EX-99.3 4 a2202509zex-99_3.htm EX-99.3

Exhibit 99.3

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS

The consolidated financial statements, the notes thereto and other financial information contained in the Management Discussion and Analysis have been prepared in accordance with Canadian generally accepted accounting principles and are the responsibility of the management of Kinross Gold Corporation. The financial information presented elsewhere in the Management Discussion and Analysis is consistent with the data that is contained in the consolidated financial statements. The consolidated financial statements, where necessary, include amounts which are based on the best estimates and judgment of management.

In order to discharge management's responsibility for the integrity of the financial statements, the Company maintains a system of internal accounting controls. These controls are designed to provide reasonable assurance that the Company's assets are safeguarded, transactions are executed and recorded in accordance with management's authorization, proper records are maintained and relevant and reliable financial information is produced. These controls include maintaining quality standards in hiring and training of employees, policies and procedures manuals, a corporate code of conduct and ensuring that there is proper accountability for performance within appropriate and well-defined areas of responsibility. The system of internal controls is further supported by a compliance function, which is designed to ensure that we and our employees comply with securities legislation and conflict of interest rules.

The Board of Directors is responsible for overseeing management's performance of its responsibilities for financial reporting and internal control. The Audit Committee, which is composed of non-executive directors, meets with management as well as the external auditors to ensure that management is properly fulfilling its financial reporting responsibilities to the Directors who approve the consolidated financial statements. The external auditors have full and unrestricted access to the Audit Committee to discuss the scope of their audits, the adequacy of the system of internal controls and review financial reporting issues.

The consolidated financial statements have been audited by KPMG LLP, the independent registered chartered accountants, in accordance with Canadian generally accepted auditing standards and standards of the Public Company Accounting Oversight Board (United States).

/s/ TYE W. BURT |  | /s/ THOMAS M. BOEHLERT
Tye W. Burt |  | Thomas M. Boehlert
President and Chief Executive Officer |  | Executive Vice President and Chief Financial Officer

Toronto, Canada
February 16, 2011

108

REPORT OF INDEPENDENT CHARTERED ACCOUNTANTS

To the Shareholders of Kinross Gold Corporation

We have audited the accompanying consolidated financial statements of Kinross Gold Corporation, which comprise the consolidated balance sheets as at December 31, 2010 and December 31, 2009, the consolidated statements of operations, cash flows, common shareholders' equity and comprehensive income (loss) for each of the years in the three-year period ended December 31, 2010, and notes, comprising a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinions.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Kinross Gold Corporation as at December 31, 2010 and December 31, 2009 and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2010 in accordance with Canadian generally accepted accounting principles.

/s/ KPMG LLP
Chartered Accountants, Licensed Public Accountants

Toronto, Canada
February 16, 2011

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 109

CONSOLIDATED
BALANCE SHEETS

As at December 31

(expressed in millions of United States dollars, except share amounts) |  |  | 2010 |  |  | 2009 |  |
Assets |  |  |  |  |  |  |  |
| Current assets |  |  |  |  |  |  |  |
|  | Cash, cash equivalents and short-term investments | Note 5 | $ | 1,466.6 |  | $ | 632.4 |  |
|  | Restricted cash |  |  | 2.1 |  |  | 24.3 |  |
|  | Accounts receivable and other assets | Note 5 |  | 329.4 |  |  | 135.5 |  |
|  | Inventories | Note 5 |  | 737.0 |  |  | 554.4 |  |
|  | Unrealized fair value of derivative assets | Note 8 |  | 133.4 |  |  | 44.3 |  |
|  |  | 2,668.5 |  |  | 1,390.9 |  |
| Property, plant and equipment | Note 5 |  | 6,911.5 |  |  | 4,989.9 |  |
| Goodwill | Note 5 |  | 5,980.0 |  |  | 1,179.9 |  |
| Long-term investments | Note 5 |  | 629.9 |  |  | 292.2 |  |
| Unrealized fair value of derivative assets | Note 8 |  | 2.6 |  |  | 1.9 |  |
| Deferred charges and other long-term assets | Note 5 |  | 204.6 |  |  | 158.4 |  |
|  | $ | 16,397.1 |  | $ | 8,013.2 |  |
Liabilities |  |  |  |  |  |  |  |
| Current liabilities |  |  |  |  |  |  |  |
|  | Accounts payable and accrued liabilities | Note 5 | $ | 496.6 |  | $ | 312.9 |  |
|  | Current portion of long-term debt | Note 9 |  | 48.4 |  |  | 177.0 |  |
|  | Current portion of reclamation and remediation obligations | Note 10 |  | 23.1 |  |  | 17.1 |  |
|  | Current portion of unrealized fair value of derivative liabilities | Note 8 |  | 359.3 |  |  | 131.0 |  |
|  |  | 927.4 |  |  | 638.0 |  |
| Long-term debt | Note 9 |  | 454.6 |  |  | 515.2 |  |
| Other long-term liabilities | Note 5 |  | 532.4 |  |  | 543.0 |  |
| Future income and mining taxes | Note 14 |  | 883.8 |  |  | 624.6 |  |
|  |  | 2,798.2 |  |  | 2,320.8 |  |
Non-controlling interest | Note 5 |  | 198.4 |  |  | 132.9 |  |
Common shareholders' equity |  |  |  |  |  |  |  |
| Common share capital and common share purchase warrants | Note 11 | $ | 13,468.6 |  | $ | 6,448.1 |  |
| Contributed surplus |  |  | 231.7 |  |  | 169.6 |  |
| Accumulated deficit |  |  | (137.1 | ) |  | (838.1 | ) |
| Accumulated other comprehensive loss | Note 6 |  | (162.7 | ) |  | (220.1 | ) |
|  |  | 13,400.5 |  |  | 5,559.5 |  |
Contingencies | Note 18 |  |  |  |  |  |  |
Subsequent events | Notes 8 |  |  |  |  |  |  |
|  | $ | 16,397.1 |  | $ | 8,013.2 |  |
Common shares |  |  |  |  |  |  |  |
| Authorized |  |  | Unlimited |  |  | Unlimited |  |
| Issued and outstanding |  |  | 1,133,294,930 |  |  | 696,027,270 |  |

Signed on behalf of the Board:

John A. Brough Director |  | John M.H. Huxley Director

The accompanying notes are an integral part of these consolidated financial statements

110

CONSOLIDATED STATEMENTS
OF OPERATIONS

For years ended December 31

(expressed in millions of United States dollars, except share amounts) |  |  |  | 2010 |  |  | 2009 |  |  | 2008 |  |
Revenue |  |  |  |  |  |  |  |  |  |  |  |
| Metal sales |  |  | $ | 3,010.1 |  | $ | 2,412.1 |  | $ | 1,617.0 |  |
Operating costs and expenses |  |  |  |  |  |  |  |  |  |  |  |
| Cost of sales (excludes accretion, depreciation, depletion and amortization) |  |  |  | 1,255.4 |  |  | 1,047.1 |  |  | 768.8 |  |
| Accretion and reclamation expense |  |  |  | 29.0 |  |  | 19.3 |  |  | 24.7 |  |
| Depreciation, depletion and amortization |  |  |  | 517.5 |  |  | 447.3 |  |  | 273.8 |  |
|  |  |  | 1,208.2 |  |  | 898.4 |  |  | 549.7 |  |
| Other operating costs |  |  |  | 53.8 |  |  | 62.3 |  |  | 7.4 |  |
| Exploration and business development |  |  |  | 142.7 |  |  | 72.5 |  |  | 59.0 |  |
| General and administrative |  |  |  | 144.5 |  |  | 117.7 |  |  | 100.8 |  |
| Impairment charges: goodwill |  |  |  | - |  |  | - |  |  | 994.1 |  |
Operating earnings (loss) |  |  |  | 867.2 |  |  | 645.9 |  |  | (611.6 | ) |
| Other income (expense) - net |  | Note 5 |  | 293.0 |  |  | (74.3 | ) |  | (42.7 | ) |
Earnings (loss) before taxes and other items |  |  |  | 1,160.2 |  |  | 571.6 |  |  | (654.3 | ) |
| Income and mining taxes expense - net |  |  |  | (275.4 | ) |  | (150.8 | ) |  | (101.1 | ) |
| Equity in losses of associated companies |  | Note 5 |  | (3.9 | ) |  | (8.6 | ) |  | (8.7 | ) |
| Non-controlling interest |  | Note 5 |  | (109.3 | ) |  | (102.3 | ) |  | (42.3 | ) |
| Dividends on convertible preferred shares of subsidiary |  |  |  | - |  |  | - |  |  | (0.8 | ) |
Net earnings (loss) |  |  | $ | 771.6 |  | $ | 309.9 |  | $ | (807.2 | ) |
Earnings (loss) per share |  |  |  |  |  |  |  |  |  |  |  |
| Basic |  |  | $ | 0.94 |  | $ | 0.45 |  | $ | (1.28 | ) |
| Diluted |  |  | $ | 0.93 |  | $ | 0.44 |  | $ | (1.28 | ) |
Weighted average number of common shares outstanding (millions) |  |  |  |  |  |  |  |  |  |  |  |
| Basic |  | Note 13 |  | 824.5 |  |  | 691.5 |  |  | 628.6 |  |
| Diluted |  | Note 13 |  | 829.2 |  |  | 696.5 |  |  | 628.6 |  |

The accompanying notes are an integral part of these consolidated financial statements

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 111

CONSOLIDATED STATEMENTS
OF CASH FLOWS

For the years ended December 31

(expressed in millions of United States dollars) |  |  | 2010 |  |  | 2009 |  |  | 2008 |  |
Net inflow (outflow) of cash related to the following activities: |  |  |  |  |  |  |  |  |  |
Operating: |  |  |  |  |  |  |  |  |  |  |
Net earnings (loss) |  | $ | 771.6 |  | $ | 309.9 |  | $ | (807.2 | ) |
Adjustments to reconcile net earnings (loss) to net cash provided from operating activities: |  |  |  |  |  |  |  |  |  |  |
| Depreciation, depletion and amortization |  |  | 517.5 |  |  | 447.3 |  |  | 273.8 |  |
| Accretion and reclamation expenses | Note 10 |  | 29.0 |  |  | 19.3 |  |  | 24.7 |  |
| Accretion of convertible debt and deferred financing costs |  |  | 18.4 |  |  | 17.1 |  |  | 15.4 |  |
| Impairment charges: |  |  |  |  |  |  |  |  |  |  |
|  | Goodwill | Note 5 |  | - |  |  | - |  |  | 994.1 |  |
|  | Investments and other assets |  |  | - |  |  | - |  |  | 83.9 |  |
| Gain on disposal of assets and investments - net | Notes 4,5 |  | (348.5 | ) |  | (16.2 | ) |  | (30.2 | ) |
| Equity in losses of associated companies | Note 5 |  | 3.9 |  |  | 8.6 |  |  | 8.7 |  |
| Non-hedge derivative losses - net | Note 5 |  | 20.1 |  |  | (2.9 | ) |  | (41.6 | ) |
| Future income and mining taxes | Note 14 |  | (79.2 | ) |  | (27.9 | ) |  | 27.9 |  |
| Non-controlling interest | Note 5 |  | 109.3 |  |  | 102.3 |  |  | 42.3 |  |
| Stock-based compensation expense | Note 12 |  | 33.0 |  |  | 29.0 |  |  | 21.6 |  |
| Foreign exchange losses and Other |  |  | 16.1 |  |  | 50.7 |  |  | 21.2 |  |
| Brazilian tax settlement | Note 18 |  | - |  |  | (71.0 | ) |  | - |  |
| Changes in operating assets and liabilities: |  |  |  |  |  |  |  |  |  |  |
|  | Accounts receivable and other assets |  |  | (82.9 | ) |  | (14.9 | ) |  | (33.7 | ) |
|  | Inventories |  |  | (98.5 | ) |  | (115.1 | ) |  | (145.4 | ) |
|  | Accounts payable and other liabilities |  |  | 58.6 |  |  | 49.4 |  |  | (11.9 | ) |
Cash flow provided from operating activities |  |  | 968.4 |  |  | 785.6 |  |  | 443.6 |  |
Investing: |  |  |  |  |  |  |  |  |  |  |
Additions to property, plant and equipment | Note 15 |  | (563.7 | ) |  | (481.2 | ) |  | (714.7 | ) |
Asset purchases - net of cash acquired | Note 4 |  | 504.0 |  |  | (41.7 | ) |  | 21.2 |  |
Net proceeds from the sale of long-term investments and other assets |  |  | 846.4 |  |  | 6.7 |  |  | 37.3 |  |
Net acquisitions of long-term investments and other assets |  |  | (617.8 | ) |  | (178.1 | ) |  | (168.9 | ) |
Net proceeds from the sale of property, plant and equipment |  |  | 3.1 |  |  | 0.9 |  |  | - |  |
Disposals (additions) to short-term investments |  |  | 35.0 |  |  | (0.5 | ) |  | (24.6 | ) |
Decrease (increase) in restricted cash |  |  | 22.2 |  |  | (11.9 | ) |  | (10.0 | ) |
Other |  |  | 2.6 |  |  | (45.7 | ) |  | 3.5 |  |
Cash flow provided from (used in) investing activities |  |  | 231.8 |  |  | (751.5 | ) |  | (856.2 | ) |
Financing: |  |  |  |  |  |  |  |  |  |  |
Issuance of common shares | Note 12 |  | - |  |  | 396.4 |  |  | - |  |
Issuance of common shares on exercise of options and warrants |  |  | 15.9 |  |  | 25.1 |  |  | 31.7 |  |
Proceeds from issuance of debt |  |  | 127.3 |  |  | 77.7 |  |  | 123.2 |  |
Proceeds from issuance of convertible debentures |  |  | - |  |  | - |  |  | 449.9 |  |
Debt issuance costs |  |  | - |  |  | - |  |  | (1.6 | ) |
Repayment of debt |  |  | (334.9 | ) |  | (325.9 | ) |  | (123.5 | ) |
Dividends paid to common shareholders |  |  | (70.6 | ) |  | (62.4 | ) |  | (51.5 | ) |
Dividends paid to non-controlling shareholders | Note 5 |  | (47.7 | ) |  | (25.8 | ) |  | - |  |
Settlement of derivative instruments |  |  | (27.3 | ) |  | (19.4 | ) |  | (23.2 | ) |
Other |  |  | - |  |  | (2.4 | ) |  | (29.3 | ) |
Cash flow provided from (used in) financing activities |  |  | (337.3 | ) |  | 63.3 |  |  | 375.7 |  |
Effect of exchange rate changes on cash |  |  | 6.3 |  |  | 9.4 |  |  | (23.8 | ) |
Increase (decrease) in cash and cash equivalents |  |  | 869.2 |  |  | 106.8 |  |  | (60.7 | ) |
Cash and cash equivalents, beginning of year |  |  | 597.4 |  |  | 490.6 |  |  | 551.3 |  |
Cash and cash equivalents, end of year |  | $ | 1,466.6 |  | $ | 597.4 |  | $ | 490.6 |  |
Short-term investments |  | $ | - |  | $ | 35.0 |  | $ | 34.5 |  |
Cash, cash equivalents and short-term investments |  | $ | 1466.6 |  | $ | 632.4 |  | $ | 525.1 |  |

The accompanying notes are an integral part of these consolidated financial statements

112

CONSOLIDATED STATEMENTS OF
COMMON SHAREHOLDERS' EQUITY

For the year ended December 31

(expressed in millions of United States dollars) |  |  |  | 2010 |  |  | 2009 |  |  | 2008 |  |
Common share capital and common share purchase warrants |  |  |  |  |  |  |  |  |  |
Balance beginning of year |  |  | $ | 6,448.1 |  | $ | 5,873.0 |  | $ | 5,123.6 |  |
| Shares issued on equity offering |  |  |  | - |  |  | 396.4 |  |  | - |  |
| Shares issued on acquisition of Lobo-Marte |  |  |  | - |  |  | 102.9 |  |  | - |  |
| Shares issued on acquisition of Aurelian |  |  |  | - |  |  | - |  |  | 639.7 |  |
| Shares issued on acquisition of Underworld |  |  |  | 117.7 |  |  | - |  |  | - |  |
| Shares issued on acquisition of Dvoinoye |  |  |  | 173.9 |  |  | - |  |  | - |  |
| Shares issued on acquisition of Red Back |  |  |  | 6,549.3 |  |  | - |  |  | - |  |
| Warrants issued on acquisition of Aurelian |  |  |  | - |  |  | - |  |  | 56.0 |  |
| Warrants issued on acquisition of Red Back |  |  |  | 117.7 |  |  | - |  |  | - |  |
| Common shares issued for employee share purchase plan |  |  |  | 5.5 |  |  | 4.4 |  |  | 3.4 |  |
| Transfer from contributed surplus on exercise of options and restricted shares |  |  |  | 44.0 |  |  | 24.2 |  |  | 18.6 |  |
| Options and warrants exercised, including cash |  |  |  | 12.4 |  |  | 47.2 |  |  | 31.7 |  |
Balance at the end of the year |  |  | $ | 13,468.6 |  | $ | 6,448.1 |  | $ | 5,873.0 |  |
Contributed surplus |  |  |  |  |  |  |  |  |  |  |  |
Balance beginning of year |  |  | $ | 169.6 |  | $ | 168.5 |  | $ | 65.4 |  |
| Equity portion of convertible notes |  |  |  | - |  |  | - |  |  | 76.6 |  |
| Stock-based compensation |  |  |  | 31.1 |  |  | 25.3 |  |  | 19.2 |  |
| Bema options exercised |  |  |  | - |  |  | (0.1 | ) |  | - |  |
| Aurelian options issued (exercised) |  |  |  | (4.3 | ) |  | (7.6 | ) |  | 25.9 |  |
| Underworld options issued |  |  |  | 5.3 |  |  | - |  |  | - |  |
| Underworld options exercised |  |  |  | (2.8 | ) |  | - |  |  | - |  |
| Red Back options issued |  |  |  | 69.8 |  |  | - |  |  | - |  |
| Red back options exercised |  |  |  | (19.8 | ) |  | - |  |  | - |  |
| Transfer of fair value of exercised options and restricted shares |  |  |  | (17.2 | ) |  | (16.5 | ) |  | (18.6 | ) |
Balance at the end of the year |  |  | $ | 231.7 |  | $ | 169.6 |  | $ | 168.5 |  |
Accumulated deficit |  |  |  |  |  |  |  |  |  |  |  |
Balance beginning of year |  |  | $ | (838.1 | ) |  | (1,100.2 | ) |  | (253.1 | ) |
| Adoption of new accounting policy |  |  |  | - |  |  | 14.6 |  |  | 11.0 |  |
| Dividends paid |  |  |  | (70.6 | ) |  | (62.4 | ) |  | (50.9 | ) |
| Net earnings (loss) |  |  |  | 771.6 |  |  | 309.9 |  |  | (807.2 | ) |
Balance at the end of the year |  |  | $ | (137.1 | ) | $ | (838.1 | ) | $ | (1,100.2 | ) |
Accumulated other comprehensive income (loss) |  |  |  |  |  |  |  |  |  |  |  |
Balance beginning of year |  |  | $ | (220.1 | ) | $ | (164.4 | ) | $ | (98.1 | ) |
| Adoption of new accounting policy |  |  |  | - |  |  | 1.6 |  |  | - |  |
| Adjusted balance, beginning of year |  |  | $ | (220.1 | ) | $ | (162.8 | ) | $ | (98.1 | ) |
| Other comprehensive income (loss) |  |  |  | 57.4 |  |  | (57.3 | ) |  | (66.3 | ) |
Balance at the end of the year |  |  | $ | (162.7 | ) | $ | (220.1 | ) | $ | (164.4 | ) |
Total accumulated deficit and accumulated other comprehensive loss |  |  | $ | (299.8 | ) | $ | (1,058.2 | ) | $ | (1,264.6 | ) |
Total common shareholders' equity |  |  | $ | 13,400.5 |  | $ | 5,559.5 |  | $ | 4,776.9 |  |

The accompanying notes are an integral part of these consolidated financial statements

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 113

CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)

For the years ended December 31

(expressed in millions of United States dollars) |  |  |  | 2010 |  |  | 2009 |  |  | 2008 |  |
Net earnings (loss) |  |  | $ | 771.6 |  | $ | 309.9 |  | $ | (807.2 | ) |
Other comprehensive income (loss), net of tax: |  | Note 6 |  |  |  |  |  |  |  |  |  |
| Change in fair value of investments (a) |  |  |  | 331.4 |  |  | 42.2 |  |  | (72.0 | ) |
| Accumulated OCI related to investments sold (b) |  |  |  | (70.8 | ) |  | 3.2 |  |  | - |  |
| Reclassification of accumulated OCI related to the investment in Red Back (b),(e) |  |  |  | (209.3 | ) |  | - |  |  | - |  |
| Reclassification of accumulated OCI related to the investment in Underworld (b),(f) |  |  |  | (7.4 | ) |  | - |  |  | - |  |
| Change in fair value of derivative financial instruments designated as cash flow hedges (c) |  |  |  | (75.2 | ) |  | (135.5 | ) |  | (80.3 | ) |
| Reclassification to earnings for impairment charges |  |  |  | - |  |  | - |  |  | 47.0 |  |
| Accumulated OCI related to derivatives settled (d) |  |  |  | 88.7 |  |  | 32.8 |  |  | 39.0 |  |
|  |  |  | 57.4 |  |  | (57.3 | ) |  | (66.3 | ) |
Total comprehensive income (loss) |  |  | $ | 829.0 |  | $ | 252.6 |  | $ | (873.5 | ) |

(a)
  Net of tax of $4.0 million (2009 - $4.0 million; 2008 - $(2.1) million).
(b)
  Net of tax of $nil (2009 - $nil; 2008 - $nil).
(c)
  Net of tax of $13.5 million (2009 - $20.0 million; 2008 - $13.2 million).
(d)
  Net of tax of $(13.2) million (2009 - $8.5 million; $3.1 million).
(e)
  See Note 4(vii).
(f)
  See Note 4(ii).

  The accompanying notes are an integral part of these consolidated financial statements

114

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

For the years ended December 31, 2010, 2009, and 2008

(in millions of United States dollars)

1. DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS

Kinross Gold Corporation (individually and collectively with its subsidiaries, as applicable, "Kinross" or the "Company") is engaged in gold mining and related activities, including exploration and acquisition of gold-bearing properties, extraction, processing and reclamation. Kinross' gold production and exploration activities are carried out principally in Canada, the United States, the Russian Federation, Brazil, Ecuador, Chile, Ghana, and Mauritania. Gold is produced in the form of doré, which is shipped to refineries for final processing. Kinross also produces and sells a quantity of silver.

The operating cash flow and profitability of the Company are affected by various factors, including the amount of gold and silver produced and sold, the market prices of gold and silver, operating costs, interest rates, regulatory and environmental compliance, the level of exploration activity and capital expenditures, general and administrative costs, and other discretionary costs and activities. Kinross is also exposed to fluctuations in currency exchange rates, interest rates, political risk and varying levels of taxation that can impact profitability and cash flow. Kinross seeks to manage the risks associated with its business operations; however, many of the factors affecting these risks are beyond the Company's control.

Certain comparative figures for 2009 and 2008 have been reclassified to conform to the 2010 financial statement presentation.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING CHANGES

The consolidated financial statements of Kinross have been prepared in accordance with Canadian generally accepted accounting principles ("CDN GAAP") using the following significant accounting policies, and are expressed in United States dollars.

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 115

Accounting policies

i Basis of presentation and principles of consolidation:

The consolidated financial statements include the accounts of the Company and all its subsidiaries and investments. The Company's significant mining properties are listed below:

|  |  | As at December 31, |
|  | Location | 2010 |  | 2009 |  | 2008 |
Through majority owned subsidiaries (Consolidated) |  |  |  |  |  |  |  |
| Fort Knox |  | USA | 100% |  | 100% |  | 100% |
| Paracatu |  | Brazil | 100% |  | 100% |  | 100% |
| Maricunga |  | Chile | 100% |  | 100% |  | 100% |
| La Coipa |  | Chile | 100% |  | 100% |  | 100% |
| Kettle River |  | USA | 100% |  | 100% |  | 100% |
| Kupol (a) |  | Russian Federation | 75% |  | 75% |  | 75% |
| Lobo-Marte (b) |  | Chile | 100% |  | 100% |  | 40% |
| Fruta del Norte |  | Ecuador | 100% |  | 100% |  | 100% |
| Tasiast (c) |  | Mauritania | 100% |  | - |  | - |
| Chirano (c) |  | Ghana | 90% |  | - |  | - |
| Dvoinoye (d) |  | Russian Federation | 100% |  | - |  | - |
| White Gold (e) |  | Canada | 100% |  | - |  | - |
As interests in unincorporated joint ventures (Proportionately consolidated) |  |  |  |  |  |  |  |
| Round Mountain |  | USA | 50% |  | 50% |  | 50% |
As interests in incorporated joint ventures (Proportionately consolidated) |  |  |  |  |  |  |  |
| Cerro Casale (f) |  | Chile | 25% |  | 50% |  | 49% |
| Crixás |  | Brazil | 50% |  | 50% |  | 50% |

(a)
  Interests in Kupol was acquired with the acquisition of Bema on February 27, 2007.
(b)
  A 40% interest in Lobo-Marte was acquired on December 16, 2008. The remaining 60% interest was acquired on January 7, 2009.
(c)
  Interests in Tasiast and Chirano were acquired with the acquisition of Red Back Mining Inc. ("Red Back") on September 17, 2010.
(d)
  On August 27, 2010, Dvoinoye was acquired with the acquisition of Northern Gold LLC and Regionruda LLC.
(e)
  On April 26, 2010, 81.6% of White Gold was acquired with the acquisition of Underworld Resources Inc. ("Underworld"). The remaining 18.4% was acquired on June 30, 2010.
(f)
  A 49% interest in Cerro Casale was acquired with the acquisition of Bema on February 27, 2007. An additional 1% interest was acquired during 2009. Subsequently, on March 31, 2010, a 25% interest was sold. Total retained interest in Cerro Casale is 25%, as at December 31, 2010, and is accounted for using the equity method.

ii Use of estimates

The preparation of the Company's consolidated financial statements in conformity with CDN GAAP requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Changes in estimates of useful lives are accounted for prospectively from the date of change. Actual results could differ from these estimates. The assets and liabilities which require management to make significant estimates and assumptions in determining carrying values include, but are not limited to, property, plant and equipment, mineral interests, inventories, financial instruments, goodwill, long-term investments, reclamation and remediation obligations, and the provision for income and mining taxes.

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iii Functional and reporting currency

The functional currency of the Company and its subsidiaries is the United States dollar. The Company and its subsidiaries and joint ventures operate in Canada, the United States, the Russian Federation, Brazil, Ecuador, Chile, Ghana, and Mauritania.

Monetary assets and liabilities of the Company's operations denominated in currencies other than the United States dollar are translated into U.S. dollars at the rates of exchange at the consolidated balance sheet dates. Non-monetary assets and liabilities are translated at historical exchange rates prevailing at each transaction date. Revenue and expenses are translated at average exchange rates throughout the reporting period, with the exception of depreciation, depletion and amortization and the expense related to equity settled stock-based compensation which are translated at historical exchange rates. Gains and losses on translation of foreign currencies are included in earnings.

The cumulative translation adjustments included in Accumulated other comprehensive income ("AOCI") relate to unrealized translation gains and losses on the Company's net investment in self-sustaining operations, including equity-accounted investees that are translated using the current rate method. The exchange gains and losses will become realized in earnings upon the substantial disposition, liquidation or closure of the investment that gave rise to such amounts.

iv Cash and cash equivalents

Cash and cash equivalents include cash and highly liquid investments with a maturity of three months or less at the date of acquisition.

v Short-term investments

Short-term investments include short-term money market instruments with terms to maturity at the date of acquisition of between three and twelve months. The carrying value of short-term investments is equal to cost and accrued interest.

vi Long-term investments including Working Interests, Impairment of Investments and Other Assets

Long-term investments in equity securities consist of investments that are accounted for using the equity method and investments that are designated as available-for-sale. If the Company can exert significant influence over an investee company, the investment in the investee company is accounted for using the equity method. Available for sale investments are measured at fair value with changes in fair value recorded in Other comprehensive income ("OCI") until such gains and losses are realized or an other-than-temporary impairment is determined to have occurred. The Company periodically reviews the carrying value of its investments. When a decline in the value of an investment is considered to be other-than-temporary, the investment is written down to fair value with a charge to other income (expense).

Earnings from Working Interests are accounted for based on Kinross' pro-rata share of earnings in the underlying entity. The cost of the Working Interest plus any funding contributions made, less any cash distributions received in excess of Kinross' share of post acquisition earnings are amortized on a units of production basis corresponding to the Proven and Probable Reserves of the underlying entity Kinross has invested in. Changes in the investment in Working Interests include changes as a result of Kinross' pro-rata share of net income or loss and are accounted for in the statement of operations as earnings from Working Interests within other income (expense). Cash received from the Working Interest is accounted for as a reduction, while funding contributions into the Working Interest are accounted for as an increase in the carrying value of the Working Interest on the balance sheet.

vii Inventories

Inventories consisting of metal in circuit ore, metal in-process and finished metal are valued at the lower of cost or net realizable value ("NRV"). NRV is calculated as the difference between the estimated gold prices based on prevailing and long-term metal prices and estimated costs to complete production into a saleable form.

Metal in circuit is comprised of ore in stockpiles and ore on heap leach pads. Ore in stockpiles is coarse ore that has been extracted from the mine and is available for further processing. Costs are added to stockpiles based on the current mining cost per tonne and removed at the average cost per tonne. Costs are added to ore on the heap leach pads based on current

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 117

mining costs and removed from the heap leach pads as ounces are recovered, based on the average cost per recoverable ounce of gold on the leach pad. Ore in stockpiles not expected to be processed in the next twelve months is classified as long-term.

In-process inventories represent materials that are in the process of being converted to a saleable product.

The quantities of recoverable gold placed on the leach pads are reconciled by comparing the grades of ore placed on the leach pads to the quantities of gold actually recovered (metallurgical balancing), however, the nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, the metallurgical balancing process is constantly monitored and the engineering estimates are refined based on actual results over time. Variances between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to NRV are accounted for on a prospective basis. The ultimate recovery of gold from a leach pad will not be known until the leaching process has concluded. In the event that the Company determines, based on engineering estimates, that a quantity of gold contained in ore on leach pads is to be recovered over a period exceeding twelve months, that portion is classified as long-term.

In process and finished metal inventories, comprised of gold and silver doré and bullion, are valued at the lower of the previous three month average production cost and NRV whereby the average does not exceed three month production costs. Average production cost represents the average cost of the respective in-process inventories incurred prior to the refining process, plus applicable refining costs and associated royalties.

Materials and supplies are valued at the lower of average cost and NRV.

Write-downs of inventory are reported in current period costs. The Company reverses write-downs in the event that there is a subsequent increase in NRV.

viii Property, plant and equipment and Impairment of property, plant and equipment

New facilities, plant and equipment are recorded at cost and carried net of depreciation. Mobile and other equipment are depreciated, net of residual value, using the straight-line method, over the estimated productive life of the asset. Productive lives for mobile and other equipment range from 2 to 25 years, but do not exceed the related estimated mine life based on Proven and Probable Reserves. Plant and other facilities, used in carrying out the mine operating plan, are depreciated using the units-of-production ("UOP") method over a period not to exceed the estimated life of the ore body based on recoverable ounces to be mined from estimated Proven and Probable Reserves. Repairs and maintenance expenditures are expensed as incurred. Expenditures that extend the useful lives of existing facilities or equipment are capitalized and depreciated over the remaining useful life of the related asset.

Exploration costs are incurred in gathering the information necessary to determine whether a particular property can become a commercially viable operating mine and include costs to determine whether a property adjacent to a property with Proven and Probable Reserves has Proven and Probable Reserves, whether Inferred Resources can be classified as Measured and Indicated Resources, or whether Measured and Indicated Resources can be converted to Proven and Probable Reserves. These costs are expensed as incurred. When it has been determined than an exploration property can be economically developed as a result of establishing Proven and Probable Reserves, costs incurred prospectively to develop the property and place it into commercial production are classified as development costs and capitalized as they are incurred until the asset is ready for its intended use.

Costs incurred in a pit expansion are capitalized and amortized using the UOP method based on recoverable ounces to be mined from estimated Proven and Probable Reserves contained in the pit expansion. Production stage mineral interests are depleted over the life of mine using the UOP method based on recoverable ounces to be mined from estimated Proven and Probable Reserves.

Costs to acquire mineral properties are capitalized and represent the property's fair value at the time it was acquired, either as an individual asset purchase or as part of a business combination.

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Interest expense attributable to the cost of developing mining properties and to constructing new facilities is capitalized until assets are ready for their intended use.

The expected useful lives used in depletion calculations are determined based on the facts and circumstances associated with the mineral interest. The Company evaluates the Proven and Probable Reserves at least on an annual basis and adjusts the UOP calculation upon which depletion is based, to correspond with the changes in reserves as necessary. Any changes in estimates of useful lives are accounted for prospectively from the date of the change.

Kinross reviews and evaluates the carrying value of its operating mines, development and exploration properties for impairment whenever events or changes in circumstances indicate that the carrying amounts of related assets or groups of assets might not be recoverable.

Whenever the total estimated future cash flows on an undiscounted basis of a property is less than the carrying amount of the property, an impairment loss is measured and recorded based on fair values. Future cash flows are based on estimated future recoverable mine production, sales prices, production levels and costs, capital requirements and reclamation and remediation obligations, which are all based on detailed engineering life of mine plans. Future recoverable mine production is determined from Proven and Probable Reserves and Measured, Indicated and Inferred Mineral Resources, net of losses during ore processing and treatment. Cash flow estimates of recoverable production are risk-adjusted to reflect relative geological uncertainty, with Proven and Probable Reserves and Measured and Indicated Resources assigned a lower discount rate and Inferred Resources assigned a higher discount rate. All long-lived assets at a particular operation are combined for purposes of estimating future cash flows.

Exploration properties are assessed for impairment by comparing the carrying value against the fair value. Fair value may be determined based on values of recent transactions involving sales of similar properties or through a discounted cash flow analysis based on a life-of-mine plan.

ix Goodwill and goodwill impairment

Business acquisitions are accounted for using the purchase method whereby acquired assets and liabilities are recorded at fair value as of the date of acquisition with the excess of the purchase price over such fair value recorded as goodwill. Goodwill is assigned to the reporting units and is not amortized.

Included in the fair value of property, plant and equipment and mineral properties is Value beyond Proven and Probable Reserves ("VBPP") resulting from Kinross' acquisitions. The concept of VBPP is described in FASB Emerging Issues Task Force ("EITF") Issue No. 04-3, "Mining Assets: Impairment and Business Combinations," and the Emerging Issues Committee abstract "EIC-152 - Mining assets - Impairment and Business Combinations" and has been interpreted differently by different mining companies. Kinross' acquisition adjustments to property, plant and equipment include VBPP attributable to mineralized material, which includes Measured and Indicated amounts that the Company believes could be brought into production, and Inferred Resources. In addition, as part of a business acquisition, the Company may acquire land with mineral rights ("exploration properties"), which is the area adjacent and contiguous to existing mines or properties containing reserves, resources or without any identified exploration targets. The exploration properties are valued based on prices paid for similar types of properties in market transactions.

Goodwill is attributed to the following factors:

•
  Expected additional value ("EAV") from identified exploration targets at the reporting unit is calculated based on management's estimates of the ounces at such targets, based on the specific geological attributes of the mineral property and based on prices in market transactions involving properties with similar exploration targets;
•
  The optionality (real option value associated with the portfolio of acquired mines as well as each individual mine) to develop additional, higher-cost reserves and to intensify efforts to develop the more promising acquired properties and reduce efforts at developing the less promising acquired properties in the future. This optionality may result from changes in the overall economics of an individual mine or a portfolio of mines, largely driven by changes in the gold price; and

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 119

•
  The going concern value of the Company's capacity to replace and augment reserves through completely new discoveries whose value is not reflected in any of the other valuations.

The value associated with EAV is assigned to reporting units at the date of acquisition. Residual goodwill represented by optionality and going-concern value as described above, is also assigned to reporting units at the date of acquisition. However, the Company assigns residual goodwill to reporting units using a relative fair value methodology.

The Company evaluates the carrying amount of goodwill allocated to reporting units on an annual basis and at any other time if events or changes in circumstances indicate that the fair value of a reporting unit may have been impaired. The Company compares the estimated fair value of reporting units to which goodwill was allocated to the carrying amounts. If the carrying value of a reporting unit were to exceed its estimated fair value, the Company would compare the implied fair value of the reporting unit's goodwill to its carrying amount. Any excess of the carrying value over the fair value is charged to earnings.

In testing goodwill for impairment, the Company compares the estimated fair value of reporting units to which goodwill was allocated to the carrying amounts. Fair value of the reporting unit for the purposes of impairment testing, is comprised of the following:

•
  Discounted nominal cash flows of reserves and resources, which includes estimates for capital expenditures.
•
  Fair value of exploration properties based on market comparable data.
•
  EAV at the impairment testing date.

Discounted nominal cash flows are estimated based on the Company's life-of-mine plans and include the following estimates and assumptions:

•
  estimated future recoverable mine production based on Proven and Probable Reserves, Measured, Indicated and Inferred Resources, metal grades and processing and recovery rates;
•
  metal prices, foreign exchange, inflation, tax rates and operating and abandonment costs, and
•
  Capital expenditures, which are all based on life-of-mine plans representing the budgets and long-term business plans for each reporting unit.

The fair value arrived at as described above, is the Company's estimate of fair value for accounting purposes and is not a "preliminary assessment" as defined in National Instrument 43-101 - Standards of Disclosure for Mineral Projects.

The use of estimates and assumptions is subjective and therefore it is possible that actual future cash flows may differ significantly from projected future results prepared using numerous estimates and assumptions. Each of the estimates and assumptions noted above are subject to significant risks and uncertainties.

In applying the Company's accounting policy at impairment testing dates, no value is computed or attributed for the optionality and the going concern value, which are contributors to goodwill at the time that the reporting units were acquired. Under the Company's accounting policy these amounts are considered to exist at the corporate level and cannot be attributed to individual reporting units or individual mines. By not attributing any value to the optionality and going-concern value at the individual mines an impairment of acquired goodwill, with all other assumptions including gold price and reserves remaining constant, is likely to occur at the time of the first impairment test after acquisition. Positive changes in valuation inputs such as the gold price and reserves in the period prior to the impairment test could moderate or eliminate any impairment.

x Financial Instruments and hedging activity

Financial instruments are measured at fair value on initial recognition of the instrument. Measurement in subsequent periods depends on whether the financial instrument has been classified as "held-for-trading", "available for sale",

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"held-to-maturity", "loans and receivables", or "other financial liabilities" as defined by the Canadian Institute of Chartered Accountants ("CICA") Handbook Section 3855 Financial Instruments - Recognition and Measurement ("Section 3855").

Financial assets and financial liabilities "held-for-trading" are measured at fair value with changes in those fair values recognized in net earnings. Financial assets "available for sale" are measured at fair value, with changes in those fair values recognized in OCI except for other-than-temporary impairment which is recorded as a charge to Other income (expense). Financial assets "held-to-maturity", "loans and receivables" and "other financial liabilities" are measured at amortized cost using the effective interest method of amortization.

Cash and cash equivalents, restricted cash, short-term investments and marketable securities are designated as "held for trading" and are measured at fair value. Trade receivables, taxes recoverable and other assets are designated as "loans and receivables". Long-term investments in equity securities, where the company cannot exert significant influence, are designated as "available-for sale". Accounts payable and accrued liabilities and long-term debt are designated as "other financial liabilities". The Company's policy is to record financial assets and liabilities net of transaction costs.

Derivative assets and liabilities include derivative financial instruments that do not qualify as hedges, or are not designated as hedges and are classified as "held-for-trading".

The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking the hedge transactions. This process includes linking all derivatives to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. Hedge effectiveness is assessed based on the degree to which the cash flows from the derivative contracts are expected to offset the cash flows of the underlying position or transaction being hedged. At the time of inception of the hedge and on an ongoing basis, the Company assesses whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. The effective portion of changes in the fair value of derivatives designated as cash flow hedges is recorded in OCI, net of tax, until earnings are affected by the hedged item, with any ineffective portion being included immediately in net earnings.

Derivative contracts that have been designated as cash flow hedges have been entered into in order to effectively establish prices for future production of metals, to hedge exposure to exchange rate fluctuations of foreign currency denominated settlement of capital and operating expenditures, to establish prices for future purchases of energy or to hedge exposure to interest rate fluctuations. Unrealized gains or losses on these contracts remain in OCI and are included in earnings when the underlying hedged transaction, identified at the contract inception, is completed. The Company has made the policy choice to match the realized gains or losses on contracts designated as cash flow hedges with the hedged expenditures at the maturity of the contracts.

Realized and unrealized gains or losses associated with designated cash flow hedges which have been terminated or cease to be effective prior to maturity, remain in OCI and are included in earnings in the period in which the underlying hedged transaction is recognized.

For hedges that do not qualify for hedge accounting, gains or losses are recorded in income in the current period. Premiums received at the inception of written call options are recorded as a liability. Changes in the fair value of the liability are recognized in current earnings.

The estimated fair value of all derivative instruments is based on quoted market prices or, in their absence, third-party market indications and forecasts.

In the event that financial instruments that qualified for hedge accounting no longer qualify for hedge accounting, any gains or losses recorded in OCI up until the time the hedge did not qualify for hedge accounting, remain in OCI. Amounts in OCI are recorded in income in the period in which the hedge is settled. Gains or losses subsequent to the hedge not qualifying for hedge accounting are included in earnings in the current period.

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 121

xi Stock-based incentive and compensation plans

The Company's stock-based incentive and compensation plans are comprised of the following plans.

Employee Share Purchase Plan ("ESPP"): The Company's contribution to the ESPP is recorded as compensation expense on a payroll cycle basis as the employer's obligation to contribute is incurred. The cost of the common shares issued under the ESPP is based on the average of the last twenty trading sessions prior to the end of the quarter.

Restricted Share Unit Plan: Restricted share units ("RSU") are only settled in equity and are valued using the market value of the underlying stock at the grant date. The Company's compensation expense is recognized on a straight-line basis over the vesting period. Adjustments to compensation expense for employment vesting requirements are accounted for in the period when they occur. On exercise of RSUs, the shares are issued from treasury.

Deferred Share Unit Plan: Deferred share units are settled in cash and accounted for as a liability as of the grant date based on the market value at the grant date. The value of the liability is re-measured each period based on the current market value of the underlying stock at period end and any changes in the liability are recorded as compensation expense each period.

Stock Option Plan: The fair value of stock options at the grant date is estimated using the Black-Scholes option pricing model. Compensation expense is recognized on a straight-line basis over the stock option vesting period. Adjustments to compensation expense due to not meeting employment vesting requirements are accounted for based on an estimated forfeiture rate and adjusted to actual on an annual basis.

xii Revenue recognition

Metal sales includes sales of refined gold and silver, which are generally delivered to customers in the period in which they are produced, with their sales price based on prevailing spot market metal prices. Metal sales revenue is recognized when the sales price is fixed, title has passed to the customer, and collectability is reasonably assured.

xiii Reclamation and remediation obligations

The Company records a liability and corresponding asset for estimated costs for future site reclamation and closure. The estimated present value of the asset retirement obligations are reassessed on an annual basis or when new material information becomes available. Increases or decreases to the obligation usually arise due to changes in legal or regulatory requirements, the extent of environmental remediation required or methods of reclamation or cost estimates. The present value of the estimated costs of these changes are recorded in the period in which the change is identified and quantified. Changes to asset retirement obligations related to operating mines are recorded with an offsetting change to the related asset. For properties where mining activities have ceased or are in reclamation, changes are charged directly to earnings. The present value is determined using the Company's credit adjusted risk free interest rate.

xiv Income and mining taxes

The Company uses the liability method of accounting for income and mining taxes. Under the liability method, future tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for tax losses and other deductions carried forward. In a business acquisition, the cost of the acquisition is allocated to the assets and liabilities acquired by reference to their fair values at the date of acquisition. Temporary differences that exist between the assigned values and the tax bases of the related assets and liabilities, result in either future income tax liabilities or assets. These future income tax assets and liabilities are treated as identifiable assets and liabilities when allocating the cost of the purchase and are considered monetary items.

Future tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply when the asset is realized or the liability settled. A reduction in respect of the benefit of a future tax asset, a valuation allowance, is

122

recorded against any future tax asset if it is not likely to be realized. The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period in which the change is substantively enacted.

xv Earnings (loss) per share

Earnings (loss) per share calculations are based on the weighted average number of common shares and common share equivalents issued and outstanding during the year. Diluted earnings (loss) per share is calculated using the treasury method, except the if-converted method is used in assessing the dilution impact of convertible debentures and preferred shares. The treasury method assumes that outstanding stock options, warrants and restricted share units with an average exercise price below market price of the underlying shares, are exercised and the assumed proceeds are used to repurchase common shares of the Company at the average market price of the common shares for the period. The if-converted method assumes that all debentures and preferred shares have been converted in determining fully diluted EPS.

3. ACCOUNTING CHANGES AND RECENT PRONOUNCEMENTS

Accounting changes

(i)
  In May 2007, the CICA issued Section 3031 "Inventories" ("Section 3031") that superseded Handbook Section 3030 to converge Canadian standards with IAS 2, Inventories. This standard requires: that inventories be measured at the lower of cost and net realizable value; that the allocation of overhead be based on normal capacity; the use of the specific cost method for inventories that are not normally interchangeable or goods and services produced for specific purposes; the use of a consistent cost formula for inventory of a similar nature and use; and the reversal of previous write-downs of inventory to net realizable value, when there is a subsequent increase in the value of inventories. Disclosure requirements include the Company's policies, carrying amounts, amounts recognized as an expense, write-downs and subsequent reversal of write-downs. The Company adopted this standard commencing in the 2008 fiscal year and upon adoption, the opening accumulated deficit decreased by $11.0 million, net of tax of $3.4 million primarily due to an adjustment of the carrying value of certain long-term stockpiles to cost as at January 1, 2008.
(ii)
  In February 2008, the CICA issued Section 3064, "Goodwill and Intangible Assets" ("Section 3064") which replaces Section 3062, "Goodwill and Other Intangible Assets." Section 3064 establishes standards for the recognition, measurement, presentation and disclosure of goodwill and intangible assets for profit-oriented enterprises. This standard was effective for the Company on January 1, 2009. Adoption of this standard had no impact on the Company's financial statements.
(iii)
  In January 2009, the Emerging Issues Committee issued EIC-173, "Credit Risk and the Fair Value of Financial Assets and Financial Liabilities" ("EIC-173"). The Committee concluded that an entity's credit risk and the credit risk of the counterparty should be taken into account in determining the fair value of financial assets and financial liabilities, including derivative instruments.

  Prior to the implementation of EIC-173, the Company had considered the impact of credit risk on a qualitative basis only. As a result of adopting EIC-173 as at January 1, 2009, the Company quantified the impact of credit risk when calculating the fair value of financial assets and liabilities, including derivatives and the impact was as follows:

•
  An increase in the current portion of Unrealized fair value of derivative assets of $0.1 million;
•
  An increase in the long-term portion of Unrealized fair value of derivative assets of $0.6 million;
•
  An increase in Future income tax assets of $0.4 million;
•
  A decrease in the current portion of Unrealized fair value of derivative liabilities of $2.1 million;
•
  A decrease in the long-term portion of Unrealized fair value of derivative liabilities of $13.0 million;
•
  An increase in opening Retained earnings of $14.6 million; and
•
  An increase in OCI of $1.6 million.

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 123

(iv)
  In March 2009, the Emerging Issues Committee issued EIC-174, "Mining Exploration Costs", which provides guidance on the capitalization of exploration costs related to mining properties and the impairment review of such capitalized exploration costs. This EIC was effective for the Company on January 1, 2009. The application of this EIC did not have an effect on the Company's financial statements.
(v)
  In May 2009, the CICA amended Section 3862, "Financial Instruments - Disclosures" ("Section 3862"), which requires additional disclosure of fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements (Level 1, Level 2 and Level 3 inputs as defined in the standard). The amendments were applicable for the Company beginning January 1, 2010, and are harmonized with disclosures currently required under US GAAP.

Recent pronouncements

(i)
  In 2008, the CICA issued Handbook Section 1582, "Business Combinations" ("Section 1582"), which is effective for business combinations with an acquisition date on or after January 1, 2011. The standard requires the additional use of fair value measurements, recognition of additional assets and liabilities and increased disclosure. The impact of Section 1582 is expected to have a material impact on how prospective business combinations are accounted for. Additionally, as part of the application of Section 1582, companies will be required to adopt CICA Handbook Section 1601 "Consolidated Financial Statements" and 1602 "Non-controlling interests". These sections will require that non-controlling interest be presented as part of shareholders' equity on the balance sheet and the controlling parent to present 100 percent of the subsidiary's results in the statement of operations with an allocation between controlling and non-controlling interest. The standards are effective as of January 1, 2011, with early adoption permitted. The Company has chosen not to early adopt these standards.
(ii)
  In August 2009, the CICA issued certain amendments to Section 3251, "Equity". The amendments apply to entities that have adopted Section 1602, "Non-controlling interests". The amendments require separate presentation on the statements of operations and comprehensive income of income attributable to owners of the Company and those attributable to non-controlling interests. The amendments also require that non-controlling interests be presented separately as a component of equity. As the Company has not adopted section 1602, which is not mandatory until the year beginning January 1, 2011, the amendments are not applicable to the Company in the interim and there is no impact to the financial statements for the period ended December 31, 2010 or 2009. The Company has chosen not to early adopt these standards.
(iii)
  The Canadian Accounting Standards Board has confirmed January 1, 2011 as the date that International Financial Reporting Standards ("IFRS") will replace Canadian GAAP for publicly accountable enterprises. As a result, Kinross will report under IFRS for interim and annual periods beginning January 1, 2011, with comparative information for 2010 restated under IFRS. Adoption of IFRS as Canadian GAAP requires the Company to make certain accounting policy choices and could materially impact its reported financial position and results of operations.

4. ACQUISITIONS AND DIVESTITURES

i Disposition of one-half interest in the Cerro Casale project

On February 17, 2010, the Company executed an agreement to sell one-half of its interest in the Cerro Casale project to Barrick Gold Corporation ("Barrick"). The sale closed on March 31, 2010. The Company received $454.3 million in gross proceeds, before transaction costs, and the transaction resulted in a gain of $36.7 million, before taxes. Additionally, as part of the agreement, Barrick assumed $20.0 million of a $40.0 million payment obligation contingent upon a production decision on the project.

Subsequent to the disposition, the Company continues to hold a 25% interest in the project and the investment is accounted for under the equity method. Refer to note 5(vii).

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ii Acquisition of Underworld Resources Inc.

On April 26, 2010, the Company acquired 81.6% of the issued and outstanding shares of Underworld Resources Inc. ("Underworld"), on a fully diluted basis, by way of a friendly take-over bid. On June 30, 2010, the Company acquired the remaining outstanding shares of Underworld it did not already own, and on July 6, 2010 the shares of Underworld were delisted. Pursuant to the acquisition approximately 6.5 million Kinross shares and approximately 0.4 million Kinross options were issued. The total transaction was valued at $126.5 million, including transaction costs. This amount was added to the cost of a previously owned investment of $3.5 million, resulting in a total cost of $130.0 million. The acquisition was accounted for as an asset acquisition.

During the second quarter of 2010, the investment in Underworld was re-classified from available for sale investments due to the acquisition of control of Underworld. As of April 26, 2010, the financial statements of Underworld are being consolidated with those of Kinross.

iii Sale of interest in Harry Winston Diamond Corporation

On July 23, 2010, the Company entered into an agreement to sell its approximate 19.9% equity interest in Harry Winston Diamond Corporation ("Harry Winston"), consisting of 15.2 million Harry Winston common shares, to a group of financial institutions, on an underwritten block trade basis for net proceeds of $185.6 million. The sale was completed on July 28, 2010 and resulted in a gain of $146.4 million.

iv Sale of interest in Diavik Diamond mine

On August 25, 2010, the Company completed the sale of its 22.5% interest in the partnership holding Harry Winston's 40% interest in the Diavik Diamond Mines ("Diavik") joint venture to Harry Winston for final net proceeds of $189.6 million. The purchase price is comprised of $50.0 million cash, approximately 7.1 million Harry Winston common shares with a value of $69.7 million based on the share price on the closing date, and a note receivable in the amount of $70.0 million maturing August 25, 2011. The note bears interest at a rate of 5% per annum and can be satisfied in cash or, subject to certain limitations, shares issued by Harry Winston to Kinross. The sale resulted in a gain of $95.5 million.

v Acquisition of the Dvoinoye deposit and the Vodorazdelnaya property

On August 27, 2010, the Company completed the acquisition of 100% of the participatory interests in Northern Gold LLC and Regionruda LLC, the owners of the Dvoinoye and Vodorazdelnaya exploration and mining licenses, both located approximately 90 km north of Kinross' Kupol operation in the Chukotka region of the Russian Far East. The purchase price of $346.8 million was comprised of $167.0 million in cash and 10.6 million newly issued Kinross shares, which are subject to a minimum hold period of four months after closing, and transaction costs of $5.9 million. This acquisition was accounted for as an asset acquisition.

vi Acquisition of B2Gold Corp's interest in Kupol exploration licenses

On August 27, 2010, the Company closed the agreement with B2Gold Corp ("B2Gold") to acquire B2Gold's right to an interest in the Kupol East and West exploration licence areas. Under the terms of a previous agreement, Kinross had undertaken to secure a 37.5% joint venture interest for B2Gold in the Kupol East and West exploration licence areas. According to the new agreement, Kinross is no longer obligated to enter into joint venture arrangements with B2Gold in respect of Kinross' 75% interest in these licence areas. The purchase price comprised: $33.0 million in cash; contingent payments based on National Instrument 43-101 qualified Proven and Probable Reserves within the licence areas at the subject properties, should such reserves be declared in future; and payments based on net smelter returns of 1.5% from any future production at the licence areas. This acquisition was accounted for as an asset acquisition.

The Kupol East and West exploration licences remain 100%-owned by the Chukotka Mining & Geological Company ("CMGC"), which also owns 100% of the Kupol mine. CMGC is owned 75% by Kinross and 25% by the State Unitary enterprise of the Chukotsky Autonomous Okrug (Chukotsnab).

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 125

vii Acquisition of Red Back Mining Inc.

On September 17, 2010 (the "acquisition date"), Kinross completed its acquisition of Red Back Mining Inc. ("Red Back") through a plan of arrangement, whereby Kinross acquired all of the issued and outstanding common shares of Red Back that it did not already own. As a result of this acquisition, the Company expanded operations into West Africa. In Ghana, the Company holds a 90% interest in the Chirano Gold Mine with the Government of Ghana having the right to the remaining 10% interest. In Mauritania, the Company holds a 100% interest in the Tasiast Mine. Total consideration for the acquisition was approximately $7,358.6 million, including the cost of the previously owned interest of $580.3 million.

Red Back shareholders received 1.778 Kinross common shares, plus 0.11 of a Kinross common share purchase warrant for each Red Back common share held. As a result of the transaction, Kinross issued 416.4 million common shares and 25.8 million common share purchase warrants. The Company also issued 8.7 million fully vested replacement options to acquire Kinross common shares to previous Red Back option holders.

As the purchase is a business combination, with Kinross being the acquirer, results of operations of Red Back have been consolidated with those of Kinross commencing on the acquisition date.

Total consideration paid of $7,358.6 million was calculated as follows:

Common shares issued (416.4 million) |  | $ | 6,549.3 |
Fair value of warrants issued (25.8 million) |  |  | 117.7 |
Fair value of options issued (8.7 million) |  |  | 69.8 |
Cost of shares previously acquired |  |  | 580.3 |
Acquisition costs |  |  | 41.5 |
Total purchase price |  | $ | 7,358.6 |

The following table sets forth a preliminary allocation of the purchase price to assets and liabilities acquired, based on preliminary estimates of fair value. Final valuations of assets and liabilities are not yet complete due to the timing of the acquisition and the inherent complexity associated with the valuations. This is a preliminary purchase price allocation and therefore subject to adjustment over the period to completion of the valuation process and analysis of resulting tax effects.

Preliminary Red Back Purchase Price Allocation |  |  |  |  |
| Cash and cash equivalents |  | $ | 742.6 |  |
| Accounts receivable and other assets |  |  | 27.0 |  |
| Inventories |  |  | 115.2 |  |
| Property, plant and equipment (including mineral interests) |  |  | 1,765.8 |  |
| Accounts payable and accrued liabilities |  |  | (103.4 | ) |
| Future income and mining tax liabilities |  |  | (311.5 | ) |
| Other long-term liabilities |  |  | (34.3 | ) |
| Non-controlling interest |  |  | (3.9 | ) |
| Goodwill |  |  | 5,161.1 |  |
| Total purchase price |  | $ | 7,358.6 |  |

viii Sale of interest in Osisko

On December 13, 2010, the Company completed the sale of its 1.8% interest in Osisko Mining Corporation ("Osisko"), consisting of approximately 6.8 million Osisko common shares, which was accounted for as an available for sale investment. The sale was completed on an underwritten block trade basis, at a gross price of CDN$14.70 per share, for net proceeds of $97.5 million. The transaction resulted in a gain of $74.1 million.

126

ix Investment in Harry Winston Diamond Corporation and Diavik Diamond mine

On March 31, 2009, Kinross completed the acquisition of 15.2 million shares of Harry Winston at a subscription price of $3.00 per share for a total subscription price of $45.6 million. Pursuant to the closing of the transaction Kinross obtained a seat on the Board of Directors of Harry Winston. Additionally, on the same date, Kinross acquired a 22.5% interest in the limited partnership that holds Harry Winston's 40% interest in the Diavik Diamond Mine, (a 9% indirect interest in the mine), for a gross subscription price of $125.1 million, inclusive of working capital adjustments which were finalized during the second quarter. The investment in Harry Winston was accounted for as an equity investment, whereas the acquisition of the partnership interest was accounted for as an acquisition of a Working Interest. Kinross incurred approximately $3 million in transaction costs on these transactions.

The Company disposed of the investments in Harry Winston and the Diavik Diamond Mine during the third quarter of 2010. Refer to note 4(iii,iv).

x Disposition of Gurupi and junior equity investments

On December 2, 2009, the Company disposed of its Gurupi property in a sale to Jaguar Mining Inc. ("Jaguar") in exchange for 3.4 million common shares of Jaguar valued at $42.5 million on the date of sale. The Company retained its ownership in the adjacent Jiboia property. At the time of sale, the net book value for the Gurupi property was $28.0 million. The Company recognized a gain on the disposition of Gurupi of $10.7 million, net of taxes of $3.3 million and transaction costs.

Additionally, during 2009 the Company disposed of all or a portion of its equity interests in several junior mining companies for proceeds of $6.7 million, resulting in a gain of $3.2 million.

xi Acquisition of Lobo-Marte

On December 16, 2008, Kinross completed the acquisition of a 40% interest in Minera Santa Rosa SCM ("Minera") from certain subsidiaries of Anglo American plc for an aggregate purchase price of $141.1 million. Minera owns 100% of the Lobo-Marte gold project located in the Maricunga district of Chile, roughly midway between the Company's Maricunga and La Coipa mines. The acquisition was accounted for as an equity investment as at December 31, 2008 and included transaction costs of $1.1 million.

On January 7, 2009, Kinross completed the 100% acquisition of Minera through the acquisition of the remaining 60% interest from Teck Cominco Limited ("Teck") for net cash of $40 million, 5.6 million shares of Kinross and a 1.75% net smelter royalty on 60% of future production, payable when the gold price is $760 per ounce or more.

As of January 7, 2009, the financial statements of Minera are being consolidated and the previously acquired 40% interest in Lobo-Marte accounted for as an equity investment as at December 31, 2008 of $141.1 million was reclassified to mineral interests.

xii Acquisition of Aurelian

Kinross acquired Aurelian Resources Inc. ("Aurelian") in 2008. On July 28, 2008, Kinross completed a purchase of 15 million Aurelian common shares pursuant to a private placement for a total subscription price of CDN$71.3 million, and concurrently mailed its offer and take-over bid circular to Aurelian shareholders. On September 30, 2008, Kinross acquired 94.29% of Aurelian's issued and outstanding common shares. Kinross immediately exercised its statutory rights under the Canada Business Corporation Act and compulsorily acquired the remaining common shares of Aurelian not deposited to the offer. Effective September 30, 2008, Aurelian became a wholly-owned subsidiary of Kinross. For each Aurelian common share, Kinross offered 0.317 of a Kinross common share, plus 0.1429 of a warrant, with each warrant entitling the holder to acquire one Kinross common share. The Kinross warrants have an exercise price of CDN$32.00 per Kinross common share and will expire in September 2013. Kinross issued 43.7 million shares, 4.1 million options and 19.7 million warrants pursuant to the transaction. Total consideration was $810 million which, net of cash acquired of $105 million, amounted to $705 million. The acquisition of Aurelian was accounted for as an asset purchase.

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 127

xiii Disposal of Julietta

Arian Resources Limited ("Arian"), a wholly-owned subsidiary of Kinross, entered into an agreement dated August 8, 2008, with Yanskaya Mining and Geological Company ("Yanskaya"), a subsidiary of Dukat Mining and Geological Company. Under the agreement, Yanskaya purchased all of the shares held by Arian in Omsukchansk Mining and Geological Company ("OMGC"). The shares represented a 90% interest in OMGC whose assets included the Julietta mine in the Russian Federation. The Julietta mine was originally purchased as part of the Bema Gold Corporation acquisition on February 27, 2007. The purchase price was $20.0 million. Arian received an additional cash payment for finished goods and supplies in transit and all of OMGC's cash was used to repay intercompany payables owing to Arian and its affiliates immediately prior to closing. In addition, there are deferred payments based on gold prices in 2009 and 2010 and deferred payments in 2011 and 2012 of $5.0 million based on specified production. The deferred payments based on the gold price have been accounted for as an embedded derivative in the financial statements (see Note 8 for additional details), whereas the deferred payments based on specified production have not been recognized due to their contingent nature. Yanskaya has further agreed to make $12.0 million in expenditures at the Julietta mine between the date of closing and January 1, 2011. The transaction closed on August 16, 2008 and resulted in a gain of $3.0 million.

xiv Disposal of Kubaka

On January 25, 2008 a wholly-owned subsidiary of the Company, Kinam Magadan Gold Corporation, completed the sale of its approximate 98.1% interest in OAO Omolon Gold Mining Company ("Omolon") to OAO Polymetal for a purchase price of $15.0 million, plus a variable royalty on future production from the Kubaka gold mine properties. The assets sold included the Kubaka gold mine and related mining licenses, located in the Magadan region in the far east of the Russian Federation. The Kubaka gold mine began commercial production in 1997 and ceased mining operations in 2005. A gain of $11.5 million was realized on this disposition.

xv Acquisition of Louisiana Land and Exploration Company Royalty

A royalty payment known as the Louisiana Land and Exploration Company Royalty ("LL&E Royalty") applies to Kinross' 50% interest in Round Mountain. The royalty rate is 3% of gross proceeds until the time that total royalty payments of $75.0 million are paid, and 1.5% thereafter. As at December 31, 2010, cumulative royalty payments total $72.5 million (December 31, 2009 - $69.1 million). On January 23, 2008, the Company purchased the LL&E royalty from ConocoPhillips. The purchase price was $26.5 million and the effective date of the purchase was January 1, 2008. On January 31, 2008, pursuant to the terms of the Round Mountain joint venture, the Company offered the opportunity to purchase 50% of the royalty, on a pro rata basis with Barrick's joint venture interest. On February 11, 2008, Barrick accepted the offer and the transaction closed on May 15, 2008 with an effective date of January 1, 2008.

xvi Hammond Reef Project Interest

Kinross and Brett Resources Inc. ("Brett") entered into a purchase and sale agreement whereby Brett agreed to purchase Kinross' 40% interest in the Hammond Reef Project located near Atikokan, Ontario. Kinross and Brett were parties to an option agreement pursuant to which Brett earned a 60% interest in the project by incurring CDN$5.0 million in expenditures and issuing 1 million common shares to Kinross. In exchange for the 40% interest in the Hammond Reef Project, Kinross received 14 million Brett shares and a 2% net smelter returns royalty on future production from the property. The transaction closed on July 31, 2008. Following completion, Kinross held 17,095,313 common shares, representing approximately 26% of Brett's issued and outstanding common shares as at the closing date. In connection with the transaction, Brett and Kinross have entered into a strategic alliance whereby Brett will spend up to CDN$2.0 million over a three-year period exploring and acquiring properties of interest in British Columbia and the Yukon Territory, in which Kinross may elect to obtain a 50% interest. The transaction resulted in a gain of $12.2 million.

xvii Ixhuatan Project Option Agreement

On October 22, 2007, the Company signed a definitive option agreement (the "Option Agreement") with a wholly owned subsidiary of Linear Gold Corp. ("Linear") to earn up to a 70% interest in Linear's Ixhuatan Project, located in Chiapas, Mexico (the "Project"). A $1.0 million transaction fee was paid to Linear upon execution of the Option Agreement. Under the terms of the Option Agreement, the Company agreed to fund $15.0 million of exploration expenditures within a 24 month period, which commenced on October 26, 2007. During 2009, the Company decided to terminate the Option Agreement, and recorded a liability of $3.4 million, representing the Company's remaining commitment to fund exploration expenditures. The amount was paid to Linear during 2010.

128

5. CONSOLIDATED FINANCIAL STATEMENT DETAILS

Consolidated Balance Sheets

i Cash, cash equivalents and short-term investments:

|  |  | December 31, 2010 |  |  | December 31, 2009 |
Cash on hand and balances with banks |  | $ | 873.3 |  | $ | 352.8 |
Short-term deposits |  |  | 593.3 |  |  | 244.6 |
Short-term investments |  |  | - |  |  | 35.0 |
|  | $ | 1,466.6 |  | $ | 632.4 |

ii Accounts receivable and other assets:

|  |  | December 31, 2010 |  |  | December 31, 2009 |
Trade receivables |  | $ | 24.3 |  | $ | 9.9 |
Taxes recoverable |  |  | 14.7 |  |  | 6.2 |
Prepaid expenses |  |  | 45.0 |  |  | 26.7 |
VAT receivable |  |  | 119.6 |  |  | 61.0 |
Note receivable (a) |  |  | 70.0 |  |  | - |
Other |  |  | 55.8 |  |  | 31.7 |
|  | $ | 329.4 |  | $ | 135.5 |

(a)
  See Note 4(iv).

iii Inventories:

|  |  | December 31, 2010 |  |  | December 31, 2009 |  |
Ore in stockpiles (a) |  | $ | 144.3 |  | $ | 120.5 |  |
Ore on leach pads (b) |  |  | 114.4 |  |  | 44.3 |  |
In-process |  |  | 39.4 |  |  | 26.1 |  |
Finished metal |  |  | 81.5 |  |  | 80.6 |  |
Materials and supplies |  |  | 460.6 |  |  | 395.1 |  |
|  |  | 840.2 |  |  | 666.6 |  |
Long-term portion of ore in stockpiles and ore on leach pads (a),(b) |  |  | (103.2 | ) |  | (112.2 | ) |
|  | $ | 737.0 |  | $ | 554.4 |  |

(a)
  Ore in stockpiles includes low-grade material not scheduled for processing within the next twelve months and is included in deferred charges and other long-term assets on the consolidated balance sheets. See deferred charges and other long-term assets, Note 5 (viii).
(b)
  Ore on leach pads relates to the Company's Maricunga, Fort Knox, Tasiast and 50% owned Round Mountain mines. Based on current mine plans, the Company expects to place the last tonne of ore on its leach pads at Maricunga in 2026, Fort Knox in 2021, Tasiast in 2026, and Round Mountain in 2017. Ore on leach pads includes material not scheduled for processing within the next twelve months and is included in deferred charges and other long-term assets on the consolidated balance sheets. See deferred charges and other long-term assets, Note 5 (viii).

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 129

iv Property, plant and equipment:

|  |  | December 31, 2010 |  |  | December 31, 2009 |
|  |  | Cost (b) |  |  | Accumulated Depreciation |  |  | Net Book Value |  |  | Cost (b) |  |  | Accumulated Depreciation |  |  | Net Book Value |
Property, plant and equipment (a),(c) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Producing properties |  | $ | 4,143.4 |  | $ | (1,373.1 | ) | $ | 2,770.3 |  | $ | 3,232.3 |  | $ | (1,023.6 | ) | $ | 2,208.7 |
Mineral Interests |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Producing properties (c) |  | $ | 2,714.0 |  | $ | (543.8 | ) | $ | 2,170.2 |  | $ | 1,278.8 |  | $ | (389.6 | ) | $ | 889.2 |
Development properties (d) |  |  | 1,756.0 |  |  | - |  |  | 1,756.0 |  |  | 801.2 |  |  | - |  |  | 801.2 |
Exploration properties (d) |  |  | 215.0 |  |  | - |  |  | 215.0 |  |  | 1,090.8 |  |  | - |  |  | 1,090.8 |
|  | $ | 4,685.0 |  | $ | (543.8 | ) | $ | 4,141.2 |  | $ | 3,170.8 |  | $ | (389.6 | ) | $ | 2,781.2 |
Total property, plant and equipment |  | $ | 8,828.4 |  | $ | (1,916.9 | ) | $ | 6,911.5 |  | $ | 6,403.1 |  | $ | (1,413.2 | ) | $ | 4,989.9 |

(a)
  Capitalized interest included within property, plant and equipment was $13.2 million and $8.6 million during the years ended December 31, 2010 and 2009, respectively. Interest capitalized during both periods related to capital expenditures at Fort Knox and Round Mountain.
(b)
  Cost includes previously recorded adjustments for the impairment in the carrying value of property, plant and equipment.
(c)
  Included in producing properties is $687.5 million (2009 - $335.2 million) related to assets that are not being depreciated, including: the construction of expansion projects, assets paid for but not yet received, and other assets that were in various stages of being readied for use.
(d)
  The amount allocated to development and exploration properties relates to assets that are not being depreciated.

v Capitalized stripping:

|  |  | December 31, 2010 |  |  | December 31, 2009 |  |
|  |  | Round Mountain |  |  | Fort Knox |  |  | Maricunga |  |  | Chirano |  |  | Total |  |  | Round Mountain |  |  | Fort Knox |  |  | Total |  |
Balance, at January 1 |  | $ | 67.9 |  | $ | 50.0 |  | $ | - |  | $ | - |  | $ | 117.9 |  | $ | 58.5 |  | $ | 29.6 |  | $ | 88.1 |  |
Additions |  |  | 18.8 |  |  | 34.0 |  |  | 5.8 |  |  | 2.4 |  |  | 61.0 |  |  | 20.4 |  |  | 32.6 |  |  | 53.0 |  |
Amortization (a) |  |  | (8.5 | ) |  | (25.1 | ) |  | - |  |  | - |  |  | (33.6 | ) |  | (11.0 | ) |  | (12.2 | ) |  | (23.2 | ) |
Balance, at December 31 |  | $ | 78.2 |  | $ | 58.9 |  | $ | 5.8 |  | $ | 2.4 |  | $ | 145.3 |  | $ | 67.9 |  | $ | 50.0 |  | $ | 117.9 |  |

(a)
  Amortization of capitalized stripping costs uses the UOP depreciation basis based on reserves that have not yet been produced that will benefit directly from the stripping activity.

130

vi Goodwill:

The Goodwill allocated to the Company's reporting units and included in the respective operating segment assets is shown in the table below:

|  |  | December 31, 2008 |  |  | Allocation and Adjustment (a) |  |  | Impairment (c) |  |  | December 31, 2009 |  |  | Additions/ (reductions) |  |  | Impairment (c) |  |  | December 31, 2010 |
Operating segments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Round Mountain |  | $ | 58.7 |  | $ | - |  | $ | - |  | $ | 58.7 |  | $ | - |  | $ | - |  | $ | 58.7 |
| Paracatu |  |  | 65.5 |  |  | - |  |  | - |  |  | 65.5 |  |  | - |  |  | - |  |  | 65.5 |
| La Coipa |  |  | 124.4 |  |  | - |  |  | - |  |  | 124.4 |  |  | - |  |  | - |  |  | 124.4 |
| Kettle River-Buckhorn |  |  | 20.9 |  |  | - |  |  | - |  |  | 20.9 |  |  | - |  |  | - |  |  | 20.9 |
| Kupol |  |  | 158.8 |  |  | - |  |  | - |  |  | 158.8 |  |  | - |  |  | - |  |  | 158.8 |
| Maricunga |  |  | 175.9 |  |  | - |  |  | - |  |  | 175.9 |  |  | - |  |  | - |  |  | 175.9 |
| Crixas |  |  | 38.0 |  |  | - |  |  | - |  |  | 38.0 |  |  | - |  |  | - |  |  | 38.0 |
| Red Back acquisition (d) |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 5,161.1 |  |  | - |  |  | 5,161.1 |
| Other operations (a)(b) |  |  | 539.7 |  |  | (2.0 | ) |  | - |  |  | 537.7 |  |  | (361.0 | ) |  | - |  |  | 176.7 |
Total |  | $ | 1,181.9 |  | $ | (2.0 | ) | $ | - |  | $ | 1,179.9 |  | $ | 4,800.1 |  | $ | - |  | $ | 5,980.0 |

(a)
  At December 31, 2010, other operations includes goodwill allocated to Quebrada Seca of $168.8 million and Jiboia of $7.9 million. In 2009, goodwill was reduced by $2.0 million as a result of the disposition of Gurupi.
(b)
  The Company disposed of one-half of its interest in the Cerro Casale project on March 31, 2010 (see Note 4(i)). As a result, goodwill was reduced by $361.0 million which represents the entire goodwill previously allocated to Cerro Casale. As the Company continues to retain a 25% interest in the project, one-half of the goodwill balance previously allocated, amounting to $180.5 million, now forms part of the carrying value of the investment in the Cerro Casale project.
(c)
  No impairment charges were recognized in 2009 and 2010.
(d)
  On September 17, 2010, the Company acquired all of the outstanding common shares of Red Back that it did not previously own (see Note 4 (vii)). Goodwill of $5,161.1 million was recorded on the transaction based on the preliminary purchase price allocation. Goodwill will be allocated among the Red Back properties once the purchase price allocation is finalized.

vii Long-term investments:

Long-term investments of $629.9 million (2009 - $292.2 million) include $426.1 million of investments accounted for using the equity method (2009 - $53.2 million), $203.8 million of investments classified as available-for-sale (2009 - $129.6 million), for which associated unrealized gains or losses are recorded in OCI, and $nil accounted for as a Working Interest (2009 - $109.4 million).

|  |  | December 31, 2010 |  |  | December 31, 2009 |
Available for sale investments (a) |  | $ | 203.8 |  | $ | 129.6 |
Investment in shares carried on an equity basis |  |  | 426.1 |  |  | 53.2 |
Working Interests (b) |  |  | - |  |  | 109.4 |
Long-term investments |  | $ | 629.9 |  | $ | 292.2 |

(a)
  During the second quarter of 2010, the investment in Underworld was re-classified from available for sale investments due to the acquisition of control of Underworld. See Note 4(ii).
(b)
  On August 25, 2010, the Company disposed of its Working Interest in Diavik. See Note 4(iv).

|  |  | December 31, 2010 |  |  | December 31, 2009 |  |
Available for sale investments |  |  | Fair Value |  |  | Gains (losses) in AOCI (a) |  |  | Fair Value |  |  | Gains (losses) in AOCI (a) |  |
Securities in an unrealized gain position |  | $ | 203.3 |  | $ | 88.5 |  | $ | 86.9 |  | $ | 51.4 |  |
Securities in an unrealized loss position |  |  | 0.5 |  |  | (0.8 | ) |  | 42.7 |  |  | (4.9 | ) |
|  | $ | 203.8 |  | $ | 87.7 |  | $ | 129.6 |  | $ | 46.5 |  |

(a)
  "AOCI" refers to Accumulated other comprehensive income (loss).

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 131

|  |  | December 31, 2010 |
Investments in shares and working interests carried on an equity basis |  |  | Carrying Value |  |  | Market Value |  | % Ownership |
Cerro Casale (a) |  | $ | 426.1 |  | $ | - |  | 25.0% |

|  |  | December 31, 2009 |
|  |  | Carrying Value |  |  | Market Value |  | % Ownership |
Victoria Gold Corporation (b) |  | $ | 11.9 |  | $ | 28.2 |  | 22.3% |
Harry Winston Diamond Corporation (c) |  |  | 41.3 |  |  | 146.0 |  | 19.9% |
|  |  | 53.2 |  | $ | 174.2 |  |  |
Working Interest in Diavik Diamond mine (d) |  |  | 109.4 |  |  |  |  |  |
|  | $ | 162.6 |  |  |  |  |  |

(a)
  On March 31, 2010, the Company sold one-half of its interest in Cerro Casale. Subsequent to the disposition, the Company continues to hold a 25% interest in the project and the investment is accounted for under the equity method. See Note 4(i). Cerro Casale is not publicly traded, therefore, its external market value is not available.
(b)
  During the second quarter of 2010, the Company ceased accounting for its investment in Victoria Gold Corporation on an equity basis as the Company no longer had the ability to exert significant influence.
(c)
  On July 28, 2010, the Company sold its investment in Harry Winston. See Note 4(iii).
(d)
  On August 25, 2010, the Company disposed of its Working Interest in Diavik. See Note 4(iv).

viii Deferred charges and other long-term assets:

|  |  | December 31, 2010 |  |  | December 31, 2009 |
Long-term ore in stockpiles and on leach pads (a) |  | $ | 103.2 |  | $ | 112.2 |
Deferred charges, net of amortization |  |  | 0.9 |  |  | 1.3 |
Long-term receivables |  |  | 52.7 |  |  | 42.8 |
Advances on the purchase of capital equipment |  |  | 23.2 |  |  | - |
Other |  |  | 24.6 |  |  | 2.1 |
|  | $ | 204.6 |  | $ | 158.4 |

(a)
  Ore in stockpiles and on leach pads represent low-grade material not scheduled for processing within the next twelve months. Ore in stockpiles are at the Company's Fort Knox, Kupol, Paracatu and Round Mountain mines. Ore on leach pads are at the Fort Knox and Round Mountain mines.

ix Accounts payable and accrued liabilities:

|  |  | December 31, 2010 |  |  | December 31, 2009 |
Trade payables |  | $ | 153.3 |  | $ | 92.5 |
Accrued liabilities |  |  | 212.6 |  |  | 150.9 |
Employee related accrued liabilities |  |  | 54.5 |  |  | 45.1 |
Taxes payable |  |  | 76.2 |  |  | 24.4 |
|  | $ | 496.6 |  | $ | 312.9 |

x Other long-term liabilities:

|  |  |  |  | December 31, 2010 |  |  | December 31, 2009 |
Reclamation and remediation obligations |  | Note 10 |  | $ | 331.5 |  | $ | 252.7 |
Unrealized fair value of derivative liabilities |  | Note 8 |  |  | 58.1 |  |  | 212.8 |
Other long-term liabilities |  |  |  |  | 142.8 |  |  | 77.5 |
|  |  |  | $ | 532.4 |  | $ | 543.0 |

132

Consolidated Statements of Operations

xi Other income (expense) - net:

|  |  |  |  | Year ended December 31, |  |
|  |  |  |  | 2010 |  |  | 2009 |  |  | 2008 |  |
Gain (loss) on sale of assets and investments - net |  |  |  | $ | 348.5 |  | $ | 16.2 |  | $ | 30.2 |  |
Impairment of investments (a) |  |  |  |  | - |  |  | - |  |  | (83.9 | ) |
Litigation reserve adjustment (b) |  |  |  |  | - |  |  | 18.5 |  |  | (19.1 | ) |
Interest income and other |  |  |  |  | 8.3 |  |  | 9.2 |  |  | 21.7 |  |
Interest expense (c) |  | Note 9 |  |  | (31.1 | ) |  | (19.1 | ) |  | (74.6 | ) |
Foreign exchange gains (losses) |  |  |  |  | (12.7 | ) |  | (91.0 | ) |  | 41.4 |  |
Net non-hedge derivative gains (losses) |  |  |  |  | (17.6 | ) |  | 2.9 |  |  | 41.6 |  |
Working Interest in Diavik Diamond mine |  |  |  |  | (2.4 | ) |  | (11.0 | ) |  | - |  |
|  |  |  | $ | 293.0 |  | $ | (74.3 | ) | $ | (42.7 | ) |

(a)
  During 2008, the Company wrote-down several available-for-sale and equity investments. The equity investments written down were acquired as part of the Bema acquisition and primarily related to Consolidated Puma Minerals, Pamodzi Gold and Victoria Gold as it was determined that the decline in fair value was other than temporary.
(b)
  See Note 18 for additional details.
(c)
  During 2010, $13.2 million (2009: $8.6 million, 2008: $30.6 million) of interest was capitalized to property, plant and equipment, respectively. See Note 5(iv).

xii Gain (loss) on sale of assets and investments - net:

|  |  | Year ended December 31, |
|  |  | 2010 |  |  | 2009 |  |  | 2008 |
Assets: |  |  |  |  |  |  |  |  |  |
| Gurupi |  | $ | - |  | $ | 14.0 |  | $ | - |
| Hammond Reef project |  |  | - |  |  | - |  |  | 12.2 |
| Julietta mine |  |  | - |  |  | - |  |  | 3.0 |
| Kubaka mine |  |  | - |  |  | - |  |  | 11.5 |
| Interest in Cerro Casale (a) |  |  | 36.7 |  |  | - |  |  | - |
Investments: |  |  |  |  |  |  |  |  |  |
| Harry Winston Diamond Corporation (b) |  |  | 146.4 |  |  | - |  |  | - |
| Working Interest in Diavik Diamond mine (c) |  |  | 95.5 |  |  | - |  |  | - |
| Osisko Mining (d) |  |  | 74.1 |  |  | - |  |  | - |
Other assets and investments |  |  | (4.2 | ) |  | 2.2 |  |  | 3.5 |
|  | $ | 348.5 |  | $ | 16.2 |  | $ | 30.2 |

(a)
  On March 31, 2010, the Company sold one-half of its interest in Cerro Casale. See Note 4(i).
(b)
  On July 28, 2010, the Company sold its investment in Harry Winston. See Note 4(iii).
(c)
  On August 25, 2010, the Company disposed of its Working Interest in Diavik. See Note 4(iv).
(d)
  On December 13, 2010, the Company sold its 1.8% interest in Osisko. See Note 4(viii).

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 133

xiii Equity income (losses) in associated companies - net:

|  |  | Year ended December 31, |  |
|  |  | 2010 |  |  | 2009 |  |  | 2008 |  |
Victoria Gold Corporation (a) |  | $ | (2.0 | ) | $ | (2.7 | ) | $ | (3.0 | ) |
Harry Winston Diamond Corporation (b) |  |  | (2.1 | ) |  | (5.1 | ) |  | - |  |
Cerro Casale (c) |  |  | 0.2 |  |  | - |  |  | - |  |
Pamodzi Gold Limited |  |  | - |  |  | - |  |  | (4.7 | ) |
Consolidated Puma Minerals Corporation |  |  | - |  |  | - |  |  | (1.1 | ) |
Rolling Rock Resources Corporation |  |  | - |  |  | - |  |  | 0.1 |  |
Brett Resources Inc. |  |  | - |  |  | (0.8 | ) |  | - |  |
|  | $ | (3.9 | ) | $ | (8.6 | ) | $ | (8.7 | ) |

(a)
  During the second quarter of 2010, the Company ceased accounting for its investment in Victoria Gold Corporation on an equity basis as the Company no longer had the ability to exert significant influence.
(b)
  On July 28, 2010, the Company sold its investment in Harry Winston. See Note 4(iii).
(c)
  On March 31, 2010, the Company sold one-half of its interest in Cerro Casale. Subsequent to the disposition, the Company continues to hold a 25% interest in the project and the investment is accounted for under the equity method. See Note 4(i).

Supplemental cash flow information

xiv Interest and income taxes paid:

|  |  | Year ended December 31, |
|  |  | 2010 |  |  | 2009 |  |  | 2008 |
Interest |  | $ | 15.7 |  | $ | 30.2 |  | $ | 49.7 |
Income taxes |  | $ | 287.3 |  | $ | 166.3 |  | $ | 75.3 |

xv Non-controlling interest:

|  |  | Kupol (a) |  |  | Chirano (b) |  |  | Total |  |
Balance at January 1, 2008 |  | $ | 14.0 |  | $ | - |  | $ | 14.0 |  |
| Share of net earnings |  |  | 42.3 |  |  | - |  |  | 42.3 |  |
Balance at December 31, 2008 |  | $ | 56.3 |  | $ | - |  | $ | 56.3 |  |
| Share of net earnings |  |  | 102.3 |  |  | - |  |  | 102.3 |  |
| Dividends paid |  |  | (25.8 | ) |  | - |  |  | (25.8 | ) |
| Other increase in non-controlling interest |  |  | 0.1 |  |  | - |  |  | 0.1 |  |
Balance at December 31, 2009 |  | $ | 132.9 |  | $ | - |  | $ | 132.9 |  |
| Addition upon acquisition |  |  | - |  |  | 3.9 |  |  | 3.9 |  |
| Share of net earnings |  |  | 106.3 |  |  | 3.0 |  |  | 109.3 |  |
| Dividends paid |  |  | (47.7 | ) |  | - |  |  | (47.7 | ) |
Balance at December 31, 2010 |  | $ | 191.5 |  | $ | 6.9 |  | $ | 198.4 |  |

(a)
  Represents non-controlling interest in Chukotka Mining and Geological Company.
(b)
  Represents non-controlling interest in Chirano Gold Mines Limited.

134

6. ACCUMULATED OTHER COMPREHENSIVE LOSS

|  |  |  |  | December 31, 2010 |  |  | December 31, 2009 |  |
Accumulated other comprehensive income (loss): |  |  |  |  |  |  |  |  |  |
| Investments (a),(b) |  | Note 5 |  | $ | 87.7 |  | $ | 43.8 |  |
| Financial derivatives (c),(d) |  | Note 8 |  |  | (250.4 | ) |  | (263.9 | ) |
Accumulated other comprehensive loss, end of period |  |  |  | $ | (162.7 | ) | $ | (220.1 | ) |

(a)
  Includes cumulative translation adjustments of $(1.2) million (2009 - $1.7 million).
(b)
  Net of tax of $8.0 million (2009 - $4.0 million).
(c)
  Net of tax of $9.9 million (2009 - $9.6 million).
(d)
  As a result of adopting EIC-173 (Note 3) on January 1, 2009, an adjustment of $1.6 million was made to Accumulated other comprehensive loss.

7. JOINT VENTURE INTERESTS

The Company conducts a portion of its business through joint ventures where the venturers are bound by contractual arrangements establishing joint control over the ventures. The Company records its proportionate share of assets, liabilities, revenue and operating costs of the joint ventures.

As at December 31, 2010, the Company had a joint venture interest in Round Mountain and Crixàs (see Note 15 for additional details).

The following tables contain selected financial information on Kinross' consolidated share of participation for each of its participating operating joint ventures for the years ended December 31, 2010, 2009, and 2008.

Operating Joint Venture interests - 2010 |  |  | Round Mountain |  |  | Crixás |  |  | Total |  |
|  |  | (i) |  |  | (ii) |  |  |  |  |
Metal sales |  | $ | 227.5 |  | $ | 94.7 |  | $ | 322.2 |  |
Cost of sales |  |  | 121.3 |  |  | 37.5 |  |  | 158.8 |  |
Accretion and reclamation expense |  |  | 1.4 |  |  | 0.2 |  |  | 1.6 |  |
Depreciation, depletion and amortization |  |  | 19.0 |  |  | 17.1 |  |  | 36.1 |  |
Exploration and business development |  |  | 1.4 |  |  | 0.9 |  |  | 2.3 |  |
Other operating costs |  |  | (0.3 | ) |  | 0.4 |  |  | 0.1 |  |
Operating earnings |  | $ | 84.7 |  | $ | 38.6 |  | $ | 123.3 |  |
Current assets |  | $ | 38.0 |  | $ | 29.8 |  | $ | 67.8 |  |
Property, plant and equipment |  |  | 164.4 |  |  | 74.6 |  |  | 239.0 |  |
Goodwill |  |  | 58.7 |  |  | 38.0 |  |  | 96.7 |  |
Deferred charges and other long-term assets |  |  | 11.3 |  |  | 2.6 |  |  | 13.9 |  |
|  | $ | 272.4 |  | $ | 145.0 |  | $ | 417.4 |  |
Current liabilities |  |  | 21.9 |  |  | 24.5 |  |  | 46.4 |  |
Long-term liabilities |  |  | 24.7 |  |  | 22.0 |  |  | 46.7 |  |
|  |  | 46.6 |  |  | 46.5 |  |  | 93.1 |  |
Net investment in joint ventures |  | $ | 225.8 |  | $ | 98.5 |  | $ | 324.3 |  |
Cash flow provided from (used in): |  |  |  |  |  |  |  |  |  |  |
Operating activities |  | $ | 107.3 |  | $ | 44.7 |  | $ | 152.0 |  |
Investing activities |  | $ | (32.6 | ) | $ | (24.5 | ) | $ | (57.1 | ) |
Financing activities |  | $ | (73.8 | ) | $ | (22.4 | ) | $ | (96.2 | ) |

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 135

Operating Joint Venture interests - 2009 |  |  | Round Mountain |  |  | Crixás |  |  | Total |  |
|  |  | (i) |  |  | (ii) |  |  |  |  |
Metal sales |  | $ | 210.0 |  | $ | 73.6 |  | $ | 283.6 |  |
Cost of sales |  |  | 111.4 |  |  | 31.0 |  |  | 142.4 |  |
Accretion and reclamation expense |  |  | 1.6 |  |  | 0.1 |  |  | 1.7 |  |
Depreciation, depletion and amortization |  |  | 12.1 |  |  | 9.7 |  |  | 21.8 |  |
Exploration and business development |  |  | 0.4 |  |  | 0.7 |  |  | 1.1 |  |
Other operating costs |  |  | 0.4 |  |  | 6.2 |  |  | 6.6 |  |
Operating earnings |  | $ | 84.1 |  | $ | 25.9 |  | $ | 110.0 |  |
Current assets |  | $ | 31.3 |  | $ | 27.8 |  |  | 59.1 |  |
Property, plant and equipment |  |  | 146.7 |  |  | 66.8 |  |  | 213.5 |  |
Goodwill |  |  | 58.7 |  |  | 38.0 |  |  | 96.7 |  |
Deferred charges and other long-term assets |  |  | 11.4 |  |  | 2.2 |  |  | 13.6 |  |
|  | $ | 248.1 |  | $ | 134.8 |  | $ | 382.9 |  |
Current liabilities |  |  | 15.3 |  |  | 17.3 |  |  | 32.6 |  |
Long-term liabilities |  |  | 19.1 |  |  | 24.0 |  |  | 43.1 |  |
|  |  | 34.4 |  |  | 41.3 |  |  | 75.7 |  |
Net investment in joint ventures |  | $ | 213.7 |  | $ | 93.5 |  | $ | 307.2 |  |
Cash flow provided from (used in): |  |  |  |  |  |  |  |  |  |  |
Operating activities |  | $ | 92.7 |  | $ | 30.0 |  | $ | 122.7 |  |
Investing activities |  | $ | (32.9 | ) | $ | (25.1 | ) | $ | (58.0 | ) |
Financing activities |  | $ | (57.6 | ) | $ | (8.3 | ) | $ | (65.9 | ) |

136

Operating Joint Venture interests - 2008 |  |  | Round Mountain |  |  | Crixás |  |  | Total |  |
|  |  | (i) |  |  | (ii) |  |  |  |  |
Metal sales |  | $ | 213.7 |  | $ | 75.3 |  | $ | 289.0 |  |
Cost of sales |  |  | 112.9 |  |  | 26.2 |  |  | 139.1 |  |
Accretion and reclamation expense |  |  | 1.1 |  |  | 0.4 |  |  | 1.5 |  |
Depreciation, depletion and amortization |  |  | 22.2 |  |  | 10.7 |  |  | 32.9 |  |
Exploration and business development |  |  | 0.7 |  |  | 2.1 |  |  | 2.8 |  |
Other operating costs |  |  | - |  |  | 0.9 |  |  | 0.9 |  |
Operating earnings |  | $ | 76.8 |  | $ | 35.0 |  | $ | 111.8 |  |
Current assets |  | $ | 26.4 |  | $ | 31.4 |  | $ | 57.8 |  |
Property, plant and equipment |  |  | 131.7 |  |  | 50.1 |  |  | 181.8 |  |
Goodwill |  |  | 58.7 |  |  | 38.0 |  |  | 96.7 |  |
Deferred charges and other long-term assets |  |  | 11.4 |  |  | 0.9 |  |  | 12.3 |  |
|  | $ | 228.2 |  | $ | 120.4 |  | $ | 348.6 |  |
Current liabilities |  |  | 19.6 |  |  | 14.1 |  |  | 33.7 |  |
Long-term liabilities |  |  | 22.5 |  |  | 15.3 |  |  | 37.8 |  |
|  |  | 42.1 |  |  | 29.4 |  |  | 71.5 |  |
Net investment in joint ventures |  | $ | 186.1 |  | $ | 91.0 |  | $ | 277.1 |  |
Cash flow provided from (used in): |  |  |  |  |  |  |  |  |  |  |
Operating activities |  | $ | 95.7 |  | $ | 34.3 |  | $ | 130.0 |  |
Investing activities |  | $ | (77.5 | ) | $ | (19.6 | ) | $ | (97.1 | ) |
Financing activities |  | $ | - |  | $ | 5.3 |  | $ | 5.3 |  |

i Round Mountain

The Company owns a 50% interest in the Smoky Valley Common Operation joint venture, which owns the Round Mountain mine, located in Nye County, Nevada, U.S.A. Under the joint venture agreement between the Company and Barrick, the Company is the operator.

The Management Committee of the joint venture represents the joint venture partners, authorizes annual programs and budgets and approves major transactions prior to execution by site management. The joint venture owners are entitled to their pro-rata share of production and are obliged to make their pro-rata share of contributions as requested.

ii. Crixás

The Company owns a 50% interest in Mineracao Serra Grande, S.A. ("MSG"), which owns the Crixás mine, located in central Brazil. Under the joint venture agreement, a wholly owned subsidiary of AngloGold Ashanti Limited is the operator.

The Board of Directors of MSG approves annual programs and budgets, and authorizes major transactions prior to execution by site management. The joint venture participants are entitled to their pro-rata share of profits in the form of distributions and are obliged to make their pro-rata share of contributions if required.

8. FINANCIAL INSTRUMENTS

The Company manages its exposure to changes in currency exchange rates, energy and interest rates by periodically entering into derivative financial instrument contracts in accordance with the formal risk management policy approved by the Company's Board of Directors. The Company has gold and silver derivative instruments acquired with the Bema acquisition,

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 137

primarily related to Kupol financing requirements. All of the Company's hedges are cash flow hedges. The Company applies hedge accounting whenever hedging relationships exist and have been documented.

Fair values of financial instruments

Carrying values for primary financial instruments, including cash and cash equivalents, short-term investments and other accounts receivable, accounts payable and accrued liabilities, approximate fair values due to their short-term maturities.

Fair value estimates for derivative contracts are based on quoted market prices for comparable contracts and represent the amount the Company would have received from, or paid to, a counterparty to unwind the contract at the market rates in effect at the balance sheet date.

|  |  | December 31, 2010 |  |  | December 31, 2009 |  |
|  |  | Asset/ (Liability) Fair Value (a) |  |  | AOCI (e) |  |  | Asset/ (Liability) Fair Value (a) |  |  | AOCI (e) |  |
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Interest rate swap |  | $ | (4.4 | ) | $ | (0.3 | ) | $ | (8.3 | ) | $ | (6.7 | ) |
|  |  | (4.4 | ) |  | (0.3 | ) |  | (8.3 | ) |  | (6.7 | ) |
Currency contracts |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Foreign currency forward contracts (b) |  |  | 55.0 |  |  | 39.9 |  |  | 38.1 |  |  | 27.2 |  |
|  |  | 55.0 |  |  | 39.9 |  |  | 38.1 |  |  | 27.2 |  |
Commodity contracts |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Gold and silver forward contracts (c) |  |  | (333.7 | ) |  | (291.3 | ) |  | (332.8 | ) |  | (285.3 | ) |
| Gold contract related to Julietta sale |  |  | - |  |  | - |  |  | 4.3 |  |  | - |  |
| Energy forward contract (d) |  |  | 1.7 |  |  | 1.3 |  |  | 1.3 |  |  | 0.9 |  |
Other contracts |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Total return swap |  |  | - |  |  | - |  |  | (0.2 | ) |  | - |  |
|  |  | (332.0 | ) |  | (290.0 | ) |  | (327.4 | ) |  | (284.4 | ) |
Total all contracts |  | $ | (281.4 | ) | $ | (250.4 | ) | $ | (297.6 | ) | $ | (263.9 | ) |

(a)
  Consists of unrealized fair value of derivative assets - current - $133.4 million (December 31, 2009 - $44.3 million), unrealized fair value of derivative assets - long-term - $2.6 million (December 31, 2009 - $1.9 million), current portion of unrealized fair value of derivative liabilities - $359.3 million (December 31, 2009 - $131.0 million), and unrealized fair value of derivative liabilities long-term - $58.1 million (December 31, 2009 - $212.8 million).
(b)
  The amount of $38.7 million of the total amount recorded in AOCI will be reclassified to net earnings within the next 12 months as a result of settling the contracts.
(c)
  The amount of $240.5 million of the total amount recorded in AOCI will be reclassified to net earnings within the next 12 months as a result of settling the contracts.
(d)
  The entire amount recorded in AOCI will be reclassified to net earnings within the next 12 months as a result of settling the contracts.
(e)
  AOCI refers to accumulated other comprehensive income (loss).

The fair value hierarchy established by Section 3862 establishes three levels to classify the inputs to valuation techniques used to measure fair value and is harmonized with disclosure requirements included in ASC Subtopic 820-10 on financial instruments under US GAAP. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (for example, interest rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value currency and commodity contracts and volatility measurements used to value option contracts), or inputs that are derived principally from or corroborated by observable market data or other means. Level 3 inputs are unobservable (supported by little or no market activity). The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.

138

Assets (liabilities) measured at fair value on a recurring basis as at December 31, 2010 include:

|  |  | Level One |  |  | Level Two |  |  | Level Three |  |  | Aggregate Fair Value |  |
Available-for-sale securities |  | $ | 203.8 |  | $ | - |  | $ | - |  | $ | 203.8 |  |
Derivative instruments |  |  | - |  |  | (281.4 | ) |  | - |  |  | (281.4 | ) |
|  | $ | 203.8 |  | $ | (281.4 | ) | $ | - |  | $ | (77.6 | ) |

The valuation techniques that are used to measure fair value are as follows:

Available-for-sale securities:

The fair value of available-for-sale securities is determined based on a market approach reflecting the closing price of each particular security at the balance sheet date. The closing price is a quoted market price obtained from the exchange that is the principal active market for the particular security, and therefore available-for-sale securities are classified within Level 1 of the fair value hierarchy established by Section 3862.

Derivative instruments:

The fair value of derivative instruments is based on quoted market prices for comparable contracts and represent the amount the Company would have received from, or paid to, a counterparty to unwind the contract at the market rates in effect at the balance sheet dates and therefore derivative instruments are classified within Level 2 of the fair value hierarchy established by Section 3862.

Gold and silver price risk management

The Company's policy is to not hedge metal sales. However in certain 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. As a result of the acquisition of Bema in February 2007, the Company assumed gold and silver forward sales contracts, call options, and put options, primarily due to requirements related to the Kupol project financing.

During 2010, the Company entered into gold forward contracts to purchase 394,885 ounces of gold at an average rate of $1,181.17 per ounce. Contracts for 91,250 oz of gold matured in 2010, 265,940 ounces mature in 2011, with the remainder of 37,695 ounces maturing in 2012. The purpose of these derivatives is to offset a portion of the above noted derivatives which were acquired as a result of the Bema acquisition in 2007. Commensurate with the engagement of these derivatives, the Company de-designated the hedging relationships and ceased hedge accounting for the maturities.

In 2009, the Company purchased silver put contracts for 3,495,000 ounces of silver at an average cost of $13.00 per ounce on anticipated silver production at La Coipa. The Company has also entered into sold silver call contracts for 3,495,000 ounces at an average cost of $17.20 per ounce. Contracts representing 689,000 ounces of silver matured in 2010, with the remaining 2,806,000 ounces maturing in 2011.

The Company's commodity price risk associated with financial instruments related to gold and silver primarily relates to changes in fair value of existing gold and silver contracts.

The following represents the financial instruments' effect on pre-tax earnings and OCI before tax due to a 10% change in gold and silver prices, based on contracts held at December 31, 2010 at December 31, 2010 prices with all other variables unchanged.

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 139

The sensitivity of the Company's financial instruments to commodity price changes is comprised of the commodity contracts described in this note:

|  |  | Price on Dec. 31, 2010 |  | Change |  |  | Effect of gold and silver contracts on pre-tax earnings, gain (loss) |  |  | Effect of gold and silver contracts on OCI before tax, gain (loss) |  |
Gold |  | $ | 1,410.25 |  | +10% |  | $ | (0.7 | ) | $ | (12.6 | ) |
Gold |  | $ | 1,410.25 |  | - 10% |  | $ | 0.5 |  | $ | 12.6 |  |
Silver |  | $ | 30.63 |  | +10% |  | $ | (0.1 | ) | $ | (16.5 | ) |
Silver |  | $ | 30.63 |  | - 10% |  | $ | 0.1 |  | $ | 16.5 |  |

Gold and silver

Under the terms of the Kupol project loan facilities, the Company was required to maintain gold and silver hedge contracts over the life of the loans in order to cover a portion of the mine's future operating and debt service costs. As a result, and as part of the acquisition of Bema in February 2007, the Company assumed gold and silver forward and option contracts related to the Kupol project as well as contracts relating to Julietta and Maricunga.

140

At December 31, 2010, the following derivative contracts were outstanding:

|  | 2011 |  | 2012 |  | Total |
Metals |  |  |  |  |  |  |
| Gold forward sell contracts (ounces) |  | 319,660 |  | 74,075 |  | 393,735 |
| Average price |  | 621.24 |  | 674.44 |  | 631.45 |
| Gold forward buy contracts (ounces) |  | 265,940 |  | 37,695 |  | 303,635 |
| Average price |  | 1,169.24 |  | 1,399.85 |  | 1,197.87 |
| Silver forward sell contracts (ounces 000's) |  | 3,600 |  | - |  | 3,600 |
| Average price |  | 10.71 |  | - |  | 10.71 |
| Purchased silver put contracts (ounces 000's) |  | 2,806 |  | - |  | 2,806 |
| Average price |  | 13.00 |  | - |  | 13.00 |
| Sold silver collar contracts (ounces 000's) |  | 2,806 |  | - |  | 2,806 |
| Average price |  | 17.29 |  | - |  | 17.29 |
Foreign currency |  |  |  |  |  |  |
| Brazil reias forward buy contracts |  |  |  |  |  |  |
| (in millions of U.S. dollars) |  | 350.0 |  | 56.0 |  | 406.0 |
| Average price |  | 1.91 |  | 2.00 |  | 1.93 |
| Chilean pesos forward buy contracts |  |  |  |  |  |  |
| (in millions of U.S. dollars) |  | 172.0 |  | - |  | 172.0 |
| Average price |  | 511.22 |  | - |  | 511.22 |
| Russian roubles forward buy contracts |  |  |  |  |  |  |
| (in millions of U.S. dollars) |  | 97.0 |  | 48.0 |  | 145.0 |
| Average price |  | 32.00 |  | 33.10 |  | 32.36 |
| Canadian dollar forward buy contracts |  |  |  |  |  |  |
| (in millions of U.S. dollars) |  | 84.0 |  | - |  | 84.0 |
| Average price |  | 1.05 |  | - |  | 1.05 |
| Euro forward buy contracts |  |  |  |  |  |  |
| (in millions of U.S. dollars) |  | 8.7 |  | - |  | 8.7 |
| Average price |  | 0.78 |  | - |  | 0.78 |
Energy |  |  |  |  |  |  |
| Oil forward buy contracts (barrels) |  | 120,000 |  | - |  | 120,000 |
| Average price |  | 79.90 |  | - |  | 79.90 |

Subsequent to December 31, 2010, the Company entered into an additional 77,045 forward purchase contracts at an average rate of $1,363.32 per ounce, of which 40,665 ounces mature in 2011 and 36,380 ounces mature in 2012.

Currency risk management

The Company is primarily exposed to currency fluctuations relative to the U.S. dollar on expenditures that are denominated in Canadian dollars, Brazilian reais, Chilean pesos, Russian roubles and euros. This risk is reduced, from time to time, through the use of foreign exchange forward contracts to lock in the exchange rates on future non-U.S. denominated currency cash outflows. The Company has entered into forward contracts to purchase the Canadian dollars, Brazilian reais, Chilean pesos, Russian roubles and euros as part of this risk management strategy. The Company is also exposed to the impact of currency fluctuations on its monetary assets and liabilities. The Company does not actively manage this exposure.

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 141

Impact of foreign exchange risk on net working capital

|  |  |  | 10% strengthening in U.S. dollar |
|  | Foreign currency net working asset (liability) in US$ |  | Effect of on pre-tax earnings, gain (loss) |  | Effect on OCI before tax, gain (loss) (a) |
Canadian dollars |  | 26.7 |  | (2.7 | ) | - |
Brazilian reais |  | 31.1 |  | (3.1 | ) | - |
Chilean pesos |  | (53.6 | ) | 5.4 |  | - |
Russian roubles |  | 43.2 |  | (4.3 | ) | - |
Euros |  | (12.8 | ) | 1.3 |  | - |
Mauritania ouguiya |  | 8.4 |  | (0.8 | ) | - |
Ghanian cedi |  | (9.1 | ) | 0.9 |  | - |
Other (b) |  | (11.2 | ) | 1.2 |  | - |

(a)
  As described in Note 2 (iii), the Company translates its monetary assets and liabilities into U.S. dollars at the rates of exchange at the consolidated balance sheet dates. Gains and losses on translation of foreign currencies are included in earnings.
(b)
  Includes British pounds, Australian dollars, South African rand, and Japanese yen.

At December 31, 2010, with other variables unchanged, the following represents the effect of the Company's foreign exchange contracts on pre-tax earnings and OCI before tax from a 10% change in the exchange rate of the U.S. dollar against the Canadian dollar, Brazilian real, Russian rouble, Chilean peso, and the euro.

|  | 10% strengthening in U.S. dollar |  | 10% weakening in U.S. dollar |
|  | Effect of on pre-tax earnings, gain (loss) (a) |  |  | Effect on OCI before tax, gain (loss) |  | Effect of on pre-tax earnings, gain (loss) (a) |  |  | Effect on OCI before tax, gain (loss) |
Canadian dollars |  | - |  | $ | (9.8 | ) | - |  | $ | 8.0 |
Brazilian reais |  | - |  | $ | (48.8 | ) | - |  | $ | 39.7 |
Chilean pesos |  | - |  | $ | (20.5 | ) | - |  | $ | 16.7 |
Russian roubles |  | - |  | $ | (16.3 | ) | - |  | $ | 13.2 |
euros |  | - |  | $ | (0.9 | ) | - |  | $ | 0.9 |

(a)
  Upon maturity of these contracts the amounts in OCI before taxes will reverse against hedged items the contracts relate to, which may be to earnings or property, plant and equipment.

Foreign currency

At December 31, 2010, Kinross had outstanding fixed foreign exchange forward contracts maturing during 2011 to sell $84.0 million U.S. dollars, and purchase Canadian dollars at an average forward exchange rate of 1.05 Canadian dollars for one U.S. dollar. The unrealized gain on these contracts at December 31, 2010 was $4.2 million (December 31, 2009 - $0.1 million).

At December 31, 2010, Kinross had outstanding fixed foreign exchange forward contracts maturing during 2011 and 2012 to sell $350.0 million and $56.0 million U.S. dollars respectively, and purchase Brazilian reais at a rate of 1.91 and 2.00 Brazilian reais for one US dollar respectively. The unrealized gain on these contracts at December 31, 2010 was $23.1 million (December 31, 2009 - $15.2 million).

At December 31, 2010, Kinross had outstanding fixed foreign exchange forward contracts maturing during 2011 and 2012 to sell $97.0 million and $48.0 million U.S. dollars respectively, and purchase Russian roubles at an average forward exchange rate of 32.00 and 33.10 Russian roubles for one U.S. dollar respectively. The unrealized gain on these contracts at December 31, 2010 was $2.2 million (December 31, 2009 - $4.3 million).

142

At December 31, 2010, Kinross had outstanding fixed foreign exchange forward contracts maturing during 2010 to sell $172.0 million U.S. dollars, and purchase Chilean pesos at an average forward exchange rate of 511.22 Chilean pesos for one U.S. dollar. The unrealized gain on these contracts at December 31, 2010 was $10.1 million (December 31, 2009 - $7.6 million).

At December 31, 2010, Kinross had outstanding fixed foreign exchange forward contracts maturing during 2010 to sell $8.7 million U.S. dollars, and purchase Euros at an average forward exchange rate of 0.78 Euros for one U.S. dollar. The unrealized gain on these contracts at December 31, 2010 was $0.3 million (December 31, 2009 -$nil).

Subsequent to December 31, 2010, the Company entered into additional fixed foreign exchange forward contracts for:

•
  $42.0 million USD at a rate of 497.4 Chilean pesos maturing in 2011.
•
  $60.0 million USD at a rate of 503.4 Chilean pesos maturing in 2012

Interest rate risks

The Company is exposed to interest rate risk on its variable rate debt. As a result of the acquisition of Bema in February 2007, the Company assumed an interest rate swap, an interest rate cap and interest rate floor contract. During the first quarter of 2008, the Company entered into an interest rate swap for Brasil Mineracao S.A. ("KBM"), formerly known as Rio Paracatu Mineracao S.A., a 100% subsidiary of Kinross.

At December 31, 2010 with other variables unchanged, a 50 basis point downward shift in the interest rate curve would decrease pre-tax earnings by $0.1 million and OCI before tax by $0.3 million, and a 50 basis point upward shift in the interest rate curve would increase pre-tax earnings by $0.1 million and OCI before tax by $0.3 million.

Interest rates

As part of the Kupol project financing which was repaid in December 2010, the Company hedged its exposure to rising interest rates by entering into an interest rate swap, and purchasing an interest rate cap, which was financed by selling an interest rate floor. The Company has contracted to pay a fixed rate of interest of 4.4975% and receive a floating rate of interest on an interest rate swap with a notional amount that varies from $4.2 million up to $140.0 million over the life of the swap. The fair market value of the interest rate swap was a liability of $2.1 million as at December 31, 2010 ($4.3 million as at December 31, 2009).

The interest rate cap has an exercise strike level of 6.37%, which is the maximum interest rate that the Company will pay on the notional amount underlying the cap. The interest rate floor has an exercise strike level of 4.75%, which is the minimum interest rate that will be paid on the notional amount. When floating U.S. dollar interest rates are between the cap and the floor, there is no settlement received or paid by the Company. The notional amount varies between $3.7 million and $70.0 million over the life of the loan. The fair value of the interest rate cap and floor was a liability of $1.9 million as at December 31, 2010 (December 31, 2009 - $2.8 million).

During the first quarter of 2008, as part of the Paracatu term loan, the Company entered into an interest rate swap to pay a fixed rate of 3.83% and receive a floating LIBOR rate plus 100 bps on a notional amount of $100 million which amortizes over the life of the loan. As at December 31, 2010, the fair market value was a liability of $0.5 million (December 31, 2009 - $1.2 million).

Energy

The Company is exposed to changes in crude oil prices through its consumption of diesel fuel, and the price of electricity in some electricity supply contracts. The Company entered into forward contracts that establish the price for some of the Company's diesel fuel consumption and manage the risk of fuel price increases. Diesel fuel is consumed in the operation of mobile equipment and electricity generation.

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 143

As at December 31, 2010, the Company had purchased oil forward contracts for 120,000 barrels of Nymex Crude WTI during 2010 at an average price of $79.90 per barrel maturing in 2011. The unrealized gain on these contracts at December 31, 2010 was $1.3 million (December 31, 2009 - $0.9 million).

At December 31, 2010, with other variables unchanged, a 10% decrease in Nymex Crude WTI prices would not impact pre-tax earnings and would decrease OCI before tax by $1.1 million, and a 10% increase in Nymex Crude WTI prices would not impact pre-tax earnings and would increase OCI before tax by $1.1 million.

Subsequent to December 31, 2010, the Company entered into additional oil forward contracts for:

•
  99,000 barrels of Nymex Crude WTI at a price of $95.17 per barrel maturing in 2011.

Total return swap

A total return swap (TRS) was engaged during the fourth quarter of 2008 as an economic hedge of the Company's deferred share units (DSUs). Under the terms of the TRS, a bank has the right to purchase Kinross shares in the marketplace as a hedge against the returns in the TRS. At December 31, 2010, 96% of the DSUs were economically hedged, although hedge accounting was not applied.

Liquidity risk

The Company manages liquidity risk by maintaining adequate cash and cash equivalent balances (December 31, 2010 - $1,466.6 million), by utilizing its lines of credit and by monitoring developments in the capital markets. The Company's Treasury department continuously monitors and reviews both actual and forecasted cash flows.

The contractual cash flow requirements for financial liabilities at December 31, 2010 are as follows:

|  |  | Total |  |  | Less than 2 years |  |  | More than 2, less than 3 years |  |  | More than 3, less than 5 years |  |  | More than 5 years |
Long-term debt (a) |  | $ | 581.6 |  | $ | 113.1 |  | $ | 468.2 |  | $ | 0.3 |  | $ | - |
Derivative liabilities - net |  | $ | 281.4 |  | $ | 277.4 |  | $ | 4.0 |  | $ | - |  | $ | - |

(a)
  Includes long-term debt, including the current portion, interest as well as obligations under letters of credit issued and the full face value of the Senior Convertible Notes.

Credit risk management

Credit risk relates to accounts receivable and derivative contracts and arises from the possibility that any counterparty to an instrument fails to perform. The Company only transacts with highly-rated counterparties and a limit on contingent exposure has been established for any counterparty based on that counterparty's credit rating. As at December 31, 2010, the Company's maximum exposure to credit risk was the carrying value of trade receivables, derivative assets, and taxes recoverable.

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9. LONG-TERM DEBT AND CREDIT FACILITIES

|  |  |  |  |  |  | As at December 31, 2010 |  |  | As at December 31, 2009 |  |
|  |  |  | Interest Rates |  |  | Nominal amount |  |  | Deferred Financing Costs |  |  | Carrying Amount (a) |  |  | Fair Value |  |  | Carrying Amount (a) |  |  | Fair Value |  |
Corporate revolving credit facility |  | (i | ) | Variable |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  |
Debt component, senior convertible notes |  | (iv | ) | 1.75% |  |  | 419.5 |  |  | - |  |  | 419.5 |  |  | 450.5 |  |  | 402.6 |  |  | 403.1 |  |
Kupol project financing |  | (iii | ) | Variable |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 158.4 |  |  | 157.9 |  |
Corporate term loan facility |  | (i | ) | Variable |  |  | 59.1 |  |  | (2.3 | ) |  | 56.8 |  |  | 57.1 |  |  | 92.0 |  |  | 92.6 |  |
Paracatu capital leases |  | (ii | ) | 5.62% |  |  | 22.3 |  |  | - |  |  | 22.3 |  |  | 23.2 |  |  | 31.8 |  |  | 32.2 |  |
Maricunga capital leases |  | (ii | ) | 6.04% |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 0.2 |  |  | 0.2 |  |
Kettle River-Buckhorn capital leases |  | (ii | ) | 7.70% |  |  | 0.1 |  |  | - |  |  | 0.1 |  |  | 0.1 |  |  | 0.1 |  |  | 0.1 |  |
Crixás bank loan and other |  |  |  | Variable |  |  | 4.3 |  |  | - |  |  | 4.3 |  |  | 4.3 |  |  | 7.1 |  |  | 7.1 |  |
|  |  |  |  |  |  | 505.3 |  |  | (2.3 | ) |  | 503.0 |  |  | 535.2 |  |  | 692.2 |  |  | 693.2 |  |
Less: current portion |  |  |  |  |  |  | (48.4 | ) |  | - |  |  | (48.4 | ) |  | (48.4 | ) |  | (177.0 | ) |  | (177.0 | ) |
Long-term debt |  |  |  |  |  | $ | 456.9 |  | $ | (2.3 | ) | $ | 454.6 |  | $ | 486.8 |  | $ | 515.2 |  | $ | 516.2 |  |

(a)
  Includes transaction costs on debt financing.

|  | Year ended December 31, |  |
|  | 2010 |  |  | 2009 |  |  | 2008 |  |
Interest incurred | $ | (44.3 | ) | $ | (27.7 | ) | $ | (105.2 | ) |
Less amounts capitalized |  | 13.2 |  |  | 8.6 |  |  | 30.6 |  |
Interest expense | $ | (31.1 | ) | $ | (19.1 | ) | $ | (74.6 | ) |

|  | 2011 |  |  | 2012 |  |  | 2013 |  |  | 2014 |  |  | 2015 |  |  | 2016 and thereafter |  |  | Total |
Corporate term loan facility | $ | 36.4 |  | $ | 22.7 |  | $ | - |  | $ | - |  | $ | - |  | $ | - |  | $ | 59.1 |
Crixas bank loan |  | 2.4 |  |  | 0.8 |  |  | 0.8 |  |  | 0.3 |  |  | - |  |  | - |  |  | 4.3 |
Paracatu capital leases |  | 9.5 |  |  | 9.5 |  |  | 3.3 |  |  | - |  |  | - |  |  | - |  |  | 22.3 |
Kettle River-Buckhorn capital leases |  | 0.1 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 0.1 |
Convertible Debenture |  | - |  |  | - |  |  | 419.5 |  |  | - |  |  | - |  |  | - |  |  | 419.5 |
Total long-term debt payable | $ | 48.4 |  | $ | 33.0 |  | $ | 423.6 |  | $ | 0.3 |  | $ | - |  | $ | - |  | $ | 505.3 |

i Corporate revolving credit and term loan facilities

In November 2009, the Company entered into an amended revolving credit facility which provides credit of $450.0 million on an unsecured basis and expires in November 2012. The term loan (corporate term loan facility) for the Paracatu property forms part of the amended revolving credit facility, and that credit will be available to the Company as the term loan is repaid.

On June 17, 2010 the Company entered into a further amendment to increase availability under the facility to $600.0 million. On September 17, 2010, the revolving credit facility was further amended to add Mauritania, Ghana, and Cote d'Ivoire as permitted jurisdictions as a result of the Red Back acquisition. All other terms and conditions under the existing revolving credit facility remain unchanged.

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 145

As at December 31, 2010, the Company had drawn $87.7 million (December 31, 2009 - $124.4 million) on the amended revolving credit facility, including drawings for the Paracatu term loan and $28.6 million (December 31, 2009 - $28.9 million) for letters of credit.

The amended revolving credit facility agreement contains various covenants including limits on indebtedness, asset sales and liens. Significant financial covenants include a minimum tangible net worth of $3,345.3 million starting September 30, 2009 and increasing by 50% of positive net income each quarter, an interest coverage ratio of at least 4.25:1, and net debt to EBITDA, as defined in the agreement, of no more than 3.5:1. The Company is in compliance with these covenants at December 31, 2010.

Loan interest is variable, set at LIBOR plus an interest rate margin which is dependent on the ratio of the Company's net debt to EBITDA as defined in the agreement.

The Company's current ratio of net debt to EBITDA, as defined in the agreement, is less than 1.50:1. At this ratio, interest charges are as follows:

Interest rates Type of Credit |  | credit facility |
Dollar based LIBOR loan |  | LIBOR plus 2.50% |
Letters of credit |  | 2.50% |
Standby fee applicable to unused availability |  | 0.75% |

Also in November 2009, the Company entered into a separate Letter of Credit guarantee facility with Export Development Canada for $125 million. Letters of credit guaranteed by this new facility are solely for reclamation liabilities at Fort Knox, Round Mountain, and Kettle River-Buckhorn. Fees related to letters of credit under this facility are 1.00% to 1.25%.

On July 30, 2010, the Company entered into an amendment to increase the amount of the Letter of Credit guarantee facility from $125 million to $136 million. As at December 31, 2010, the amount outstanding under this facility was $135.1 million. All other terms and conditions under this agreement remain the same.

In addition, at December 31, 2010, the Company had approximately $11.5 million (December 31, 2009 - $15.8 million) in letters of credit outstanding, in respect of its operations in Brazil. These letters of credit have been issued pursuant to arrangements with Brazilian and international banks.

ii Capital leases

At December 31, 2010, the Company had equipment under capital lease totaling $22.4 million (December 31, 2009 - $32.1 million). Repayments on the capital leases end in 2013.

The Company recorded interest expense related to the capital leases of $1.6 million, $2.3 million, and $2.2 million for the years ended December 31, 2010, 2009, and 2008, respectively. The cost of the assets and the accumulated depreciation related to the capital leases is $39.8 million and $14.1 million, respectively as at December 31, 2010 (December 31, 2009 - $73.8 million and $24.1 million). The depreciation expense related to these assets in 2010 is $8.4 million (2009 - $8.4 million).

146

For the years ended December 31, 2010 and 2009, the capital lease obligations are as follows:

|  |  | 2010 |  |  | 2009 |
2010 |  | $ | - |  | $ | 11.4 |
2011 |  |  | 10.7 |  |  | 10.5 |
2012 |  |  | 10.0 |  |  | 10.0 |
2013 |  |  | 3.3 |  |  | 3.3 |
2014 |  |  | - |  |  | - |
2015 |  |  | - |  |  | - |
Total minimum lease payments |  | $ | 24.0 |  | $ | 35.2 |
Less amount representing interest |  |  | 1.6 |  |  | 3.1 |
Present value of net minimum lease payments |  | $ | 22.4 |  | $ | 32.1 |
Current portion of obligations under capital lease |  |  | 9.6 |  |  | 9.7 |
|  | $ | 12.8 |  | $ | 22.4 |

iii Kupol project financing

The Kupol project financing loan was repaid in full in December 2010.

The Kupol project financing consisted of a project loan ("Project Loan") with a syndicate of banks and previously consisted of a subordinated loan with the International Finance Corporation ("IFC"). The Project Loan and IFC loan were undertaken by the Company's 75% owned subsidiary, the Chukotka Mining and Geological Company ("CMGC").

The Project Loan consisted of two tranches totaling $400.0 million. Tranche A, for $150.0 million, maturing June 30, 2013, was from a group of multilateral and industry finance institutions, of which the mandated lead arrangers were Caterpillar Financial SARL, Export Development Canada, IFC, Bank of Tokyo and ING. As at December 31, 2010, $nil (December 31, 2009 - $69.5 million) was outstanding on Tranche A. Tranche B, for $250.0 million, maturing June 30, 2012, was fully underwritten by the mandated lead arrangers, namely HVB and Société Générale Corporate & Investment Banking ("SG CIB") and as at December 31, 2010, $nil (December 31, 2009 - $88.9 million) was outstanding. Both tranches of the Project Loan were drawn down on a pro rata basis and administered by HVB, as documentation and facility agent, and SG CIB, as technical and insurance agent.

Tranche A of the Project Loan had a seven-and-one half year term from drawdown, and Tranche B had a six-and-one half year term. The annual interest rate was: (a) LIBOR plus 2% prior to economic completion of the Kupol mine; (b) LIBOR plus 2.5% for two years after economic completion; and (c) LIBOR plus 3% for each remaining term (each rate is net of political risk insurance premiums). The Project Loan was collateralized against the Kupol Mine and was guaranteed by a subsidiary until economic completion was achieved, as defined by the loan agreements. The loan agreements included customary covenants for debt financings of this type including that EastWest Gold Corporation ("EastWest"), a subsidiary of Kinross, was required to maintain minimum liquidity to meet future capital expenditure requirements at Kupol. This liquidity requirement declined as capital expenditures were made. Kinross agreed to assume the hedge contracts for the Kupol project in the event that the Kupol loan is accelerated, and the net mark-to-market position of all the hedge contracts is negative.

Under the terms of the Kupol Project Loan there were two significant milestones that the project had to meet in order for the loan to become a non-recourse loan; Mechanical Completion, and Economic Completion. Mechanical Completion was achieved on September 30, 2008, and Economic completion was achieved on September 23, 2009.

Having achieved economic completion, the Company was released from a guarantee that EastWest Gold (formerly known as Bema Gold) had given the project lenders and the Company received back a $25 million letter of credit. The Company received consent from the lenders to allow it to complete a special cash distribution when economic completion was

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 147

achieved. As part of the distribution, the Company was required to prepay a portion of the principal outstanding on the loan (approximately $89.0 million), and as a result, also declared and paid a dividend (total dividend payment $102.6 million, Kinross' share $76.8 million).

The Project Loan contained various covenants, including certain ratios of estimated future cash flows to total debt that are to be greater than 135% over the term of the loans and greater than 150% over the term of the project; debt coverage ratios of at least 115%; and the minimum Proven and Probable Reserves of at least 30% of the Proven and Probable Reserves as of the effective date of the Project Loan.

On March 20, 2009, 8.5 million Kinross share purchase warrants were converted into 3.8 million Kinross shares at a price of $6.61 plus CDN$0.01 per warrant. As a result, the balance outstanding on the IFC loan of $25 million was assigned to EastWest Gold. As the loan was of an intercompany nature, it was eliminated on consolidation, and as at December 31, 2010 the loan was fully repaid. The $25 million was allocated to common shares commensurate with the issuance of the 3.8 million Kinross shares.

As at December 31, 2010, cash of $nil (December 31, 2009 - $22.2 million) was restricted for payments related to the Project Loan, as the loan was repaid in full.

iv Senior convertible notes

During January 2008, the Company completed a public offering of $460.0 million Senior Convertible Notes due March 15, 2028, each in the amount of one thousand dollars. The notes will pay interest semi-annually at a rate of 1.75% per annum. The notes will be convertible, at the holder's option, equivalent to a conversion price of $28.04 per share of common stock, subject to adjustment. Kinross received net proceeds of $449.9 million from the offering of Convertible Notes, after payment of the commissions of the initial purchasers and expenses of the offering. The Convertible Notes are convertible into Kinross common shares at a fixed conversion rate, subject to certain anti-dilution adjustments, only in the event that (i) the market price of Kinross common shares exceeds 130% of the effective conversion price of the Convertible Notes, (ii) the trading price of the Convertible Notes falls below 98% of the amount equal to Kinross' then prevailing common share price, times the applicable conversion rate, (iii) the Convertible Notes are called for redemption, (iv) upon the occurrence of specified corporate transactions or (v) if Kinross common shares cease to be listed on a specified stock exchange or eligible for trading on an over-the-counter market. The Convertible Notes will also be convertible on and after December 15, 2027. The Convertible Senior Notes are redeemable by the Company, in whole or part, for cash at any time on or after March 20, 2013, at a redemption price equal to par plus accrued and unpaid interest, if any, to the redemption date. Holders of the Convertible Notes will have the right to require Kinross to repurchase the Convertible Notes on March 15, 2013, 2018 and 2023, and, on or prior to March 20, 2013, upon certain fundamental changes. The redemption price will be equal to 100% of the principal amount of the Convertible Notes plus accrued and unpaid interest to the redemption date, if any.

148

10. RECLAMATION AND REMEDIATION OBLIGATIONS

The Company conducts its operations so as to protect the public health and the environment, and to comply with all applicable laws and regulations governing protection of the environment. Reclamation and remediation obligations arise throughout the life of each mine. The Company estimates future reclamation costs based on the level of current mining activity and estimates of costs required to fulfill the Company's future obligation. The following table details the items that affect the reclamation and remediation obligations:

|  |  |  | December 31, 2010 |  |  | December 31, 2009 |  |
Balance at January 1, |  |  | $ | 269.8 |  | $ | 246.8 |  |
| Additions resulting from acquisition of Red Back |  |  |  | 11.9 |  |  | - |  |
| Additions resulting from acquisition of Dvoinoye |  |  |  | 5.0 |  |  | - |  |
| Reclamation spending |  |  |  | (13.1 | ) |  | (12.5 | ) |
| Accretion and reclamation expenses |  |  |  | 29.0 |  |  | 19.3 |  |
| Asset retirement cost |  |  |  | 52.0 |  |  | 16.2 |  |
Balance at December 31 |  |  |  | 354.6 |  |  | 269.8 |  |
Less: current portion |  |  |  | (23.1 | ) |  | (17.1 | ) |
Long-term reclamation and remediation obligations |  |  | $ | 331.5 |  | $ | 252.7 |  |

Included in the December 31, 2010 accretion and reclamation expenses is a $8.1 million charge (2009 - $3.6 million reduction) reflecting revised estimated fair values of costs that support the reclamation and remediation obligation for properties that have been closed. The undiscounted cash flows, before inflation adjustments, estimated to settle the reclamation and remediation obligations as at December 31, 2010 are approximately $613.5 million (2009 - $470.5 million). The majority of the expenditures are expected to occur between 2011 and 2051. The credit adjusted risk-free rates used in estimating the site restoration cost obligation were 6%, 9% and, 9%, and the inflation rate used was 2% for each of the years ended December 31, 2010, 2009 and 2008, respectively.

Regulatory authorities in certain jurisdictions require that security be provided to cover the estimated reclamation and remediation obligations. As at December 31, 2010, letters of credit totaling $155.4 million (2009 - $119.5 million) had been issued to various regulatory agencies to satisfy financial assurance requirements for this purpose. The letters of credit were issued against the Company's Letter of Credit guarantee facility with Export Development Canada and the revolving credit facility. The Company believes it is in compliance with all applicable requirements under these facilities.

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 149

11. COMMON SHARE CAPITAL AND COMMON SHARE PURCHASE WARRANTS

The authorized share capital of the Company is comprised of an unlimited number of common shares. A summary of common share transactions are as follows:

|  | 2010 |  | 2009 |  | 2008 |  |
|  | Number of shares (000's) |  |  | Amount |  | Number of shares (000's) |  |  | Amount |  | Number of shares (000's) |  |  | Amount |  |
Common shares |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1, |  | 696,027 |  | $ | 6,387.0 |  | 659,438 |  | $ | 5,779.2 |  | 611,925 |  | $ | 5,085.6 |  |
Issued (cancelled): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Equity Issuance |  | - |  |  | - |  | 24,035 |  |  | 396.4 |  | - |  |  | - |  |
| On acquisition of Lobo-Marte |  | - |  |  | - |  | 5,605 |  |  | 102.9 |  | - |  |  | - |  |
| On acquisition of Aurelian |  | - |  |  | - |  | - |  |  | - |  | 43,692 |  |  | 639.7 |  |
| On acquisition of Underworld |  | 6,501 |  |  | 117.7 |  | - |  |  | - |  | - |  |  | - |  |
| On acquisition of Dvoinoye |  | 10,558 |  |  | 173.9 |  | - |  |  | - |  | - |  |  | - |  |
| On acquisition of Red Back |  | 416,358 |  |  | 6,549.3 |  | - |  |  | - |  | - |  |  | - |  |
| Under employee share purchase plan |  | 304 |  |  | 5.5 |  | 225 |  |  | 4.4 |  | 187 |  |  | 3.4 |  |
| Under stock option and restricted share plan |  | 1,152 |  |  | 20.8 |  | 1,953 |  |  | 30.4 |  | 3,343 |  |  | 46.2 |  |
| Under Aurelian options |  | 316 |  |  | 4.6 |  | 918 |  |  | 15.1 |  | 246 |  |  | 3.8 |  |
| Expiry of Echo Bay options |  | - |  |  | - |  | - |  |  | - |  | - |  |  | (0.1 | ) |
| Under Bema options |  | 11 |  |  | 0.1 |  | 65 |  |  | 0.8 |  | - |  |  | - |  |
| Under Echo Bay options |  | - |  |  | - |  | 6 |  |  | 0.1 |  | - |  |  | - |  |
| Under Underworld options |  | 214 |  |  | 3.8 |  | - |  |  | - |  | - |  |  | - |  |
| Under Red Back options |  | 1,632 |  |  | 25.7 |  | - |  |  | - |  | - |  |  | - |  |
Conversions: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Bema warrants (a) |  | 222 |  |  | 2.4 |  | 3,782 |  |  | 57.7 |  | 45 |  |  | 0.6 |  |
Balance at December 31, |  | 1,133,295 |  | $ | 13,290.8 |  | 696,027 |  | $ | 6,387.0 |  | 659,438 |  | $ | 5,779.2 |  |
Common share purchase warrants (a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1, |  | 24,725 |  | $ | 61.1 |  | 28,507 |  | $ | 93.8 |  | 8,856 |  | $ | 38.0 |  |
| On acquisition of Aurelian |  | - |  |  | - |  | - |  |  | - |  | 19,696 |  |  | 56.0 |  |
| On acquisition of Red Back |  | 25,759 |  |  | 117.7 |  | - |  |  | - |  | - |  |  | - |  |
| Conversion of warrants |  | (222 | ) |  | (1.0 | ) | (3,782 | ) |  | (32.7 | ) | (45 | ) |  | (0.2 | ) |
Balance at December 31, |  | 50,262 |  | $ | 177.8 |  | 24,725 |  | $ | 61.1 |  | 28,507 |  | $ | 93.8 |  |
Total common share capital and common share purchase warrants |  |  |  | $ | 13,468.6 |  |  |  | $ | 6,448.1 |  |  |  | $ | 5,873.0 |  |

(a)
  See below for discussion of common share purchase warrants.

On February 16, 2011, the Board of Directors declared a dividend of $0.05 per common share to shareholders of record on March 24, 2011.

On August 4, 2010, the Board of Directors declared a dividend of $0.05 per share which was payable to common shareholders on September 30, 2010. On February 17, 2010, the Board of Directors declared a dividend of $0.05 per common share which was payable to common shareholders on March 31, 2010.

On August 12, 2009, the Board of Directors declared a cash dividend of $0.05 per common share. A cash dividend of $0.04 per common share was declared on February 18, 2009.

A cash dividend of $0.04 per common share was declared on February 21, 2008.

150

Updated shareholders' rights plan

On February 26, 2009, the Company entered into a new shareholder rights plan (the "New Plan"). The New Plan ensures that Kinross and its shareholders continue to receive the benefits associated with Kinross' current shareholder rights plan (the "Old Plan") which expired on March 29, 2009. The New Plan has been adopted at this time to prevent any gap in shareholder protection and was effective on March 29, 2009. Subject to shareholder reconfirmation of the New Plan at Kinross' annual meetings in 2012 and 2015, the New Plan will be in effect until the ninth anniversary of the date on which it becomes effective.

As with the Old Plan, the New Plan is designed to provide adequate time for the Board of Directors and shareholders to assess an unsolicited take-over bid for Kinross, to provide the Board of Directors with sufficient time to explore and develop alternatives for maximizing shareholder value if a take-over bid is made, and to provide shareholders with an equal opportunity to participate in a take-over bid and receive full and fair value for their Kinross common shares (the "Common Shares").

The rights issued under the New Plan will initially attach to and trade with the Common Shares and no separate certificates will be issued unless an event triggering these rights occurs. The rights will become exercisable only when a person, including any party related to it, acquires or attempts to acquire 20 percent or more of the outstanding Shares without complying with the "Permitted Bid" provisions of the New Plan or without approval of the Board of Directors. Should such an acquisition occur or be announced, each right would, upon exercise, entitle a rights holder, other than the acquiring person and related persons, to purchase Common Shares at a 50 percent discount to the market price at the time.

Under the New Plan, a Permitted Bid is a bid which is made to all holders of the Common Shares and which is open for acceptance for not less than 60 days. If at the end of 60 days at least 50 percent of the outstanding Common Shares, other than those owned by the offeror and certain related parties have been tendered, the offeror may take up and pay for the Common Shares but must extend the bid for a further 10 days to allow other shareholders to tender.

Common share purchase warrants

A summary of the status of the common share purchase warrants and changes during the year ended December 31, 2010 are as follows:

Canadian $ denominated common share purchase warrants |
|  | Number outstanding (000's) (a) |  |  | Weighted average exercise price (CDN$) |
Balance, January 1, 2010 |  | 24,392 |  | $ | 30.17 |
Issued |  | - |  |  | - |
Exercised |  | - |  |  | - |
Outstanding at December 31, 2010 (c) |  | 24,392 |  | $ | 30.17 |

US $ denominated common share purchase warrants |
|  | Number outstanding (000's) (a) |  |  | Weighted average exercise price |
Balance, January 1, 2010 |  | 333 |  | $ | 8.46 |
Issued (b) |  | 25,759 |  |  | 21.30 |
Exercised |  | (222 | ) |  | 6.30 |
Outstanding at December 31, 2010 (d) |  | 25,870 |  | $ | 21.26 |

(a)
  Represents share equivalents of warrants.
(b)
  On acquisition of Red Back, 25.8 million purchase warrants were issued.
(c)
  Includes 10.6 million Bema warrants outstanding that are convertible into 4.7 million Kinross shares plus CDN$0.01 per Bema warrant.
(d)
  Includes 0.3 million Bema warrants outstanding that are convertible into 0.1 million Kinross shares plus CDN$0.01 per Bema warrant.

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 151

The following table summarizes information regarding the common share purchase warrants outstanding and exercisable at December 31, 2010:

Canadian $ denominated common share purchase warrants |
Exercise price |  | Number outstanding (000's) (a) |  |  | Weighted average exercise price (CDN$) |  | Weighted average remaining contractual life (years) |
$ 22.48 |  | 4,697 |  | $ | 22.48 |  | 0.68 |
| 32.00 |  | 19,695 |  |  | 32.00 |  | 2.68 |
Outstanding at December 31, 2010 |  | 24,392 |  | $ | 30.17 |  | 2.29 |

US $ denominated common share purchase warrants |
Exercise price |  | Number outstanding (000's) (a) |  |  | Weighted average exercise price (US$) |  | Weighted average remaining contractual life (years) |
$ 12.89 |  | 111 |  | $ | 12.89 |  | 0.40 |
| 21.30 |  | 25,759 |  |  | 21.30 |  | 3.72 |
Outstanding at December 31, 2010 |  | 25,870 |  | $ | 21.26 |  | 3.70 |

(a)
  Represents share equivalents of warrants.

Capital Management

Our 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 our long-term growth strategy
•
  Provide investors with a superior rate of return on their invested capital
•
  Ensure compliance with all bank covenant ratios
•
  Minimize counterparty credit risk

Kinross adjusts its capital structure based on changes in forecasted economic conditions and based on the Company's 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.

152

The Company's quantitative capital management objectives are largely driven by the requirements under its debt agreements and are noted in the tables below:

|  |  | December 31, 2010 |  |  | December 31, 2009 |
Long-term debt |  | $ | 454.6 |  | $ | 515.2 |
Current portion of long-term debt |  | $ | 48.4 |  | $ | 177.0 |
Total debt |  | $ | 503.0 |  | $ | 692.2 |
Common shareholders' equity |  | $ | 13,400.5 |  | $ | 5,559.5 |
Gross debt/equity ratio |  |  | 3.8% |  |  | 12.5% |
Company target |  |  | 0 - 30% |  |  | 0 - 30% |

|  |  | December 31, 2010 |  |  | December 31, 2009 |
Rolling 12 month EBITDA (a) |  | $ | 1,471.9 |  | $ | 1,104.2 |
Rolling 12 month Interest expense (b) |  | $ | 44.3 |  | $ | 27.7 |
Interest coverage ratio |  |  | 33.23:1 |  |  | 39.86:1 |
Company target ratio |  |  | > 4.25:1 |  |  | > 4.25:1 |

(a)
  EBITDA is a defined term under the Company's current credit facility agreement.
(b)
  Interest expense includes interest expense reported in the financial statements in addition to capitalized interest.

12. STOCK-BASED COMPENSATION

Stock-based compensation recorded during the years ended December 31 was as follows:

|  | 2010 |  |  | 2009 |  |  | 2008 |
Stock option plan expense | $ | 10.8 |  | $ | 11.1 |  | $ | 6.8 |
Employer portion of share purchase plan |  | 1.9 |  |  | 1.5 |  |  | 1.1 |
Restricted share plan expense, including restricted performance share plan |  | 19.7 |  |  | 16.4 |  |  | 12.4 |
Deferred share unit plan expense |  | 0.6 |  |  | - |  |  | 1.3 |
Total stock-based compensation expense | $ | 33.0 |  | $ | 29.0 |  | $ | 21.6 |

Share purchase plan

The Company has an Employee Share Purchase Plan whereby North American employees of the Company have the opportunity to contribute up to a maximum of 10% of their annual base salary to purchase common shares. Since 2004, the Company contributes 50% of the employees' contributions. The Company issues common shares equal to the employees' contributions and the Company's contribution from treasury each quarter. The common shares are purchased based on the weighted average price on the last twenty trading sessions prior to the end of the quarter. The number of shares issued by the Company and the average of the price per share for the years ending December 31 are as follows:

|  | 2010 |  |  | 2009 |  |  | 2008 |
Common shares issued (000's) |  | 304 |  |  | 225 |  |  | 187 |
Average price of shares issued | $ | 18.01 |  | $ | 19.33 |  | $ | 18.15 |

Restricted share unit plan

The Company has a Restricted Share Unit ("RSU") plan whereby restricted share units may be granted to employees, officers, directors and consultants of the Company. A restricted share unit is exercisable into one common share entitling the holder to

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 153

acquire the common share for no additional consideration. Restricted share units vest over a three year period. The current maximum number of common shares issuable under the RSU plan is 8.0 million. A total of 1,335,000 restricted share units with a weighted average grant-date fair value of CDN$18.98 per unit were granted during the year ended December 31, 2010 (2009 - 1,145,000 at CDN$22.72; 2008 - 896,000 at CDN$21.93). There were 2,132,000 and 1,856,000 restricted share units granted and outstanding as at December 31, 2010 and 2009, respectively.

A summary of the status of the restricted share unit plan and changes during the years ended December 31, 2010, 2009, and 2008, are as follows:

Restricted share units | 2010 (000's) |  | 2009 (000's) |  | 2008 (000's) |  |
Balance, January 1 | 1,856 |  | 1,597 |  | 1,215 |  |
Granted | 1,335 |  | 1,145 |  | 896 |  |
Reinvested | 12 |  | 8 |  | 6 |  |
Redeemed | (878 | ) | (714 | ) | (453 | ) |
Forfeited | (193 | ) | (180 | ) | (67 | ) |
Outstanding at December 31 | 2,132 |  | 1,856 |  | 1,597 |  |

Restricted performance share unit plan

In 2009, the Company implemented a restricted performance share unit plan ("RPSUs"). The RPSUs are subject to certain vesting requirements and vest after 35 months. The vesting requirements are based on certain criteria established by the Company. A total of 214,000 restricted performance share units with a weighted average grant-date fair value of CDN$19.23 per unit were granted during the year ended December 31, 2010 (2009 - 49,000 at CDN$23.74). There were 223,000 and 42,000 restricted performance share units granted and outstanding as at December 31, 2010 and 2009, respectively.

A summary of the status of the restricted performance share unit plan and changes during the years ended December 31, 2010 and 2009 are as follows:

Restricted performance share units | 2010 (000's) |  | 2009 (000's) |  |
Balance, January 1 | 42 |  | - |  |
Granted | 214 |  | 49 |  |
Reinvested | 2 |  | - |  |
Forfeited | (35 | ) | (7 | ) |
Outstanding at December 31 | 223 |  | 42 |  |

Deferred share unit plan

The Company has a deferred share unit ("DSU") plan for its outside directors that provides that each outside director receives, on the date in each quarter which is two business days following the publication by the Company of its earnings results for the previous quarter, or year in the case of the first quarter, that number of DSUs having a value equal to 50% of the compensation of the outside director for the current quarter. Each outside director can elect to receive a greater percentage of their compensation in DSUs, and an outside director who has exceeded a minimum DSU/common share ownership requirement may elect to receive cash for all or any portion of the compensation otherwise payable in DSUs. The number of DSUs granted to an outside director is based on the closing price of the Company's common shares on the Toronto Stock Exchange on the business day immediately preceding the date of grant. At such time as an outside director ceases to be a director, the Company will make a cash payment to the outside director, equal to the market value of a Kinross common share on the date of departure, multiplied by the number of DSUs held on that date. A total of 37,300 DSU's with a weighted average grant-date fair value of

154

CDN$18.44 were granted during the year ended December 31, 2010 (2009 - 38,500 at CDN$21.91; 2008 - 38,100 at CDN $21.67 per unit). There were 255,100, 220,000, and 201,200 DSUs outstanding as at December 31, 2010, 2009, and 2008, respectively.

Stock option plan

The Company has a stock option plan for officers and employees, enabling them to purchase common shares. The total number of options outstanding at any time cannot exceed 10% of the total number of outstanding common shares. Each option granted under the plan is for a maximum term of five years. One-third of the options are exercisable each year commencing one year after the date of grant. The exercise price is determined by the Company's Board of Directors at the time the option is granted, subject to regulatory approval and may not be less than the closing market price of the common shares on the last trading day prior to the grant of the option. The stock options outstanding at December 31, 2010 expire at various dates to 2015. As at December 31, 2010, 6,518,846 common shares, in addition to those outstanding at year end, were available for granting of options.

A summary of the status of the stock option plan and changes during the years ended December 31, 2010, 2009, and 2008, are as follows:

|  | 2010 |  | 2009 |  | 2008
Canadian $ denominated options |  | (000's) |  |  | Weighted average price (CDN$) |  | (000's) |  |  | Weighted average price (CDN$) |  | (000's) |  |  | Weighted average price (CDN$) |
Balance, January 1 |  | 7,192 |  | $ | 18.80 |  | 8,293 |  | $ | 16.22 |  | 5,948 |  | $ | 12.31 |
Options issued on acquisition of Aurelian |  | - |  |  | - |  | - |  |  | - |  | 4,125 |  |  | 14.84 |
Options issued on acquisition of Red Back |  | 8,726 |  |  | 8.55 |  | - |  |  | - |  | - |  |  | - |
Options issued on acquisition of Underworld |  | 420 |  |  | 5.69 |  | - |  |  | - |  | - |  |  | - |
Granted |  | 1,575 |  |  | 19.14 |  | 1,500 |  |  | 22.95 |  | 1,500 |  |  | 22.58 |
Exercised |  | (2,446 | ) |  | 4.54 |  | (2,229 | ) |  | 11.57 |  | (3,136 | ) |  | 10.08 |
Forfeited |  | (221 | ) |  | 20.78 |  | (372 | ) |  | 21.34 |  | (144 | ) |  | 17.11 |
Outstanding at December 31 |  | 15,246 |  | $ | 14.86 |  | 7,192 |  | $ | 18.80 |  | 8,293 |  | $ | 16.22 |

|  | 2010 |  | 2009 |  | 2008
United States $ denominated options |  | (000's) |  |  | Weighted average exercise price (CDN$) |  | (000's) |  |  | Weighted average exercise price (CDN$) |  | (000's) |  |  | Weighted average exercise price (CDN$) |
Balance, January 1 |  | - |  | $ | - |  | - |  | $ | - |  | 1 |  | $ | 9.15 |
Adjustments |  | - |  |  | - |  | - |  |  | - |  | - |  |  | - |
Exercised |  | - |  |  | - |  | - |  |  | - |  | - |  |  | - |
Forfeited |  | - |  |  | - |  | - |  |  | - |  | (1 | ) |  | 9.15 |
Outstanding at December 31 |  | - |  | $ | - |  | - |  | $ | - |  | - |  | $ | - |

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 155

The following table summarizes information about the stock options outstanding and exercisable at December 31, 2010:

|  |  |  |  | Options outstanding |  | Options exercisable |
Exercise Price range in Canadian dollars: |  | Number outstanding (000') |  |  | Weighted average exercise price (CDN$) |  | Weighted average remaining contractual life (years) |  | Number outstanding (000') |  |  | Weighted average exercise price (CDN$) |  | Weighted average remaining contractual life (years) |
| $ 3.01 |  | $ 4.03 |  | 2,133 |  | $ | 3.72 |  | 2.32 |  | 2,133 |  | $ | 3.72 |  | 2.32 |
| 4.04 |  | 9.22 |  | 2,469 |  |  | 7.31 |  | 3.14 |  | 2,469 |  |  | 7.31 |  | 3.14 |
| 9.23 |  | 13.82 |  | 1,274 |  |  | 13.27 |  | 1.77 |  | 1,274 |  |  | 13.27 |  | 1.77 |
| 13.83 |  | 21.06 |  | 5,812 |  |  | 17.03 |  | 3.47 |  | 4,062 |  |  | 16.11 |  | 3.19 |
| 21.07 |  | 26.42 |  | 3,558 |  |  | 23.81 |  | 2.09 |  | 2,570 |  |  | 23.83 |  | 1.81 |
|  |  |  |  | 15,246 |  | $ | 14.86 |  | 2.79 |  | 12,508 |  | $ | 13.56 |  | 2.60 |

The following weighted average assumptions were used in computing the fair value of stock options granted during the last three fiscal years ended December 31:

Black-Scholes weighted-average assumptions: |  | 2010 |  |  | 2009 |  |  | 2008 |
| Expected dividend yield |  | 0.52% |  |  | 0.36% |  |  | 0.5% |
| Expected volatility |  | 49.9% |  |  | 50.4% |  |  | 42.3% |
| Risk-free interest rate |  | 1.7% |  |  | 1.7% |  |  | 2.9% |
| Estimated forfeiture rate |  | 3.0% |  |  | 3.0% |  |  | 3.0% |
| Expected option life in years |  | 3.5 |  |  | 3.5 |  |  | 3.2 |
Weighted average fair value per stock option granted CDN$ | $ | 7.01 |  | $ | 8.54 |  | $ | 6.82 |

156

13. EARNINGS PER SHARE

Earnings per share ("EPS") has been calculated using the weighted average number of common shares and common share equivalents issued and outstanding during the period. Stock options and common share purchase warrants are reflected in diluted earnings per share by application of the treasury method. In 2008, the Kinam Gold Inc. preferred shares and convertible notes were reflected in diluted earnings per share by application of the if-converted method. The following table details the weighted average number of outstanding common shares for the purposes of computing basic and diluted earnings per common share for the following periods:

(Number of common shares in thousands) | 2010 |  | 2009 |  | 2008 |
Basic weighted average shares outstanding: | 824,545 |  | 691,509 |  | 628,594 |
Weighted average shares dilution adjustments: |  |  |  |  |  |
| Dilutive stock options (a) | 2,212 |  | 2,086 |  | - |
| Restricted shares | 2,151 |  | 1,884 |  | - |
| Performance shares | 223 |  | 41 |  | - |
| Common share purchase warrants (a) | 78 |  | 969 |  | - |
Diluted weighted average shares outstanding | 829,209 |  | 696,489 |  | 628,594 |
Weighted average shares dilution adjustments - exclusions: (b) |  |  |  |  |  |
| Stock options | 5,876 |  | 1,509 |  | 2,712 |
| Common share purchase warrants | 50,152 |  | 24,393 |  | 13,744 |
| Kinam preferred shares | - |  | - |  | 331 |
| Convertible notes | 25,960 |  | 16,152 |  | 22,737 |

(a)
  Dilutive stock options and warrants were determined using the Company's average share price for the period. For the year ended December 31, 2010 the average share price used was $17.72 (2009: $18.64, 2008: $nil per share).
(b)
  These adjustments were excluded, as they were anti-dilutive for the years ended December 31, 2010, 2009, and 2008.

14. INCOME AND MINING TAXES

i Income and mining taxes expense

The following table shows the provision for income and mining taxes:

(in millions) |  |  | 2010 |  |  | 2009 |  |  | 2008 |  |
Income Taxes |  |  |  |  |  |  |  |  |  |  |
Current |  |  |  |  |  |  |  |  |  |  |
| Canada |  | $ | - |  | $ | - |  | $ | - |  |
| Foreign |  |  | (352.9 | ) |  | (175.5 | ) |  | (71.3 | ) |
Future |  |  |  |  |  |  |  |  |  |  |
| Canada |  |  | 2.5 |  |  | - |  |  | - |  |
| Foreign |  |  | 74.2 |  |  | 29.7 |  |  | (24.3 | ) |
Mining Taxes |  |  |  |  |  |  |  |  |  |  |
Current |  |  |  |  |  |  |  |  |  |  |
| Canada |  |  | - |  |  | - |  |  | 0.1 |  |
| Foreign |  |  | (1.7 | ) |  | (3.2 | ) |  | (2.0 | ) |
Future |  |  |  |  |  |  |  |  |  |  |
| Canada |  |  | - |  |  | - |  |  | - |  |
| Foreign |  |  | 2.5 |  |  | (1.8 | ) |  | (3.6 | ) |
|  | $ | (275.4 | ) | $ | (150.8 | ) | $ | (101.1 | ) |

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 157

The reconciliation of the combined Canadian federal and provincial statutory income tax rate to the effective tax rate is as follows:

| 2010 |  | 2009 |  | 2008 |  |
Combined statutory income tax rate | 31.0% |  | 33.0% |  | 33.5% |  |
Increase (decrease) resulting from: |  |  |  |  |  |  |
| Mining taxes | 0.8% |  | 1.0% |  | (0.8% | ) |
| Resource allowance and depletion | - |  | - |  | 1.5% |  |
| Difference in foreign tax rates and foreign exchange on future tax balances | 0.3% |  | (13.8% | ) | 7.8% |  |
| Benefit of losses not recognized | (3.3% | ) | 3.4% |  | (8.1% | ) |
| Taxes on repatriation of foreign earnings | 2.3% |  | - |  | - |  |
| Income not subject to tax | (6.7% | ) | - |  | - |  |
| Effect of non-deductible goodwill impairment | - |  | - |  | (50.9% | ) |
| Enacted rate change | (2.3% | ) | - |  | - |  |
| Other (a) | 1.6% |  | 2.8% |  | 1.5% |  |
Effective tax rate | 23.7% |  | 26.4% |  | (15.5% | ) |

(a)
  For 2009, other is primarily the income tax expense related to foreign exchange gains on US dollar intercompany and third party debt owing by Paracatu less the income tax recovery related to the Brazilian Federal Tax Amnesty program.

ii Future income taxes

The following table summarizes the components of future income taxes:

|  |  | 2010 |  |  | 2009 |  |
Future tax assets |  |  |  |  |  |  |  |
| Accrued expenses and other |  | $ | 115.3 |  | $ | 98.7 |  |
| Reclamation and remediation obligations |  |  | 71.3 |  |  | 39.1 |  |
| Alternative minimum tax credits |  |  | - |  |  | 78.0 |  |
| Non-capital loss carryforwards |  |  | 152.2 |  |  | 216.5 |  |
| Property, plant and equipment |  |  | 104.6 |  |  | 95.4 |  |
| Inventory capitalization |  |  | 7.0 |  |  | 4.5 |  |
| Valuation allowance |  |  | (230.3 | ) |  | (310.7 | ) |
|  |  | 220.1 |  |  | 221.5 |  |
Future tax liabilities |  |  |  |  |  |  |  |
| Accrued expenses and other |  |  | 49.4 |  |  | 13.2 |  |
| Property, plant and equipment |  |  | 1,029.2 |  |  | 831.6 |  |
| Inventory capitalization |  |  | 25.3 |  |  | 1.3 |  |
Future tax liabilities - net |  |  | 883.8 |  |  | 624.6 |  |

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iii Non-capital losses

The following table summarizes the Company's non-capital losses that can be applied against future taxable income:

Country |  | Type |  |  | Amount |  | Expiry Date |
Canada (a) |  | Net operating losses |  | $ | 277.5 |  | 2011 - 2030 |
United States (b) |  | Net operating losses |  |  | 175.8 |  | 2011 - 2030 |
United States (b) |  | Alternative minimum tax |  |  | 17.8 |  | 2011 - 2030 |
Chile |  | Net operating losses |  |  | 277.8 |  | No expiry |
Mexico |  | Net operating losses |  |  | 13.7 |  | 2020 - 2021 |
Brazil |  | Net operating losses |  |  | 8.9 |  | No expiry |
Barbados |  | Net operating losses |  |  | 320.2 |  | 2014-2020 |
Other |  | Net operating losses |  |  | 13.6 |  | 2020 |

(a)
  Approximately $3.9 million are limited in their deduction to income from specific operations.
(b)
  Utilization of the U.S. loss carry forwards will be limited in any year as a result of previous changes in ownership.

15. SEGMENTED INFORMATION

The Company operates primarily in the gold mining industry and its major product is gold. Its activities include gold production, acquisition, exploration and development of gold properties. The Company's primary mining operations are in the United States, the Russian Federation, Brazil, Ecuador, Chile, Ghana, and Mauritania. The reported segments are those operations whose operating results are reviewed by the Chief Executive Officer and that pass certain quantitative measures. Operations whose revenues, earnings or losses or assets exceed 10% of the total consolidated revenue, earnings or losses, or assets are reportable segments. Properties that are in development or have not reached commercial production levels are reported as non-operating segments. Properties that are under care and maintenance, are shut down and are in reclamation and non-mining and other operations are reported in Corporate and other.

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 159

The following tables set forth information by segment.

Year ended December 31, 2010:

|  | Metal sales |  |  | Cost of sales (a) |  |  | Accretion |  |  | DD&A (b) |  |  | Exploration and business development |  |  | Other (c) |  |  | Segment operating earnings (loss) |  |  | Capital expenditures |  |  | Segment assets - As at December 31, 2010 |
Operating segments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Fort Knox | $ | 432.9 |  | $ | 192.1 |  | $ | 1.8 |  | $ | 53.5 |  | $ | 3.0 |  | $ | - |  | $ | 182.5 |  | $ | 87.9 |  | $ | 491.2 |
| Round Mountain |  | 227.5 |  |  | 121.3 |  |  | 1.4 |  |  | 19.0 |  |  | 1.4 |  |  | (0.3 | ) |  | 84.7 |  |  | 32.7 |  |  | 272.4 |
| Kettle River-Buckhorn |  | 242.6 |  |  | 64.7 |  |  | 2.3 |  |  | 91.5 |  |  | 7.1 |  |  | (2.6 | ) |  | 79.6 |  |  | 9.2 |  |  | 258.1 |
| Kupol |  | 781.8 |  |  | 236.2 |  |  | 1.6 |  |  | 156.6 |  |  | 15.7 |  |  | 1.2 |  |  | 370.5 |  |  | 32.1 |  |  | 1,332.2 |
| Paracatu |  | 597.8 |  |  | 261.0 |  |  | 2.5 |  |  | 62.9 |  |  | - |  |  | 10.7 |  |  | 260.7 |  |  | 161.4 |  |  | 1,563.7 |
| Crixás |  | 94.7 |  |  | 37.5 |  |  | 0.2 |  |  | 17.1 |  |  | 0.9 |  |  | 0.4 |  |  | 38.6 |  |  | 24.6 |  |  | 145.0 |
| La Coipa |  | 250.5 |  |  | 132.0 |  |  | 9.1 |  |  | 45.8 |  |  | 5.1 |  |  | 0.2 |  |  | 58.3 |  |  | 26.5 |  |  | 450.8 |
| Maricunga |  | 187.5 |  |  | 115.9 |  |  | 0.6 |  |  | 14.5 |  |  | 1.1 |  |  | 1.6 |  |  | 53.8 |  |  | 72.0 |  |  | 609.3 |
| Tasiast |  | 78.0 |  |  | 43.1 |  |  | 0.1 |  |  | 20.4 |  |  | 22.9 |  |  | 0.7 |  |  | (9.2 | ) |  | 53.8 |  |  | 1,323.3 |
| Chirano |  | 116.8 |  |  | 51.6 |  |  | 0.1 |  |  | 31.1 |  |  | 4.4 |  |  | 0.2 |  |  | 29.4 |  |  | 10.1 |  |  | 712.6 |
Non-operating segments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Fruta del Norte |  | - |  |  | - |  |  | - |  |  | 0.6 |  |  | 7.8 |  |  | 31.7 |  |  | (40.1 | ) |  | 1.4 |  |  | 1,040.6 |
| Cerro Casale (d) |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 4.0 |  |  | - |
Corporate and other (e) |  | - |  |  | - |  |  | 9.3 |  |  | 4.5 |  |  | 73.3 |  |  | 154.5 |  |  | (241.6 | ) |  | 48.0 |  |  | 8,197.9 |
Total | $ | 3,010.1 |  | $ | 1,255.4 |  | $ | 29.0 |  | $ | 517.5 |  | $ | 142.7 |  | $ | 198.3 |  | $ | 867.2 |  | $ | 563.7 |  | $ | 16,397.1 |

Year ended December 31, 2009:

|  | Metal sales |  |  | Cost of sales (a) |  |  | Accretion |  |  | DD&A (b) |  |  | Exploration and business development |  |  | Other (c) |  |  | Segment operating earnings (loss) |  |  | Capital expenditures |  |  | Segment assets - As at December 31, 2009 |
Operating segments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Fort Knox | $ | 261.0 |  | $ | 143.7 |  | $ | 1.7 |  | $ | 32.6 |  | $ | 2.4 |  | $ | 0.2 |  | $ | 80.4 |  | $ | 133.1 |  | $ | 434.2 |
| Round Mountain |  | 210.0 |  |  | 111.4 |  |  | 1.6 |  |  | 12.1 |  |  | 0.4 |  |  | 0.4 |  |  | 84.1 |  |  | 33.0 |  |  | 248.1 |
| Kettle River-Buckhorn |  | 182.0 |  |  | 53.6 |  |  | 2.9 |  |  | 64.6 |  |  | 3.9 |  |  | (1.6 | ) |  | 58.6 |  |  | 30.3 |  |  | 332.8 |
| Kupol |  | 900.2 |  |  | 245.5 |  |  | 1.4 |  |  | 205.1 |  |  | 4.8 |  |  | 0.9 |  |  | 442.5 |  |  | 39.3 |  |  | 1,411.8 |
| Paracatu |  | 340.1 |  |  | 240.9 |  |  | 1.0 |  |  | 42.5 |  |  | - |  |  | 14.0 |  |  | 41.7 |  |  | 124.1 |  |  | 1,358.9 |
| Crixás |  | 73.6 |  |  | 31.0 |  |  | 0.1 |  |  | 9.7 |  |  | 0.7 |  |  | 6.2 |  |  | 25.9 |  |  | 25.2 |  |  | 134.8 |
| La Coipa |  | 216.4 |  |  | 97.6 |  |  | 8.5 |  |  | 57.5 |  |  | 6.3 |  |  | 4.2 |  |  | 42.3 |  |  | 18.8 |  |  | 436.8 |
| Maricunga |  | 228.8 |  |  | 123.4 |  |  | 0.5 |  |  | 19.3 |  |  | 0.2 |  |  | 2.2 |  |  | 83.2 |  |  | 42.5 |  |  | 537.5 |
Non-operating segments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Fruta del Norte |  | - |  |  | - |  |  | - |  |  | 0.3 |  |  | 4.3 |  |  | 21.4 |  |  | (26.0 | ) |  | 3.1 |  |  | 1,033.4 |
| Cerro Casale (d) |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 0.4 |  |  | (0.4 | ) |  | 22.2 |  |  | 914.6 |
Corporate and other (e) |  | - |  |  | - |  |  | 1.6 |  |  | 3.6 |  |  | 49.5 |  |  | 131.7 |  |  | (186.4 | ) |  | 9.6 |  |  | 1,170.3 |
Total | $ | 2,412.1 |  | $ | 1,047.1 |  | $ | 19.3 |  | $ | 447.3 |  | $ | 72.5 |  | $ | 180.0 |  | $ | 645.9 |  | $ | 481.2 |  | $ | 8,013.2 |

160

Year ended December 31, 2008:

|  | Metal sales |  |  | Cost of sales (a) |  |  | Accretion |  |  | DD&A (b) |  |  | Exploration and business development |  |  | Other (c) |  |  | Impairment - Goodwill |  |  | Segment operating earnings (loss) |  |  | Capital expenditures |  |  | Segment assets - As at December 31, 2008 |
Operating segments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Fort Knox | $ | 290.3 |  | $ | 152.4 |  | $ | 1.2 |  | $ | 29.7 |  | $ | 2.7 |  | $ | 2.0 |  | $ | - |  | $ | 102.3 |  | $ | 126.6 |  | $ | 315.8 |
| Round Mountain |  | 213.7 |  |  | 112.9 |  |  | 1.1 |  |  | 22.2 |  |  | 0.7 |  |  | - |  |  | - |  |  | 76.8 |  |  | 36.9 |  |  | 228.2 |
| Kettle River-Buckhorn |  | 13.7 |  |  | 5.6 |  |  | 2.1 |  |  | 5.9 |  |  | 3.4 |  |  | 3.3 |  |  | - |  |  | (6.6 | ) |  | 42.5 |  |  | 362.5 |
| Kupol |  | 433.2 |  |  | 116.8 |  |  | 0.9 |  |  | 121.6 |  |  | 5.4 |  |  | - |  |  | 668.4 |  |  | (479.9 | ) |  | 102.4 |  |  | 1,476.3 |
| Paracatu |  | 161.4 |  |  | 82.4 |  |  | 1.2 |  |  | 16.3 |  |  | - |  |  | (8.7 | ) |  | - |  |  | 70.2 |  |  | 329.2 |  |  | 1,241.0 |
| Crixás |  | 75.3 |  |  | 26.2 |  |  | 0.4 |  |  | 10.7 |  |  | 2.1 |  |  | 0.9 |  |  | - |  |  | 35.0 |  |  | 19.7 |  |  | 120.4 |
| La Coipa |  | 206.6 |  |  | 114.7 |  |  | 7.9 |  |  | 38.8 |  |  | 3.7 |  |  | 2.8 |  |  | - |  |  | 38.7 |  |  | 17.1 |  |  | 408.5 |
| Maricunga |  | 184.8 |  |  | 125.5 |  |  | 0.4 |  |  | 17.8 |  |  | 1.4 |  |  | - |  |  | 220.2 |  |  | (180.5 | ) |  | 22.4 |  |  | 525.5 |
| Julietta (f) |  | 38.0 |  |  | 32.3 |  |  | 0.2 |  |  | 8.1 |  |  | 0.4 |  |  | - |  |  | - |  |  | (3.0 | ) |  | 2.4 |  |  | - |
Non-operating segments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Fruta del Norte |  | - |  |  | - |  |  | - |  |  | - |  |  | 0.4 |  |  | 4.4 |  |  | - |  |  | (4.8 | ) |  | - |  |  | 1,043.3 |
| Cerro Casale (d) |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 0.1 |  |  | - |  |  | (0.1 | ) |  | 10.9 |  |  | 884.8 |
Corporate and other (e) |  | - |  |  | - |  |  | 9.3 |  |  | 2.7 |  |  | 38.8 |  |  | 103.4 |  |  | 105.5 |  |  | (259.7 | ) |  | 4.6 |  |  | 781.2 |
Total | $ | 1,617.0 |  | $ | 768.8 |  | $ | 24.7 |  | $ | 273.8 |  | $ | 59.0 |  | $ | 108.2 |  | $ | 994.1 |  | $ | (611.6 | ) | $ | 714.7 |  | $ | 7,387.5 |

(a)
  Cost of sales excludes accretion, depreciation, depletion and amortization.
(b)
  Depreciation, depletion and amortization is referred to as "DD&A" in the tables above.
(c)
  Other includes Other operating costs and General and administrative expenses.
(d)
  As of March 31, 2010, Cerro Casale is accounted for as an equity investment.
(e)
  Includes corporate, shutdown operations and other non-core operations. As at December 31, 2010, Corporate and other includes unallocated goodwill relating to the acquisition of Red Back of $5,161.1 million.
(f)
  Julietta was sold in August 2008.

The following table outlines information by country:

|  |  | Metal sales |  |  | Property, plant & equipment |
|  |  | For the years ended December |  |  | December 31, |  |  | December 31, |
|  |  | 2010 |  |  | 2009 |  |  | 2008 |  |  | 2010 |  |  | 2009 |
Geographic information: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 903.0 |  | $ | 653.0 |  | $ | 517.7 |  | $ | 714.2 |  | $ | 730.4 |
Russian Federation |  |  | 781.8 |  |  | 900.2 |  |  | 471.2 |  |  | 1,081.0 |  |  | 707.5 |
Brazil |  |  | 692.5 |  |  | 413.7 |  |  | 236.7 |  |  | 1,323.4 |  |  | 1,197.3 |
Chile |  |  | 438.0 |  |  | 445.2 |  |  | 391.4 |  |  | 827.1 |  |  | 1,290.0 |
Mauritania |  |  | 78.0 |  |  | - |  |  | - |  |  | 1,199.0 |  |  | - |
Ghana |  |  | 116.8 |  |  | - |  |  | - |  |  | 582.8 |  |  | - |
Ecuador |  |  | - |  |  | - |  |  | - |  |  | 1,028.8 |  |  | 1,028.0 |
Canada |  |  | - |  |  | - |  |  | - |  |  | 155.2 |  |  | 36.7 |
Total |  | $ | 3,010.1 |  | $ | 2,412.1 |  | $ | 1,617.0 |  | $ | 6,911.5 |  | $ | 4,989.9 |

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 161

The following table outlines sales to individual customers exceeding 10% of annual metal sales:

|  |  | Metal Sales |
|  |  | For the years ended December 31, |
Rank |  |  | 2010 |  |  | 2009 |  |  | 2008 |
1 |  | $ | 1,152.7 |  | $ | 1,187.6 |  | $ | 579.5 |
2 |  |  | 353.4 |  |  | 300.7 |  |  | 244.0 |
3 |  |  | 353.1 |  |  | 250.5 |  |  | 195.8 |
4 |  |  | - |  |  | - |  |  | 165.3 |
5 |  |  | - |  |  | - |  |  | 118.6 |
Total |  | $ | 1,859.2 |  | $ | 1,738.8 |  | $ | 1,303.2 |
% of total metal sales |  |  | 61.8% |  |  | 72.0% |  |  | 80.6% |

The Company is not economically dependent on a limited number of customers for the sale of its product because gold can be sold through numerous commodity market traders worldwide.

16. OPERATING LEASES

The Company has a number of operating lease agreements involving office space and equipment. The operating leases for equipment provide that the Company may, after the initial lease term, renew the lease for successive yearly periods or may purchase the equipment at its fair market value. One of the operating leases for office facilities contains escalation clauses for increases in operating costs and property taxes. A majority of these leases are cancelable and are renewable on a yearly basis. Future minimum lease payments required to meet obligations that have initial or remaining non-cancelable lease terms in excess of one year are $6.0 million, $4.8 million, $4.8 million, $4.6 million and $4.3 million for each year from 2011 to 2015, respectively, and $19.2 million thereafter.

17. RELATED PARTY TRANSACTION

There were no material related party transactions in 2010, 2009, and 2008.

18. CONTINGENCIES

General

Estimated losses from contingencies are accrued by a charge to earnings when information available prior to the issuance of the financial statements indicates that it is likely that a future event will confirm that an asset has been impaired or a liability incurred at the date of the financial statements and the amount of the loss can be reasonably estimated.

Aurelian Warrant Litigation

In 2009, the Company settled litigation in respect of certain actions brought against Aurelian Resources Inc., which was acquired in 2008. As a result, an adjustment to the litigation reserve was made in the amount of $18.5 million.

Kinam Preferred Shares

During 2008, the Company entered into a memorandum of understanding to settle all claims related to the Kinam preferred share litigation in the amount of $29.25 million. As the Company previously held the preferred shares balance at $10.1 million, this resulted in a charge of $19.1 million in 2008 (see Note 5(xi)).

Cerro Casale Contingency

The Company was obligated to pay $40 million to Barrick when a production decision is made relating to the Cerro Casale project. During the first quarter of 2010, this contingent liability was reduced to $20 million in accordance with the agreement with Barrick under which the Company sold one-half of its 50% interest in the Cerro Casale project. See Note 4(i) for more details on the disposition.

Other legal matters

The Company is involved in legal proceedings from time to time, arising in the ordinary course of its business. Typically, the amount of ultimate liability with respect to these actions will not, in the opinion of management, materially affect Kinross' financial position, results of operations or cash flows.

162

Income taxes

The Company operates in numerous countries around the world and accordingly is subject to, and pays annual income taxes under the various regimes in countries in which it operates. These tax regimes are determined under general corporate income tax laws of the country. The Company has historically filed, and continues to file, all required income tax returns and to pay the taxes reasonably determined to be due. The tax rules and regulations in many countries are complex and subject to interpretation. From time to time the Company will undergo a review of its historic tax returns and in connection with such reviews, disputes can arise with the taxing authorities over the Company's interpretation of the country's income tax rules.

Brazil

During 2009, the Brazilian federal legislature passed a tax amnesty program. A Brazilian taxpayer could agree to settle its federal tax debts resulting from an assessment of tax before December 1, 2009 at a discount. On November 27, 2009, the Company settled a significant portion of its Brazilian federal tax debts under this amnesty program resulting in a reduction in its other expense line in the income statement of $45.5 million.

In early August 2009, the Company's wholly-owned Brazilian subsidiary, Kinross Brasil Mineracao S.A. ("KBM"), formerly known as Rio Paracatu Mineracao S.A., the owner of Paracatu, received a tax assessment from the Brazilian federal tax authorities in the amount of $153.7 million (December 31, 2009 - $146.0 million), including penalties and interest of $89.5 million (December 31, 2009 - $82 million). The assessment denies deductions for goodwill claimed by KBM during 2005 through 2008. As at December 31, 2010, the Company has a future tax asset of approximately $66.4 million recorded in its financial statements in respect of the goodwill balance, the future deduction of which will depend on the outcome of the assessment. The Company has assessed the net tax benefit related to this item, concluding it appropriate. On September 1, 2009, the Company filed its administrative appeal of this assessment.

In late December 2008, KBM received a tax assessment from the Brazilian tax authorities in respect of its 2003 tax. This assessment is the result of the denial of a deduction for interest paid on certain debentures issued by such Brazilian subsidiary. On July 15, 2009, the Company received a similar assessment with respect to its 2004 tax year. On November 27, 2009, the Company settled these tax debts under the Brazilian tax amnesty program.

Mineracao Serra Grande, S.A. ("MSG") which owns the Crixás mine, the Company's 50% joint venture with Anglogold Ashanti, received two tax reassessments since November 2003 from the Minas Gerais State and Goias State tax authorities. The reassessments disallowed the claiming of certain sales tax credits and assessed interest and penalties of which the Company's 50% share totals approximately $9.7 million (December 31, 2009 - $8.9 million). The Company and its joint venture partner believe that this reassessment will be resolved without any material adverse effect on its financial position, results of operations or cash flows. This reassessment relates to the Crixás operating segment.

In December 2007, the Company's 100% owned Brazilian subsidiary, Kinross Participacoes Ltda. received a tax assessment from the Brazilian federal tax authorities in the amount of $137.4 million (December 31, 2009 - $126.5 million), including penalties and interest in respect of alleged income taxes not withheld from a third party. The Company has appealed this assessment and believes that it has reasonable defences to the assessment. The Company is pursuing its indemnity rights from the third party in respect of the assessment.

In September 2005, MSG received assessments relating to payments of sales taxes on exported gold deliveries from tax inspectors for the State of Goias. The Company's share of the assessments is approximately $55.3 million (December 31, 2009 - $46.7 million). The counsel for MSG believes the suit is in violation of Federal legislation on sales taxes and that there is a remote chance of success for the State of Goias. The assessment has been appealed. This reassessment relates to the Crixás operating segment.

In October 2006, MSG received an assessment from the State of Goias tax authorities relating to remittance of gold from Crixás to Nova Lima in Minas Gerais for export purposes. Since May 2006, the Goias State signed an authorization (TARE) to this procedure. The Company's share of this assessment is approximately $34.0 million (December 31, 2009 - $28.7million). The Company and its joint venture partner believe that this reassessment will be resolved without any material adverse affect on its financial position, results of operations or cash flows.

KINROSS GOLD CORPORATION 2010 ANNUAL REPORT 163