January 19, 1998.
Kinross Announces Significantly Improved Operating Performance For The Fourth Quarter of 1997
Toronto, Canada - Kinross Gold Corporation (TSE - K; NYSE - KGC) Depressed gold prices and the
recently announced Chapter 11 filing of Pegasus Gold Inc. have raised questions with investors,
analysts and in the media concerning corporate viability for gold companies in general. To dispel these
concerns as they may relate to Kinross, the following summary of fourth quarter 1997 performance is
presented. The detailed year-end financial data, subject to year-end audit, is expected to be released
in early March.
Fourth Quarter and Full Year 1997 Operating Performance
Kinross is pleased to report that the company produced approximately 145,000 ounces of gold
equivalent in the fourth quarter of 1997 at average cash operating costs of less than US$ 230 per gold
equivalent ounce. This represents a significant improvement over the 120,000 gold equivalent ounces
produced in the third quarter of 1997 at cash operating costs of US$ 282 per ounce. Gold equivalent
production for 1997 totaled approximately 499,000 ounces at average cash operating costs of
approximately US$ 265 per ounce compared to 525,000 ounces at US$ 255 per ounce in 1996. The
most significant component of the improved performance in the fourth quarter was at the Hoyle Pond
mine where gold production rose to almost 62,000 from 39,000 ounces in the previous quarter and
cash operating costs declined from US$ 219 to US$ 139 per ounce. The third quarter at Hoyle Pond had
been adversely impacted by certain technical problems that were rectified by the end of the third
quarter. For the full year 1997, Hoyle Pond operating performance was essentially on plan with
production of more than 174,000 ounces of gold at cash operating costs of approximately US$ 184 per
ounce.
Expectations For 1998
Gold equivalent production is expected to decline slightly in 1998 to about 455,000 ounces while cash
operating costs are expected to be reduced from approximately US$ 265 in 1997 to about US$ 240 per
gold equivalent ounce in 1998. Sustaining capital expenditures for operations in 1998 are estimated at
approximately US$ 21 million.
During the fourth quarter, Kinross deployed over US$ 20 million of cash to position the company for
certain opportunities. These expenditures were more than offset by the cash realized by the unwinding
of gold hedges in December and January such that Kinross’ cash balance has grown to more than US$
200 million at present. The debt position of the company consists of the debt component of the
convertible debenture and minor capital lease obligations. At year-end 1997 the face value of the
outstanding convertible debenture was approximately Cdn$ 196 million (or about US$ 144 million).
Under Canadian Generally Accepted Accounting Principles (GAAP) the debt component of the
convertible debenture at year-end 1997 was approximately US$ 47 million, while the equity component
was approximately US$ 97 million. The interest coupon of 5.5% for the convertible debenture plus the
interest expense of the capital lease obligations are expected to have a carrying cost of about US$ 8
million in 1998. Consequently, Kinross is very well positioned to acquire additional core producing
assets in 1998, thereby resuming a growth profile when the gold market eventually turns upward.