Kinross Gold Corporation (NYSE:KGC) Q2 2023 Earnings Call Transcript

Andrea Freeborough: Yes, I mean, we’ve always said we expected costs at Round to be–you know, to stay elevated this year. They were down a bit in the second quarter, so we do expect them to be higher in the second half of the year. As Paul mentioned, this is really just related to our heap leach accounting and it kind of peaks in the second half of this year, so we expect the costs to come back down in 2024.

Anita Soni: All right, and so all of that will reverse this year, right? Nothing in 2024?

Paul Rollinson: Yes, this year, I think it’s accounting. It’s not really representative of cash flow. It’s that inventory accounting effect, and next year we’ll be moving into a different portion of the pit with less strip and better grades.

Andrea Freeborough: Yes, I think we may still have this inventory impact next year, but we don’t expect it to be as significant as in the second half of this year. This is also kind of gold price dependent as well.

Anita Soni: Okay, all right.

Andrea Freeborough: We can take you through in detail offline if that’s helpful, Anita.

Anita Soni: Yes, I think so. But yes, thanks and congrats on a good quarter.

Operator: Your next question comes from the line of Carey MacRury from Canaccord Genuity. Your line is open.

Carey MacRury: Good morning everyone. Just a question on the Tasiast ramp-up, the plant did just over 18,000 tons a day, the project’s complete and I know you’re ramping it up, but how was throughput in July and is there any guidance you can give on what we should expect for Q3?

Claude Schimper: We really got the throughput in July right. We did have, as we did–in June and July, we did mention that we had a shutdown planned for the first part of June. We delayed that a little bit into the June-July crossover, so we had some days there that weren’t working but to tie in some other things with some piping [ph]. But once we got going, then that’s where we hit those record tonnages [indiscernible] in a day. What we’re now doing is focusing on as we commission the back end of the plant, to make sure that we don’t stress the system too much and set ourselves up for a solid back end of the year [indiscernible] to the plant.

Carey MacRury: So should we be assuming something like 20,000 tons a day in Q3, or is that too much?

Claude Schimper: Well, we did say–in the first quarter, we said we would average between 20 and 21. We’re now looking closer to 21,000 for the whole year, so things are looking solid at best.

Carey MacRury: Okay, great. Then maybe on the solar plant, can you quantify what sort of cost per ounce savings you’d expect to see there?

Claude Schimper: We’ll have to get back to you on that particular number exactly on the cost per ounce. We are looking for considerable savings on our fuel costs obviously as we put the plant into operation. The number’s just come through here – it’s $15 an ounce we’re expecting just on power savings alone.

Carey MacRury: Great, thank you.

Operator: Your next question comes from the line of Tanya Jakusconek from Scotiabank. Your line is open.

Tanya Jakusconek: Good morning everyone. Thank you so much for taking my questions. I have two. First is on the reserve and resources, and second is just on the cost. Can I just circle back to the resources? Just maybe, Ned, can you just remind me, the underground at Great Bear when you reported the resource, I think it was underground of about 1.3 million. Was that in the–you know, between just about the 500 meter level? I’m just looking at your cross-section on Page 23 and I’m just trying to understand for the resources that you’re going to report at year end 2023 for Great Bear, is that going to be between the 500 meter level and the 1,000 meter level?

Ned Jalil: Hi Tanya, good morning. We got your name right this time, right?

Tanya Jakusconek: Right, it’s me!

Ned Jalil: Yes, thanks for your questions. That’s a great question. I’m just looking at the numbers here. What we reported for the underground was approximately 1.7 million ounces, and you got it right – that’s down to the 500 meter mark based on what we got from drilling. Like I mentioned in the presentation, our focus now is from 500 meters below what we’ve announced down to 1 kilometer, so we’re very focused, and that directional drilling is amazing. It’s saving us a lot of time, so we’re bringing in a lot of potential ounces here. What we see is that with the year-end resource statement, what I see, Tanya, is material increase in the underground resource. Be watching for that number that will come by year end.