August 18, 1998
Financial Tables
Toronto, Ontario -
KINROSS GOLD CORPORATION (TSE-K; NYSE-KGC)
announced today that
results for the three and six months ended June 30, 1998 are as follows:
All results are expressed in United States Dollars unless otherwise stated. Results for the second
quarter and the six months ended include one months operating results from the mines acquired
pursuant to the merger with AMAX Gold Inc., which became effective June 1, 1998.
Net Income (Loss)
Net income for the six months ended June 30, 1998 was $907,000 or a loss of 2 cents per share after
accounting for the convertible debenture equity component increase and the AMAX preferred dividends,
on revenues of $106,668,000. This compares with a loss of $25,621,000 or 22 cents per share after
accounting for the convertible debenture equity component increase, on revenues of $90,647,000 in
the first half of 1997. The 1997 results includes an after tax writedown of $24,000,000 as a result of a
series of rockbursts that occurred in April of last year at the Macassa operations. Operating cash flow
before changes in non-cash working capital was $19,613,000 or 13 cents per share for the first six
months of 1998 compared to $14,666,000 or 12 cents per share during the same period of 1997.
Net loss for the three months ended June 30, 1998 was $1,280,000 or 2 cents per share after
accounting for the convertible debenture equity component increase and the AMAX preferred dividends,
on revenues of $64,099,000. This compares with a loss of $23,546,000 or 20 cents per share after
accounting for the convertible debenture equity component increase, on revenues of $47,315,000 in
the second quarter of 1997. Operating cash flow before changes in non-cash working capital was
$13,602,000 or 7 cents per share for the second quarter of 1998 compared to $9,462,000 or 8 cents
per share during the same period of 1997.
Revenue
Revenue from the sale of 169,646 ounces of gold and 754,000 ounces of silver during the second
quarter of 1998 was $59,304,000, 32% higher than the $44,825,000 revenue reported in the second
quarter of 1997 from the sale of 103,158 ounces of gold and 1,460,000 ounces of silver. Average
realized prices for the second quarter of 1998 were $306 (1997 - $356) for gold and $5.41 (1997 -
$5.56) for silver which compares to average spot prices of $300 (1997 - $344) for gold and $5.71
(1997 - $4.76) for silver. The average realized price in the first six months of 1998 were $310 (1997 -
$362) for gold and $5.86 (1997 - $5.54) for silver which compares to average spot prices of $297
(1997 - $347) for gold and $5.98 (1997 - $4.89) for silver. Increased production and lower average
cash operating costs helped compensate for the lower spot gold prices.
Operations
Operating costs were $71,236,000 during the first six months of 1998, as compared to $67,906,000 in
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1997. On a per ounce basis, cash operating costs decreased by 22% to $219 per equivalent ounce of
gold as compared to $280 in the first half of 1997.
The operating results for the first six months of 1998 were positively impacted by a lower Canadian
dollar, improved production at the Hoyle Pond mine and a successful pillar recovery program and
improvements in underground mining at the Macassa mine. In addition, the completion of the merger
with AMAX added further low cost production to the portfolio of mines.
Production at the Refugio mine was significantly below planned at higher than expected cash operating
costs as a result of mechanical failures with the overland conveyor system.
Management is currently completing a detailed review of all mines and is identifying areas that will
improve operating performance and profitability. The Company has reviewed the supplies inventory
requirements at Kubaka for the upcoming winter road season and has substantially reduced the
working capital requirements for 1999 as a result of this review.
Outlook
The Company has a strong balance sheet with $134.9 million of cash ($180.9 million following the
conversion of the AMAX hedges in early July), $212.1 million of working capital, a common
shareholders’ equity of $941.4 million and a debt to total capitalization ratio under Canadian GAAP of
0.17:1, at June 30, 1998. Management will continue to focus on preserving the strength of the balance
sheet, while harmonizing the newly acquired operations into the Kinross organization.
This press release includes certain "Forward-Looking Statements" within the meaning of section 21E of
the United States Securities Exchange Act of 1934, as amended. All statements, other than statements
of historical fact, included herein, including without limitation, statements regarding potential
mineralization and reserves, exploration results and future plans and objectives of Kinross Gold
Corporation ("Kinross"), are forward-looking statements that involve various risks and uncertainties.
There can be no assurance that such statements will prove to be accurate, and actual results and
future events could differ materially from those anticipated in such statements. Important factors that
could cause actual results to differ materially from Kinross’ expectations are disclosed under the
heading "Risk Factors" and elsewhere in Kinross’ documents filed from time to time with the Toronto
Stock Exchange, the United States Securities and Exchange Commission and other regulatory
authorities.
-30-
For further information contact:
Robert M. Buchan
Chairman and Chief Executive
Officer
Tel: (416) 365-5650
Gordon A. McCreary
Vice President, Investor Relations
and Corporate Development
Tel: (416) 365-5132
Brian W. Penny
Vice President, Finance and Chief
Financial Officer
Tel: (416) 365-5662
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Kinross Gold: News - Finanacial Tables 1998 Q2 Financials
BACK
Page 1 of 5
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Changes in Financial Position
Production Data
Notes to Unaudited Interim Consolidated Financial Statements
KINROSS GOLD CORPORATION
CONSOLIDATED BALANCE SHEETS
(expressed in thousands of U.S. dollars)
As at June 30
1998
(unaudited)
ASSETS
Current assets
Cash and equivalents
Bullion settlements and other accounts receivable
Inventories
Marketable securities
Commodity derivative contracts - Note 2
Mineral properties, plant and equipment - Note 1
Long - term investments
Deferred charges and other assets
As at December 31
1997
$134,899
51,321
62,540
16,653
45,952
311,365
1,042,780
15,540
15,531
$1,385,216
$190,328
15,707
21,778
18,711
-
246,524
196,912
16,006
1,598
$461,040
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities
Current portion of long - term debt
Current portion of site restoration cost accruals
Site restoration cost accruals
Deferred income and mining taxes
Deferred revenue and other
Long-term debt
Convertible debentures
Redeemable retractable preferred shares
$64,278
27,483
7,501
99,262
32,283
6,745
33,979
135,068
45,043
3,077
355,457
$15,562
1,435
-
16,997
10,011
7,713
18,927
3,805
46,853
3,077
107,383
-
312,406
3,422
96,935
-45,070
-14,036
353,657
$461,040
CONVERTIBLE PREFERRED SHARES OF AMAX
COMMON SHAREHOLDERS' EQUITY
Common share capital
Contributed surplus
Convertible debentures
Deficit
Foreign currency translation adjustment
88,338
905,512
3,422
99,981
-47,694
-19,800
941,421
$1,385,216
Kinross Gold Corporation
Consolidated Statements of Operations
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Kinross Gold: News - Finanacial Tables 1998 Q2 Financials
For the six months ended June 30
(expressed in thousands of U.S. dollars except per share amounts)
(unaudited)
Three months ended
June 30
1998
1997
Revenue
Mining revenue
$59,304
$44,825
Interest and other income
4,795
2,490
64,099
47,315
Expenses
Operating
41,878
32,965
General and administrative
1,927
1,999
Exploration and business development
1,884
673
Depreciation, depletion and amortization
16,549
8,932
62,238
44,569
Income before the undernoted
Foreign exchange gain (loss) and other
Gain on sale of marketable securities
Equity loss in associated companies
Interest expense
Writedown of mineral properties
Income (loss) before taxes and other items
(Provision for) recovery of income and mining
taxes
Net income (loss) for the period
Convertible debenture equity component increase
Dividends on convertible preferred shares
Net loss attributable to common shares
Net loss per share
Net basic and fully diluted
Weighted average number common shares
outstanding
Total issued and outstanding common shares at
June 30
1,861
329
-
(103)
(2,246)
-
(159)
(1,121)
(1,280)
(1,479)
(575)
($3,334)
2,746
(1)
-
-
(1,389)
(35,719)
(34,363)
10,817
(23,546)
(908)
-
($24,454)
Page 2 of 5
Six months ended
June 30
1998
1997
$98,129
8,539
106,668
71,236
3,177
3,120
23,748
101,281
5,387
317
826
-208
-3,418
-
2,904
-1,997
907
-2,956
-575
($2,624)
$85,652
4,995
90,647
67,906
3,651
1,336
17,120
90,013
634
(154)
-
-
(2,692)
(35,719)
(37,931)
12,310
(25,621)
(1,831)
-
($27,452)
($0.02)
192,494
($0.20)
122,081
($0.02)
149,824
($0.22)
122,081
292,882
125,103
Kinross Gold Corporation
Consolidated Statements of Changes in Financial Position
For the six months ended June 30
(expressed in thousands of U.S. dollars except per share amounts)
(unaudited)
Three months ended
June 30
1998
1997
Net inflow (outflow) of cash related to the following activities:
Operating:
Six months ended
June 30
1998
1997
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Kinross Gold: News - Finanacial Tables 1998 Q2 Financials
Net income (loss) for the period
Items not affecting cash:
Depreciation, depletion and amortization
Writedown of mineral properties
Gain on sale of marketable securities
Deferred income and mining taxes
Deferred revenue realized
Site restoration cost accruals
Other
Deferred revenue - hedging gains
Effect of exchange rate changes
Changes in non-cash working capital
Bullion settlements and other accounts
receivable
Inventories
Marketable securities
Accounts payable and accrued liabilities
($1,280)
16,549
-
-
(82)
(2,535)
1,074
(124)
13,602
-
(4,284)
7,860
864
(2,238)
(7,908)
7,896
($23,546)
8,932
35,719
-
(12,292)
-
649
-
9,462
-
46
(1,008)
967
(104)
(3,411)
5,952
$907
23,748
-
-826
-1,129
-4,546
1,667
-208
19,613
13,885
-5,270
5,863
1,829
3,155
-3,104
35,971
Page 3 of 5
($25,621)
17,120
35,719
-
(13,463)
-
911
-
14,666
-
(1,576)
12,444
1,130
(302)
(6,827)
19,535
Financing:
Reduction of convertible debentures
Issuance of common shares, net
Repayment of debt
(904)
463,312
(345,554)
116,854
(1,234)
17,987
(782)
15,971
-1,810
593,106
-345,846
245,450
(1,716)
18,575
(1,583)
15,276
Investing:
Additions to properties, plant and equipment
Business acquisitions, net of cash acquired
Proceeds from the sale of equipment
(7,379)
(321,985)
1,964
(327,399)
(202,650)
337,549
$134,899
(10,671)
(24,503)
500
(34,674)
(12,751)
202,848
$190,097
-12,204
-326,610
1,964
(336,850)
(55,429)
190,328
$134,899
(21,312)
(24,503)
500
(45,315)
(10,504)
200,601
$190,097
Decrease in cash and equivalents
Cash and equivalents, beginning of period
Cash and equivalents, end of period
Kinross Gold Corporation
Production Data
Gold and Silver Production
Three months ended
June 30
1998
1997
Gold (ounces)
Canada
Hoyle Pond
Macassa
QR
United States
Denton-Rawhide
Delamar
Candelaria
* Hayden Hill
* Fort Knox
Russia
Six months ended
June 30
1998
1997
38,213
27,107
5,372
14,863
9,915
754
2,001
34,659
41,940
9,421
9,940
15,564
11,077
3,552
-
-
84,617
42,146
14,069
30,963
20,641
1,973
2,001
34,659
73,533
23,301
20,039
30,202
19,659
6,429
-
-
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Kinross Gold: News - Finanacial Tables 1998 Q2 Financials
* Kubaka
Chile
* Refugio
* Guanoco
Zimbabwe
Blanket
Golden Kopje
21,413
5,063
1,475
8,811
-
169,646
-
-
-
9,322
2,342
103,158
21,413
5,063
1,475
17,093
-
276,113
Page 4 of 5
-
-
-
17,582
4,805
195,550
Silver (000 ounces)
United States
Denton-Rawhide
Delamar
Candelaria
124
324
306
754
183,952
162
326
972
1,460
123,482
237
622
693
1,552
307,375
307