Kinross Reports 2012 Third-Quarter Results

Company on Track to Meet Full-Year Production and Cost of Sales Forecasts

Marketwired

TORONTO, ONTARIO--(Marketwire - Nov 7, 2012) - Kinross Gold Corporation (TSX:K)(KGC) today announced its results for the third quarter ended September 30, 2012.

(This news release contains forward-looking information that is subject to the risks and assumptions set out in our Cautionary Statement on Forward-Looking Information located on page seven of this news release. All dollar amounts in this news release are expressed in U.S. dollars, unless otherwise noted. The comparative figures have been recast to exclude Crixás due to its disposal.)

Financial and operating highlights:

  • Production(1): 672,173 gold equivalent ounces, compared with 632,432 ounces in Q3 2011.
  • Revenue: $1,109.7 million, compared with $1,041.0 million in Q3 2011.
  • Production cost of sales(2): $677 per gold equivalent ounce, compared with $626 in Q3 2011.
  • Attributable margin(3): $972 per ounce sold, compared with $1,018 in Q3 2011.
  • Adjusted operating cash flow(4): $434.4 million, compared with $412.9 million in Q3 2011. Adjusted operating cash flow per share was $0.38, compared with $0.36 in Q3 2011.
  • Adjusted net earnings(4), (5): $250.4 million, compared with $269.4 million in Q3 2011. Adjusted net earnings per share were $0.22, compared with $0.24 in Q3 2011.
  • Reported net earnings(5): $224.9 million, or $0.20 per share, compared with $207.1 million, or $0.18 per share, for Q3 2011.
  • Outlook: The Company remains on track to meet its 2012 production forecast of approximately 2.5-2.6 million gold equivalent ounces from its continuing operations, and its cost of sales forecast of $690-$725 per gold equivalent ounce. As a result of the cost reduction initiative announced in Q2 2012, Kinross has identified approximately $200 million in capital expenditure reductions for 2012, and has reduced its full-year capital expenditure forecast to $2.0 billion from the previous forecast of $2.2 billion.

Other developments:

  • The Tasiast pre-feasibility study (PFS) remains on schedule to be completed in Q1 2013.
  • Development at Dvoinoye continues to advance and the project remains on schedule to deliver first ore to the Kupol mill in the second half of 2013.
  • On August 17, 2012 Kinross announced a new three-year unsecured $1.0 billion term loan and amended its unsecured revolving credit facility to increase available credit to $1.5 billion from $1.2 billion and extend the maturity date from March 2015 to August 2017.
  • On October 31, 2012 the Company announced the appointment of Tony S. Giardini as Executive Vice-President and Chief Financial Officer, effective December 1, 2012. Mr. Giardini will replace Paul H. Barry, whose departure was announced on October 10, 2012. 
  • During the third quarter, Kinross was named to the Dow Jones Sustainability World Index for the second consecutive year and the Dow Jones Sustainability North America Index for the third year in a row.

CEO Commentary

J. Paul Rollinson, CEO, made the following comments in relation to third-quarter 2012 results:

"We recorded solid results in the third quarter and remain on track to deliver on our full-year guidance for production and costs. In line with our cost reduction initiative announced last quarter, we are reducing our forecast capital expenditures for 2012 by approximately $200 million.

"As we go through our budgeting process for 2013, and looking beyond, we are seeking every available opportunity to control costs, with a focus on margins and free cash flow across our operations.

"To that end, we have launched a systematic, long-term program which we call internally ''The Kinross Way Forward'', with the objective of delivering greater value at both our mines and projects. Our focus will be on quality, and not just quantity, in our mine planning, production, exploration and resource strategy, and on margins and free cash flow in all of our business decisions."

Financial results

Summary of financial and operating results

  Three months ended Nine months ended
  September 30, September 30,
(dollars in millions, except per share and per ounce amounts) 2012 2011 2012 2011
                 
Total gold equivalent ounces(a)(e) - Produced (c)   678,933   654,820   1,945,014   2,051,930
Total gold equivalent ounces(a)(e) - Sold (c)   672,221   670,386   1,958,173   2,093,410
                 
Gold equivalent ounces from continuing operations (a)(d) - Produced (c)   678,933   639,269   1,914,020   2,006,128
Gold equivalent ounces from continuing operations (a)(d) - Sold (c)   672,221   653,792   1,925,409   2,047,032
                 
Total attributable gold equivalent ounces(a)(e) - Produced (c)   672,173   647,983   1,924,297   1,967,085
Total attributable gold equivalent ounces(a)(e) - Sold (c)   665,251   663,517   1,937,080   2,010,128
                 
Attributable gold equivalent ounces from continuing operations (a)(d) - Produced (c)   672,173   632,432   1,893,303   1,921,283
Attributable gold equivalent ounces from continuing operations (a)(d) - Sold (c)   665,251   646,923   1,904,316   1,963,750
                 
Financial Highlights from Continuing Operations (d)                
Metal sales $ 1,109.7 $ 1,041.0 $ 3,124.5 $ 2,922.7
Production cost of sales $ 455.7 $ 410.2 $ 1,373.2 $ 1,170.7
Depreciation, depletion and amortization $ 181.6 $ 139.7 $ 481.3 $ 436.7
Operating earnings $ 343.1 $ 408.8 $ 904.8 $ 1,086.7
Net earnings from continuing operations attributable to common shareholders $ 224.9 $ 207.1 $ 440.3 $ 697.6
Basic earnings per share from continuing operations attributable to common shareholders $ 0.20 $ 0.18 $ 0.39 $ 0.61
Diluted earnings per share from continuing operations attributable to common shareholders $ 0.20 $ 0.18 $ 0.38 $ 0.61
Adjusted net earnings from continuing operations attributable to common shareholders(b) $ 250.4 $ 269.4 $ 602.7 $ 663.6
Adjusted net earnings from continuing operations per share(b) $ 0.22 $ 0.24 $ 0.53 $ 0.58
Net cash flow of continuing operations provided from operating activities $ 368.8 $ 289.0 $ 822.7 $ 976.2
Adjusted operating cash flow from continuing operations(b) $ 434.4 $ 412.9 $ 1,025.6 $ 1,208.4
Adjusted operating cash flow from continuing operations per share(b) $ 0.38 $ 0.36 $ 0.90 $ 1.06
Average realized gold price per ounce from continuing operations $ 1,649 $ 1,644 $ 1,620 $ 1,470
Consolidated production cost of sales from continuing operations per equivalent ounce(c) sold(b) $ 678 $ 627 $ 713 $ 572
Attributable(a) production cost of sales from continuing operations per equivalent ounce(c) sold(b) $ 677 $ 626 $ 713 $ 579
Attributable(a) production cost of sales from continuing operations per ounce sold on a by-product basis(b) $ 594 $ 584 $ 634 $ 518
(a) Total includes 100% of Kupol and Chirano production.  "Attributable" includes Kinross'' share of Kupol (75% up to April 27, 2011, 100% thereafter) and Chirano (90%) production.
(b) "Adjusted net earnings from continuing operations attributable to common shareholders", "Adjusted net earnings from continuing operations per share", "Adjusted operating cash flow from continuing operations", "Adjusted operating cash flow from continuing operations per share", "Consolidated production cost of sales from continuing operations per equivalent ounce sold", "Attributable production cost of sales from continuing operations per equivalent ounce sold", and "Attributable production cost of sales from continuing operations per ounce sold on a by-product basis" are non-GAAP measures.  The definition and reconciliation of these non-GAAP financial measures is included on page nine of this news release.
(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 third quarter of 2012 was 55.44:1, compared with 43.87:1 for the third quarter of 2011 and for the first nine months of 2012 was 53.92:1, compared with 42.36:1 for the first nine months of 2011.
(d) The comparative figures have been recast to exclude Crixás'' results due to its disposal.
(e) The total gold equivalent ounces and total attributable gold equivalent ounces include Crixás.

The following operating and financial results are based on Q3 2012 attributable gold equivalent production from continuing operations:

Kinross produced 672,173 attributable gold equivalent ounces from continuing operations in the third quarter of 2012, a 6% increase over the third quarter of 2011, mainly due to production increases at Fort Knox and Kupol. Production increased 6% in Q3 2012 compared with Q2 2012, in line with an expected increase in production in the second half of 2012 based on the full-year mining plan.

Production cost of sales per gold equivalent ounce(2) was $677 compared with $626 for the third quarter of 2011, mainly due to higher costs for energy, labour, and consumables. On a quarter-over-quarter basis, compared with Q2 2012, production cost of sales was reduced by $48 per gold equivalent ounce, or 7%, due primarily to increased production. Production cost of sales per gold ounce on a by-product basis was $594 in the third quarter of 2012, compared with $584 in Q3 2011, based on Q3 2012 attributable gold sales of 613,617 ounces and attributable silver sales of 2,862,528 ounces. 

Revenue from metal sales was $1,109.7 million in the third quarter of 2012, compared with $1,041.0 million during the same period in 2011, an increase of 7%, mainly due to increased production. The average realized gold price was $1,649 per ounce in Q3 2012, compared with $1,644 per ounce for Q3 2011.

Kinross'' margin per gold equivalent ounce sold(3) was $972 for the third quarter of 2012, a decrease of 5% compared with Q3 2011, due primarily to higher production cost of sales per ounce for the quarter.

Adjusted operating cash flow(4) was $434.4 million for the quarter, or $0.38 per share, compared with $412.9 million, or $0.36 per share, for Q3 2011. Cash and cash equivalents and short-term investments were $2,089.3 million as at September 30, 2012 compared with $1,767.3 million as at December 31, 2011.

Adjusted net earnings(4), (5) were $250.4 million, or $0.22 per share, for Q3 2012, compared with $269.4 million, or $0.24 per share, for Q3 2011. Adjustments included a one-time severance expense of $16.4 million related to the departure of the former CEO.

Reported net earnings(5) were $224.9 million, or $0.20 per share, for Q3 2012, compared with reported net earnings of $207.1 million, or $0.18 per share, for Q3 2011.

Capital expenditures were $451.2 million for Q3 2012, compared with $389.6 million for the same period last year, an increase due mainly to project related expenditures at Tasiast, offset by a decrease at Paracatu.

Operating results

Mine-by-mine summaries for third-quarter 2012 operating results may be found on pages 12 and 16 of this news release. Highlights include the following:

North America: Production from the region was strong during the quarter, and higher than in Q3 2011, primarily as a result of increased production at Fort Knox. All three mines also increased production compared with Q2 2012.

Fort Knox''s strong performance relative to Q3 2011 was due to an increase in tonnes of ore mined and processed, as well as higher mill grades, mill recoveries and accelerating heap leach production. Kettle River-Buckhorn''s year-over-year increase in production was a result of higher grades and recoveries. Round Mountain''s production compared with the same period last year was slightly lower due to lower grades and tonnes processed, but marginally higher than Q2 2012 due to strong heap leach performance. Regional cost of sales per ounce improved both on a year-over-year and quarter-over-quarter basis mainly due to higher production. North America is expected to complete the year at the high end of regional production guidance.

Russia: Production at Kupol increased year-over-year, mainly due to record mill throughput, higher grades and process improvements resulting in higher silver recoveries. Plant throughput has increased to over 3,500 tonnes per day on average, compared with the design throughput of 3,000 tonnes per day, due mainly to Continuous Improvement initiatives. Compared with Q2 2012, production increased due to slightly higher throughput and recoveries. Kupol''s strong performance is projected to continue in Q4 2012, with production expected to be at the high end and production cost of sales at the low end of the regional guidance range for full-year 2012.

West Africa: Tasiast Q3 2012 production improved compared with the previous quarter and on a year-over-year basis. However, production was negatively impacted by variability in gold grade that continues to be encountered in the banded iron formation-type ore currently being mined in the Piment pits. In addition, water supply rates continue to have some impact on leach production. Ongoing repairs to the existing pipelines are expected to progressively improve water availability through the remainder of the year. Chirano''s production for the quarter was slightly higher than Q2 2012, as a result of improved plant throughput.

Year-to-date operating costs remain high for the region, mainly as a result of lower than expected production. Full-year production and cost guidance for the region remain unchanged.

South America: Regional quarterly results were lower compared with Q3 2011, and the previous quarter, mainly due to lower than expected production at Paracatu. Paracatu encountered lower recoveries at both Plants 1 and 2. A task force has been established to focus on the recovery issue, and the Company expects improvement in the last quarter of the year. Commissioning of Paracatu''s fourth ball mill began during the third quarter and is expected to be completed in the fourth quarter.

Due to suspended solids in the leach solution, Maricunga had lower production for the quarter compared with the same period last year. The issue has been addressed, and as a result, production is expected to improve in the fourth quarter. La Coipa''s production was higher compared with the previous quarter as a result of stronger silver grades and improved gold recoveries. Full-year production and cost guidance for the region remain unchanged.

Project update and new developments

The forward-looking information contained in this section of the release is subject to the risks and assumptions contained in the Cautionary Statement on Forward-Looking Information on page seven of this news release.

Tasiast expansion project

As previously disclosed, Kinross expects to complete a pre-feasibility (PFS) study for construction of a mid-sized, expandable CIL mill in the 30,000 tonne per day (tpd) range, for the purpose of comparison with a 60,000 tpd mill option, in the first quarter of 2013.

The Company has completed a program of heap leach column testing begun earlier this year to determine the viability of heap leaching sulphide ore at Tasiast. The oxide low grade ores are currently leached successfully on the dump leach pads without crushing. The average gold recovery rate obtained in tests of sulphide samples taken from different representative zones of the ore body (after fine crushing to predominately -8mm) was approximately 60%.

The Company has concluded that based on this recovery level, heap leaching is not an economically attractive alternative to CIL processing for sulphide ore. In addition, capital investment in a fine crush heap leach supplement to CIL production is not justified at this time. Heap leaching is not contemplated in the pre-feasibility study and therefore these test results will not affect the PFS economics.

Work continues on building basic infrastructure improvements, including the permanent camp, tailings facility, truck shop, warehouse facilities, West Branch dump leach pads, main access road, and other infrastructure components. Permitting for a seawater supply system is progressing as expected.

Dvoinoye

Construction at Dvoinoye made good progress through the third quarter of 2012, and the project remains on schedule for expected delivery of first ore to Kupol in the second half of 2013. Underground development is 52% complete and is progressing ahead of plan. 

Construction of infrastructure and surface facilities is 45% complete. Construction of the all-season road between Dvoinoye and Kupol has progressed well. All necessary permits for the current scope of underground development and construction activities are in place.

Fruta del Norte

Exploitation and investment protection agreement negotiations with the Ecuadorian government on an enhanced economic, investment and legal package for Fruta del Norte (FDN) continue. Kinross understands that the government intends to make mining and tax legislative reforms to mitigate the effects of the Windfall Profits Tax and to enhance the mining investment climate, which Kinross believes to be critical to the negotiations. The Company expects negotiations with the government to extend into 2013.

In parallel with the negotiation process, Kinross continues to advance the project optimization studies for the project and regional exploration drilling and sampling in the Condor district around FDN. As part of the project optimization, Kinross is exploring alternative processing scenarios including gravity float leach, which could result in lower capital expenditures and reduced operating risk, while improving overall project economics.

Other developments 

Term loan and revolving credit facility: On August 17, 2012, Kinross closed a three-year, $1.0 billion term loan that will mature on August 10, 2015, and has no mandatory amortization payments. Kinross also announced that it amended its unsecured revolving credit facility to increase available credit to $1.5 billion from $1.2 billion, and extended the term to August 10, 2017 from March 31, 2015.

Exploration update

Total exploration expenditures for the third quarter of 2012 were $51.0 million, including $40.0 million for expensed exploration and $11.0 million for capitalized exploration. Exploration expenditures for the third quarter of 2011 totaled $57.5 million.

Kinross was active on 34 mine site, near-mine and greenfield initiatives in the third quarter of 2012, with drilling across all projects totalling 136,991 metres. Highlights include:

- Tasiast: District drilling outside of the Tasiast deposit footprint has been accelerated in 2012, with approximately 2,400 holes (200,000 metres) completed year-to-date up and down the 80-kilometre belt (Figure 1: www.kinross.com/media/239677/figure%201%20tasiast%20exploration%20kinross%20-%20q3%202012.pdf). Drilling, mapping and sampling in the third quarter has encountered encouraging results at seven new targets, along with positive results in follow-up drilling at C67 and C68. A total of 11 district targets have been prioritized for additional work, with the expectation of providing further confirmation that the Tasiast district has additional development potential.

- La Coipa: The infill drilling program at Pompeya was completed during the quarter, along with metallurgical, geotechnical and condemnation work. The Company is currently in the process of transitioning Pompeya from Exploration to the Projects team.

- Kupol: Drilling on the Kupol West licence to follow up results in previous holes completed at Moroshka (located four kilometres east of Kupol) has encountered further precious metals mineralization along strike and at depth.

- Chirano: Follow-up drilling under the open pits during the quarter has returned positive results, and reinforces the potential for mineralization to continue at depth.

Outlook

The forward-looking information contained in this section is subject to the risk factors and assumptions contained in the Cautionary Statement on Forward-Looking Information located on page seven of this news release.

Kinross expects to be toward the higher end of both its 2012 production forecast of approximately 2.5-2.6 million gold equivalent ounces from its continuing operations, and its 2012 cost of sales forecast of $690-$725 per gold equivalent ounce.

The Company has reduced its forecast 2012 capital expenditures to approximately $2.0 billion, compared with the previous forecast of $2.2 billion. This is the result of approximately $200 million in cost reductions, deferrals, and eliminations, approximately two-thirds of which is related to development capital, and one-third of which is related to sustaining capital.

The Company''s depreciation, depletion and amortization is forecast to be approximately $255 per gold equivalent ounce, compared with the previously-stated guidance of $235 per gold equivalent ounce.

Conference call details

In connection with this news release, Kinross will hold a conference call and audio webcast on Thursday, November 8, 2012 at 8 a.m. ET to discuss the results, followed by a question-and-answer session. To access the call, please dial:

Canada & US toll-free - 1-800-319-4610
Outside of Canada & US - 1-604-638-5340

Replay (available up to 14 days after the call):

Canada & US toll-free - 1-800-319-6413; Passcode - 3310 followed by #.
Outside of Canada & US - 1-604-638-9010; Passcode - 3310 followed by #.

You may also access the conference call on a listen-only basis via webcast at our website www.kinross.com. The audio webcast will be archived on our website at www.kinross.com.

This release should be read in conjunction with Kinross'' unaudited third-quarter 2012 Financial Statements and Management''s Discussion and Analysis report at www.kinross.com. Kinross'' unaudited third-quarter 2012 financial statements have been filed with Canadian securities regulators (available at www.sedar.com) and furnished with the U.S. Securities and Exchange Commission (available at www.sec.gov). Kinross shareholders may obtain a copy of the financial statements free of charge upon request to the Company.

About Kinross Gold Corporation

Kinross is a Canadian-based gold mining company with mines and projects in Brazil, Canada, Chile, Ecuador, Ghana, Mauritania, Russia and the United States, employing approximately 8,000 people worldwide. Kinross maintains listings on the Toronto Stock Exchange (symbol:K) and the New York Stock Exchange (KGC).

Cautionary statement on forward-looking information

All statements, other than statements of historical fact, contained or incorporated by reference in this news release, 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 harbour" 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 news release. Forward-looking statements include, without limitation, statements with respect to: possible events, the future price of gold and silver, the estimation of mineral reserves and mineral resources, the realization of mineral reserve and mineral resource estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of projects and new deposits, success of exploration, development and mining activities, permitting timelines, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. The words "plans", "expects", "indicative", "scheduled", "timeline", "estimates", "forecasts", "guidance", "opportunity", "outlook", "potential", "projected", "seek", "strategy", "targets", "models", or "believes", or variations of or similar such words and phrases or statements that certain actions, events or results "may", "could", "would", or "should", "might", or "will be taken", "occur" or "be achieved" and similar 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 news release, which may prove to be incorrect, include, but are not limited to, the various assumptions set forth herein and in our most recently filed Annual Information Form and our most recently filed Management''s Discussion and Analysis as well as: (1) there being no significant disruptions affecting the operations of the Company or any entity in which it now or hereafter directly or indirectly holds an investment, whether due to labour disruptions, supply disruptions, power disruptions, damage to equipment or otherwise; (2) permitting, development, operations, expansion and acquisitions at Paracatu (including, without limitation, land acquisitions and permitting for the construction and operation of the new tailings facility) being consistent with our current expectations; (3) the viability, permitting and development of the Fruta del Norte deposit, and its continuing ownership by the Company, being consistent with Kinross'' current expectations; (4) political and legal developments in any jurisdiction in which the Company, or any entity in which it now or hereafter directly or indirectly holds an investment, operates being consistent with its current expectations including, without limitation, the implementation of Ecuador''s mining and investment laws (and prospective amendment to these laws) and related regulations and policies, being consistent with Kinross'' current expectations, and the unenforceability of any new law in Brazil requiring that all Paracatu tailings facilities have an impermeable liner; (5) negotiation of an exploitation contract and an investment protection contract for Fruta del Norte with the Ecuadorian government being consistent with Kinross'' current expectations, including but not limited to Kinross requesting and the government declaring a phase change from economic evaluation to exploitation in Q1, 2013 (or any government approved extension of up to two years) and entering into an exploitation agreement with the government within six months of such declared phase change, the failure of which will likely result in forfeiture of the FDN concession and related project infrastructure to the government; (6) 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;
(7) certain price assumptions for gold and silver; (8) prices for diesel, natural gas, fuel oil, electricity and other key supplies being approximately consistent with current levels; (9) production and cost of sales forecasts for the Company, and entities in which it now or hereafter directly or indirectly holds an investment, meeting expectations; (10) 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) and any entity in which it now or hereafter directly or indirectly holds an investment; (11) labour and materials costs increasing on a basis consistent with Kinross'' current expectations; (12) the development of the Dvoinoye deposit being consistent with Kinross'' expectations; (13) the viability of the Tasiast and Chirano mines (including but not limited to, at Tasiast, the impact of ore tonnage and grade variability reconciliation analysis) as well as permitting, development and expansion (including but not limited to, at Tasiast, expansion optimization initiatives leading to changes in processing approach and maintenance and, as required, conversion of exploration licences to mining licences) of the Tasiast and Chirano mines being consistent with Kinross'' current expectations; (14) 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; (15) goodwill and/or asset impairment potential; and (16) access to capital markets, including but not limited to maintaining an investment grade debt rating and securing partial project financing for the Dvoinoye, Fruta del Norte and the Tasiast expansion projects, being consistent with the Company''s current 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: fluctuations in the currency markets; fluctuations in the spot and forward price of gold or certain other commodities (such as diesel fuel and electricity); increases in the discount rates applied to present value net future cash flows based on country-specific real weighted average cost of capital; declines 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 interest rates or gold or silver lease rates that could impact the mark-to-market value of outstanding derivative instruments and ongoing payments/receipts under any interest rate swaps and variable rate debt 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, Ecuador, Mauritania, Ghana, or other countries in which Kinross, or entities in which it now or hereafter directly or indirectly holds an interest, do 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; commencement of litigation against the Company including, but not limited to, securities class action in Canada and/or the U.S.; 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 rating; 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 news release are qualified by these cautionary statements 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 Factors" section of our most recently filed Annual Information Form and full-year 2011 and Q3 2012 Management Discussion and Analysis. 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.

Key Sensitivities

Approximately 60%-70% of the Company''s costs are denominated in US dollars.

A 10% change in foreign exchange could result in an approximate $5 impact in production cost of sales per ounce.(6)

A $10 per barrel change in the price of oil could result in an approximate $2 impact on production cost of sales per ounce.

The impact on royalties of a $100 change in the gold price could result in an approximate $4 impact on cost of sales per ounce.

Other information

Where we say "we", "us", "our", the "Company", or "Kinross" in this news release, we mean Kinross Gold Corporation and/or one or more or all of its subsidiaries, as may be applicable.

The technical information about the Company''s material mineral properties (other than exploration activities) contained in this news release has been prepared under the supervision of Mr. Jim Fowler, an officer of the Company who is a "qualified person" within the meaning of National Instrument 43-101. The technical information about the Company''s drilling and exploration activities contained in this news release has been prepared under the supervision of Dr. Glen Masterman, an officer with the Company who is a "qualified person" within the meaning of National Instrument 43-101.

   
(1) Unless otherwise stated, production figures in this news release are based on Kinross'' 90% share of Chirano production. Prior year production figures have been adjusted to exclude Crixás due to its sale in Q2 2012.
(2) "Production cost of sales per gold equivalent ounce" is a non-GAAP measure defined as production cost of sales per the financial statements divided by the attributable number of gold equivalent ounces sold, both reduced to reflect a 90% ownership interest in Chirano sales. Production cost of sales is equivalent to total cost of sales (per the financial statements), less depreciation, depletion, amortization, and impairment charges.
(3) "Attributable margin per ounce sold" is a non-GAAP measure and is defined as "average realized gold price per ounce" less "attributable production cost of sales per gold equivalent ounce sold".
(4) Reconciliation of non-GAAP measures are provided on page nine of this news release.
(5) "Net earnings" figures in this release represent "net earnings from continuing operations attributable to common shareholders."
(6) Refers to all of the currencies in the countries where the Company has mining operations, fluctuating simultaneously by 10% in the same direction, either appreciating or depreciating, taking into consideration the impact of hedging and the weighting of each currency within our consolidated cost structure.

Reconciliation of non-GAAP financial measures

The Company has included certain non-GAAP financial measures in this document. These measures are not defined under IFRS and should not be considered in isolation. The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. The inclusion of these measures is meant to provide additional information and should not be used as a substitute for performance measures prepared in accordance with IFRS. These measures are not necessarily standard and therefore may not be comparable to other issuers.

Adjusted net earnings attributable to common shareholders and adjusted net earnings per share are non-GAAP measures which determine the performance of the Company, excluding certain impacts which the Company believes are not reflective of the Company''s underlying performance for the reporting period, such as the impact of foreign exchange gains and losses, reassessment of prior year taxes and/or taxes otherwise not related to the current period, impairment charges, gains and losses and other one-time costs related to acquisitions, dispositions and other transactions, and non-hedge derivative gains and losses. Although some of the items are recurring, the Company believes that they are not reflective of the underlying operating performance of its current business and are not necessarily indicative of future operating results. Management believes that these measures, which are used internally to assess performance and in planning and forecasting future operating results, provide investors with the ability to better evaluate underlying performance, particularly since the excluded items are typically not included in public guidance. However, adjusted net earnings and adjusted net earnings per share measures are not necessarily indicative of net earnings and earnings per share measures as determined under IFRS.

The following table provides a reconciliation of net earnings from continuing operations to adjusted net earnings from continuing operations for the periods presented:

  GAAP to Adjusted Earnings from Continuing Operations Reconciliation  
(in US$ millions) Three months ended   Nine months ended  
  September 30,   September 30,  
  2012   2011   2012   2011  
                         
Net earnings from continuing operations attributable to common shareholders - as reported $ 224.9   $ 207.1   $ 440.3   $ 697.6  
                         
Adjusting items:                        
  Foreign exchange (gains) losses   (3.5 )   9.1     2.7     (12.8 )
  Non-hedge derivatives (gains) losses - net of tax   7.1     3.1     (6.4 )   (45.5 )
  (Gains) losses on acquisition/disposition of assets and investments - net of tax   0.1     (0.2 )   0.4     (31.4 )
  Foreign exchange (gain) loss on translation of tax basis and foreign exchange on deferred income taxes within income tax expense   (0.8 )   47.6     11.3     46.0  
  Change in deferred tax due to a change in statutory corporate income tax rate   6.2     -     116.5     -  
  Taxes in respect of prior years   -     -     1.3     -  
  Impairment of investments   -     -     20.2     -  
  Inventory fair value adjustment - net of tax   -     2.7     -     9.7  
  Severance expense   16.4     -     16.4     -  
    25.5     62.3     162.4     (34.0 )
Net earnings from continuing operations attributable to common shareholders - Adjusted $ 250.4   $ 269.4   $ 602.7   $ 663.6  
Weighted average number of common shares outstanding - Basic   1,139.4     1,136.7     1,138.8     1,135.5  
Net earnings from continuing operations per share - Adjusted $ 0.22   $ 0.24   $ 0.53   $ 0.58  

The Company makes reference to a non-GAAP measure for adjusted operating cash flow and adjusted operating cash flow per share. Adjusted operating cash flow is defined as cash flow from operations excluding certain impacts which the Company believes are not reflective of the Company''s regular operating cash flow, and excluding changes in working capital. Working capital can be volatile due to numerous factors, including the timing of tax payments, and in the case of Kupol, a build-up of inventory due to transportation logistics. The Company uses adjusted operating cash flow internally as a measure of the underlying operating cash flow performance and future operating cash flow-generating capability of the Company. However, adjusted operating cash flow and adjusted operating cash flow per share measures are not necessarily indicative of net cash flow from operations as determined under IFRS.

The following table provides a reconciliation of adjusted operating cash flow from continuing operations for the periods presented:

  GAAP to Adjusted Operating Cash Flow from Continuing Operations  
(in US$ millions) Three months ended   Nine months ended  
  September 30,   September 30,  
  2012   2011   2012   2011  
                         
Net cash flow of continuing operations provided from operating activities - as reported $ 368.8   $ 289.0   $ 822.7   $ 976.2  
                         
Adjusting items:                        
  Close out and early settlement of derivative instruments   -     112.8     (48.7 )   112.8  
  Working capital changes:                        
    Accounts receivable and other assets   (30.6 )   (26.1 )   54.8     141.8  
    Inventories   110.0     93.9     158.6     96.4  
    Accounts payable and other liabilities, including taxes   (13.8 )   (56.7 )   38.2     (118.8 )
    65.6     123.9     202.9     232.2  
Adjusted operating cash flow from continuing operations $ 434.4   $ 412.9   $ 1,025.6   $ 1,208.4  
Weighted average number of common shares outstanding - Basic   1,139.4     1,136.7     1,138.8     1,135.5  
Adjusted operating cash flow from continuing operations per share $ 0.38   $ 0.36   $ 0.90   $ 1.06  

Consolidated production cost of sales per gold equivalent ounce sold is a non-GAAP measure and is defined as production cost of sales as per the consolidated financial statements divided by the total number of gold equivalent ounces sold. This measure converts the Company''s non-gold production into gold equivalent ounces and credits it to total production.

Attributable production cost of sales per gold equivalent ounce sold is a non-GAAP measure and is defined as attributable production cost of sales divided by the attributable number of gold equivalent ounces sold. This measure converts the Company''s non-gold production into gold equivalent ounces and credits it to total production.

Management uses these measures to monitor and evaluate the performance of its operating properties.

  Consolidated and Attributable Cost of Sales from Continuing Operations Per Equivalent Ounce Sold  
                 
(in US$ millions) Three months ended   Nine months ended  
  September 30,   September 30,  
  2012   2011   2012   2011  
                         
Production cost of sales from continuing operations $ 455.7   $ 410.2   $ 1,373.2   $ 1,170.7  
Less: portion attributable to Kupol non-controlling interest(1)   -     -     -     (21.0 )
Less: portion attributable to Chirano non-controlling interest   (5.1 )   (5.0 )   (15.4 )   (13.6 )
Attributable production cost of sales from continuing operations $ 450.6   $ 405.2   $ 1,357.8   $ 1,136.1  
                         
Gold equivalent ounces sold from continuing operations   672,221     653,792     1,925,409     2,047,032  
Less: portion attributable to Kupol non-controlling interest(1)   -     -     -     (63,802 )
Less: portion attributable to Chirano non-controlling interest   (6,970 )   (6,869 )   (21,093 )   (19,480 )
Attributable gold equivalent ounces sold   665,251     646,923     1,904,316     1,963,750  
Consolidated production cost of sales from continuing operations per equivalent ounce sold $ 678   $ 627   $ 713   $ 572  
Attributable production cost of sales from continuing operations per equivalent ounce sold $ 677   $ 626   $ 713   $ 579  
   
(1) On April 27, 2011, Kinross acquired the remaining 25% of CMGC, and thereby obtained 100% ownership of Kupol. As such, the results up to April 27, 2011 reflect 75% and results thereafter reflect 100%.

Attributable production cost of sales per ounce sold on a by-product basis is a non-GAAP measure which calculates the Company''s non-gold production as a credit against its per ounce production costs, rather than converting its non-gold production into gold equivalent ounces and crediting it to total production, as is the case in co-product accounting. Management believes that this measure provides investors with the ability to better evaluate Kinross'' production cost of sales per ounce on a comparable basis with other major gold producers who routinely calculate their cost of sales per ounce using by-product accounting rather than co-product accounting.

The following table provides a reconciliation of attributable production cost of sales per ounce sold on a by-product basis for the periods presented:

                 
  Attributable Cost of Sales from Continuing Operations Per Ounce Sold on a By-Product Basis  
(in US$ millions) Three months ended   Nine months ended  
  September 30,   September 30,  
  2012   2011   2012   2011  
                         
Production cost of sales from continuing operations(1) $ 455.7   $ 410.2   $ 1,373.2   $ 1,170.7  
Less: portion attributable to Kupol non-controlling interest(2)   -     -     -     (21.0 )
Less: portion attributable to Chirano non-controlling interest   (5.1 )   (5.0 )   (15.4 )   (13.6 )
Less: attributable silver sales   (86.3 )   (61.9 )   (244.5 )   (227.4 )
Attributable production cost of sales from continuing operations net of silver by-product revenue $ 364.3   $ 343.3   $ 1,113.3   $ 908.7  
                         
Gold ounces sold   620,567     595,001     1,777,374     1,821,924  
Less: portion attributable to Kupol non-controlling interest(2)   -     -     -     (49,299 )
Less: portion attributable to Chirano non-controlling interest   (6,950 )   (6,836 )   (21,035 )   (19,388 )
Attributable gold ounces sold   613,617     588,165     1,756,339     1,753,237  
Attributable production cost of sales from continuing operations per ounce sold on a by-product basis $ 594   $ 584   $ 634   $ 518  
                         
(1) "Production cost of sales" is equivalent to "Total cost of sales" per the consolidated financial statements less depreciation, depletion and amortization and impairment charges.
(2) On April 27, 2011, Kinross acquired the remaining 25% of CMGC, and thereby obtained 100% ownership of Kupol. As such, the results up to April 27, 2011 reflect 75% and results thereafter reflect 100%.

Review of Operations

Three months ended September 30,   Gold equivalent ounces              
    Produced     Sold   Production
cost of
sales
(1)
($millions)
  Production
cost of
sales
(1)
/oz
    2012     2011     2012     2011   2012   2011   2012 2011
                                             
Fort Knox   106,698     76,261     100,172     75,611   $ 64.9   $ 53.8   $ 648 $ 712
Round Mountain   53,205     54,588     53,237     52,658     32.2     35.2     605   668
Kettle River - Buckhorn   43,942     41,200     44,049     42,109     20.7     19.5     470   463
North America Total   203,845     172,049     197,458     170,378     117.8     108.5     597   637
                                             
Kupol (100%)   155,533     124,912     164,025     138,278     76.5     58.4     466   422
Russia Total   155,533     124,912     164,025     138,278     76.5     58.4     466   422
                                             
Paracatu   111,558     135,099     104,937     133,827     92.0     89.7     877   670
La Coipa   41,585     38,539     42,240     35,566     45.9     32.1     1,087   903
Maricunga   46,971     53,123     45,818     58,591     40.0     30.2     873   515
South America Total   200,114     226,761     192,995     227,984     177.9     152.0     922   667
                                             
Tasiast   51,842     47,175     48,045     48,455     32.2     40.8     670   842
Chirano (100%)   67,599     68,372     69,698     68,697     51.3     50.5     736   735
West Africa Total   119,441     115,547     117,743     117,152     83.5     91.3     709   779
                                             
Continuing operations   678,933     639,269     672,221     653,792     455.7     410.2     678   627
Discontinued operations(2)   -     15,551     -     16,594     -     15.3     -   922
                                             
Operations Total   678,933     654,820     672,221     670,386   $ 455.7   $ 425.5   $ 678 $ 635
Less Chirano non-controlling interest (10%)   (6,760 )   (6,837 )   (6,970 )   (6,869 )   (5.1 )   (5.0 )        
Attributable - Continuing operations   672,173     632,432     665,251     646,923   $ 450.6   $ 405.2   $ 677 $ 626
Attributable Total   672,173     647,983     665,251     663,517   $ 450.6   $ 420.5   $ 677 $ 634
                                             
(1) "Production cost of sales" is equivalent to "Total cost of sales" per the consolidated financial statements less depreciation, depletion and amortization and impairment charges.
(2) On June 28, 2012, the Company completed the sale of its 50% interest in the Crixás gold mine.
 
Nine months ended September 30,   Gold equivalent ounces   Production
cost of
sales
(1)
($millions)
  Production
cost of
sales
(1)/oz
    Produced     Sold  
    2012     2011     2012     2011   2012   2011   2012   2011
                                               
Fort Knox   240,366     219,035     232,515     217,546   $ 171.4   $ 146.8   $ 737   $ 675
Round Mountain   151,110     143,860     149,221     141,154     104.1     102.8     698     728
Kettle River - Buckhorn   122,545     133,289     123,724     135,180     60.2     55.7     487     412
North America Total   514,021     496,184     505,460     493,880     335.7     305.3     664     618
                                               
Kupol (100%)   431,717     514,653     447,476     541,389     210.9     193.0     471     356
Russia Total   431,717     514,653     447,476     541,389     210.9     193.0     471     356
                                               
Paracatu   334,595     335,419     333,853     337,557     305.6     241.3     915     715
La Coipa   115,438     143,852     116,277     155,403     126.1     110.1     1,084     708
Maricunga   171,801     181,968     176,248     177,841     128.2     83.3     727     468
South America Total   621,834     661,239     626,378     670,801     559.9     434.7     894     648
                                               
Tasiast   139,283     145,745     135,168     146,161     112.6     101.0     833     691
Chirano (100%)   207,165     188,307     210,927     194,801     154.1     136.7     731     702
West Africa Total   346,448     334,052     346,095     340,962     266.7     237.7     771     697
                                               
Continuing operations   1,914,020     2,006,128     1,925,409     2,047,032     1,373.2     1,170.7     713     572
Discontinued operations(3)   30,994     45,802     32,764     46,378     27.4     39.0     836     841
                                               
Operations Total   1,945,014     2,051,930     1,958,173     2,093,410   $ 1,400.6   $ 1,209.7   $ 715   $ 578
Less Kupol non-controlling interest (25%)(2)   -     (66,014 )   -     (63,802 )   -     (21.0 )          
Less Chirano non-controlling interest (10%)   (20,717 )   (18,831 )   (21,093 )   (19,480 )   (15.4 )   (13.6 )          
Attributable - Continuing operations   1,893,303     1,921,283     1,904,316     1,963,750   $ 1,357.8   $ 1,136.1   $ 713   $ 579
Attributable Total   1,924,297     1,967,085     1,937,080     2,010,128   $ 1,385.2   $ 1,175.1   $ 715   $ 585
                                               
(1) "Production cost of sales" is equivalent to "Total cost of sales" per the consolidated financial statements less depreciation, depletion and amortization and impairment charges.
(2) On April 27, 2011, Kinross acquired the remaining 25% of CMGC, and thereby obtained 100% ownership of Kupol. As such, the results up to April 27, 2011 reflect 75% and results thereafter reflect 100%.
(3) On June 28, 2012, the Company completed the sale of its 50% interest in the Crixás gold mine.

Consolidated balance sheets

(unaudited expressed in millions of United States dollars, except share amounts)

         
  As at  
  September 30,   December 31,  
  2012   2011  
             
Assets            
  Current assets            
    Cash and cash equivalents $ 1,339.7   $ 1,766.0  
    Restricted cash   61.1     62.1  
    Short-term investments   749.6     1.3  
    Accounts receivable and other assets   327.7     309.4  
    Inventories   1,123.3     976.2  
    Unrealized fair value of derivative assets   17.1     2.8  
    3,618.5     3,117.8  
  Non-current assets            
    Property, plant and equipment   9,874.0     8,959.4  
    Goodwill   3,382.3     3,420.3  
    Long-term investments   75.7     79.4  
    Investments in associates   514.5     502.5  
    Unrealized fair value of derivative assets   12.4     1.1  
    Deferred charges and other long-term assets   482.3     406.4  
    Deferred tax assets   33.3     21.9  
Total assets $ 17,993.0   $ 16,508.8  
             
Liabilities            
  Current liabilities            
    Accounts payable and accrued liabilities $ 591.5   $ 575.3  
    Current tax payable   78.3     82.9  
    Current portion of long-term debt   512.0     32.7  
    Current portion of provisions   33.2     38.1  
    Current portion of unrealized fair value of derivative liabilities   33.6     66.7  
    1,248.6     795.7  
  Non-current liabilities            
    Long-term debt   2,117.5     1,600.4  
    Provisions   591.2     597.1  
    Unrealized fair value of derivative liabilities   18.3     32.7  
    Other long-term liabilities   134.2     133.1  
    Deferred tax liabilities   970.7     879.1  
Total liabilities   5,080.5     4,038.1  
             
Equity            
  Common shareholders'' equity            
    Common share capital and common share purchase warrants $ 14,686.0   $ 14,656.6  
    Contributed surplus   85.4     81.4  
    Accumulated deficit   (1,948.0 )   (2,249.9 )
    Accumulated other comprehensive income (loss)   16.1     (97.7 )
Total common shareholders'' equity   12,839.5     12,390.4  
  Non-controlling interest   73.0     80.3  
Total equity   12,912.5     12,470.7  
Commitments and contingencies            
Total liabilities and equity $ 17,993.0   $ 16,508.8  
             
Common shares            
  Authorized   Unlimited     Unlimited  
  Issued and outstanding   1,139,703,976     1,137,732,344  

Consolidated statements of operations

(unaudited expressed in millions of United States dollars, except per share and share amounts)

  Three months ended   Nine months ended  
                 
  September 30,   September 30,   September 30,   September 30,  
  2012   2011   2012   2011  
                         
Revenue                        
  Metal sales $ 1,109.7   $ 1,041.0   $ 3,124.5   $ 2,922.7  
                         
Cost of sales                        
  Production cost of sales   455.7     410.2     1,373.2     1,170.7  
  Depreciation, depletion and amortization   181.6     139.7     481.3     436.7  
Total cost of sales   637.3     549.9     1,854.5     1,607.4  
Gross profit   472.4     491.1     1,270.0     1,315.3  
  Other operating costs   20.1     8.6     42.4     21.6  
  Exploration and business development   56.9     37.5     186.8     87.4  
  General and administrative   52.3     36.2     136.0     119.6  
Operating earnings   343.1     408.8     904.8     1,086.7  
  Other income (expense) - net   (2.7 )   (9.1 )   (18.9 )   96.0  
  Equity in losses of associates   (1.8 )   (1.4 )   (4.7 )   (1.4 )
  Finance income   1.5     1.7     3.6     5.4  
  Finance expense   (13.4 )   (22.9 )   (32.2 )   (55.2 )
Earnings before taxes   326.7     377.1     852.6     1,131.5  
  Income tax expense - net   (100.5 )   (167.2 )   (419.6 )   (376.3 )
Earnings from continuing operations after tax   226.2     209.9     433.0     755.2  
Earnings from discontinued operations after tax   -     5.5     43.9     12.5  
Net earnings $ 226.2   $ 215.4   $ 476.9   $ 767.7  
                         
Net earnings from continuing operations attributable to:                        
  Non-controlling interest $ 1.3   $ 2.8   $ (7.3 ) $ 57.6  
  Common shareholders $ 224.9   $ 207.1   $ 440.3   $ 697.6  
Net earnings attributable to:                        
  Non-controlling interest $ 1.3   $ 2.8   $ (7.3 ) $ 57.6  
  Common shareholders $ 224.9   $ 212.6   $ 484.2   $ 710.1  
                         
Earnings per share from continuing operations attributable to common shareholders                        
                         
  Basic $ 0.20   $ 0.18   $ 0.39   $ 0.61  
  Diluted $ 0.20   $ 0.18   $ 0.38   $ 0.61  
Net earnings per share attributable to common shareholders                        
                         
  Basic $ 0.20   $ 0.19   $ 0.43   $ 0.63  
  Diluted $ 0.20   $ 0.19   $ 0.42   $ 0.62  
                         
Weighted average number of common shares outstanding (millions)                        
  Basic   1,139.4     1,136.7     1,138.8     1,135.5  
  Diluted   1,145.6     1,142.4     1,145.0     1,141.3  

Consolidated statements of cash flows

(expressed in millions of United States dollars)

  Three months ended   Nine months ended  
  September 30,   September 30,   September 30,   September 30,  
  2012   2011   2012   2011  
Net inflow (outflow) of cash related to the following activities:                        
                         
Operating:                        
Net earnings from continuing operations $ 226.2   $ 209.9   $ 433.0   $ 755.2  
Adjustments to reconcile net earnings from continuing operations to net cash provided from (used in) operating activities:                        
  Depreciation, depletion and amortization   181.6     139.7     481.3     436.7  
  (Gains) losses on acquisition/
disposition of assets and investments - net
  0.2     (0.3 )   0.7     (31.7 )
  Equity in losses of associates   1.8     1.4     4.7     1.4  
  Non-hedge derivative (gains) losses - net   7.1     3.4     (6.4 )   (44.7 )
  Settlement of derivative instruments   (0.2 )   (112.8 )   48.5     (112.8 )
  Share-based compensation expense   9.9     8.8     28.8     27.2  
  Accretion expense   9.0     13.9     19.7     40.4  
  Deferred tax expense   1.9     33.3     85.4     21.2  
  Foreign exchange (gains) losses and other   (3.1 )   2.8     (21.4 )   2.7  
  Changes in operating assets and liabilities:                        
    Accounts receivable and other assets   30.6     26.1     (54.8 )   (141.8 )
    Inventories   (110.0 )   (93.9 )   (158.6 )   (96.4 )
    Accounts payable and accrued liabilities   100.2     136.3     240.3     381.3  
Cash flow provided from operating activities   455.2     368.6     1,101.2     1,238.7  
  Income taxes paid   (86.4 )   (79.6 )   (278.5 )   (262.5 )
Net cash flow of continuing operations provided from operating activities   368.8     289.0     822.7     976.2  
Net cash flow of discontinued operations provided from (used in) operating activities   (62.4 )   13.4     (47.6 )   22.6  
                         
Investing:                        
  Additions to property, plant and equipment   (451.2 )   (389.6 )   (1,412.6 )   (1,051.3 )
  Net proceeds from the sale of long-term investments and other assets   -     -     0.2     101.1  
  Additions to long-term investments and other assets   (5.4 )   (48.1 )   (18.1 )   (124.6 )
  Net proceeds from the sale of property, plant and equipment   0.2     1.0     0.4     1.8  
  Additions to short-term investments   (749.6 )   (0.5 )   (748.3 )   (1.8 )
  Note received from Harry Winston   -     70.0     -     70.0  
  Decrease in restricted cash   (6.3 )   (11.9 )   (5.0 )   (15.8 )
  Interest received   1.2     4.5     3.3     6.4  
  Other   0.1     (0.2 )   0.2     (3.2 )
Net cash flow of continuing operations used in investing activities   (1,211.0 )   (374.8 )   (2,179.9 )   (1,017.4 )
Net cash flow of discontinued operations provided from (used in) investing activities   -     (4.2 )   198.9     (20.9 )
                         
Financing:                        
  Issuance of common shares on exercise of options and warrants   1.2     11.9     4.7     26.8  
  Acquisition of CMGC 25% non-controlling interest   -     -     -     (335.4 )
  Proceeds from issuance of debt   1,140.8     1,136.5     1,437.1     1,329.1  
  Repayment of debt   (145.0 )   (167.0 )   (467.5 )   (382.6 )
  Interest paid   (1.7 )   (4.6 )   (6.5 )   (9.7 )
  Dividends paid to common shareholders   (91.2 )   (68.0 )   (182.3 )   (124.8 )
  Settlement of derivative instruments   -     (23.9 )   -     (43.6 )
  Other   (4.2 )   (0.5 )   (5.0 )   (6.2 )
Net cash flow of continuing operations provided from financing activities   899.9     884.4     780.5     453.6  
Net cash flow of discontinued operations used in financing activities   -     (1.2 )   (0.6 )   (2.6 )
Effect of exchange rate changes on cash and cash equivalents of continuing operations   4.1     (12.3 )   (0.3 )   (3.5 )
Increase (decrease) in cash and cash equivalents   (0.6 )   794.3     (426.3 )   408.0  
Cash and cash equivalents, beginning of period   1,340.3     1,080.3     1,766.0     1,466.6  
Cash and cash equivalents, end of period $ 1,339.7   $ 1,874.6   $ 1,339.7   $ 1,874.6  
                         
 
Operating Summary
  Mine Period Ownership Ore
Processed
(1)
Grade Recovery
(2)
  Gold Eq
Production
(10)
Gold Eq
Sales
(10)
Production costs of
sales
(11)
Production
cost of
sales
(11)/oz
Cap Ex DD&A
      (%) (''000 tonnes) (g/t) (%)   (ounces) (ounces) ($ millions) ($/ounce) ($ millions) ($ millions)
North America Fort Knox(3) Q3 2012 100 16,111 0.76 84 % 106,698 100,172 $ 64.9 $ 648 $ 13.7 $ 25.7
Q2 2012 100 13,084 0.51 85 % 71,952 71,978   54.5   757   38.4   11.3
Q1 2012 100 4,156 0.46 84 % 61,716 60,365   52.0   861   24.8   9.1
Q4 2011 100 8,197 0.51 79 % 70,759 69,973   52.3   747   28.4   10.0
Q3 2011 100 9,415 0.49 77 % 76,261 75,611   53.8   712   26.8   15.4
Round Mountain (4) Q3 2012 50 6,144 0.72 71 % 53,205 53,237   32.2   605   14.4   6.6
Q2 2012 50 4,674 0.82 74 % 53,147 52,433   34.7   662   19.3   8.4
Q1 2012 50 5,121 0.92 78 % 44,758 43,551   37.3   856   13.6   7.8
Q4 2011 50 6,317 0.98 81 % 43,584 44,231   26.4   597   22.2   6.1
Q3 2011 50 6,989 0.95 74 % 54,588 52,658   35.2   668   9.6   8.8
Kettle River Q3 2012 100 95 15.23 94 % 43,942 44,049   20.7   470   1.0   21.7
Q2 2012 100 111 11.52 92 % 35,985 40,354   20.5   508   3.2   18.2
Q1 2012 100 112 12.81 90 % 42,618 39,321   18.9   481   0.5   18.9
Q4 2011 100 123 12.24 89 % 42,003 43,089   19.2   446   3.0   21.6
Q3 2011 100 110 13.06 91 % 41,200 42,109   19.5   463   3.9   17.5
Russia Kupol - (6)(7) Q3 2012 100 332 12.34 94 % 155,533 164,025   76.5   466   17.0   30.1
Q2 2012 100 329 12.23 93 % 149,214 156,716   73.2   467   12.3   29.4
Q1 2012 100 309 11.76 93 % 126,970 126,735   61.2   483   10.4   23.6
Q4 2011 100 325 10.81 93 % 138,410 113,936   54.8   481   18.5   21.3
Q3 2011 100 303 10.39 93 % 124,912 138,278   58.4   422   8.0   25.7
South America Paracatu Q3 2012 100 13,386 0.38 70 % 111,558 104,937   92.0   877   81.0   20.0
Q2 2012 100 12,988 0.38 74 % 118,419 118,389   108.2   914   67.2   19.2
Q1 2012 100 12,910 0.35 72 % 104,618 110,527   105.4   954   74.6   14.6
Q4 2011 100 11,578 0.42 74 % 117,977 112,048   82.6   737   131.6   15.1
Q3 2011 100 13,202 0.43 74 % 135,099 133,827   89.7   670   105.9   16.9
Crixás(12) Q3 2012 0 - - -   - -   -   -   -   -
Q2 2012 50 302 3.43 91 % 15,105 15,611   13.6   871   3.6   4.9
Q1 2012 50 282 3.82 91 % 15,889 17,153   13.8   805   3.8   4.0
Q4 2011 50 302 4.58 93 % 20,781 17,379   11.3   650   7.1   3.6
Q3 2011 50 300 3.49 92 % 15,551 16,594   15.3   922   5.4   3.7
La Coipa (5) Q3 2012 100 1,297 0.65 79 % 41,585 42,240   45.9   1,087   25.9   12.2
Q2 2012 100 1,256 0.72 77 % 36,113 30,325   35.7   1,177   22.2   6.2
Q1 2012 100 1,467 0.56 78 % 37,740 43,712   44.5   1,018   15.3   4.5
Q4 2011 100 1,060 0.58 85 % 34,435 35,629   35.4   994   23.2   3.3
Q3 2011 100 1,011 0.70 76 % 38,539 35,566   32.1   903   17.4   6.6
Maricunga Q3 2012 100 3,755 0.64 nm   46,971 45,818   40.0   873   33.9   4.9
Q2 2012 100 3,487 0.65 nm   60,841 61,367   44.5   725   50.7   5.5
Q1 2012 100 4,014 0.66 nm   63,989 69,063   43.7   633   35.6   6.3
Q4 2011 100 3,960 0.76 nm   54,281 52,987   22.2   419   34.0   4.8
Q3 2011 100 3,284 0.80 nm   53,123 58,591   30.2   515   29.9   5.5
West Africa Tasiast(9) Q3 2012 100 2,530 1.55 92 % 51,842 48,045   32.2   670   190.4   18.6
Q2 2012 100 5,133 1.74 86 % 49,807 46,296   44.5   961   124.3   19.9
Q1 2012 100 1,597 1.71 89 % 37,634 40,827   35.9   879   260.0   13.8
Q4 2011 100 4,581 2.33 88 % 54,874 50,800   37.2   732   204.6   14.8
Q3 2011 100 2,679 2.05 87 % 47,175 48,455   40.8   842   88.3   18.4
Chirano - 100% Q3 2012 90 846 2.67 93 % 67,599 69,698   51.3   736   15.9   39.5
Q2 2012 90 802 2.70 92 % 63,660 62,978   49.1   780   20.6   36.9
Q1 2012 90 854 2.97 93 % 75,906 78,251   53.7   686   22.5   41.8
Q4 2011 90 917 2.70 93 % 73,539 67,876   45.3   667   28.6   28.4
Q3 2011 90 949 2.45 91 % 68,372 68,697   50.5   735   19.5   23.6
Chirano(8) Q3 2012 90 846 2.67 93 % 60,839 62,728   46.2   736   14.3   35.6
Q2 2012 90 802 2.70 92 % 57,294 56,680   44.2   780   18.5   33.2
Q1 2012 90 854 2.97 93 % 68,315 70,426   48.3   686   20.3   37.6
Q4 2011 90 917 2.70 93 % 66,185 61,086   40.8   667   25.7   25.6
Q3 2011 90 949 2.45 91 % 61,535 61,828   45.5   735   17.6   21.2
(1) Ore processed is to 100%, production and costs are to Kinross'' account.
(2) Due to the nature of heap leach operations, recovery rates at Maricunga cannot be accurately measured on a quarterly basis. Recovery rates at Fort Knox, Round Mountain and Tasiast represent mill recovery only.
(3) Includes 12,873,000 tonnes placed on the heap leach pad during the third quarter of 2012, and 23,420,000 tonnes for the first nine months of 2012. Grade and recovery represent mill processing only. Ore placed on the heap leach pad had an average grade of 0.30 grams per tonne for the third quarter of 2012 and 0.31 for the nine months ended September 30, 2012.
(4) Includes 5,118,000 tonnes placed on the heap leach pad during the third quarter of 2012, and 13,180,000 tonnes for the first nine months of 2012. The presentation has been amended to reflect mill grade and recovery only, with heap leach grade disclosed separately, rather than a blended rate for mill and heap leach grades. Ore placed on the heap leach pad had an average grade of 0.44 grams per tonne for the third quarter of 2012 and the first nine months of 2012. In addition, the presentation has been amended to exclude tonnes transferred between heap leach pads.
(5) La Coipa silver grade and recovery were as follows: Q3 (2012) 55.58 g/t, 45%; Q2 (2012) 42.04 g/t, 46%; Q1 (2012) 38.78 g/t, 51%; Q4 (2011) 56.82 g/t, 54%; Q3 (2011) 65.00 g/t, 43%.
(6) The Kupol segment excludes Dvoinoye capital expenditures.
(7) Kupol silver grade and recovery were as follows: Q3 (2012) 163.68 g/t, 85%; Q2 (2012) 187.49 g/t, 87%; Q1 (2012) 171.8 g/t, 85%; Q4 (2011) 170.52 g/t, 85%; Q3 (2011) 159.03 g/t, 82%.
(8) Includes Kinross'' share of Chirano at 90%.
(9) Includes 1,887,000 tonnes placed on the heap leach pad during the third quarter of 2012, and 7,366,000 tonnes for the first nine months of 2012. Grade and recovery represent mill processing only. Ore placed on the heap leach pad had an average grade of 0.51 grams per tonne for the third quarter of 2012, and 0.50 grams per tonne for the first nine months of 2012.
(10) Gold equivalent ounces include silver ounces produced and sold converted to a gold equivalent based on the ratio of the average spot market prices for the commodities for each period. The ratios for the quarters presented are as follows: Q3 2012: 55.44:1, Q2 2012: 54.77:1, Q1 2012: 51.82:1, Q4 2011: 52.64:1, Q3 2011: 43.87:1.
(11) "Production cost of sales" is equivalent to "Total cost of sales" per the consolidated financial statements less depreciation, depletion and amortization and impairment charges.
(12) On June 28, 2012, the Company completed the sale of its 50% interest in the Crixás gold mine.

For more information, please see Kinross'' 2012 third quarter Financial Statements and MD&A at www.kinross.com.

Contact:
Media Kinross Gold Corporation
Steve Mitchell
Vice-President, Corporate Communications
416-365-2726
steve.mitchell@kinross.com
Investor Relations Kinross Gold Corporation
Tom Elliott
Vice-President, Investor Relations
416-365-3390
tom.elliott@kinross.com
www.kinross.com

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