Kinross Gold Corporation (NYSE:KGC) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 08:00 am ET

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Kinross Gold Corporation (NYSE:KGC) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Greg Barnes with TD Securities.

Analyst
Greg Barnes

Yes. Thank you. Thanks to Paul Tomory again. On the 2021 production levels at Tasiast, so you said it'll be down modestly from a technical point. I just want to know what modest is.

Executive
Paul B. Tomory

About 40,000 ounces to 60,000 ounces that our current view. We're still refining the mine plan. There's a couple of variables that have yet to settle. One is how quickly can we ramp the mining rate back up? So the mining right now is increasing. So every week we mine more than the previous week, however COVID related impacts remain and in is primarily quarantine related. And the number of people we can have in the camp there. The COVID situation at Tasiast is continually improving. So the uncertainty is really how quickly can we rank back up to planned rates. But at our first blush, like I said, 40,000 ounces to 60,000 ounces, less than the TR. And that's primarily, that's almost exclusively grade driven.

Analyst
Greg Barnes

And switching back to Paul Rollinson. Paul, your statement about a trial. I missed it a little bit, but something to do with the -- you have similar opportunities that you can bring forward or potentially monetize I think is what you're driving?

Executive
J. Paul Rollinson

Well, I think I just -- again, I think this quarter in particular versus other years we're pretty excited on the exploration side. We've got a lot of new stuff. We've had some great drilling in the first half of the year. Paul touched on the success of Chirano where we're very excited about Curlew. There's that aspect to it.

The other side of it that I kind of alluded to was -- as you know, we do our budgeting and our reserves at $1,200. And there is flex obviously in the revenue line where if a project were to greenlight with your $1,200 hurdle of optionality or expansion at higher commodity prices without incurring incremental capital. And what I was trying to say was should commodity prices go back down, we still have positive cash flow, positive IRR, but we are going to get the benefit of a higher commodity prices by building at the $1,200 threshold.

Analyst
Greg Barnes

Got you. Okay. And just finally Paul, off the dividend. I know you're being cautious around COVID-19 and it's unclear what the impact will look like over the next six to 12 months, but you are generating a lot of free cash flow. I know you've got an attractive pipeline, but clearly, that's something I think that investors would like to see returned.

Executive
J. Paul Rollinson

Yes. Okay. Absolutely. And we get it. I think, Greg, we were getting questions on return of capital in January-February based on what the expectation of the year's cash flow -- the year ahead cash flow would be -- the COVID camp put everything in the backseat. What we said on our previous call was it feels to us a little bit incongruent to be reinstating or initiating a dividend when