For Kinross, 2013 was a defining year. We made tough decisions, and delivered on a strategy grounded in operational excellence, a relentless focus on margins and cash flow, and strict financial discipline.
The team rallied and not only met, but exceeded expectations, with record production, and the launch of a new low-cost mine on time and on budget, all while reducing spending. As a result, Kinross enters 2014 with renewed strength, targeting another solid year of production and declining all-in sustaining cost, and with a strong balance sheet that affords us financial flexibility.
There is no question that 2013 was a difficult year for the gold industry. Every producer had to confront the decline in the gold price which impacted their balance sheets, their cost structures and their share price. Kinross was no exception. But these challenges also motivated us to excel, and in 2013 we were proud of what we achieved in a number of areas.
Most notably, 2013 marked an impressive year for Kinross operationally. Record production at Fort Knox and Paracatu, and another excellent year at Kupol, which included additional production from the newly opened Dvoinoye mine, helped fuel four consecutive quarters of strong performance. As a result, we surpassed our initial 2013 production guidance of 2.4-2.6 million gold equivalent ounces with record year-end output of 2.63 million gold equivalent ounces. We also beat our guidance on all-in sustaining cost and came in at the low end of guidance for cost of sales. And, we achieved one of the best safety records in the industry, with one of the lowest injury rates among our peers.
Our strong foundation of operational excellence, combined with a willingness to take early, decisive action on a number of fronts, helped us to manage the impact of a volatile gold price from a position of strength. We were among the first to maintain our 2011 gold price assumption for our 2012 year-end reserve estimate. We also applied a rigorous, fully-loaded costing methodology for estimating our mineral reserves as part of our mine plan optimization. While this reduced our total reserve estimate in 2013, it increased overall grades by approximately 17%, net of Fruta del Norte (FDN), and reinforced our focus on generating cash flow by targeting higher margin, lower cost ounces. At Kinross, our emphasis on quality over quantity is hard-wired into every stage of the mine cycle, from exploration through to processing.
This comprehensive approach – what we call the Kinross Way Forward – was first launched in the fall of 2012. It has driven savings and efficiencies in areas such as supply chain management, energy use, and overhead. In the case of our workforce, we have reduced overall headcount while at the same time investing in our technical bench strength, thereby allowing us to rely less on contractors. At Chirano, Fort Knox, and other sites, we have moved from contractors to self-perform mining, a decision aimed at saving money and building internal expertise.