KINROSS GOLD. Image Source: Kinross Gold website

Transcription

1 PC WONG

2 DISCLAIMER The views by the author are his alone. All opinions expressed by the author are subject to change. The viewer is not to assume the performance of any company shares will equal its past performance. Use of informadon contained in this presentadon does not consdtute any contractual reladonship between the viewer and the author. The author hereby disclaims all responsibilides and liabilides for any use of informadon contained in this presentadon. The author s risk assessment may differ from the viewer's. Risks are subject to economic uncertaindes and market condidons. Viewers are advised to exercise due diligence and do their own assessment of the risks involved when invesdng in any company. Viewers shall not hold the author liable for investments which have gone sour.

3 Image Source: Kinross Gold website KINROSS GOLD

4 KINROSS GOLD Listed on the NYSE under code KGC. Singular unit Ranked number 5 as the world s largest producer in % of producdon in the Americas (Brazil, Chile and US) 25% of producdon in Russia 14% of producdon in the West Africa (Ghana and Mauritania)

5 EXPLORATION LOCATIONS La Coipa, Chile Kupol, Russia Dvoinoye, Russia Chirano, Ghana Tasiast, Mauritania Bald Mountain, USA 1.4 million oz added to Measured and Indicated Gold Resources through exploradon

6 SUMMARY OF FINANCIALS Q Revenue US$782.6M in 2016 vs US$781.4M in 2015 Loss - US$15.3M in 2016 vs Loss - US$7.5M in 2015 Current Assets US$2,171.8M Non Current Assets US$5,961.1M Total Assets US$8,132.9M Current LiabiliDes US$674.2M Non Current LiabiliDes US$3,223.9M Total LiabiliDes US$3,898.1M Total Equity US$4,234.8M

7 BENCHMARK AGAINST KPIs Actual KPI Revenue Growth +0.1% +5% Net Profit Growth % +10% Current RaDo 3.22 >1.0 Debt to Equity RaDo 0.92 <1.5 Payback Period NA <5.0 yrs DistribuDon Yield (based on US$5.40) NA 7.5% NAVPS US$3.42 SP/NAVPS 1.58x <3x

8 KEY TAKEAWAYS 1 Revenue remained flat while Net Loss widened despite higher producdon of 687,463 oz of gold compared to 629,360 oz in Q1 2015, mainly due to lower gold price and high AISC of US$963 per oz Strong balance sheet with both Current RaDo and Debt to Equity RaDo meedng the KPIs Cashflow from operadng acdvides of US$202.6M Cash at hand of US$1,043.99M 2016 producdon forecast million oz with AISC at US$890 - US$990 per oz

9 KEY TAKEAWAYS 2 Tasiast Phase One expansion, which is expected to nearly double producdon and reduce producdon cost. However recent setback in the form of a strike and issue of employment permits with expatriates Strike issue resolved but permits issue remains. Management expect this to be resolved soon. Mine operadons temporary suspended

10 KEY TAKEAWAYS 3 AcquisiDon of Bald Mountain and 50% of Round Mountain on January 11, 2016 for $610 million Bald Mountain: Can potendally increase the site's current mineral reserve esdmate and extend esdmated life of mine by developing two sets of deposits in the near- term Round Mountain: New Process SoluDon Management (PSM) programme is expected to produce approximately 200, ,000 oz over life of mine at a low cost of $200 - $400 per oz (this producdon cost and not AISC) The compledon of the Phase W expansion scoping study adds approximately 2.4 million oz to the esdmated inferred mineral resource

11 DIVIDEND HISTORY 2010 US$ US$ US$ US$

12 SHARE PRICE PERFORMANCE Chart Source: Morningstar 52 Week Low of US$1.31 and 52 Week High of US$5.82 Previous high when gold reached US$1,900 per oz: US$17.95 Current price of US$5.40 is 69.9% off its previous week high of US$17.95

13 Fall in gold price EVENTS WHICH COULD IMPACT THE STOCK NEGATIVELY Labour strike and government policy on permits. While labour strike is resolved in Mauritania, prolonged issue with the work permits will provide a drag on the stock price Failure to address its high AISC

14 IFS ASSESSMENT Trading BUY to ride on the increase in the price of gold Not for long term holding due to inherent risks in Mauritania which resulted in a suspension of all operadons The other risk factor is the high AISC However, would consider long term hold if AISC falls below the US$900 per oz and work permits issue in Mauritania is resolved Medium risk Non Syariah compliant

15 Image Source: Yaman Gold website YAMANA GOLD All rights reserved by Jupiter Consultancy Sdn Bhd. Any unauthorised copying or distribudon is deemed an infringement under the Malaysian Copyright Act 1987

16 YAMANA GOLD Listed on the NYSE under code AUY. Singular unit Gold, silver and copper producer covering the Americas with presence in the following countries: Canada Mexico Brazil Chile ArgenDna

17 PRODUCING AND DEVELOPING MINES Chapada, Brazil - gold El Penon, Chile - gold and silver Canadian MalarDc - gold Mercedes, Mexico - gold and silver Qualcamayo, ArgenDna - gold Jacobina, Brazil - gold Minera Florida, Chile - gold and silver Brio Gold, Brazil gold Cerro Moro, ArgenDna - gold Aqua Rica, ArgenDna gold, silver and copper Suyai, ArgenDna gold and silver Image Source: Yaman Gold website

18 SUMMARY OF FINANCIALS Q Revenue US$430.3M in 2016 vs US$$458.1M in 2015 Net Profit US$36.3M in 2016 vs - US$151.8M in 2015 Current Assets US$637.1M Non Current Assets US$8,946.9M Total Assets US$9,584.0M Current LiabiliDes US$504.7M Non Current LiabiliDes US$4,178.6M Total LiabiliDes US$4,683.3M Total Equity US$4,900.7M

19 BENCHMARK AGAINST KPIs Actual KPI Revenue Growth - 6.1% +5% Net Profit Growth % +10% Current RaDo 1.26 >1.0 Debt to Equity RaDo 0.96 <1.5 Payback Period 11.9yrs <5.0 yrs DistribuDon Yield (Based on US$5.90) 1.3% 7.5% NAVPS US$5.17 SP/NAVPS 1.14x <3x

20 KEY TAKEAWAYS 1 Although Revenue is down vs 2015, Net Profit grew 123.9% due to reducdon in AISC Cash flows from operadng acdvides US$122.8M in 2016 vs US$14.4M in 2015 Cash at hand of US$124.6M Gold producdon for FY2016 esdmated at 1.264M M oz Silver producdon FY2016 esdmated at 6.915M M oz Copper producdon FY2016 esdmated at 122M - 125M lbs Consolidated AISC of US$845/oz for gold and US$10.75/oz for silver Long payback period for debt of 11 years Net debt reducdon of approximately $286 million during Plans to further decrease debt by at least $300 million between 2016 and 2017

21 KEY TAKEAWAYS 2 Completed the acquisidon of the Riacho dos Machados gold mine in Minas Gerais State, Brazil on April 29, 2016 $53 million expenditure planned for Cerro Moro resuldng in inidal producdon the second quarter of 2018 Pre- feasibility study at C1 Santa Luz will be available by mid- year. Once operadons resume, C1 Santa Luz could produce approximately 100,000 oz of gold annually ExploraDons to condnue at exisdng sites in Canadian MalarDc

22 DIVIDEND HISTORY 2010 US$ US$ US$ US$ US$ US$

23 SHARE PRICE PERFORMANCE Chart Source: Morningstar 52 Week Low of US$1.38 and 52 Week High of US$5.95 Previous high when gold reached US$1,900 per oz: US$20.13 Current price of US$5.90 is 70.7% off its previous week high of US$20.13

24 Fall in gold price EVENTS WHICH COULD IMPACT THE STOCK NEGATIVELY Labour strike and government policies

25 BUY due to improving profitability AISC is below US$900/oz IFS ASSESSMENT While balance sheet meets the important KPIs, the payback period looks long. However management is commiqed to reduce debt by US$300M in the next 2 years Cerro Moro producdon coming on line in 2018 and potendal of C1 Santa Luz contribudng 100,000 oz annually when operadons start Medium risk Not rated by Ideal RaDngs

26 Image Source: I Am Gold website I AM GOLD

27 I AM GOLD Listed on the NYSE under code IAG. Singular unit Five operadng gold mines Rosebel Gold Mine, Suriname (95% IAG, 5% Suriname Govt) Essakane Gold Mine, Burkina Faso (90% IAG, 10% Burkina Faso Govt) Westwood Gold Mine, Canada (100% IAG) Sadiola Gold Mine, Mali (41% IAG, 41% AngloGold AshanD, 18% Mali Govt Yatela Gold Mine, Mali (40% IAG, 40% AngloGold AshanD, 20% Mali Govt Expected to produce between 770,000 and 800,000 oz of gold in 2016

28 LOCATIONS Image Source: I Am Gold website

29 SUMMARY OF FINANCIALS Q Revenue US$219.7M in 2016 vs US$244.7M in 2015 Net Profit US$52.7M in 2016 vs US$28.0M in 2015 Current Assets US$961.9M Non Current Assets US$2,327.0M Total Assets US$3,288.9M Current LiabiliDes US$181.1M Non Current LiabiliDes US$1,077.1M Total LiabiliDes US$1,258.2M Total Equity US$2,030.7M

30 BENCHMARK AGAINST KPIs Actual KPI Revenue Growth % +5% Net Profit Growth +88.2% +10% Current RaDo 5.31 >1.0 Debt to Equity RaDo 0.61 <1.5 Payback Period 2.98 yrs <5.0 yrs DistribuDon Yield (Based on US$4.80) NA 7.5% NAVPS US$5.00 SP/NAVPS 0.96x <3x

31 KEY TAKEAWAYS 1 Although Revenue was down, Net Profit increased 88.2% due to lower AISC at US$746 per oz Cashflow from operadng acdvides at US$51.4M in 2016 vs US$30.0M in 2015 Cash at hand of US$586.7M Restricted cash of US$71.4M Strong financial disposidon due to excellent Current RaDo and low Debt to Equity RaDo

32 KEY TAKEAWAYS 2 However AISC for 2016 is expected to increase to US$1,000 US$1,100 per oz due to expanded works to ramp up producdon Essakane Burkina Faso Westwood Quebec Sadiola- Mali AISC increase due to in increase in CAPEX Plans at hand to improve plant efficiencies Reduced producdon to expedite development works to open new mining areas Lower AISC due to improved efficiencies in plant Rosebel Suriname Second crusher to be installed in H AISC expected to be low by sustaining the CAPEX and improved efficiency in plant ExploraDons in progress in Boto (Senegal), Pitangui (Brazil), Diakha- Siribaya (Mali), Eastern Borosi (Nicaragua), Monster Lake & Nelligan (Canada)

33 DIVIDEND HISTORY 2010 US$ US$ US$ US$

34 SHARE PRICE PERFORMANCE Chart Source: Morningstar 52 Week Low of US$1.15 and 52 Week High of US$4.95 Previous high when gold reached US$1,900 per oz: US$22.73 Current price of US$4.80 is 78.9% off its previous week high of US$22.73

35 Fall in gold price EVENTS WHICH COULD IMPACT THE STOCK NEGATIVELY Labour strike and government policies

36 IFS ASSESSMENT Trading BUY despite the strong Net Profit growth as management has projected an increase in the AISC to US$1,000 US$1,100 per oz However would monitor for improvement in the AISC for commitment as along term investment subject to the following: - Balance sheet remains strong - SubstanDal increase in the price of gold which will negate the higher AISC Medium risk due to the higher AISC porjected Non Syariah compliant

37 I do not own shares of AIG and AUY I own shares of KGC MY DISCLOSURE

38 32 YEAR OLD XAU vs GOLD RATIO The mean rado is 0.25 in the past 32 years Currently at 0.08 For the rado to achieve its mean rado of 0.25, MINERS HAVE TO INCREASE IN PRICE 3X! Chart Source: King World News

39 Q & A All rights reserved by Jupiter Consultancy Sdn Bhd. Any unauthorised copying is deemed an infringement under the Malaysian Copyright Act 1987

40 HAPPY INVESTING! THANK YOU All rights reserved by Jupiter Consultancy Sdn Bhd. Any unauthorised copying is deemed an infringement under the Malaysian Copyright Act 1987