LETTER TO SHAREHOLDERS

Kinross Gold 2012 Annual Report

The Way Forward principles strongly influenced our budgeting and planning process for 2013. We have stressed quality over quantity in our mine planning, and our operations have maintained a concerted focus on addressing the costs that lie within our control.

That said, we forecast that our 2013 production will be slightly less than 2012, and our costs per ounce slightly higher, due to anticipated lower grades at most of our mines, the planned suspension of mining at La Coipa in the second half, and expected increases in consumable and labour costs. Notwithstanding these cost pressures, we expect that our cost per tonne in 2013 will be similar to 2012. We forecast 2013 production of 2.4 to 2.6 million gold equivalent ounces at a cost of sales of $740 to $790 per ounce.

In the area of capital discipline, when I became CEO in August 2012, we launched a targeted initiative to find opportunities to reduce our capital expenditures. This resulted in a reduction of $200 million in our 2012 capital forecast, bringing it down to $2 billion. Our actual expenditures for the full year 2012 were $1.92 billion.

In 2013, we expect to spend about $325 million less on capital than we did in 2012. This includes reductions in all three categories of capital expenditure: sustaining, opportunity, and growth. In all of our capital decisions, we will remain focused on disciplined spending that drives margin and cash flow, consistent with our Way Forward principles.

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 long-term 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.

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