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Unformatted text preview: ounce sold in 2012. iv KINROSS GOLD 2012 ANNUAL REPORT Going forward, we will continue to look for opportunities to reduce both our operating
and capital costs in the seven specific areas of opportunity we have identified. Already, we
are making progress in the areas of supply chain management, energy management, and
reduced use of contractors, all of which are expected to deliver bottom-line savings in 2013.
Above all, we understand that our primary objective is to continue delivering on our
commitments – quarter after quarter.
When we launched our Way Forward, we said we would make tough decisions to build longterm value. A good example is our mineral resource strategy. For the first time in several
years, we did not increase the gold price assumptions that we use to estimate our year-end
mineral reserves and resources. Instead, we made a strategic decision to use the same price
assumptions as we did in 2011.
This decision was driven by the principle of quality versus quantity. While holding the line
on our gold price assumptions reduced our 2012 year-end resource estimates, it specifically
targeted higher margin ounces with less capital intensity, instead of high-cost, low-margin
ounces. It should also be noted that, in a lower cost or higher gold price environment, most
of these ounces may still be brought back into mineral resources.
Turning to our growth projects, we are exercising a highly disciplined approach to development,
and are aiming to reduce capital requirements and execution risk while maximizing margins and
Our Dvoinoye project in Russia remains on budget and on schedule. Dvoinoye will provide
higher grade feed to the Kupol mill, which is expanding throughput to 4,500 tonnes per day,
with the first shipment of ore expected in the second half of the year. The project is expected
to increase production and extend mine life at Kupol. SENIOR LEADERSHIP TEAM (pictured left to right)
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- Spring '14