Kinross Gold Q2 2025 Earnings Report

Kinross Gold EPS Results

• Actual EPS: $0.44
• Consensus EPS: $0.33
• Beat/Miss: Beat by +$0.11
• One Year Ago EPS: $0.14

Kinross Gold Revenue Results

• Actual Revenue: $1.75 billion
• Expected Revenue: $1.52 billion
• Beat/Miss: Beat by +$231.28 million
• YoY Revenue Growth: +41.70%

Kinross Gold Announcement Details

• Quarter: Q2 2025
• Date: 7/30/2025
• Time: After Market Closes
• Conference Call Date: Thursday, July 31, 2025
• Conference Call Time: 8:00AM ET

Kinross Gold (NYSE:KGC), together with its subsidiaries, engages in the acquisition, exploration, and development of gold properties principally in the United States, Brazil, Chile, Canada, and Mauritania. The company operates the Fort Knox mine and the Manh Choh project in Alaska, as well as the Round Mountain and the Bald Mountain mines in Nevada, the United States; the Paracatu mine in Brazil; the La Coipa and the Lobo-Marte project in Chile; the Tasiast mine in Mauritania; and the Great Bear project in Canada. It is also involved in the extraction and processing of gold-containing ores; reclamation of gold mining properties; and production and sale of silver. Kinross Gold Corporation was founded in 1993 and is headquartered in Toronto, Canada.

Kinross Gold Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Kinross produced 513,000 ounces of gold in Q2 at $10.74/oz cost of sales, achieving record margins and generating $647 million in free cash flow.
• Positive Sentiment: Ended Q2 with $1.1 billion cash and $2.8 billion liquidity, reduced net debt to ~$100 million (on track to be net cash in Q3), and returned nearly $300 million to shareholders year-to-date.
• Neutral Sentiment: Operationally, Paracatu led production with 149,000 ounces at $958/oz, Tasiast met its budget of 119,000 ounces at $843/oz, and La Coipa experienced groundwater inflows but remains on track to meet its annual guidance.
• Positive Sentiment: Key brownfield projects (Kerlu, Phase X) and greenfield developments (Great Bear, Lobo Marte) advanced with strong exploration results, supporting potential mine-life extensions and resource optionality.
• Neutral Sentiment: Reconfirmed full-year 2025 guidance of 2 million ounces at $11.20/oz cost of sales and $1,500/oz AISC, with second-half cost increases driven by mine sequencing, inflation and fixed-cost spreading.

Presentation

[Operator]

Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ken Ross Gold Second Quarter twenty twenty five Results Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

[Operator]

Thank you. It is now my pleasure to turn the call over to David Shaver, Senior Vice President. Please go ahead.

[David Shaver, SVP - Investor Relations & Communications at Kinross Gold]

Thank you, and good morning. In the room with us today on the call, we have Paul Rollinson, CEO and from the Kinross senior leadership team, Andrea Freeborough, Claude Schimper, Will Dunford and Jeff Gold. For a complete discussion of the risks and uncertainties which may lead to actual results differing from estimates contained in our forward looking information, please refer to Page three of this presentation, our news release dated 07/30/2025, the MD and A for the period ended 06/30/2025, and our most recently filed AIF, all of which are available on our website. I will now turn the call over to Paul.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

Thanks, Stephen, and thank you all for joining us. This morning, I will discuss our second quarter results, provide high level updates across our portfolio, comment on sustainability and confirm our outlook. I will then hand the call over to the team to provide more detail. Following a good Q1, we delivered another strong quarter in Q2, establishing an excellent first half and positioning us well to achieve our full year guidance. Our production in the second quarter was on plan, delivering 513,000 ounces at a cost of sales of $10.74 dollars per ounce.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

Our strong production and cost management, combined with the gold price, resulted in record operating margins. As a result, we also delivered record free cash flow in the second quarter of almost $650,000,000 and a first half total of just over $1,000,000,000 Our financial position and cash flow outlook remains excellent, and we plan to continue to return meaningful capital to shareholders through ongoing share repurchases and our quarterly dividend. With respect to our operations, Paracatu and Tasiast together accounted for more than half of our production and contributed significant cash flow. Paracatu delivered another strong quarter and was the highest producer in the portfolio, generating substantial cash flow. At Tasiast, we delivered our budgeted production in the second quarter.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

The mill has been performing well, and the site remains on track to meet its full year guidance. At La Coipa, despite encountering some excess groundwater in the pits, production was higher quarter over quarter, and the site remains on track to meet its full year production guidance. Our U. S. Assets delivered strong production and costs as planned.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

In Alaska, we saw another quarter of contributions from both Fort Knox and Mancho that were on plan. In Nevada, we saw stronger production from both Bald Mountain and Round Mountain. At Bald Mountain, mining activity for Phase one of Red Bird is progressing well and steady work for Phase two is ongoing. At Round Mountain, initial production from the Phase S open pit has commenced and is expected to ramp up throughout the year and into next. At Phase X, underground development is progressing well, and we continue to see strong exploration results.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

All of our projects continue to progress well in Q2. Our brownfields projects at Kerlu and Phase X both had positive exploration updates and are showing potential to contribute to our production profile later in the decade and beyond. The greenfield projects at Great Barre and Lobo also progressed well and are expected to contribute to our production in 2029 and 02/1931, respectively. Also, in the current gold price environment, we are seeing value generating investment opportunities across our portfolio that capitalize on our significant resource base and our recent positive drill results. We see opportunities to extend mine life while maintaining our focus on margins and shareholder value.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

The team will comment on our resource optionality later. Turning now to a few remarks on sustainability. Our annual sustainability report was published earlier in May. It is a comprehensive document, which I encourage you all to review. Also, in Q2, we made progress across various water management initiatives, which remains a key focus area within our approach to sustainability.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

For example, at La Coipa, we enhanced water efficiency through an optimization program to reduce the amount of water loss going to our dry stack tailings. In Alaska, at Fish Creek, a historic mining area that Kenros did not operate, but later reclaimed for the benefit of the environment and local communities, fish populations continue to thrive. Turning now to our outlook. Following a strong second quarter and first half, we have produced just over 1,000,000 ounces at a cost of sales in line with our guidance. Looking ahead, we remain firmly on track to achieve our full year guidance.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

We will continue to maintain our financial discipline and prioritize margins to drive strong cash flow, which will support ongoing return of capital and further strengthen the balance sheet. With that, I will now turn the call over to Andrea.

[Andrea Freeborough, EVP & CFO at Kinross Gold]

Thanks, Paul. This morning, I will review our financial highlights from the quarter, provide an update on our balance sheet and return of capital program, and comment on our guidance and outlook. As Paul noted, we had a strong second quarter. We produced 513,000 gold equivalent ounces with sales of 508,000 ounces. Cost of sales was $10.74 dollars per ounce and with an average realized gold price of $3,285 per ounce, we delivered record margins of just over $2,200 per ounce.

[Andrea Freeborough, EVP & CFO at Kinross Gold]

Cost of sales of $10.74 dollars per ounce increased from Q1 largely due to higher royalties. Higher sustaining capital expenditures also contributed to higher all in sustaining costs compared to Q1. In Q2, our adjusted earnings were $0.44 per share and adjusted operating cash flow was $844,000,000 Attributable CapEx was $3.00 $2,000,000 split relatively evenly between sustaining and growth. Attributable free cash flow was a record $647,000,000 or $542,000,000 excluding changes in working capital. Turning to our balance sheet, which remains in excellent shape and continued to strengthen in Q2.

[Andrea Freeborough, EVP & CFO at Kinross Gold]

We ended the quarter with just over $1,100,000,000 in cash and approximately $2,800,000,000 of total liquidity, both increasing from Q1. We improved our net debt position to approximately $100,000,000 at the end of Q2 and expect to be at net cash in Q3. In Q2, we repurchased and canceled approximately $170,000,000 in shares and subsequently have completed another $55,000,000 for a total of $225,000,000 to date. Including our quarterly dividend, we have returned almost $300,000,000 to shareholders so far, and we're on track for our minimum target of $650,000,000 this year. As we look forward, we expect to continue to return a substantial amount of capital to shareholders while also strengthening our balance sheet with a view to repaying our $500,000,000.20 27 notes.

[Andrea Freeborough, EVP & CFO at Kinross Gold]

Turning to our guidance. Following the first half, we remain solidly on track to produce 2,000,000 ounces at a cost of sales of $11.20 dollars per ounce and all in sustaining cost of $1,500 per ounce. Production over the two remaining quarters this year is expected to be relatively even at approximately 500,000 ounces each to deliver our full year production guidance. Operating costs are budgeted to increase in the second half to meet our full year cost guidance. The expected increase is due to the following reasons.

[Andrea Freeborough, EVP & CFO at Kinross Gold]

First, planned mine sequencing with costs expected to increase at several sites as we transition from capitalized stripping into operating waste second, some expected inflation as we progress through the rest of the year and third, slightly stronger production in the first half providing a favorable denominator on fixed costs with production in the remaining quarters expected to deliver our guidance of 2,000,000 expenditures remain on track to meet guidance of $1,150,000,000 with a slightly higher weighting towards sustaining versus growth capital for the second half of the year. I'll now turn the call over to Claude to discuss our operations.

[Claude Schimper, EVP & COO at Kinross Gold]

Thank you, Andrea. In the second quarter, our safety programs continue to be focused on proactive identification of hazards, people development and leadership training. We have continued to roll out our new safety brand, Safeguard, which has included co design of site specific and culturally relevant communication plans of key messages. Our operations continued their strong performance in the second quarter, delivering production of 513,000 ounces with strong contributions across the portfolio. Starting with Paracatu, mine had another steady quarter, strong production driving significant cash flow.

[Claude Schimper, EVP & COO at Kinross Gold]

Production of 149,000 ounces increased over the prior quarter due to the higher throughput and strong mill recoveries. Our cost of sales of $958 per ounce was in line with the previous quarter. Paracatu remains on track to meet its guidance, producing 585,000 ounces at a cost of sales of $10.25 dollars per ounce. At Tasiast, we delivered budgeted production in the second quarter, producing 119,000 ounces at a cost of sales of $843 per ounce. Budgeted production was achieved through strong mill performance and recoveries.

[Claude Schimper, EVP & COO at Kinross Gold]

Pre stripping of the Fenics satellites pit to the north has also commenced in the second quarter. Tasiast remains on track to meet its production guidance of 500,000 ounces at a target cost of sales of $860 per ounce for the year. At La Coipa, we produced 54,000 ounces at a cost of sales of $13.97 dollars per ounce in the second quarter. Ore tonnes mined were lower over the prior quarter due to higher than anticipated groundwater inflows into the pits, resulting in higher tonnes processed from lower grade stockpiles and leading to higher costs in the second quarter. Team has gained a good understanding of the input water conditions and increased dewatering and made adjustments to the mine plan. Production is expected to be stronger and costs lower in the second half of the year, mining transitions to the planned higher grades from Phase seven ore. Okwipo remains on track, giving its full year production guidance of 230,000 ounces.

[Claude Schimper, EVP & COO at Kinross Gold]

Moving to our U. S. Operations. Production was higher quarter over quarter, benefiting from strong contributions from Fort Knox and Mancho in Alaska and stronger grades in Nevada. Collectively, The U.

[Claude Schimper, EVP & COO at Kinross Gold]

S. Sites delivered production of 190,000 ounces at a cost of sales of $12.29 dollars per ounce in the second quarter. Our U. S. Operations remain on track to meet its guidance of 685,000 ounces at a cost of sales of $14.20 dollars per ounce.

[Claude Schimper, EVP & COO at Kinross Gold]

At Fort Knox, second quarter production of 98,000 ounces was in line with our first quarter. Cost of sales of $12.47 dollars per ounce was slightly higher over the prior quarter due to higher processing costs. At Bald Mountain, we produced 54,000 ounces at a cost of sales of $10.95 dollars per ounce, improving over the prior quarter due to stronger grades as we are finishing mining the higher grade LPM plant. Cost of sales of $10.95 dollars per ounce was lower quarter over quarter due to the higher ounces sold and a higher proportion of capitalized costs as mining at Red Bird Phase 1 continues to ramp up. At Round Mountain, production of 39,000 ounces increased over the prior quarter due to higher grades.

[Claude Schimper, EVP & COO at Kinross Gold]

Cost of sales of $13.76 dollars per ounce decreased from the prior quarter. With that, I will now pass the call over to William to discuss our project.

[William Dunford, Senior Vice-President of Technical Services at Kinross Gold]

Thanks, Claude. We continue to leverage our strong in house technical team to advance optionality across our large resource base, consisting of 26,000,000 ounces measured and indicated and an additional 13,000,000 ounces of inferred resource calculated at $2,000 per ounce. Our technical team is focused on drilling, technical studies and permitting to advance resources into our production profile, while also conducting exploration aimed at identifying new opportunities to augment our resource base. Here, you can see updates on a few areas of our resource base. Starting in Chile at La Coipa, study and permitting work is progressing well for the oxide extensions.

[William Dunford, Senior Vice-President of Technical Services at Kinross Gold]

In Q2, we submitted our impact assessment, initiating the agency review process for permits to continue mining the next layback at Pier N, which sits in our resource. We are already mining an open pit at Pier N today and pending permits, plan to extend mining through the end of the decade with this next layback of the pit. At Lobo Marte, the project team continues to advance technical work as well as baseline studies to support our EIA. Project update will be provided with our year end results. At Bald Mountain, technical studies optimization work and detailed engineering for the Red Bird Phase II extensions are ongoing.

[William Dunford, Senior Vice-President of Technical Services at Kinross Gold]

Recall Phase two would bring in an additional 680,000 ounces to the mine plan beyond Phase one and extend production out to at least 02/1931. In addition, we are also progressing drilling, technical work and studies across multiple smaller quick payback satellite pit opportunities at Pall that sit in our resource and could augment the Red Bird Phase two production profile. Prolific land package at Pall with over 40 historic open pits on the property continues to provide strong targets for mine life extensions and is a focus for our exploration and technical teams. Moving to Kurloo. Drilling in Q2 continued to highlight strong grades and wets, further improving the quality of the project and showing potential for high margin underground production.

[William Dunford, Senior Vice-President of Technical Services at Kinross Gold]

This drilling included intersections of approximately six meters true width at 14 grams per tonne at Stealth and approximately five meters true width at 12 grams per tonne at K5. We've seen impressive growth of the resource size, quality and grade over the last few years at Kerloo. And with these exploration results, we continue to see potential for further high value extensions. The underground development has advanced over 800 meters as we extend our decline at depth towards our 2023 discovery at Roadrunner and along Strike at Stealth to target further extensions of high grade mineralization. Technical studies and detailed engineering are also progressing well.

[William Dunford, Senior Vice-President of Technical Services at Kinross Gold]

A resource and project update for Kirlou will be provided with our twenty twenty five year end results. At Phase X, development of the underground exploration decline continues to advance with over 4,500 meters developed to date. Infill drilling is also progressing well with good coverage now extending across both the upper and lower target zones. The results are again showing good grades and widths in both areas, further increasing confidence in our initial exploration thesis of a bulk mining target at Phase X. You can also see on the slide holes DX 162 And 163, which were extension holes drilled down dip of our primary exploration target.

[William Dunford, Senior Vice-President of Technical Services at Kinross Gold]

With widths in excess of 60 meters and grades of around three grams per tonne, the results of these extension holes show continuation of mineralization outside of the original target area. Beyond the exciting exploration results, engineering work and technical studies to support project execution of a potential underground mine in the main target area are also advancing well, including development of the underground mine design and schedule, extensive geotechnical studies and studies for a paste backfill facility. The completion of the ongoing drill program and technical work will support a planned initial underground resource estimate and a project update for Phase X as part of our year end results update. At Great Bear, work on the AEX program and main project is progressing well. We've made significant progress on construction with the AEX camp nearing completion and earthwork activities in the portal area well advanced. You

[William Dunford, Senior Vice-President of Technical Services at Kinross Gold]

with progress development decline. We are we start the initial development of

[William Dunford, Senior Vice-President of Technical Services at Kinross Gold]

the the exploration exploration decline decline by year end, subject to permitting. For the main project, detailed engineering for all site infrastructure is continuing to advance, including key items such as the mill and tailings facility. Initial procurement activities for major process equipment have begun with awards planned to start later this year and manufacturing of a few long lead items expected to begin next year. I will now hand it over to Jeff to provide a brief update on Great Bear permitting.

[Geoffrey Gold, President at Kinross Gold]

Thanks, Will. Permitting of the AEX program and main project continue to advance as we work with the provincial and federal authorities. For AEX, we have the permits we need for our current activities and expect to receive our two remaining water permits in the near term. In terms of the main project, we continue to work with the Impact Assessment Agency of Canada to advance the project impact statement. In order to advance this statement on a timely basis, we are coordinating with this federal agency on a staged filing process.

[Geoffrey Gold, President at Kinross Gold]

We intend to file the majority of the technical chapters by year end and the remaining chapters by the end of Q1 twenty twenty six. This approach will underpin a robust impact statement filing with the necessary technical and indigenous contributions and to help facilitate an efficient review process. We also continue to advance our IBA negotiations with Laxuil and Wabeskaya on whose traditional territory the project resides. Black Sewell and Wabascan are progressing their independent project impact assessment work, which will help facilitate federal and provincial permitting on the main project and the completion of the IBA. I will now turn it back to Paul for closing remarks.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

Thanks, Jeff. After another strong quarter and a great first half of the year, we are well positioned to meet our targets in 2025. Looking forward, we are excited about our future. We have a strong production profile. We are generating significant free cash flow.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

We have an excellent balance sheet. We have an attractive return of capital through both the dividend and share buybacks. We have an exciting organic pipeline, and we are very proud of our commitment to responsible mining that continues to make us a leader in sustainability. With that, operator, I'd like to open up the line for questions.

[Operator]

Thank you. Our first question comes from Fahad Gareek with Jefferies. Please go ahead.

[Fahad Tariq, SVP - Equity Research at Jefferies Financial Group]

Hi. Can you hear me?

[J. Paul Rollinson, CEO & Director at Kinross Gold]

We can hear you.

[Fahad Tariq, SVP - Equity Research at Jefferies Financial Group]

Okay, great. Thank you. I just wanted to ask about Bald Mountain. The grades were of course very high in the second quarter due to the LBM pit. Maybe just remind us how to think about the second half at Bald Mountain?

[Claude Schimper, EVP & COO at Kinross Gold]

Yes. Fahad, it's Claude here. We've had a very strong first half of the year in Bald. The second half will be slightly off the pace as we continue to push on the Redbird startup, which is progressing very well. From a production point of view, we expect it to be slightly less than the first quarter because we don't have the same LBM grades as we've now finished that area.

[Fahad Tariq, SVP - Equity Research at Jefferies Financial Group]

Okay. And then maybe just taking a step back, The U. S. Operations as a whole, it seems like it could be trending above the midpoint of full year guidance. Maybe just walk us through are there any offsets that we should be thinking about?

[Fahad Tariq, SVP - Equity Research at Jefferies Financial Group]

It sounds like Bald Mountain and Round will be pretty strong in the second half as well.

[Claude Schimper, EVP & COO at Kinross Gold]

Yes. We expect to continue the good performance from The U. S. Operations. Obviously, our second half will be slightly lower at Fort Knox as we cycle out the different production from Mantou and Fort Knox.

[Claude Schimper, EVP & COO at Kinross Gold]

So I think we as we've said across the board, we've had a very strong first half of the year from all the sites of good contributions. We do expect the second half in The U. S. To be slightly lower. As Andrea said, that's impacting the cost as well.

[Fahad Tariq, SVP - Equity Research at Jefferies Financial Group]

Okay. Thank you.

[Operator]

Your next question comes from the line of Carey MacRury with Canaccord Genuity. Please go ahead.

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

Hi, good morning everyone and congrats on the good quarter. Maybe first on the pure end for laid back. Just wondering if you can give us a bit more color on what that looks like from a tons of ore perspective and grade and maybe strip ratio, if you can.

[William Dunford, Senior Vice-President of Technical Services at Kinross Gold]

Yes. We can give you a sense of it. We're looking at we've got about a little over 5,000,000 ounces of resource there. And I think the average grade there is similar to what we've seen in the past around that two gram per tonne mark, potentially a little bit lower as we continue to optimize the pit there. So we see the potential to continue with similar mining at Grand Fora to what we've seen in Foran2.

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

And any high level thoughts on strip ratio?

[William Dunford, Senior Vice-President of Technical Services at Kinross Gold]

Yeah. We might have to get back to you on that. I'm not sure off the top of my head the exact strip ratio of the extensions. I think it's relatively similar to what we've been doing. You can see in the image that we stripped the majority of the deposit already.

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

Okay. Fair enough. And then maybe for Andrea. You're focused on paying down the $500,000,000 debt due, I think, in 2026 or 2027. But beyond that, is there any plans to buy back any debt earlier, or are you comfortable to hold that debt?

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

It is pretty long term and pretty pretty attractive rates.

[Andrea Freeborough, EVP & CFO at Kinross Gold]

Yeah. I mean, there's obviously a cost always a cost associated with retiring debt early. First up is the 2027, Doug, you said. So we expect to repay those either at or potentially before maturity. Taking a step back, I mean, we're just expecting to get to net cash in the third quarter.

[Andrea Freeborough, EVP & CFO at Kinross Gold]

So we've talked previously about sort of a minimum cash balance around $500,000,000 We're now at the end of Q2 at $1,000,000,000 which is the minimum cash of 500,000,000 plus 500,000,000 that we could use to repay the 2027. So that's sort of where we sit today, but we're certainly comfortable continuing to grow the cash balance. And

[Operator]

our final question comes from the line of Tanya Jakusconek with Scotiabank. Please go ahead.

[Tanya Jakusconek, Director at Scotiabank]

Great. Good morning. Thank you for taking my questions.

[Tanya Jakusconek, Director at Scotiabank]

Congrats on a good quarter. The first one is just, Andrea, if I can continue your line of thought on your free cash flow. So we're going to be net cash positive in Q3. You've got that $1,000,000,000 on in cash on the balance sheet. You're going to pay down the $500,000,000 notes in 2027.

[Tanya Jakusconek, Director at Scotiabank]

Should I be thinking then if I keep the cash in that $500,000,000 range, anything above and beyond would go to your share buyback?

[J. Paul Rollinson, CEO & Director at Kinross Gold]

Yeah. Maybe I'll jump in on that one, Tanya. Thanks for the question. Yeah. Look.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

I guess I would just say, number one, you know, what's important here is we're gonna do what we say we we will, and we did commit to 500,000,000 in buybacks. Again, context, we're all very happy with where gold price is. But for for context, we just reactivated the buyback in in q two, and now we're reporting, you know, q two. And so far, so good. So we're definitely committed to the 500 and the $1.50, so $6.50 of return of capital.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

As we look through the windshield later into the year, you know, it's all kind of gold price dependent. And we we've always said we also wanna continue to build cash on the balance sheet. So I guess it feels early days to to sort of make a a prediction on what we might do with excess cash at this point. It's kinda hypothetical. But I think what's important is it's clear that we have been buying and we'll continue to buy.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

And if all of this positive gold price continues, our expectation is we'll keep going with the buyback next year and perhaps the year after depending upon share price and gold price.

[Tanya Jakusconek, Director at Scotiabank]

Okay. Yeah. Thank you for that. And if I could ask a second question, it's I'm trying to understand how you're getting through your budgeting phase as you look for forward to 2026. How are you thinking about your life of mine plans and your reserve and resource base?

[Tanya Jakusconek, Director at Scotiabank]

I mean, it's quite different from lower gold price assumptions versus where the gold price is today. So I'm kind of trying to understand how you're approaching, your life of mine plan and your, reserves and resources given the discrepancy in pricing.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

Yeah. Maybe I'll maybe I'll take that one as well. Yeah. I mean, it's it's it's interesting times. You know, I'm looking at spot, and I'm looking at, for example, long term consensus, commodity prices that that you guys are using, and there's never been this big a lag.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

So I think we're all kinda absorbing, digesting, where is this gold price going? Where is it going to last? I think if the gold prices hang in, around current levels or higher, you'll probably expect the industry will move up their reserve resource pricing again. But those are decisions that happen towards the end of the year. Key point for us though is we don't need those higher prices.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

We've said many times we're not in a high price environment dropping our cutoff grades. We're absolutely focused on margin, cash flow, value creation. But but you're right. As Will alluded to, we have a lot of optionality in our portfolio, and we're getting really good results in exploration. And so we're advancing more studies.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

And and I think the way I would think about those studies and the optionality is is really about, you know, more production in the thirties. And so as it relates to the gold price, as you can expect, we're going look at a range of prices just like we look at payback, pay for buck, IRR. But it's a good place to be. We've got a significant amount of optionality. The gold price certainly and combined with the exploration results gives us lots to think about.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

But right now, we're not using any higher gold prices than what we're we've got currently in our reserve resource.

[Tanya Jakusconek, Director at Scotiabank]

No. Yeah. I appreciate that. It's it's an interesting time for the industry. Never had this discrepancy before and Hollywood problem, I guess.

[Tanya Jakusconek, Director at Scotiabank]

And maybe my final question, if I could, despite the gold price, can we just talk about some of your properties where you are seeing these expiration results that you're going to be able to replace reserves regardless of the gold price? What properties do

[J. Paul Rollinson, CEO & Director at Kinross Gold]

you the key Yeah.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

I mean, the key areas where I think we're really excited is that Kerloo, which Will alluded to and and phase x where, you know, these are brownfield development. I think we're, you know, we're we're we're kinda guiding softly that these could be contributors in around 2028. Two things are happening there. We're getting they're growing in size, and we're getting good grades and widths. So they're they're moving in the right direction. I I would highlight those two in particular.

[Tanya Jakusconek, Director at Scotiabank]

Okay. Thank you very much for taking my question.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

Thanks, Tanya.

[Operator]

Your next question comes from the line of Anita Soni with CIBC World Market. Please go ahead.

[Anita Soni, Managing Director - Senior Precious Metals Research Analyst at CIBC Capital Markets]

Hi, good morning guys. Thanks for taking my question. So most of them have asked and answered already in terms of allocation and gold prices and the reserve replacement. But could you just give a little color on Lobo Marte and how you see that fitting into the fold and the work you're doing there?

[William Dunford, Senior Vice-President of Technical Services at Kinross Gold]

Sure. Yes. We as you know, we released an FS on Lobo Marte a few years ago, and we're really in the permitting process right now. So we're making sure we're doing the robust technical work to support that permit submission. We see that as a really, really strong ASIC, high margin mine, really just on the back of the grade.

[William Dunford, Senior Vice-President of Technical Services at Kinross Gold]

It's 1.3 gram per tonne going on to a heap leach. So really strong economics. Low strip strip ratio, yes, two:one strip. So it's going to be a really good contributor in the 30s. We're just going through the process of getting ready for the permitting efforts right now. And we'll it's kind of on that escalator to get it into the production profile, doing all the right upfront work.

[Anita Soni, Managing Director - Senior Precious Metals Research Analyst at CIBC Capital Markets]

All right. Thanks for taking my question. Congrats on a great quarter.

[Operator]

Your next question comes from the line of Carey MacRury with Canaccord Genuity.

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

Just one follow-up on the higher cost expected in the second half. Andrew, you mentioned that that's going to recur at a number of operations. Just wondering if you can just highlight which of those operations we should be looking at.

[Andrea Freeborough, EVP & CFO at Kinross Gold]

Sure. So I mentioned previously, I think even back last quarter, there's a couple of operations where we're moving from stripping being characterized as capital to operating waste. So that's Fort Knox Phase 10, Round Mountain Phase S. And then at Tasiast, we also have more operating waste in the second half and planned lower grades. So those are sort of the three operations where we're seeing the change in stripping cost characterization.

[Andrea Freeborough, EVP & CFO at Kinross Gold]

And then there's some other impacts as well. So at Paracatu, we expect higher power costs in the second half. That's just typical seasonality and also potentially higher power costs in Alaska. All of that is just reflected in our guidance. So we're still on guidance for our annual guidance for the year, and this is just explaining why the second half is higher than the first half to get us to that guidance number.

[Carey MacRury, Equity Research Analyst at Canaccord Genuity Group]

Okay, great. That's helpful. Thanks, Andrew.

[Operator]

And with no further questions in the queue, I will turn the call back over to Paul Rawlings for closing remarks.

[J. Paul Rollinson, CEO & Director at Kinross Gold]

Great. Thank you, operator. Thanks, everyone, for joining us this morning. We look forward to catching up with you in person in the coming weeks. Thank you.

[Operator]

Thank you again for joining us today. This does conclude today's presentation. You may now disconnect.

Participants

Executives

• David Shaver, SVP - Investor Relations & Communications
• J. Paul Rollinson, CEO & Director
• Andrea Freeborough, EVP & CFO
• Claude Schimper, EVP & COO
• William Dunford, Senior Vice-President of Technical Services
• Geoffrey Gold, President

Analysts

• Fahad Tariq, SVP - Equity Research at Jefferies Financial Group
• Carey MacRury, Equity Research Analyst at Canaccord Genuity Group
• Tanya Jakusconek, Director at Scotiabank
• Anita Soni, Managing Director - Senior Precious Metals Research Analyst at CIBC Capital Markets