Kinross Gold Corporation: Kupol Begins Processing Ore

Market Wire, May, 2008

Kinross Gold Corporation (TSX: K)(NYSE: KGC) today announced its unaudited results for the three months ended March 31, 2008.

(This news release contains forward-looking information that is subject to the risk factors and assumptions set out in our Cautionary Statement on Forward-Looking Information located on page 15 of this news release. All dollar amounts in this news release are expressed in U.S. dollars, unless otherwise noted.)

2008 First Quarter Highlights

- Gold equivalent production was 331,784 gold equivalent ounces in the first quarter of 2008, compared with 389,394 ounces for the same period last year. Consistent with previously disclosed quidance, the Company remains on track to produce approximately 1.9 - 2.0 million gold equivalent ounces in 2008.

- Revenue was $330.2 million in the first quarter, a 34% increase over the same period last year, and the average realized gold price was $929 per ounce sold, compared with an average realized gold price of $650 per ounce in the first quarter of 2007.

- Cost of sales per gold equivalent ounce(1) was $455 in the first quarter, before an incremental fair value inventory charge of $6.1 million relating to the La Coipa acquisition, on sales of 356,864 gold equivalent ounces. Reported cost of sales per ounce including the inventory charge ($17 per ounce) totaled $472. This compares with a cost of sales of $328 per ounce on sales of 378,167 gold equivalent ounces in the first quarter of 2007. A further $20 of the increase over previously disclosed cost of sales per ounce guidance relates to changes in currency exchange rates, oil prices, and higher royalty payments resulting from higher gold prices. This variance is consistent with sensitivity information previously disclosed. The remaining variance relates primarily to mine operating factors and higher consumable costs.

- Based on reported cost of sales per gold equivalent ounce of $472, Kinross' margin per ounce sold was $457 in the first quarter, compared with $322 for the first quarter 2007, an increase of 42%.

- Incorporating first quarter actual results and based on the price assumptions outlined in our previous guidance for the remainder of the year, the Company expects its average 2008 cost of sales will be $385-395 per gold equivalent ounce versus the previously announced forecast of $365-375. Approximately 65% of this increase relates to first quarter actual results and the remainder to an expected increase in maintenance and repair costs at Maricunga, and pit wall repair costs at La Coipa. The Company expects that the cost of sales per ounce will be impacted positively over the course of the year as the Paracatu, Kupol and Buckhorn projects are commissioned and total production increases.

- Net earnings for the first quarter were $70.9 million, or $0.12 per share, compared with net earnings of $68.5 million, or $0.16 per share, for the same period last year. Earnings for the first quarter included a gain of $11.5 million, or $0.02 per share, related to the sale of Kubaka. The year-over-year decrease in earnings per share is largely due to a 39% increase in the average number of shares outstanding.

- Cash flow from operating activities was $76.3 million in the first quarter of 2008, compared with $90.2 million for the corresponding period in 2007. Cash and short-term investment balances were $889.5 million at March 31, 2008 compared with $561.2 million at December 31, 2007.

- Capital expenditures totaled $190.5 million in the first quarter. The Company expects 2008 capital expenditures to increase to approximately $752 million versus the previous forecast of $685 million. This increase relates to several investment initiatives including moving $35 million in capital forward from 2009 to accelerate the Fort Knox project, $12 million for Cerro Casale feasibility work, and $20 million to advance the purchase of mobile equipment at Paracatu and to purchase a fuel transport fleet at Kupol.

- The Kupol mill is now processing ore and first gold and silver production is expected during May Paracatu is on schedule to begin commissioning in July. Buckhorn is on schedule to begin commissioning in October. All permit appeals at Buckhorn have been settled and dismissed.

(1) Cost of sales per ounce is defined as cost of sales as per the financial statements divided by the number of gold equivalent ounces sold.

CEO commentary

Tye Burt, Kinross President and CEO, made the following comments in relation to the first quarter 2008 results:

"The significant growth we expect in 2008 is becoming a reality at our three projects. We have reached a major milestone at Kupol, as mining continues and milling is now underway. Initial production is expected on schedule during May Paracatu and Buckhorn remain on schedule to begin commissioning in July and October, respectively. We recently settled Buckhorn's outstanding permit and authorization appeals, reaching an agreement with a group which opposed development of the mine for many years.

"At current operations, production was slightly below our plan in the first quarter due to operational issues at Fort Knox, Round Mountain and La Coipa, which deferred some production and negatively impacted costs. These issues were short-term and were somewhat offset by solid production from Paracatu and Maricunga. We remain on track to produce 1.9 - 2.0 million gold equivalent ounces in 2008.