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Kinross announces Q2 results

August 12, 2008

Revenue and margins increase

Kupol produces first gold, Paracatu commissioning underway

Toronto, Ontario, August 12, 2008 - Kinross Gold Corporation (TSX-K; NYSE-KGC) today announced its unaudited results for the six months ended June 30, 2008.

(This news release contains forward-looking information that is subject to the risk factors and assumptions set out in our Cautionary Statement on Forward-Looking Information located on page 16 of this news release. All dollar amounts in this news release are expressed in U.S. dollars, unless otherwise noted.)

• Gold equivalent production(1) was 406,032 gold equivalent ounces in the second quarter of 2008, in line with plan, compared with 439,783 ounces for the same period last year. Production is expected to increase during the third and fourth quarters as the Company's three growth projects proceed through commissioning and ramp-up. Taking into account the impact of the sale of the Julietta operation and the projected commissioning and ramp-up schedule at Paracatu, Kinross expects 2008 production to be approximately 1.8-1.9 million gold equivalent ounces, slightly below the previously stated forecast.

• Kupol poured its first gold on schedule. Kinross' share of Kupol production for the quarter was 51,487 gold equivalent ounces, at an average ore grade of over 36 gold g/tonne and 427 silver g/tonne.

• Revenue was $298.7 million in the second quarter, an increase of 3% over the same period last year, and $628.9 million for the six months ended June 30, a year-over-year increase of 17%. The average realized gold price was $903 per ounce sold, compared with an average realized gold price of $662 per ounce in the second quarter of 2007. Second quarter production exceeded sales by 75,399 gold equivalent ounces, 51,4871 ounces of which represented June production from Kupol which was sold in the third quarter.

• Cost of sales per gold equivalent ounce(2) was $466 in the second quarter, compared to $348 per ounce in the second quarter of 2007. Cost of sales per gold equivalent ounce is expected to be approximately $425-445 for the full year 2008 compared to the previous forecast of $385-$395. Approximately half of this increase results from updating actual and forecast gold and oil prices and foreign exchange rates, and half from other cost and operating factors.

• Kinross' margin per ounce sold was $437 in the second quarter, compared with $314 for the second quarter of 2007, an increase of 39%.

• Adjusted net earnings(3) for the second quarter were $55.8 million, or $0.09 per share, compared with $47.6 million, or $0.08 per share, in the second quarter of 2007. Reported net earnings, in accordance with GAAP, were $26.0 million, or $0.04 per share, in the second quarter compared with $53.0 million, or $0.09 per share, in the second quarter of 2007.

• Cash flow from operating activities before changes in working capital was $110.8 million in the second quarter, compared to $98.9 million in the same period last year. Changes in working capital in the second quarter reduced cash flow provided from operating activities by $150.5 million.

• Commissioning of the Paracatu expansion has begun, with first gold production expected in September and full production expected in December. Surface construction at Buckhorn is complete and the project remains on schedule for first production in October.

• Kinross has launched a friendly bid to acquire 100% of the common shares of Aurelian Resources and combine both companies to advance responsible development of the Fruta del Norte (FDN) deposit in Ecuador. Kinross' bid expires on September 3, 2008.

• Kinross has agreed to the sale of its 90% interest in the Julietta operation in the Russian Federation for proceeds of $20.0 million, plus other consideration detailed below, as part of the Company's strategy to streamline its portfolio and to focus on core assets.

(1) Unless otherwise indicated, production figures in this release are based on Kinross' share of Kupol production (75%)

(2) Cost of sales per ounce is defined as cost of sales as per the financial statements divided by the number of gold equivalent ounces sold.

(3) Adjusted net earnings is a non-GAAP measure and represents net earnings before foreign currency losses on future income taxes and unrealized non-hedge derivatives losses, and other items such as the write-off of fair value adjustments in respect of purchase accounting.

CEO commentary

Tye Burt, Kinross President and CEO, made the following comments in relation to the second quarter 2008 results:

"The major story for Kinross in 2008 continues to be the successful development of our three growth projects. We are proud of our teams for delivering these projects on schedule and within a reasonable budget range, considering the inflationary pressures affecting new mine development projects around the world.

"The start-up at Kupol has gone as planned, with strong initial production and excellent grades. Commissioning of our Paracatu expansion is now underway, and we expect first gold production at the end of September and full production by year-end. At Buckhorn, we remain on schedule for first production from the mine in October.

"Our revenues, margins, operating earnings and cash flow before working capital have all increased year-over-year, reflecting a strong gold price and solid operating performance. At the same time, our bottom line has been affected by industry-wide cost pressures, including higher prices for energy and other consumables, currency exchange impacts, and higher taxes and royalties.

"A key part of our response to industry-wide cost pressures is the start-up of Kinross' new growth projects. As the new projects ramp up to full production, they will have a positive impact on our average cost of sales. We expect to see this impact in the second half of 2008, and more fully during their first full year of production in 2009.

"The announcement of our friendly offer to acquire Aurelian Resources demonstrates Kinross' continued commitment to long-term, disciplined growth through maintaining a pipeline of high-quality development projects, and developing them responsibly in close cooperation with the governments and local communities where we operate.

"We wish to thank our employees at Julietta for their dedicated efforts and contributions. Our decision to sell our interest in Julietta is consistent with our strategy to streamline our portfolio and to focus on core assets in the geographic regions where we operate."

Please download the PDF for the full version of this news release.

Click here to download the Q2 2008 report (PDF).

Cautionary Statement on Forward-Looking Information
All statements, other than statements of historical fact, contained or incorporated by reference in this news release, including any information as to the future financial or operating performance of Kinross, constitute “forward looking statements” within the meaning of certain securities laws, including the provisions of the Securities Act (Ontario) and the provisions for “safe harbour” under the United States Private Securities Litigation Reform Act of 1995 and are based on expectations, estimates and projections as of the date of this news release. Forward looking statements include, without limitation, possible events, statements with respect to possible events, the future price of gold and silver, the estimation of mineral reserves and resources, the realization of mineral reserve and resource estimates, the timing and amount of estimated future production, costs of production, expected capital expenditures, costs and timing of the development of new deposits, success of exploration, development and mining activities, permitting time lines, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. The words “plans,” “expects,” or “does not expect,” “is expected,” “budget,” “scheduled,” “estimates,” “forecasts,” “intends,” “anticipates,” or “does not anticipate,” or “believes,” or variations of such words and phrases or statements that certain actions, events or results “may,” “could,” “would,” “might,” or “will be taken,” “occur” or “be achieved” and similar expressions identify forward looking statements. Forward looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Kinross as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The estimates and assumptions of Kinross contained or incorporated by reference in this news release, which may prove to be incorrect, include, but are not limited to, the various assumptions set forth herein and in our most recently filed Annual Information Form and Management’s Discussion and Analysis and our offer and take-over bid circular recently filed in respect of Aurelian Resources Inc. (“Aurelian Bid Circular”) as well as: (1) there being no significant disruptions affecting operations, whether due to labour disruptions, supply disruptions, power disruptions, damage to equipment or otherwise; (2) permitting, development, expansion and power supply at Paracatu proceeding on a basis consistent with our current expectations; (3) permitting and development at the Kettle River - Buckhorn project proceeding on a basis consistent with Kinross’ current expectations; (4) development of the Phase 7 pit expansion and the heap leach project at Fort Knox proceeding on a basis consistent with Kinross’ current expectations; (5) permitting and development at the Kupol gold and silver project proceeding on a basis consistent with Kinross’ current expectations; (6) the new feasibility study to be prepared by the joint venture for Cerro Casale, incorporating updated geological, mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors, and permitting, being consistent with the Company’s current expectations; (7) that the exchange rate between the Canadian dollar, Brazilian real, Chilean peso, Russian rouble and the U.S. dollar will be approximately consistent with current levels or as set out in this news release; (8) certain price assumptions for gold and silver; (9) prices for natural gas, fuel oil, electricity and other key supplies remaining consistent with current levels; (10) production forecasts meet expectations; (11) the accuracy of our current mineral reserve and mineral resource estimates; and (12) labour and materials costs increasing on a basis consistent with Kinross’ current expectations. Known and unknown factors could cause actual results to differ materially from those projected in the forward looking statements. Such factors include, but are not limited to: fluctuations in the currency markets; fluctuations in the spot and forward price of gold or certain other commodities (such as diesel fuel and electricity); changes in interest rates or gold or silver lease rates that could impact the mark-to-market value of outstanding derivative instruments and ongoing payments/receipts under any interest rate swaps and variable rate debt obligations; risks arising from holding derivative instruments (such as credit risk, market liquidity risk and mark-to-market risk); changes in national and local government legislation, taxation, controls, regulations and political or economic developments in Canada, the United States, Chile, Brazil, Russia or other countries in which we do or may carry on business in the future; business opportunities that may be presented to, or pursued by, us; our ability to successfully integrate acquisitions; operating or technical difficulties in connection with mining or development activities; employee relations; the speculative nature of gold exploration and development, including the risks of obtaining necessary licenses and permits; diminishing quantities or grades of reserves; adverse changes in our credit rating; and contests over title to properties, particularly title to undeveloped properties. In addition, there are risks and hazards associated with the business of gold exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance, or inability to obtain insurance, to cover these risks). Many of these uncertainties and contingencies can affect Kinross’ actual results and could cause actual results to differ materially from those expressed or implied in any forward looking statements made by, or on behalf of, Kinross. There can be no assurance that forward looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. All of the forward looking statements made in this news release are qualified by these cautionary statements, those made in the “Risk Analysis” section of our most recently filed Management’s Discussion and Analysis, and those made in the “Risk Factors” section of our most recently filed Annual Information Form, in the “Risk Factors Related to the Offer” section of our Aurelian Bid Circular and our other filings with the securities regulators of Canada and the U.S. These factors are not intended to represent a complete list of the factors that could affect Kinross. Kinross disclaims any intention or obligation to update or revise any forward looking statements whether as a result of new information, future events or otherwise, or to explain any material difference between subsequent actual events and such forward looking statements, except to the extent required by applicable law.

Other information
This news release does not constitute an offer to buy or an invitation to sell, or the solicitation of an offer to buy or invitation to sell, any of the securities of Kinross or Aurelian Resources Inc. Such an offer may only be made pursuant to an offer and take-over bid circular filed with the securities regulatory authorities in Canada. Kinross has filed the Aurelian Bid Circular with Canadian provincial securities regulators. Kinross has also filed with the U.S. Securities and Exchange Commission a Registration Statement on Form F-8 which includes the Aurelian Bid Circular. Investors and security holders are urged to read the Aurelian Bid Circular because it contains important information. Investors may obtain a free copy of the Aurelian Bid Circular and other documents filed by Kinross with the Canadian provincial securities regulators on SEDAR at, and with the SEC at the SEC's website at The Aurelian Bid Circular and these other documents may also be obtained on Kinross' website.

Key sensitivities
Approximately 55%-60% of the Company’s costs are denominated in U.S. dollars.
A 10% change in foreign exchange could result in an approximate $13 impact in cost of sales per ounce. With respect to the last six months of 2008, and considering the current hedges in place, a 10% change in foreign exchange could result in an approximate $8 impact in cost of sales per ounce.
A $10 change in the price of oil could result in an approximate $4 impact on cost of sales per ounce.
The impact on royalties of a $100 change in the gold price could result in an approximate $6 impact on cost of sales per ounce.

Where we say “we”, “us”, “our”, the “Company”, or “Kinross” in this news release, we mean Kinross Gold Corporation and/or one or more or all of its subsidiaries, as may be applicable.