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Unformatted text preview: ettled all outstanding gold forward sales and purchase contracts. Mark-tomarket losses on those gold forward sales contracts incurred up to the dates the offsetting purchase
contracts were entered into continued to impact metal sales (and the average realized gold price) during
2011 and up to June 30, 2012. KINROSS GOLD 2012 ANNUAL REPORT MDA11 Inflationary Cost Pressures
The Company’s profitability is subject to industry wide cost pressures on development and operating costs
with respect to labour, energy, capital expenditures and consumables in general. Since mining is generally
an energy intensive activity, especially in open pit mining, energy prices can have a significant impact on
operations. The cost of fuel as a percentage of operating costs varies amongst the Company’s mines, and
overall, operations have experienced modest increases in fuel costs in 2012, reflecting global oil and fuel
price increases that occurred during the same period. Kinross continues to actively manage its exposure to
energy costs by entering into various hedge positions – refer to Section 6 Liquidity and Capital Resources for
details. Source: Bloomberg In order to mitigate the impact of higher consumable prices, the Company continues to focus on continuous
improvement, both by promoting more efficient use of materials and supplies, and by pursuing more
advantageous pricing, whilst increasing performance and without compromising operational integrity. MDA12 KINROSS GOLD 2012 ANNUAL REPORT Currency Fluctuations Source: Bloomberg At the Company’s non-U.S. mining operations and exploration activities, which are located in Brazil, Chile,
Ecuador, Ghana, Mauritania, the Russian Federation, and Canada, a portion of operating costs and capital
expenditures are denominated in their respective local currencies. Generally, as the U.S. dollar strengthens,
these currencies weaken, and as the U.S. dollar weakens, these foreign currencies strengthen. These
currencies were subject to high market volatility over the course of the year. Approximately 75% of the
Company’s expected attributable...
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This document was uploaded on 03/30/2014.
- Spring '14