Kinross is a Canadian-based senior gold mining company with mines and projects in Brazil, Chile, Ghana, Mauritania, Russia and the United States. Kinross is focused on delivering value based on its core principles of operational excellence, balance sheet strength and responsible mining.

TO OUR SHAREHOLDERS

Kinross’ continued focus on operational excellence, financial discipline and balance sheet strength has set the Company on a solid path that garnered excellent results in 2014 with record production of 2.71 million gold equivalent ounces and $1 billion in cash on the balance sheet as of year-end.

As we move into 2015, generating value for our shareholders – and all our stakeholders – remains our priority; we continue to target cost-saving initiatives and explore growth opportunities. Our decision in early February to defer the Tasiast mill expansion underscores our emphasis on preserving balance sheet strength in a challenging gold price environment and affords us important financial flexibility. While market conditions remain challenging, and our share price has been impacted along with many industry peers, Kinross’ strong operational track record, industry-leading safety record and robust balance sheet provide the necessary building blocks upon which to generate value.

2014 Highlights

• Record annual production of 2.71 million Au eq. oz. at an all-in sustaining cost of $973 per ounce, a $109 reduction compared with 2013
• Record annual production at Paracatu, Maricunga and Tasiast, and a 19% and 22% reduction in cost of sales compared with 2013 at Maricunga and Chirano, respectively
• A 50% reduction over 2013 in capital expenditure to $632 million
• $1 billion in cash on the balance sheet, $2.5 billion in liquidity, $60 million in debt repayments, with total net debt of $1 billion as of year-end
• Sale of interest in Aurelian Resources and the Fruta del Norte project for $240 million
• An industry-leading safety record, and the best in company history
• Delivered 687 local community programs and events, benefiting an estimated 805,000 people

Delivering Results

See how Kinross delivered excellent operational results in 2014 and is strongly positioned to capitalize on opportunities.

2015 Guidance ²

Having met or exceeded our targets for the last 10 consecutive quarters, Kinross will continue its focus on operational excellence in the year ahead. Guidance for 2015 is largely in line with 2014, with production guidance of 2.4 to 2.6 million Au eq. oz. Kinross’ centre of gravity remains firmly in the Americas, where five of our mines are expected to produce 54% of our 2015 production. Our two West African mines are projected to contribute 17% of production, with our Russia region forecast to produce the remaining 29%.

Forecast production cost of sales in the range of $720 to $780 per Au eq. oz. is in line with 2014, while all-in sustaining cost is forecast to be between $1,000 and $1,100, reflecting a prudent approach to cost assumptions for oil and foreign exchange prices. Capital expenditures are expected to be approximately $725 million, as we invest in stripping to sustain, or possibly extend, the life of mine at some of our existing operations.

Tasiast mill expansion, balance sheet strength and future growth

With gold price volatility continuing into 2015, maintaining balance sheet strength will remain a key consideration. That is why, as we announced on February 10, 2015, we are not proceeding with the 38,000 t/d Tasiast mill expansion at the present time. Kinross continues to believe in the expansion’s potential to add significant value as a large, low cost, cornerstone asset. However, we would need to see a sustained higher gold price in order to finance a capital project of this magnitude over its three-year construction period.

While a Tasiast mill expansion remains an exciting growth opportunity leveraged to the gold price, we are redoubling our efforts at reducing operating costs at the current operation. In 2014, we made substantial progress in reducing costs at several sites with a Company-wide drive to replace contractors with employees and continuous improvement initiatives. That effort, which also included cost-saving procurement strategies and a rigorous approach to working capital and inventory management as part of a “cash first” focus at each site, will remain a centrepiece of our disciplined management approach.

As a result of our solid financial position, Kinross has the flexibility to take advantage of potential growth opportunities, should they arise. In that regard, a pre-feasibility study to explore the potential restart of La Coipa is on track to be completed this year and is further supported by positive exploration results from the nearby Catalina target. We also plan to continue work on promising exploration targets near existing operations, including at Chirano and Kupol.

Our Value Proposition

While focused on managing our business for the long term, we remain keenly aware of the decline in our share price, which we do not believe reflects Kinross’ strong fundamentals. To a large degree, Kinross’ share price is being impacted by the gold price and concerns over current tensions between Russia and the Ukraine.

In the case of Russia, it remains business as usual at our operations in the country’s Far East, where we have operated uninterrupted for the past 20 years. Our track record in Russia, and in every jurisdiction where we operate, reflects Kinross’ strong in-country partnerships and respectful approach to the people, laws and culture where we do business. In 2014 alone, Kinross engaged approximately 91,000 stakeholders – including community members, government representatives and non-profit organizations, among others – and, in our 22-year history, we have never experienced a major event or permitting delay as a result of stakeholder concerns.

Whether it be our high standards for corporate responsibility, our best-in-class safety record, excellent operational performance or rigorous financial discipline, we could not continue to deliver on our commitments without the care, diligence and professionalism of our people. I would like to thank them for a job well done. They are at the core of our value proposition and the reason Kinross is strongly positioned to capitalize on opportunities, weather market volatility and ultimately generate value for our shareholders, host communities and employees.

J. Paul Rollinson, President
and Chief Executive Officer
Kinross Gold Corporation

At Kinross, our success depends on our ability to operate in a manner that is safe for our employees, protective of the environment, and to the benefit of the host countries and communities where our mines are located. We achieve this through the integration of health and safety, environment, community, and governance systems in all of our operations and an unwavering commitment to our Ten Guiding Principles for Corporate Responsibility.

In 2014, we advanced our Corporate Responsibility (CR) practices at all of our operations, achieving record performance in key areas of safety and environment and contributing to a positive and lasting difference in the lives of individuals and in the communities where we operate.

Our commitment to our workforce means never compromising on health and safety and providing a rewarding and meaningful livelihood to the more than 9,000 men and women who make up our Company.

In 2014, we achieved record safety performance and had one of the best safety records among our peers.

• Completed the year with zero employee and contractor fatalities for the second consecutive year.
• Reduced our Total Reported Injury Frequency Rate by 10% compared with 2013, to 0.38 per 200,000 hours worked.
• Delivered a wide range of training, skills and career development opportunities that promote safety, and professional and personal growth.

In 2014, we continued to demonstrate our commitment to the highest standards of environmental stewardship.

• Advanced our strategic focus of managing water at all operations, and achieved a more than 25% reduction in water consumption at our Maricunga mine in Chile’s water-stressed Atacama region.
• Continued the best practice of regular independent technical reviews of all tailings storage facilities to ensure their secure and safe design, construction and operation.
• Maintained our record of no spills to the environment outside our operations.

Our operations generate positive economic and social benefits as measured by our Benefit Footprint. In 2014, we continued practices aimed at improving the overall quality of people’s lives in a manner that is sustainable beyond the life of the mine.

• Delivered on our commitment to maximize employment, business, and economic opportunities in the countries where we operate. In 2014, our in-country procurement was more than 75% of total procurement, and at year-end, 98% of Kinross employees were from host countries.
• Supported 687 local initiatives, benefiting more than 800,000 people living in and around the local communities near our operations.
• Engaged more than 90,500 stakeholders in host communities to promote ongoing dialogue in a spirit of transparency and good faith.
• Published a comprehensive GRI-based CR report spanning 2012 and 2013.