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Kinross reports 2018 third-quarter results

On track to meet company-wide annual production and cost guidance

Tasiast Phase One commissioning complete; construction of U.S. and Russia projects on schedule

TORONTO, Nov. 07, 2018 (GLOBE NEWSWIRE) -- Kinross Gold Corporation (TSX: K, NYSE: KGC) today announced its results for the third-quarter ended September 30, 2018.

(This news release contains forward-looking information about expected future events and financial and operating performance of the Company. We refer to the risks and assumptions set out in our Cautionary Statement on Forward-Looking Information located on page 18 of this release. All dollar amounts are expressed in U.S. dollars, unless otherwise noted.)

2018 third-quarter highlights:                            

  • Production1: 586,260 gold equivalent ounces (Au eq. oz.), compared with 653,993 Au eq. oz. in Q3 2017.
  • Gold equivalent ounces sold: 618,463 Au eq. oz. compared with 638,659 Au eq. oz. sold in Q3 2017.  
  • Revenue: $753.9 million, compared with $828.0 million in Q3 2017.
  • Production cost of sales2: $777 per Au eq. oz., compared with $662 in Q3 2017.
  • All-in sustaining cost2: $1,049 per Au eq. oz. sold, compared with $937 in Q3 2017. All-in sustaining cost per gold ounce (Au oz.) sold on a by-product basis was $1,046 in Q3 2018, compared with $927 in Q3 2017.
  • Operating cash flow: $127.2 million, compared with $197.7 million in Q3 2017.
  • Adjusted operating cash flow2: $143.2 million, compared with $320.8 million in Q3 2017.
  • Reported net earnings/loss3: loss of 104.4 million, or $0.08 per share, compared with net earnings of $60.1 million, or $0.05 per share, in Q3 2017.
  • Adjusted net earnings/loss2,3: loss of $48.4 million, or $0.04 per share, compared with adjusted net earnings of $84.1 million, or $0.07 per share, in Q3 2017.
  • Organic projects and development opportunities:
    • Tasiast expansion: Phase One SAG mill commissioning has been completed. The Company continues to assess alternative throughput approaches to expand Tasiast and advanced discussions with the Government of Mauritania. Kinross also advanced project financing activities during the quarter.  
    • Round Mountain Phase W project: On schedule and on budget, with initial ore expected in mid-2019.
    • Fort Knox Gilmore project: On schedule and on budget, with initial production expected in early 2020.
    • Bald Mountain Vantage Complex project: On schedule and on budget, as stripping and stacking on the new heap leach pad have now commenced. On October 2, 2018, the Company acquired the remaining 50% interest in the Bald Mountain Exploration Joint Venture that it did not already own from Barrick Gold for consideration including $15.5 million in cash and a 1.25% net smelter royalty, giving Kinross 100% ownership of the entire Bald Mountain land package.
    • Russia satellite projects: The Moroshka project was completed as production commenced at the high-grade deposit located near Kupol. Development at Dvoinoye Zone 1 is proceeding as planned.  
    • Chile projects: The La Coipa Restart project feasibility study remains on schedule to be completed in the second half of 2019, with permitting now complete for the project. The Lobo Marte scoping study also remains on schedule, and is expected to be completed in the first half of 2019. 
  • Outlook: Kinross expects to produce 2.5 million Au eq. oz. (+/- 5%) at a production cost of sales per Au eq. oz. of $730 (+/- 5%) and all-in sustaining cost of $975 (+/- 5%) per ounce sold on both a gold equivalent and by-product basis for 2018. Total capital expenditures are forecast to be approximately $1,075 million (+/- 5%).
  • Balance sheet: As of September 30, 2018, Kinross had cash and cash equivalents of $470.1 million and available credit of $1,554.3 million, for total liquidity of approximately $2.0 billion, and no debt maturities until 2021.
  • Board Chair update: John Oliver has announced he will retire from his role as Board Chair effective December 31, 2018. Catherine McLeod-Seltzer, a Board member since 2005, has been appointed the new Independent Chair effective January 1, 2019. 

CEO Commentary

J. Paul Rollinson, President and CEO, made the following comments in relation to 2018 third-quarter results:

“During the first nine months of 2018, our global portfolio of mines achieved solid production and generated robust cash flow. Our Nevada, Brazil, Ghana and Russia operations performed well during the quarter and we remain on track to meet our company-wide production and cost guidance for the year.

“Commissioning of the new SAG mill for the Tasiast Phase One expansion has been completed. Performance at Tasiast is expected to further improve in the fourth quarter, as the mine delivered record monthly production in October and began mining higher grade ore. We also continue to advance discussions with the Government of Mauritania regarding our operations in the country and have now signed mandate letters with Export Development Canada (EDC) and the International Finance Corporation (IFC), a division of the World Bank, regarding project financing.

“Construction at our U.S. projects – Round Mountain Phase W and Bald Mountain Vantage Complex in Nevada and Fort Knox Gilmore in Alaska – remain on schedule and on budget as we continue to solidify our production footprint in the country. In Russia, the Moroskha project was completed and production commenced at the high-grade satellite deposit near Kupol, while our studies assessing a return to long-term production in Chile are proceeding well.”

Financial results

Summary of financial and operating results

    Three months ended  Nine months ended
    September 30, September 30,
(in millions, except ounces, per share amounts, and per ounce amounts) 2018 2017 2018 2017
Operating Highlights           
Total gold equivalent ounces(a)           
Produced(c)   591,928   660,564   1,859,789   2,038,797
Sold(c)   623,854   645,235   1,891,811   1,987,113
           
Attributable gold equivalent ounces(a)         
Produced(c)   586,260   653,993   1,842,246   2,020,823
Sold(c)   618,463   638,659   1,874,236   1,968,189
           
Financial Highlights           
Metal sales   $     753.9   $   828.0   $   2,426.1   $   2,492.7
Production cost of sales   $     484.6   $   427.5   $   1,384.1   $   1,342.9
Depreciation, depletion and amortization   $     204.7   $   207.6   $   588.1   $   629.1
Operating earnings (loss)   $     (48.8)   $   80.1   $   175.4   $   233.6
Net earnings (loss) attributable to common shareholders   $     (104.4)   $   60.1   $   4.1   $   227.8
Basic earnings (loss) per share attributable to common shareholders   $     (0.08)   $   0.05   $   0.00   $   0.18
Diluted earnings (loss) per share attributable to common shareholders   $     (0.08)   $   0.05   $   0.00   $   0.18
Adjusted net earnings (loss) attributable to common shareholders(b)   $     (48.4)   $   84.1   $   114.6   $   162.4
Adjusted net earnings (loss) per share(b)   $     (0.04)   $   0.07   $   0.09   $   0.13
Net cash flow provided from operating activities   $     127.2   $   197.7   $   605.2   $   585.2
Adjusted operating cash flow(b)   $     143.2   $   320.8   $   738.4   $   802.5
Capital expenditures    $     276.4   $   204.7   $   770.4   $   584.3
Average realized gold price per ounce(d)   $     1,209   $   1,283   $   1,283   $   1,254
Consolidated production cost of sales per equivalent ounce(c) sold(b)   $     777   $   663   $   732   $   676
Attributable(a) production cost of sales per equivalent ounce(c) sold(b)   $     777   $   662   $   731   $   674
Attributable(a) production cost of sales per ounce sold on a by-product basis(b)   $     768   $   645   $   719   $   658
Attributable(a) all-in sustaining cost per ounce sold on a by-product basis(b)   $     1,046   $   927   $   960   $   924
Attributable(a) all-in sustaining cost per equivalent ounce(c) sold(b)   $     1,049   $   937   $   967   $   933
Attributable(a) all-in cost per ounce sold on a by-product basis(b)   $     1,360   $   1,155   $   1,270   $   1,117
Attributable(a) all-in cost per equivalent ounce(c) sold(b)   $     1,356   $   1,158   $   1,270   $   1,121
  1. "Total" includes 100% of Chirano production. "Attributable" includes Kinross' share of Chirano (90%) production.
  2. The definition and reconciliation of these non-GAAP financial measures is included on pages 13 to 17 of this news release.
  3. "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 2018 was 80.80:1 (third quarter of 2017 - 75.91:1). The ratio for the first nine months of 2018 was 79.65:1 (first nine months of 2017 - 72.94:1).
  4. The definition of this non-GAAP financial measure is included on pages 13 to 17 of this news release.

The following operating and financial results are based on third quarter 2018 gold equivalent production. Production and cost measures are on an attributable basis:

Production: Kinross produced 586,260 attributable Au eq. oz. in Q3 of 2018, compared with 653,993 Au eq. oz. in Q3 2017.

Gold equivalent ounces sold: Kinross sold 618,463 Au eq. oz. in Q3 2018, which was higher than production during the quarter due to timing, but less than the 638,659 Au eq. oz. sold in Q3 2017 due to lower production.  

Production cost of sales: Production cost of sales per Au eq. oz.2 was $777 for Q3 2018, compared with $662 for Q3 2017, mainly as a result of higher cost of sales per ounce sold at Fort Knox, Tasiast and Kupol.

Production cost of sales per Au oz. on a by-product basis2 was $768 in Q3 2018, compared with $645 in Q3 2017, based on Q3 2018 attributable gold sales of 605,244 ounces and attributable silver sales of 1,068,248 ounces.

All-in sustaining cost: All-in sustaining cost per Au eq. oz. sold2 was $1,049 in Q3 2018, compared with $937 in Q3 2017. All-in sustaining cost per Au oz. sold on a by-product basis2 was $1,046 in Q3 2018, compared with $927 in Q3 2017.

Revenue: Revenue from metal sales was $753.9 million in the third quarter of 2018, compared with $828.0 million during the same period in 2017, due to a decrease in gold equivalent ounces sold and the average realized gold price.

Average realized gold price4: The average realized gold price in Q3 2018 was $1,209 per ounce, compared with $1,283 per ounce in Q3 2017.

Margins: Kinross’ attributable margin was $432 per Au eq. oz. sold5 for Q3 2018, compared with $621 per Au eq. oz. sold in Q3 2017.

Operating cash flow: Net operating cash flow was $127.2 million for the third quarter of 2018, compared with $197.7 million for Q3 2017.

Adjusted operating cash flow2 was $143.2 million for Q3 2018, compared with $320.8 million for Q3 2017.

Earnings/loss: Reported net loss3 was $104.4 million, or $0.08 per share, for Q3 2018, compared with earnings of $60.1 million, or $0.05 per share, in Q3 2017. The decrease was mainly a result of lower margins and an increase in income tax expense.

Adjusted net loss2,3 was $48.4 million, or $0.04 per share, for Q3 2018, compared with adjusted net earnings of $84.1 million, or $0.07 per share, for Q3 2017.

Capital expenditures: Capital expenditures increased to $276.4 million for Q3 2018, compared with $204.7 million for the same period last year, mainly due to increased spending at Round Mountain and Bald Mountain.

Operating results

Mine-by-mine summaries for 2018 third-quarter operating results may be found on pages eight and 12 of this news release. Highlights include the following:

Americas

Round Mountain continued its consistent performance, with production in line and cost of sales per ounce sold lower compared with the previous quarter mainly due to a decrease in operating waste mined and the timing of ounces processed through the mill. Production was lower and cost of sales per ounce sold was higher year-over-year primarily due to lower mill grade, as the mine achieved the highest mill grades since 2003 during Q3 2017. The site experienced a wall failure in the southwest corner of the pit, which the Company does not expect to significantly impact production or the Phase W project.

At Bald Mountain, production was down year-over-year mainly due to fewer tonnes and lower grade ore placed on the heap leach pads and was in line quarter-over-quarter. Gold sales were higher compared with the previous quarter and year-over-year mainly due to timing of sales. Cost of sales per ounce sold decreased year-over-year as a result of less operating waste mined and was higher quarter-over-quarter mainly due to an increase in operating waste mined.

At Fort Knox, production was lower year-over-year largely due to the impact of the pit wall slide in Q1 2018 and higher than average amount of rainfall in the area which affected geotechnical stability during the quarter. In addition, production was lower compared with the previous quarter mainly due to lower mill grades and fewer tonnes of ore processed on the heap leach pads. Cost of sales per ounce sold was higher compared with the previous quarter and prior year primarily due to the decline in mill grades and lower gold equivalent ounces sold. Additionally, cost of sales per ounce was higher compared with Q3 2017 due to an increase in operating waste mined. Fort Knox production and costs are expected to be at similar levels in Q4 2018.

Paracatu continued to perform well in Q3 2018, with increased production compared with the second quarter due to timing of ounces processed through the mill and slightly higher grades and recoveries. Production was significantly higher year-over-year as mining and processing activities were curtailed in Q3 2017 due to lower than average rainfall in the region. Cost of sales per ounce sold was lower compared with the previous quarter and year-over-year due to lower power costs as a result of the acquisition of the power plants in Q3 2018 and favourable foreign exchange movements.

At Maricunga, production decreased compared with the previous quarter and Q3 2017 as the rinsing of ore placed on the heap leach pads prior to the suspension of mining activities ramped down. Cost of sales per ounce sold increased quarter-over-quarter and year-over-year mainly due to timing of gold sales.

Russia

The region performed well in Q3 2018, as Kupol and Dvoinoye production increased compared with the previous quarter mainly due to higher grades. Compared with Q3 2017, production decreased mainly due to planned mining of lower grade ore. Cost of sales per ounce sold increased quarter-over-quarter mainly due to higher reagent costs, and increased year-over-year mainly due to lower grades and high operating waste mined, partially offset by favourable foreign exchange movements.

West Africa

At Tasiast, commissioning of the new SAG mill was completed during the quarter as the ramp-up of throughput advanced well and was consistently at nameplate capacity by the end of the quarter. Production increased quarter-over-quarter as the mill achieved higher throughput with the completion of Phase One commissioning. Production decreased year-over-year mainly due to lower mill grades as a result of delays in the mine plan to access higher grade material. Cost of sales per ounce sold increased quarter-over-quarter and year-over-year mainly due to higher fuel and maintenance costs. An increase in operating waste mined and lower gold equivalent ounces sold also contributed to the higher year-over-year cost of sales. Tasiast performance is expected to further improve in the fourth quarter, with the mine achieving record monthly production in October as mining moved to higher grade areas of the pit.

Chirano continued to perform well, with production largely in line with Q2 2018 due to strong mill performance.  Production decreased year-over-year primarily due to anticipated lower grades. Cost of sales per ounce sold was in line quarter-over-quarter and higher year-over-year due to fewer ounces sold, partially offset by lower labour, power and maintenance costs. Exploration activities focused on potential incremental additions to mine life continue to show promising results.

Organic development projects and opportunities

Tasiast expansion update

Kinross continues to analyze alternative approaches to incrementally expand throughput at the Tasiast mine after pausing activities at the Phase Two project. The Company also continues to advance its discussions with the Government of Mauritania regarding its activities in the country, including agreeing to a process with the Minister of Petroleum, Energy and Mines to facilitate a resolution of the matter raised in the letter received from the Government in May 2018. The Company’s evaluation of alternative throughput approaches, and a decision on the next steps for Phase Two, are subject to the ongoing engagement with the Government.

Kinross has also advanced the approximately $300 million in project financing it is targeting for Tasiast. During the third quarter, the Company signed a mandate letter with EDC, indicating their interest in the financing, subject to further due diligence. This was in addition to a mandate letter signed with the IFC, a division of the World Bank, in Q2 2018. Meetings with EDC, IFC and their technical advisors were conducted during the quarter, followed by a due diligence site visit in early Q4 2018 that included meetings with relevant Mauritanian government Ministers and officials. Commercial banks continue to express interest in the financing.

Round Mountain Phase W

The Round Mountain Phase W project is progressing on schedule and on budget, with pre-stripping advancing well and initial Phase W ore expected to be encountered in mid-2019. Detailed engineering of all major infrastructure is now complete and construction of the vertical carbon-in-column (VCIC) plant is proceeding well, with supporting concrete work nearing completion. Construction of the new heap leach pad has commenced and is now 20% complete, with construction of project infrastructure such as the truck shop, warehouse, wash bay and fueling area proceeding as planned.

Fort Knox Gilmore project

The Fort Knox Gilmore project is progressing on schedule and on budget, with initial production expected in early 2020. Preparations for major construction of the new heap leach pad, which includes grading, is proceeding well. Drilling and expansion of the dewatering system has begun to prepare for the expected start of stripping in mid-2019. Engineering is now essentially complete.

Bald Mountain Vantage Complex

The Bald Mountain Vantage Complex project is proceeding well and is on schedule and on budget. Stripping and stacking of economic but previously leached ore on the new heap leach pad have commenced. Commissioning of the heap leach and processing facilities is expected to begin in Q1 2019, with ore from the Vantage Complex expected to be encountered by year-end. Engineering is now complete and initial construction and concrete work has begun for the truck shop, wash bay and the VCIC plant.

On October 2, 2018, KG Mining (Bald Mountain) Inc., a subsidiary of the Company, completed a transaction with Barrick Gold to acquire the remaining 50% interest in the Bald Mountain Exploration Joint Venture that it did not already own for consideration including $15.5 million in cash and a 1.25% net smelter royalty. The Company now owns 100% of the Bald Mountain property, the largest private mining land package in the U.S.

Russia satellite deposits

The Moroshka project has been completed, as production commenced in October at the high-grade satellite deposit located approximately four kilometres east of Kupol. At the Dvoinoye Zone 1 deposit, mine and surface infrastructure is nearly complete and development is continuing as scheduled, with production expected to commence in mid-2019.

Chile projects

The feasibility study for the La Coipa Restart project and the scoping study for the Lobo Marte project both remain on schedule to be completed in the second half of 2019 and the first half of 2019 respectively. Permitting for the La Coipa Restart project has now been completed, as the Company received final sectoral permits for the Phase 7 deposit in the third quarter. Engineering firms have been selected and have commenced work on the studies.

The Company is evaluating both projects for a return to long-term production in Chile and assessing the potential to share resources and leverage synergies between the projects, which are located approximately 80 kilometres apart. The La Coipa Restart feasibility study is contemplating refurbishments of the existing plant and infrastructure, and the processing of high-grade materials from the Phase 7 deposit. The Lobo Marte scoping study is taking a refreshed look at the project and assessing optimum processing scenarios for the potential for a production start at the end of La Coipa’s mine life.

Balance sheet and financial flexibility

As of September 30, 2018, Kinross had cash and cash equivalents of $470.1 million, compared with $1,025.8 million at December 31, 2017, mainly due to capital expenditures at the Company’s development projects across its portfolio and the acquisition of two hydroelectric power plants in Brazil, partially offset by operating cash flow. The Company also had available credit of $1,554.3 million, for total liquidity of approximately $2.0 billion, and has no debt maturities until 2021.

Outlook

The following section of the news release represents forward-looking information and users are cautioned that actual results may vary. We refer to the risks and assumptions contained in the Cautionary Statement on Forward-Looking Information on page 18 of this news release.

Kinross annual production guidance remains unchanged, as the Company expects to produce 2.5 million Au eq. oz. (+/- 5%) for the year. The Company is also on track to meet its 2018 full-year production cost of sales guidance of $730 per Au eq. oz. (+/- 5%) and all-in sustaining cost guidance of $975 (+/- 5%) per ounce sold on both a gold equivalent and by-product basis.

The Company expects to meet its 2018 capital expenditure forecast of approximately $1,075 million (+/- 5%), which includes sustaining capital of $355 million and non-sustaining capital of approximately $680 million.

Other operating costs are now expected to be approximately $130 million for 2018, compared with the previous guidance of approximately $100 million, mainly as a result of tax related items at Tasiast and pit wall slide related costs at Fort Knox.

Board Chair update

John Oliver, Kinross’ Independent Board Chair since 2002, has announced that he will retire from his role as Board Chair effective December 31, 2018. Catherine McLeod-Seltzer, a Board member since 2005, has been appointed the new Independent Chair of Kinross, effective January 1, 2019.

Mr. Oliver has made numerous significant contributions during his long and distinguished directorship at the Company. He has overseen strategy as Kinross grew and expanded to be one of the leading gold mining companies in the world. During his tenure, he also oversaw a number of key Board governance initiatives, including: a “refresh” of the Board; the development and implementation of various governance policies, such as Board diversity; and a restructuring of Board committees. These initiatives have addressed the evolving business needs of the Company to position it for future success in a more complex regulatory and operating environment. Mr. Oliver was also chair of the Human Resources and Compensation Committee and oversaw executive compensation and the development and successorship of senior management. Following a short transition period with the new Chairperson, Mr. Oliver will not stand for re-election at the 2019 Annual Meeting of Shareholders.

Ms. McLeod-Seltzer has extensive and proven leadership experience in the mining industry, having been a founder, Board member and Chief Executive Officer in numerous mineral companies. She is recognized for her financial expertise, ability to create growth-focused companies, and has been an instrumental part of many corporate transactions and mining ventures. Ms. McLeod-Seltzer was named “Mining Man of the Year” by The Northern Miner in 1999; given the “Award for Performance” by the Association of Women in Finance in 1997; named on the Financial Post’s “Power 50”; has received the “Canada’s Most Powerful Women Top 100 Award”; and was named one of “100 Global Inspirational Women in Mining” in 2013 and 2016 by Women In Mining (UK).      

“We are pleased that Catherine will take on the role of Independent Chair and look forward to her guidance and stewardship as we continue to build on Kinross’ strong foundation and responsibly deliver on our strategy to create value for all our stakeholders,” said J. Paul Rollinson, President and CEO. “On behalf of the Board and Kinross management, I would like to extend a sincere thank you to John for his leadership and deep commitment to the Company. John has been an important part of Kinross for more than 20 years and has overseen Kinross’ tremendous growth during his chairmanship.”

Conference call details

In connection with the release, Kinross will hold a conference call and audio webcast on Thursday, November 8, 2018 at 8:00 a.m. ET. to discuss the results, followed by a question-and-answer session. To access the call, please dial:

Canada & US toll-free – (877) 201-0168; Conference ID: 7793997
Outside of Canada & US – +1 (647) 788-4901; Conference ID: 7793997

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

Canada & US toll-free – (800) 585-8367; Conference ID: 7793997
Outside of Canada & US – +1 (416) 621-4642; Conference ID: 7793997

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 www.kinross.com.

This news release should be read in conjunction with Kinross’ 2018 third-quarter unaudited Financial Statements
and Management’s Discussion and Analysis report at www.kinross.com. Kinross’ 2018 third-quarter unaudited
Financial Statements and Management’s Discussion and Analysis have been filed with Canadian securities
regulators (available at www.sedar.com) and furnished to 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 senior gold mining company with mines and projects in the United States, Brazil, Russia, Mauritania, Chile and Ghana. Kinross maintains listings on the Toronto Stock Exchange (symbol:K) and the New York Stock Exchange (KGC).

Media Contact
Louie Diaz
Senior Director, Corporate Communications
phone: 416-369-6469
louie.diaz@kinross.com

Investor Relations Contact
Tom Elliott                                                            
Senior Vice-President, Investor Relations and Corporate Development
phone: 416-365-3390                                         
tom.elliott@kinross.com

Review of operations

                       
Three months ended September 30,    Gold equivalent ounces              
  Produced   Sold   Production cost of sales ($millions)   Production cost of sales/equivalent ounce sold 
  2018 2017   2018 2017   2018 2017   2018 2017
                       
Fort Knox   51,984   101,047     52,197   101,077   $   53.0 $   64.8   $   1,015 $   641
Round Mountain   94,153   120,743     96,496   120,944     69.0   75.7     715   626
Bald Mountain   72,560   80,677     90,931   67,598     53.4   46.7     587   691
Kettle River - Buckhorn   -    17,132     -    17,385     -    10.3     -   592
Paracatu    126,515   46,971     125,700   53,076     97.6   53.0     776   999
Maricunga   10,808   20,463     30,442   14,129     22.4   8.1     736   573
Americas Total    356,020   387,033     395,766   374,209     295.4   258.6     746   691
                       
Kupol    125,870   145,759     123,624   142,821     81.3   74.8     658   524
Russia Total    125,870   145,759     123,624   142,821     81.3   74.8     658   524
                       
Tasiast   53,363   62,065     50,549   62,448     66.2   46.1     1,310   738
Chirano (100%)    56,675   65,707     53,915   65,757     41.7   48.0     773   730
West Africa Total   110,038   127,772     104,464   128,205     107.9   94.1     1,033   734
                       
Operations Total   591,928   660,564     623,854   645,235     484.6   427.5     777   663
Less Chirano non-controlling
interest (10%) 
  (5,668)   (6,571)     (5,391)   (6,576)     (4.1)   (4.8)      
Attributable Total   586,260   653,993     618,463   638,659   $   480.5 $   422.7   $   777 $   662
                       
                       
 
                       
Nine months ended September 30,   Gold equivalent ounces              
  Produced   Sold   Production cost of sales ($millions)   Production cost of
sales/equivalent ounce sold 
  2018 2017   2018 2017   2018 2017   2018 2017
                       
Fort Knox   203,375   285,933     204,148   287,055   $   165.3 $   181.2   $   810 $   631
Round Mountain   288,886   338,683     289,709   333,853     207.6   220.9     717   662
Bald Mountain   237,435   177,635     249,803   163,553     127.2   121.9     509   745
Kettle River - Buckhorn   -    72,664     927   73,138     -    36.4     -   498
Paracatu    375,941   293,936     371,022   293,408     313.9   250.4     846   853
Maricunga   52,840   72,088     70,560   30,115     49.6   13.0     703   432
Americas Total    1,158,477   1,240,939     1,186,169   1,181,122     863.6   823.8     728   697
                       
Kupol    366,469   435,150     370,427   435,489     219.5   227.1     593   521
Russia Total    366,469   435,150     370,427   435,489     219.5   227.1     593   521
                       
Tasiast   159,417   182,966     159,461   181,263     167.8   135.2     1,052   746
Chirano (100%)    175,426   179,742     175,754   189,239     133.2   156.8     758   829
West Africa Total   334,843   362,708     335,215   370,502     301.0   292.0     898   788
                       
Operations Total   1,859,789   2,038,797     1,891,811   1,987,113     1,384.1   1,342.9     732   676
Less Chirano non-controlling
interest (10%) 
  (17,543)   (17,974)     (17,575)   (18,924)     (13.3)   (15.7)      
Attributable Total   1,842,246   2,020,823     1,874,236   1,968,189   $   1,370.8 $   1,327.2   $   731 $   674


Consolidated balance sheets

(unaudited expressed in millions of United States dollars, except share amounts)          
           
    As at  
    September 30,   December 31,  
    2018   2017  
           
Assets          
Current assets          
Cash and cash equivalents   $   470.1   $   1,025.8  
Restricted cash     12.5     12.1  
Accounts receivable and other assets     191.3     91.3  
Current income tax recoverable     35.7     43.9  
Inventories      1,047.7     1,094.3  
Unrealized fair value of derivative assets     17.3     17.0  
      1,774.6     2,284.4  
Non-current assets           
Property, plant and equipment      5,385.5     4,887.2  
Goodwill     162.7     162.7  
Long-term investments      154.8     188.0  
Investments in joint ventures     24.3     23.7  
Unrealized fair value of derivative assets      8.4     3.9  
Other long-term assets      628.9     574.0  
Deferred tax assets     30.0     33.3  
Total assets   $   8,169.2   $   8,157.2  
           
Liabilities          
Current liabilities          
Accounts payable and accrued liabilities   $   456.2   $   482.6  
Current income tax payable     27.3     35.1  
Current portion of provisions     36.3     66.5  
Current portion of unrealized fair value of derivative liabilities     28.0     1.1  
Deferred payment obligation     30.0     -   
      577.8     585.3  
  Non-current liabilities          
  Long-term debt      1,734.4     1,732.6  
  Provisions     849.0     830.5  
  Unrealized fair value of derivative liabilities     13.7     0.2  
  Other long-term liabilities     139.9     133.8  
  Deferred tax liabilities     277.0     255.6  
Total liabilities     3,591.8     3,538.0  
           
Equity          
  Common shareholders' equity          
Common share capital    $   14,913.4   $   14,902.5  
Contributed surplus     236.4     240.7  
Accumulated deficit     (10,520.3)     (10,580.7)  
Accumulated other comprehensive income (loss)     (73.6)     21.1  
Total common shareholders' equity     4,555.9     4,583.6  
  Non-controlling interest     21.5     35.6  
Total equity     4,577.4     4,619.2  
Total liabilities and equity   $   8,169.2   $   8,157.2  
           
Common shares           
Authorized   Unlimited   Unlimited  
Issued and outstanding   1,250,228,821     1,247,003,940  
           
           


Consolidated statements of operations

(unaudited expressed in millions of United States dollars, except share and per share amounts)              
    Three months ended   Nine months ended
    September 30,   September 30,   September 30,   September 30,
    2018   2017   2018   2017
                 
Revenue                
Metal sales   $   753.9   $   828.0   $   2,426.1   $   2,492.7
                 
Cost of sales                
Production cost of sales     484.6     427.5     1,384.1     1,342.9
Depreciation, depletion and amortization     204.7     207.6     588.1     629.1
Total cost of sales     689.3     635.1     1,972.2     1,972.0
Gross profit     64.6     192.9     453.9     520.7
Other operating expense     46.7     55.1     101.5     116.3
Exploration and business development      32.5     26.1     76.8     72.0
General and administrative      34.2     31.6     100.2     98.8
Operating earnings (loss)     (48.8)     80.1     175.4     233.6
Other income (expense) - net     (2.6)     (1.2)     5.1     123.5
Equity in losses of joint ventures and associate     (0.2)     (0.1)     (0.4)     (1.0)
Finance income     2.5     3.3     9.1     9.4
Finance expense     (22.1)     (32.3)     (73.7)     (89.3)
Earnings (loss) before tax     (71.2)     49.8     115.5     276.2
Income tax recovery (expense) - net     (34.1)     10.3     (112.5)     (50.6)
Net earnings (loss)    $   (105.3)   $   60.1   $   3.0   $   225.6
Net earnings (loss) attributable to:                
  Non-controlling interest   $   (0.9)   -   $   (1.1)   $   (2.2)
  Common shareholders   $   (104.4)   $   60.1   $   4.1   $   227.8
Earnings (loss) per share attributable to common shareholders                
                 
Basic   $   (0.08)   $   0.05   $   0.00   $   0.18
Diluted   $   (0.08)   $   0.05   $   0.00   $   0.18
                 
Weighted average number of common shares outstanding
(millions)
               
Basic     1,250.2     1,247.0     1,249.2     1,246.5
Diluted     1,250.2     1,257.1     1,258.7     1,256.5


Consolidated statements of cash flows

(unaudited expressed in millions of United States dollars)              
  Three months ended   Nine months ended
  September 30,   September 30,   September 30,   September 30,
  2018   2017   2018   2017
Net inflow (outflow) of cash related to the following activities:              
               
Operating:              
Net earnings (loss)  $   (105.3)   $   60.1   $   3.0   $   225.6
Adjustments to reconcile net earnings (loss) to net cash provided from
operating activities:
             
Depreciation, depletion and amortization   204.7     207.6     588.1     629.1
Gain on disposition of associate and other interests - net   -      -      -      (11.0)
Reversal of impairment charges   -      -      -      (97.0)
Equity in losses of joint ventures and associate   0.2     0.1     0.4     1.0
Share-based compensation expense   3.7     3.5     11.2     10.1
Finance expense   22.1     32.3     73.7     89.3
Deferred tax expense (recovery)   7.8     3.7     35.1     (13.5)
Foreign exchange losses (gains) and other   10.0     1.6     26.9     (45.0)
Reclamation expense   -      11.9     -      13.9
Changes in operating assets and liabilities:              
Accounts receivable and other assets   (74.0)     (76.5)     (118.1)     (33.4)
Inventories   15.9     (60.7)     14.1     (65.8)
Accounts payable and accrued liabilities   65.0     46.1     49.0     28.3
Cash flow provided from operating activities   150.1     229.7     683.4     731.6
Income taxes paid   (22.9)     (32.0)     (78.2)     (146.4)
Net cash flow provided from operating activities   127.2     197.7     605.2     585.2
               
Investing:              
Additions to property, plant and equipment   (276.4)     (204.7)     (770.4)     (584.3)
Acquisition   (253.7)     -      (288.8)     - 
Net additions to long-term investments and other assets   (6.0)     (32.9)     (36.2)     (48.0)
Net proceeds from the sale of property, plant and equipment   0.8     1.5     4.8     6.3
Net proceeds from disposition of associate and other interests   -      -      -      267.5
Decrease (increase) in restricted cash   (0.3)     0.4     (0.4)     (0.7)
Interest received and other   1.5     1.9     6.5     5.2
Net cash flow used in investing activities   (534.1)     (233.8)     (1,084.5)     (354.0)
Financing:              
Issuance of common shares on exercise of options    -      -      0.5     0.8
Proceeds from issuance of debt   80.0     494.7     80.0     494.7
Repayment of debt   (80.0)     (500.0)     (80.0)     (500.0)
Interest paid   (27.8)     (28.4)     (57.8)     (62.9)
Dividend paid to non-controlling interest   (13.0)     -      (13.0)     - 
Other   (1.8)     (1.1)     (1.9)     (1.6)
Net cash flow used in financing activities   (42.6)     (34.8)     (72.2)     (69.0)
Effect of exchange rate changes on cash and cash equivalents   0.9     1.7     (4.2)     2.9
Increase (decrease) in cash and cash equivalents   (448.6)     (69.2)     (555.7)     165.1
Cash and cash equivalents, beginning of period   918.7     1,061.3     1,025.8     827.0
Cash and cash equivalents, end of period $   470.1   $   992.1   $   470.1   $   992.1
               


...
  Mine Period Ownership Tonnes Ore Mined (1) Ore
Processed (Milled) (1) 
Ore
Processed (Heap Leach) (1)