The companys operations are sensitive to changes in

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Unformatted text preview: Board of Directors. The Company’s policy is to not hedge metal sales. However, in limited circumstances the Company may use derivative contracts to hedge against the risk of falling prices for a portion of its forecasted metal sales. The Company may also assume derivative contracts as part of a business acquisition or they may be required under financing arrangements. All of the Company’s hedges are cash flow hedges. The Company applies hedge accounting whenever hedging relationships exist and have been documented. i. Capital management The Company’s objectives when managing capital are to: Ensure the Company has sufficient cash available to support the mining, exploration, and other areas of the business in any gold price environment; Ensure the Company has the capital and capacity to support a long-term growth strategy; Provide investors with a superior rate of return on their invested capital; Ensure compliance with all bank covenant ratios; and Minimize counterparty credit risk. Kinross adjusts its capital structure based on changes in forecasted economic conditions and based on its long term strategic business plan. Kinross has the ability to adjust its capital structure by issuing new equity, drawing on existing credit facilities, issuing new debt, and by selling or acquiring assets. Kinross can also control how much capital is returned to shareholders through dividends and share buybacks. The Company is not subject to any externally imposed capital requirements, other than the requirement to maintain a minimum tangible net worth under the terms of its revolving credit facility and term loan agreement, as disclosed in Note 13(i). FS42 KINROSS GOLD 2012 ANNUAL REPORT The Company’s quantitative capital management objectives are largely driven by the requirements under its debt agreements and its total debt to total debt and common shareholders’ equity ratio as noted in the table below: December 31, December 31, 2012 2011 $ 2 ,116.4 $ 1 ,600.4 516.2 3 2.7 2,632.6 1 ,633.1 9,850.2 1 2...
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This document was uploaded on 03/30/2014.

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