.8 | ) | - | (377.3 | ) | (203.1 | ) | - | (580.4 | ) | ||||||||||||||||
Financing: | ||||||||||||||||||||||||||||
Net proceeds from issuance/drawdown of debt | 260.0 | - | - | 260.0 | - | - | 260.0 | |||||||||||||||||||||
Repayment of debt | (105.0 | ) | - | - | (105.0 | ) | - | - | (105.0 | ) | ||||||||||||||||||
Payment of lease liabilities | (1.0 | ) | (4.4 | ) | - | (5.4 | ) | (1.8 | ) | - | (7.2 | ) | ||||||||||||||||
Interest paid | (28.4 | ) | - | - | (28.4 | ) | - | - | (28.4 | ) | ||||||||||||||||||
Dividends received from (paid to) common shareholders and subsidiaries | - | - | - | - | (35.0 | ) | 35.0 | - | ||||||||||||||||||||
Intercompany advances | (113.0 | ) | 31.9 | 5.8 | (75.3 | ) | (30.0 | ) | 105.3 | - | ||||||||||||||||||
Other | 0.9 | - | - | 0.9 | (1.1 | ) | - | (0.2 | ) | |||||||||||||||||||
Net cash flow provided from (used in) financing activities | 13.5 | 27.5 | 5.8 | 46.8 | (67.9 | ) | 140.3 | 119.2 | ||||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | - | - | - | - | 3.0 | - | 3.0 | |||||||||||||||||||||
Increase (decrease) in cash and cash equivalents | (10.7 | ) | 12.9 | - | 2.2 | 124.2 | - | 126.4 | ||||||||||||||||||||
Cash and cash equivalents, beginning of period | 29.7 | 103.8 | - | 133.5 | 215.5 | - | 349.0 | |||||||||||||||||||||
Cash and cash equivalents, end of period | $ | 19.0 | $ | 116.7 | $ | - | $ | 135.7 | $ | 339.7 | $ | - | $ | 475.4 | ||||||||||||||
Guarantors | ||||||||||||||||||||||||||||
Kinross Gold Corp. | Guarantor Subsidiaries | Guarantor Adjustments | Total Guarantors | Non-guarantors | Eliminations | Consolidated | ||||||||||||||||||||||
Net inflow (outflow) of cash related to the following activities: | ||||||||||||||||||||||||||||
Operating: | ||||||||||||||||||||||||||||
Net earnings (loss) | $ | 108.5 | $ | 194.4 | $ | (194.4 | ) | $ | 108.5 | $ | 55.0 | $ | (55.2 | ) | $ | 108.3 | ||||||||||||
Adjustments to reconcile net earnings (loss) to net cash provided from (used in) operating activities: | ||||||||||||||||||||||||||||
Depreciation, depletion and amortization | 2.4 | 203.7 | (0.2 | ) | 205.9 | 177.5 | - | 383.4 | ||||||||||||||||||||
Equity in (earnings) losses of joint ventures and intercompany investments | (143.4 | ) | (23.0 | ) | 194.4 | 28.0 | - | (27.8 | ) | 0.2 | ||||||||||||||||||
Share-based compensation expense | 7.5 | - | - | 7.5 | - | - | 7.5 | |||||||||||||||||||||
Finance expense | 35.1 | 23.3 | (1.7 | ) | 56.7 | 72.7 | (77.8 | ) | 51.6 | |||||||||||||||||||
Deferred tax expense (recovery) | 1.3 | 28.7 | - | 30.0 | (2.7 | ) | - | 27.3 | ||||||||||||||||||||
Foreign exchange losses (gains) and other | 5.5 | (12.7 | ) | - | (7.2 | ) | 24.1 | - | 16.9 | |||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||||||||||
Accounts receivable and other assets | (4.7 | ) | 0.4 | - | (4.3 | ) | (39.8 | ) | - | (44.1 | ) | |||||||||||||||||
Inventories | (1.2 | ) | (26.3 | ) | 0.2 | (27.3 | ) | 25.5 | - | (1.8 | ) | |||||||||||||||||
Accounts payable and accrued liabilities | (25.4 | ) | (13.6 | ) | - | (39.0 | ) | 23.0 | - | (16.0 | ) | |||||||||||||||||
Cash flow provided from (used in) operating activities | (14.4 | ) | 374.9 | (1.7 | ) | 358.8 | 335.3 | (160.8 | ) | 533.3 | ||||||||||||||||||
Income taxes recovered (paid) | - | (25.6 | ) | - | (25.6 | ) | (29.7 | ) | - | (55.3 | ) | |||||||||||||||||
Net cash flow provided from (used in) operating activities | (14.4 | ) | 349.3 | (1.7 | ) | 333.2 | 305.6 | (160.8 | ) | 478.0 | ||||||||||||||||||
Investing: | ||||||||||||||||||||||||||||
Additions to property, plant and equipment | (2.6 | ) | (202.5 | ) | - | (205.1 | ) | (288.9 | ) | - | (494.0 | ) | ||||||||||||||||
Settlement of deferred payment obligation and initial acquisition | - | - | - | - | (35.1 | ) | - | (35.1 | ) | |||||||||||||||||||
Net additions to long-term investments and other assets | 0.9 | (11.0 | ) | - | (10.1 | ) | (20.1 | ) | - | (30.2 | ) | |||||||||||||||||
Net proceeds from the sale of property, plant and equipment | - | 0.3 | - | 0.3 | 3.7 | - | 4.0 | |||||||||||||||||||||
Increase in restricted cash | - | (0.1 | ) | - | (0.1 | ) | - | - | (0.1 | ) | ||||||||||||||||||
Interest received and other | 1.7 | 1.1 | - | 2.8 | 2.2 | - | 5.0 | |||||||||||||||||||||
Net cash flow used in investing activities | - | (212.2 | ) | - | (212.2 | ) | (338.2 | ) | - | (550.4 | ) | |||||||||||||||||
Financing: | ||||||||||||||||||||||||||||
Proceeds from issuance/drawdown of debt | - | - | - | - | - | - | - | |||||||||||||||||||||
Repayment of debt | - | - | - | - | - | - | - | |||||||||||||||||||||
Payment of lease liabilities | ||||||||||||||||||||||||||||
Interest paid | (30.0 | ) | - | - | (30.0 | ) | - | - | (30.0 | ) | ||||||||||||||||||
Dividends received from (paid to) common shareholders and subsidiaries | - | - | - | - | (83.0 | ) | 83.0 | - | ||||||||||||||||||||
Intercompany advances | (151.2 | ) | (95.3 | ) | 1.7 | (244.8 | ) | 167.0 | 77.8 | - | ||||||||||||||||||
Other | 0.5 | - | - | 0.5 | (0.1 | ) | - | 0.4 | ||||||||||||||||||||
Net cash flow provided from (used in) financing activities | (180.7 | ) | (95.3 | ) | 1.7 | (274.3 | ) | 83.9 | 160.8 | (29.6 | ) | |||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | - | - | - | - | (5.1 | ) | - | (5.1 | ) | |||||||||||||||||||
Increase (decrease) in cash and cash equivalents | (195.1 | ) | 41.8 | - | (153.3 | ) | 46.2 | - | (107.1 | ) | ||||||||||||||||||
Cash and cash equivalents, beginning of period | 267.6 | 122.7 | - | 390.3 | 635.5 | - | 1,025.8 | |||||||||||||||||||||
Cash and cash equivalents, end of period | $ | 72.5 | $ | 164.5 | $ | - | $ | 237.0 | $ | 681.7 | $ | - | $ | 918.7 | ||||||||||||||