Each one in plain English, with the numbers worked through for a shareholder.
11 June 2013debt financing▼ BadMajor
Two announcements in one filing. The larger one abandons the Fruta del Norte project in Ecuador after two years of failed negotiation with the government, ending the asset Kinross bought with Aurelian Resources; the second extends the US$1.5 billion revolver to August 2018 and the US$1.0 billion term loan to August 2017, leaving no debt maturing before 2016.
The Tasiast expansion pre-feasibility put a 30,000 tonne-per-day mill at roughly 830,000 ounces a year for five years, cash costs near US$500 an ounce and all-in sustaining costs near US$735, but at a capital cost of about US$2.7 billion for an 11% return. Kinross opted to study a larger 38,000 tonne-per-day mill instead.
Holders put US$454.6 million of the 1.75% 2028 convertible notes back for cash, and Kinross said it would compulsorily redeem whatever stub remained at par around 30 April. Effectively the whole 2028 convertible issue was retired for cash.
Formally notified holders of its 1.75% convertible notes due 2028 that they could put the notes back to the company at par on 15 March 2013, a right written into the 2008 indenture rather than anything new.
Agreed to sell its non-operated 50% of the Crixas gold mine in Brazil to partner and operator AngloGold Ashanti for US$220 million cash. Kinross's half held about 375,000 ounces of reserves and was forecast to contribute roughly 70,000 gold-equivalent ounces in 2012.
The full Tasiast technical report itself, effective 30 March 2012, filed alongside the 2011 annual report. It documents the mine as it then stood, six weeks after Kinross wrote US$2,490.1 million of Tasiast goodwill off its balance sheet.
Filed the National Instrument 43-101 technical report backing the Tasiast reserve and resource figures already published in February 2012. It covers only the existing 8,000 tonne-per-day operation and deliberately excludes every expansion scenario then under study.
The material change report behind the 2011 year-end results: a non-cash goodwill impairment of US$2,937.6 million on the Tasiast and Chirano assets bought from Red Back Mining in September 2010, of which US$2,490.1 million was Tasiast and US$447.5 million Chirano. Kinross blamed industry-wide cost inflation, lower sector valuations and its own improving understanding of the Tasiast mine plan, and cut back capital, deferring Fruta del Norte and Lobo-Marte.
Kinross said preliminary 2011 production was about 2.6 million gold-equivalent ounces at roughly US$600 cost of sales per ounce, both within guidance. It guided 2012 to 2.6-2.8 million ounces at US$670-715 and launched a capital and project optimization review of Tasiast, Fruta del Norte and Lobo-Marte that could extend their feasibility timetables.
A US$200 million five-year non-recourse loan at LIBOR plus 2.5% was drawn down to pay for lifting Kinross to full ownership of the Kupol mine in Russia, completed the previous April. Lenders were Export Development Canada, BNP Paribas, HSBC, ING and Societe Generale.
6 Dec 2011regulatory community update● NeutralMajor
On 5 December 2011 Kinross reached a non-binding agreement in principle with Ecuador on the Fruta del Norte exploitation contract. Terms include a minimum 52% government share of project economic benefits, a sliding royalty of 5% to 8% by gold price, US$65m of advance royalties, 22% corporate tax, 15% profit sharing, and a 70% windfall tax above a base price of at least US$1,650 per ounce. Kinross said capital and operating costs are expected to be about 25-30% above the pre-feasibility estimates, and the feasibility study is due at year-end 2011. Binding agreements still need the study, a change in project status and definitive contracts. This continues the Fruta del Norte thread, which later ended with development abandoned in 2013. The release now cites about 8,000 employees, up from about 7,000.
Kinross priced a US$1 billion offering of senior unsecured notes in three tranches: US$250 million of 3.625% due 2016, US$500 million of 5.125% due 2021 and US$250 million of 6.875% due 2041. Proceeds were for general corporate purposes, including capital expenditures, and the offering was expected to close on 22 August 2011.
Kinross filed a technical report on the Kupol mine in Russia, effective 9 May 2011. It confirms that on 27 April 2011 Kinross's subsidiary CMGC repurchased the 25% held by the Chukotka state enterprise, so Kinross now owns 100% of Kupol and the Kupol East-West licences. This resolves the pre-approval from late March 2011. Kinross's original 75% came from the Bema Gold purchase on 27 February 2007. Resource, reserve and economic figures are cut off in the text, so none are given here.
Kinross amended its unsecured revolving credit facility on 31 March 2011, raising available credit from US$600 million to US$1.2 billion. The facility now expires 31 March 2015 and was arranged by Scotia Capital and Merrill Lynch. The release attributes the increase to the company's growth over the past year, which is consistent with the Red Back deal. The filing does not say whether any of it is drawn. This replaces the facility terms in the earlier context (amended US$450m facility expiring Nov 2012).
Kinross filed a technical report on its wholly owned Tasiast mine in Mauritania, effective 31 December 2010, now prepared by Kinross itself rather than for Red Back as in August 2010. It states reserves of 7.56 million ounces of gold and says the mine could keep producing until 2040 at about 250,000 oz a year. It also cites a December 2010 scoping study for an expansion: about 1.5 million gold-equivalent ounces a year over the first eight full years, with pre-commissioning capital of about US$1.8 billion plus roughly US$400 million contingency. A feasibility study has begun. This continues the Tasiast thread from the Red Back purchase; the later expansion plans were scaled down and not built as scoped (inference from the context).
Two releases. On 25 March 2011 Kinross said Russia's foreign investment commission pre-approved raising its stake in the Kupol mine's owner to 100% from 75% by repurchasing shares held by the Chukotka state enterprise. It plans to fund this from the Harry Winston share sale proceeds plus a non-recourse debt facility of about US$200m, with EDC and commercial banks showing interest. The share purchase agreement is not yet signed and the commission's minutes may carry conditions. On 28 March it reported Tasiast drilling: 26 rigs, 70,000 metres drilled this year, two encouraging reconnaissance targets (Charlize, 15 km south, with intercepts such as 12 m at 2.06 g/t), the expansion feasibility study 36% complete, and positive step-out holes at Chirano in Ghana. This continues the Red Back/Tasiast thread, now closed as Kinross assets.
Kinross sold its remaining roughly 8.5% Harry Winston stake (about 7.1m shares) in an underwritten block trade at Cdn$14.00 per share, for gross proceeds of Cdn$100m. These were the shares received in the August 2010 Diavik sale, so this closes out the share holding from the diamond exit. The filing does not say what happened to the US$70m note.
Kinross filed a new technical report on its wholly owned Fruta del Norte project in Ecuador, effective 31 December 2010 and written by its own Robert Henderson, with his consent. It updates the January 2010 report. It incorporates a pre-feasibility study by Hatch Ltd. envisaging a two-phase underground mine and plant over a 16-year life, 2,500 t/d rising to 5,000 t/d, with total production of 6.3Moz of gold and 6.8Moz of silver from reserves of 26.1 million tonnes. The reserve grades, costs and cash-flow tables are cut off, so those figures are not available. This continues the Fruta del Norte thread, which ended with its development abandoned in 2013.
Kinross sold its roughly 1.8% stake in Osisko Mining (about 6.8m shares) in an underwritten block trade at a gross price of Cdn$14.70 per share. The CEO called it a non-core holding and said the sale adds to Kinross's financial position. The filing does not give total proceeds (implied from the figures: roughly Cdn$100m, an inference). Kinross's description now lists Ghana and Mauritania and about 7,000 employees, showing the Red Back assets are in the group.
The business acquisition report for Red Back Mining, acquired 17 September 2010. Consideration was 1.778 Kinross shares plus 0.11 of a four-year warrant exercisable at US$21.30 for each Red Back share, with options exchanged at a 1.81 ratio. No cash was paid; the whole US$7.1 billion was Kinross paper.
Closed the purchase of the companies owning the Dvoinoye deposit and Vodorazdelnaya licences in Chukotka for US$165 million cash and about 10.56 million new Kinross shares, held for four months. Kinross also closed its deal with B2Gold for the Kupol East and West exploration licences.
25 Aug 2010asset acquisition disposition● NeutralMajor
Kinross completed the sale of its 22.5% interest in the partnership holding Harry Winston's 40% of the Diavik diamond mine for US$220m: US$50m cash, about 7.1m Harry Winston shares (about US$100m when announced) and a US$70m note due in 12 months at 5% interest. This completes the deal agreed in principle on 23 July 2010 and unwinds the March 2009 diamond investment. After the earlier block sale of 15.2m shares, Kinross holds about 7.1m Harry Winston shares (about 8.5%); the note is an outstanding receivable.
Kinross filed a technical report on the Tasiast gold mine in Mauritania, written for Red Back Mining and dated 10 August 2010, a week after Kinross agreed to buy Red Back (2 Aug 2010). It says Red Back bought Tasiast from Lundin Mining in August 2007 and that the mine reached commercial production in January 2008. The text is cut off before the resource, reserve and cost tables, so no ounce or economic figures can be given. This is background on the asset Kinross is acquiring, not a Kinross estimate.
Russia's foreign investment commission approved Kinross buying 100% of Northern Gold, owner of the Dvoinoye deposit in Chukotka, clearing the main condition on the deal first announced in January 2010 (US$368m, with Vodorazdelnaya via Regionruda). Completion procedures start once the official decision is released. Separately, Kinross named Brant Hinze, formerly of Newmont, as Executive VP and Chief Operating Officer from 1 October 2010, succeeding the retiring Tim Baker.
Agreed to acquire Red Back Mining in a friendly all-share plan of arrangement valued at about US$7.1 billion fully diluted, a 21% premium. Kinross expected to issue about 425 million shares and 26 million warrants, leaving its holders with about 63%, and said it would accelerate development at Tasiast.
23 July 2010asset acquisition disposition● NeutralMajor
Kinross reversed its March 2009 move into diamonds. It agreed to sell its roughly 19.9% Harry Winston stake (15.2m shares) in an underwritten block trade, and agreed in principle to sell its 22.5% partnership interest tied to the Diavik mine to Harry Winston for US$220m: US$50m cash, about 7.1m Harry Winston shares worth about US$100m, and a US$70m note. The March 2009 total was a net US$150m (US$104.4m for the partnership interest, US$45.6m for the shares). The Diavik sale still needs definitive documents, board, third-party and regulatory approvals including the TSX, and after it Kinross would hold no Harry Winston shares beyond those issued in the deal. The block trade price is not stated.
Kinross completed its acquisition of Underworld Resources on 30 June 2010 under a plan of arrangement, with each Underworld share exchanged for 0.141 of a Kinross share plus Cdn$0.01 cash. This completes the offer proposed in March 2010, and gives Kinross the White Gold project in the Yukon (named in the March release). The filing gives no total cost or final share count.
Kinross filed a technical report on Cerro Casale in northern Chile, effective 18 February 2010 and written by its own employee Robert D. Henderson (so not independent), with his certificate and consent. It follows the 2009 pre-feasibility report and is dated just after the 17 Feb 2010 agreement to sell 25% to Barrick, which closed on 31 March. Only the table of contents is visible, so no reserve, resource, cost or return figures can be given.