Good morning.
First of
all, let me remind everyone except for registered media, the taking of photographs and the use of audio, video recording equipment is prohibited without the express consent of Kinross. Also, please ensure you silence cell phones or
and Special
Meeting of Shareholders of Kinross Gold Corporation. My name is John Oliver. I am Chairman of Kinross Board. On behalf of employees, management and directors, I welcome you today to today's meeting. I would like to mention to those of you in attendance that this meeting is being recorded by Kinross and is also being broadcast on the Kinross website.
At this time, I would like to take the opportunity to introduce you to the other director nominees. First, I would like to introduce our newest director on the Kinross Board, Kerry Dight.
Also present
here are the other directors, Ian Atkinson, John Ruff, Ave Lethbridge, Catherine McLeod Seltzer, Bill Power and Paul Rollinson. Kelly Osborn is not able to join us this morning. Pursuant to the bylaws, I as Chairman of the corporation will chair the meeting and I appoint Kathleen Grandy, Corporate Secretary of Corporation as Secretary for the meeting. I further appoint Paul Allen and Jamie Basek of Computershare Services Inc. As scrutineers.
Joining me on the stage this morning are Paul Rollinson and Kathleen Grandy. The notice calling this meeting of shareholders was mailed on April 3, 2018 to all the shareholders of record on March 21, 2018. The Secretariat will annex to the minutes of this meeting the declaration of Computershare Investors Services Inc confirming the mailing of the notice of the meeting. The scrutineers have submitted their preliminary report on attendance and it shows that holders of more than 870,166,822 shares, representing approximately 69.62 percent of the outstanding common shares are represented at the meeting today. As a result, we have a quorum for the meeting.
In order to expedite the formal part of the meeting, I have asked Andrea Freeburel and Tara Wiseman, both shareholders of the corporation to move and second each motion. Notice having been given in accordance with the bylaws and a quarter being present, I declare that this meeting is duly constituted for the transaction of business. The minutes of the previous annual meeting of Kinross Gold Corporation held on May 3, 2017 are available in the registration area at the entrance to the room for review by interested shareholders. The next item of business is to place before the meeting the consolidated financial statements for the fiscal year ended December 31, 2017, including the balance sheet and accompanying statements, together with the auditors report thereon, all contained in the annual report made available to shareholders. Extra copies are available in the registration area.
We will first deal with the advisory resolution respecting Kinross' approach to executive compensation. Details of Kinross' approach to the compensation of its executives and the text of the proposed advisory resolution have been included in the management information circular for today's meeting. May I have a motion to approve such resolution? Thank you. Do I have a seconder?
Second the motion.
Thank you, Tara. The motion has been moved and seconded. Is there any discussion on the motion? We will now conduct a vote by ballot on the matter. As each shareholder or proxy holder registered with the scrutineers, they received a yellow ballot.
If any registered shareholder or proxy holder has not received a yellow ballot, please raise your hand. Shareholders who have previously completed a proxy should not vote by way of ballot unless they wish to revoke their proxy. Each shareholder or proxy holder wishing to vote by ballot should mark the yellow ballot with an X indicating whether to vote whether the vote is in favor of or against the motion. Each person voting on this motion should sign and print his or her name clearly in the appropriate place at the bottom of the yellow ballot. When you are done, please raise your hand and the scrutineers will collect your ballot.
Does anyone need more time? I declare the polls closed. We will proceed with the other items of business while we await the scrutineers report on the ballot. The next item of business is the election of 9 directors to hold office until the next annual meeting of shareholders or until such successors are elected or appointed. I will ask for a nomination of the 9 nominees named in the management information circular for today's meeting.
I nominate the 9 nominees named in the management information circular for election to the Board of Directors of the Corporation. Thank you. As the
number of nominees is equal to the number of directors required to be elected, I now declare Ian Atkinson, John Brough, Carrie Dight, Abbe Lethbridge, Catherine McLeod Seltzer, John Oliver, Kelly Osborne, Unipower and Paul Rowenson elected directors of the corporation to hold office until the next annual meeting of shareholders next matter to be dealt with is the appointment of KPMG LLP to serve as auditors of the corporation until the next annual meeting of shareholders and authorizing the directors to fix the auditors' remuneration. May I have a motion to approve such appointment?
I so move.
Thank you. Do I have a seconder?
I think the motion.
The motion has been moved and seconded. Is there any discussion on the motion? All those in favor, please signify your approval by raising your right hand. Any contrary? Harry, I declare the appointment of KPMG as auditors of Kinross to hold office until the close of the next annual meeting.
The next item of business is to consider and if deemed appropriate, ratify the adoption of a new shareholders' rights plan. Details of the new shareholders rights plan were included in the management information circular previously delivered to shareholders of the corporation. This resolution must be passed by a majority of the votes cast at the meeting. Based on the proxies that were deposited prior to the start of the meeting, the motion has the support of 97.24 percent of the votes by proxy. I will ask for a motion to ratify the adoption of the new shareholders' rights plan by the corporation as set forth in the circular?
I so move.
Thank you. Do I have a seconder? Thank you. The motion has been moved and seconded. Is there any discussion on the motion?
All those in favor signify your approval by raising your right hand. Any contrary? Carried. A report of all matters voted on this meeting will be filed on SEDAR.
Bye.
The report from the scrutineers on the executive compensation is the forward motion is carried at 92.75%. This concludes the formal part of the business. Before I hand it over to Paul, I'd like to say a few words about the exceptional milestone we are recognizing this year. This year marks Kinross' 25th year as a company and I'm very proud to celebrate this anniversary. In the company's 1st year, we produced about 83,000 gold equivalent ounces and had revenues of just over $43,000,000 Last year, we produced more than 2,600,000 ounces, which ranks us among the world's largest gold producers with revenue of more than $3,300,000,000 This kind of growth isn't easy in this business.
Very few mining companies successfully make the ascent from small producer to top tier player. In addition to growing our production, we've also grown to develop true world class capabilities in some very some key areas. I'm very proud of the strength of our global team, our safety record, our safety record, our environmental stewardship, our culture and our relations with the communities where we operate. We put together a video that celebrates our 20 5 years and shows you how we have evolved as a company. Speaking personally, it has been a great privilege to serve Kinross and its shareholders on this remarkable journey.
Speaking on behalf of the Board, we are exceptionally proud of the job that the entire Kinross team has done to position the company for continued success in the coming years. I will now hand it over to Paul, who will tell you more about recent performance and our exciting plans for the future.
Paul? Thank you. And on behalf of everyone at Kenrass, I'd like to thank John and our current and past Board members for their distinguished service to the company. You've all been a key part of our success story. And thanks to everyone else for joining us this morning.
A little bit of housekeeping. I'm going to walk through our prepared AGM materials. But as I think everyone's aware, we had some late breaking news yesterday that we released in relation to Mauritania, and I will speak to that at the end. But before I start, I'm obliged to call your attention to our cautionary statement on forward looking information. I'd also like to recognize all the hard work and dedication of our senior leadership team and I'd ask each of them to stand as I call out their names.
Gina Jardine, Senior Vice President, Human Resources Tony Giardini, Chief Financial Officer Lauren Roberts, Chief Operating Officer Paul Tomory, Chief Technical Officer and Jeff Gold, Chief Legal EVP, Corporate Development and External Relations. Thanks. And as I do every year, I also like to open my remarks with recognizing the efforts of our 9,000 employees globally. And as we celebrate our 25th anniversary, the video for me really did a great job strengths of the company and who we are today. And namely our diverse portfolio of mines, our high performance global team and of course the core values that guide how we conduct our business.
At the outset, well, I guess what I'd like to do is just it's important this is an important time for Kinross. And in addition to our operations, we are developing several major projects and exploring new opportunities that will shape our future for the years to come. We are where we are today as a result of our strategy, a strategy that I believe has proven to be the right one. It's a strategy that's focused on responsible mining, operational excellence and financial strength and discipline. Today, I would like to review our track record of delivering on each of these strategic priorities to illustrate our approach to building long term value for our investors and our stakeholders.
Our first strategic priority is responsible mining. That responsibility starts with the safety of our employees. Sending our people home safely at the end of work each day is our number one objective, and we have a long history as one of the safest operators in the sector. Our overall approach to responsible mining is built around 3 main underlying values: be good to the environment in which we operate, act ethically and transparently and make a positive contribution in the communities where we operate. Our success at turning those values into day to day practice is reflected in our long history of cooperative relations with our host communities.
We take great pride in the 25 year track record we've built as a good neighbor and committed community partner, advancing programs in health, education, culture and other local priorities. It has earned us external recognition and more importantly, trust in the communities where we work. Strong environmental stewardship has been a key to our record of cooperation and trust. It also means working with stakeholders to make a positive impact where we can and I'm very proud of our efforts in this area. We have another video here which shows you what strong environmental stewardship can look like.
Thank you. Really great project and we've got an excellent relationship with Trout Unlimited. We've done many other projects with them and it's something we're really passionate about. It's very proud of that. Our second strategic priority is operational excellence.
And for us that means not only being a safe operator, but also being a reliable one that consistently delivers on guidance targets. In short, for us, it's an imperative that we do what we say we will. I'm very proud of the fact that 2017 was our 6th consecutive year of meeting or exceeding our guidance on production and costs. We finished the year at the high end of our guidance on production and the low end of our guidance on costs. Yesterday, we announced our Q1 results.
We delivered strong Q1 production of approximately 654,000 ounces and saw excellent cost performance across almost all of our operations. As a result, we achieved an all in sustaining cost of $8.46 per ounce. That's the lowest level since 2012 and we are firmly on track to meet our 2018 guidance. Our excellent track record and the strength of our technical and operating teams give us great confidence that we'll be able to continue to meet or exceed on our targets. Our 3rd strategic priority is financial strength and discipline.
The strength of our balance sheet has been a key priority when it comes to planning and decision making. At our operations, a rigorous focus on managing our costs and capital spending goes hand in hand with our commitment to meeting guidance. We're very proud of the fact that we are nearing the finish line on the Tasiast Phase 1 expansion in a stronger financial position than we began construction 2 years ago. We've also tactically structured our debt repayment schedule with no significant maturities prior to 2021, which is after this cycle of reinvestment into our business. The culmination of this rigorous focus on cash cost management and disciplined capital allocation decisions is that Kinross has the balance sheet strength and the financial flexibility to invest in our future.
Our successful track record in delivering on each of these priorities, responsible mining, operational excellence and financial discipline has laid the foundation for the future ahead. So in addition to our portfolio of 8 producing mines, we also have a diversified pipeline of high quality projects. Our projects enjoy significant benefits of existing infrastructure in well known mining jurisdictions. I'll just go through a few highlights from the development portfolio. Round Mountain Phase W, which is expected to extend production to 2027 at one of our top performing operations.
The Bald Mountain Vantage Complex, which is expected to initiate production in the south area of the property and represents the next chapter in Ball's future. The Maroshka satellite deposit near our Kupo mine, which is expected to begin mining high grade ore in the second half of this year. And as mentioned, we are nearing completion on the Tasiast Phase 1 expansion. At last year's AGM, we gave you a drone flyover of the construction status at that time 1 year ago. And we've got another video this year and it will contrast what you saw last year with where the project is or was in April of this year?
Great video, great resolution and really quite nicely shows the everything that's been accomplished by the team in the last year. Very, very good work. So in terms of additional opportunities beyond what we're currently executing, there are other things in the development queue, namely Fort Knox Gilmore. And we're completing the feasibility study on this opportunity that will be done mid June and we look forward to reporting the results at that time. We also plan to initiate a feasibility study on the La Coipa restart project.
And of course, we'll continue to focus our exploration efforts on high potential targets at our existing mines. Overall, our development portfolio is advancing well, and we're focused on this next round of future opportunities. I'd now like to provide some commentary on our latest events where we got some new news as it relates to Mauritania. And I'll just give some context. We the way this came about and we became aware of it yesterday and we put it in our press release, we've had an ongoing discussion with the government of Mauritania around a conversion of an exploration concession to an exploitation session.
Pretty routine, that's something we do all the time. But we've just learned and the government has just suggested that they would also now in addition to talking about that conversion, they would like to bring into the subject the concept of exploring additional mutual benefit for the benefit of Mauritanians on all Kinross' activities in the country. And our understanding is that the government is looking for a proposal by us to provide greater economic benefits. And I'd like to stress a couple of key takeaways. 1, we have operated successfully in Mauritania with good government support for the past 8 years.
We've developed an excellent Mauritanian workforce that frankly has exceeded all of our budget expectations. And as we just discussed, we've just completed we're in the process of completing a fairly major project And we've done that essentially on schedule, and we will hopefully be complete on budget in the coming weeks. And interestingly, I would point out, again, as I said earlier, with the majority of the Phase 1 spending now behind us, again, I just want to remind our balance sheet is even stronger than when we started 2 years ago. This recent development was unexpected. We'll work through it.
It's early days, but it does reinforce risk mitigate the risk mitigation benefit of a 2 phased expansion. And the point I'm making here is even as a standalone project, Phase 1 is an excellent mine with substantial low cost production and robust margins. And we will look forward to the contribution it will make to our portfolio. But with this development, and again, early days, we'll get into it, we'll work it through. We are assessing the government's request, and we're thinking about what that might mean for our Phase 2 development.
Again, as you know, we're a large company. Have a diverse portfolio of assets. And from time to time, as we operate globally, we will encounter issues in jurisdictions where we operate and typically we work through them and resolve them. And again, we have been in Mauritania for 8 years. We have had issues come up from time to time and we've worked through them.
And so we're hopeful that this will be a similar case and we're looking forward to moving the discussions forward with the government. I'll conclude with a couple of remarks and maybe open it up to questions. But I'm very, very proud of this company and what our achievements are, what our accomplishments are. And as you can see, we've got a very long record of responsible mining. We have a great portfolio of operations that's consistently delivered.
We have the financial strength and liquidity to invest in our future. And we've got a whole bunch of stuff in our development pipeline that we're steadily advancing. So thank you all for your attention today. And with that, I would be happy to take some questions. I can't really see anyone in the dark, so you'll have to wave your hand.
Okay. Dividend ever. Yes, it's a good question. Return of capital is something that we see the importance of. We're shareholders.
For me, the question of return on capital, whether it's a dividend or some kind of buyback is it's really a question of timing. And when I look back in context, we've come through a period where we saw the gold price go from $1800 to sub $1100 During that time, we were highly focused on strengthening the balance sheet. We paid off $1,000,000,000 of debt. And as we've come out and gold hopefully has found a bit of a level here, dollars 1300,000,000 and hopefully higher, That's definitely helped. We budget at $1200,000,000 So we're ahead of budget on our gold price assumption.
But we are, as I indicated, in a fairly significant reinvestment in our business over the next couple of years. But I think for me, it's definitely something we need to be mindful of. It's just a question of timing. And for me, it's about getting in front of the reinvestment and making sure your balance sheet is strong because we and I speak for our CFO, Tony here in the front row, we're not a culture that likes debt. We are reinvesting in our business.
And I think when you can get that balance sheet and reinvestment behind you, then we're going to have a conversation about what the right return of capital might be.
Is there a possibility for next year to get into $14,000,000 or $15,000,000
Well, I do get the question on gold price. I'm not an I worry more about the lower gold price than the higher. My own personal view is I'm biased to the upside. I look at it from a couple of different perspectives. On the one hand, as I look pretty simply with all the QE that's taken place and the 1,000,000,000,000 of dollars that's been printed, I'm sort of old school.
If you over manufacture something, it's generally worth less. And there's a lot of debt in the system and there's a lot of new dollars in the system. So that to me ultimately should be supportive of gold. But on the other hand, if you wanted to take the exact opposite view and say, you know what, the world is fine, the U. S.
Economy is just getting stronger and stronger. Well, then another thing happens, and then I call it the I word, inflation starts to kick in. And so if we get to that scenario and there's inflation, I do think that will be good for gold. I do think a lot of cultures have seen their paper money become worth less over time. For a lot of cultures, gold is a hard asset currency alternative.
So I'm biased to the upside. But what I can tell you is we spend a lot of time thinking about how we would run our business, protect our business, keep our company strong in the event gold were to go down from here. Other questions? I'm sorry, could you I just I heard what are your chances? Gold.
Well, look, I think there are China is a big buyer of gold. Russia is a big buyer of gold. India is a big buyer of gold. And they're quite comfortable to grow their gold holdings. So I think again, that's a bit about what I was saying earlier with the cultural history.
And I think the thesis for gold is it's not about being all in, putting everything you have into gold. It's about we'll have we'll have a supportive tone on the commodity with upside from there. Well, if there are no further questions, I want to again thank everyone for coming out. And there will be some members of our management team around and our directors. Thank you all for coming.
We appreciate it. Thank you.