Kinross Gold Corporation 2026 Q3 Earnings Call

Please go ahead. Thank you, and good morning.

In the room with us today on the call, we have Paul Rollinson, CEO, and from the Kinross senior leadership team, Andrea Freeborough, Bernard Wessels, Will Dunford, and Geoff Gold. For a complete discussion of the risks and uncertainties which may lead to actual results differing from estimates contained in our forward-looking information, please refer to page three of this presentation, our news release dated October 28, 2026, the MD&A for the period ended September 30, 2026, and our most recently filed AIF, all of which are available on our website. I will now turn the call over to Paul.

Thanks, David, and thank you all for joining us. This morning, I will discuss our third quarter results, provide high-level updates from across our portfolio, comment on our sustainability achievements, and confirm our outlook. I will then hand the call over to the team to provide further details. Before we begin discussing the quarter, in keeping with our first priorities, I would like to address a very important matter with regards to safety. We are deeply saddened by the tragic loss of two employees of business partners of our Bald Mountain operations in Nevada. We extend our sincere condolences to their families, friends, and colleagues. The safety of every individual at our sites is our highest priority, and we are committed to learning from these incidents and reinforcing our safety controls across our operations. Turning now to our results.

Following a strong H1, our portfolio delivered on our updated commitments for the third quarter. Both Tasiast and Paracatu, our two top-tier low-cost assets, were key contributors and together accounted for more than half of our production at attractive operating costs. In La Coipa and Round Mountain, the two smaller assets behind the near-term guidance update delivered in line with our updated expectations. In terms of cost, we continued to hold the line on total operating costs and delivered strong operating margins. All this translated to free cash flow of over $1.8 billion through the first nine months, and we ended the quarter with significant financial strength, including $2.6 billion in cash. This enabled us to increase our shareholder returns from 40% to 50% of our free cash flow, and we have now returned over $950 million to our shareholders year to date.

I am pleased to report that over the last six quarters, we have now repurchased approximately 5% of our outstanding shares. Turning now to our growth projects. Our project pipeline is advancing as we continue to make strong progress across our mine life extensions and growth opportunities. In the U.S., the team continues to progress our three high-quality projects, Phase X, Redbird, and Curlew. At Great Bear, both the advanced exploration and the main project are advancing well. In terms of AEX, we continue to make strong progress advancing the north and south exploration declines for a combined total of over 500 meters of underground development completed to date. With respect to the main project, both detailed engineering and permitting are advancing well, and we remain on track for first production in late 2029.

In terms of permitting, we continue to work closely with the authorities and are significantly advanced on the federal and provincial permitting process. In parallel, we are actively engaging with the local communities and indigenous partners through regular community meetings, ongoing collaboration, and transparent communication, which Geoff will comment on later. Moving across to growth in Chile. Last quarter, we provided an updated view of Lobo-Marte, highlighting its strong production profile, low cost structure, and attractive economics. In Q3, we continued to advance permitting, detailed engineering, and execution planning towards targeted first production in the early 2030s. Turning now to a few remarks on sustainability. In Q3, we continued to make meaningful impact across our regions. Three highlights include our work with Trout Unlimited on the Cripple Creek Restoration Project in Alaska, which focused on restoring waterways and fish habitat impacted by non-Kinross historic mining.

We also supported recovery efforts following the Tok wildfire in Alaska, including emergency assistance for families whose homes were rendered uninhabitable. In Chile, we were proud to receive the Mining Foundation of Chile's award for commitment to territories and education, recognizing our support for education, training, and opportunities in the Atacama region. Turning now to our outlook. The broader portfolio continues to perform well. Operations at La Coipa and Round Mountain have stabilized, and we are firmly on track to deliver our updated production guidance of 1.84 million to 1.86 million ounces. Looking ahead, we remain focused on the following. Safe operational execution, cost management through productivity initiatives, delivering our grade enhancement strategy, maintaining our strong financial position, disciplined capital allocation, and advancement of our high-quality resource base and project pipeline. With that, I'll now turn the call over to Andrea.

Thanks, Paul. I will review our financial highlights from the quarter, provide an overview of our balance sheet and return of capital, and comment on our outlook. We delivered Q3 as per our updated plan, with production and cost in line and a significant amount of capital returned to shareholders through our dividend and increased share buyback plan. We produced 425,000 ounces and sold 410,000 ounces, with the difference a function of timing of ounces sold. Cost of sales was $1,485 per ounce, and all-in sustaining cost was $1,947 per ounce. Through the first nine months, our production cost of sales was $1,396 per ounce, and our all-in sustaining cost was $1,827 per ounce, both tracking well for their updated full-year guidance. Q3 margins were strong at approximately $2,750 per ounce.

Our adjusted earnings were $0.50 per share in the quarter. Our adjusted operating cash flow was $831 million in the quarter and over $3 billion through the first nine months. Attributable adjusted free cash flow was $391 million when excluding the impact of working capital outflows. Working capital outflows primarily reflected an increase in short-term stockpile balances at Manh Choh, along with lower payables and higher prepaids, all of which are a function of timing. Free cash flow was also impacted by the timing of ounces sold, given the bank holiday on September 30. The unsold ounces at the end of the quarter were sold in early October. Turning now to our balance sheet and return of capital, we ended the quarter with $2.6 billion in cash and $1.9 billion in net cash.

During the quarter, S&P upgraded our credit rating to BBB flat with a stable outlook, consistent with our ratings at both Moody's and Fitch. With respect to our return of capital, in September, we increased our commitment from 40% to 50% of our full-year free cash flow through both dividends and share repurchases. We believe our shares continue to represent a strong return on invested capital, considering our even more attractive valuation and free cash flow yield. In Q3, we accelerated our buyback program and repurchased a total of 8.6 million shares for $230 million. We also continued to pay our quarterly dividend of approximately $50 million. Combined, our total return of capital in the first nine months represented approximately 46% of our attributable free cash flow, an increase from 37% in the first half of the year.

Subsequent to quarter end, we repurchased an additional $100 million in shares, and we remain on track to achieve our 50% commitment by the end of this year. Since resuming our share buybacks in April 2025, we have repurchased over $1.4 billion in shares, representing approximately 5% of our outstanding share count. Including our dividends, we have returned over $950 million to date in 2026 and over $1.7 billion since the start of 2025. These results reflect the strength of our cash flow generation and our ongoing commitment to delivering meaningful returns to shareholders while continuing to invest in our business and further strengthening our balance sheet. Turning now to our guidance, we remain on track to deliver our updated production, cost of sales, and all-in sustaining cost guidance.

Production is expected to be between 430,000 and 450,000 ounces in the fourth quarter to deliver 1.84 million to 1.86 million ounces for the year. We are on track to meet our updated cost of sales guidance of $1,420-$1,460 per ounce, and all-in sustaining cost guidance of $1,850-$1,900 per ounce. We are also on track with our original capital guidance range of $1.5 billion, plus or minus 5%. Looking ahead to 2027, as noted in our September update, we also expect production in the range of 1.84 million to 1.86 million ounces. In terms of 2027 capital, as previously noted, our $1.5 billion guidance range remains subject to inflation and incremental project additions to support production in the 2030s. We are actively evaluating incremental investment opportunities to unlock value from our significant resource inventory.

This includes the Fort Knox Phase 11 extension and other targeted opportunities across the portfolio to add ounces and extend mine life. Will is going to discuss these later in the call. Our annual budgeting process is underway, and we will provide detailed 2027 production costs and capital guidance with our year-end results. Looking forward to 2028, our grade enhancement strategy is expected to drive higher production relative to 2027 and provide an organic offset to inflation with the addition of higher-grade ounces from Phase X, Curlew, and Tasiast. With that, I will now turn the call over to Bernard.