Good morning. My name is Laura, and I will be your conference operator today. At this time, I would like to welcome everyone to the Kinross Gold Corporation First Quarter 2020 Results Conference Call and Webcast. All participants are in a listen-only mode to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator instructions] Thank you. At this time, I'd like to turn the call over to Mr. Tom Elliott, Senior Vice President, Investor Relations, and Corporate Development. Mr. Elliott, you may begin your conference.

Thank you, and good morning. With us today, we have Paul Rollinson, President and CEO and the Kinross senior leadership team, Andrea Freeborough, Paul Tomory and Geoff Gold. Before we begin, I'd like to bring your attention to the fact that we will be making forward-looking statements during this presentation. For a complete discussion of the risks, uncertainties and assumptions, which may lead to actual results and performance being different from estimates contained in our forward-looking information, please refer to Page 2 of this presentation, our news releases dated May 5, 2020, the MD&A for the period ended March 31, 2020, and our most recently filed AIF, all of which are available on our website. I'll now turn the call over to Paul.

Thanks, Tom, and thank you all for joining us today. This morning, we'll provide an update on how we're managing in the current environment at our quarterly results. First, however, I want to convey that our thoughts with all those who have been affected by the pandemic as well. On behalf of our company, I'd like to express our deepest gratitude and respect for all of the frontline workers who continue to put themselves at personal risk during this crisis. Regarding Kinross, we, like many companies are facing various pandemic-related challenges across our business. However, through a combination of early planning, disciplined adherence to health and safety protocols and supportive of host governments, all of our mines remained in operation during the quarter and have not been materially impacted. During the quarter, we did not experience significant business interruptions and most importantly our employees were healthy and safe. However, we are taking nothing for granted and have established business continuity and contingency plans to help us manage a wide range of financial and operational scenarios. Throughout this crisis, we have been working closely with our host governments and communities to aid their campaigns to control the spread of COVID. We've committed $5.3 million in support of local efforts to provide medical supplies, equipment, and food aid at our sites around the world. Despite this challenging environment, we have performed well and we are proud of our first quarter results. Our three largest mines, Paracatu, Kupol-Dvoinoye and Tasiast delivered strong production and cost during the quarter. Of note, Tasiast delivered its second consecutive quarter of record production. As is the case with any global portfolio, there were some puts and takes during the quarter and we did encounter some challenges that are smaller mines. However, the impact of the company as…

Thanks, Paul. I'll begin with a few financial highlights from the quarter, review capital expenditures and end with a summary of the balance sheet. During Q1, we produced approximately 567,000 attributable gold equivalent ounces at an average cost of sales of $754 per ounce and all-in sustaining cost of $993 per ounce. Our average realized gold price was $1,581 per ounce in Q1, up 21% from last year. And we achieved a margin of $827 per ounce, up 33% compared with the same period last year. During the quarter, we sold approximately 15,000 ounces of gold, fewer than we produced largely due to the impact of the pandemic on time in the metal shipments to refinery. However, this was higher than our previous sales estimate noted on April 1 due to favorable timing of sales principally from Bald Mountain. Our adjusted EPS of $0.10 and adjusted operating cash flow per share of $0.33 were both up compared with the first quarter last year. Adjusted operating cash flow was $419 million versus $231 million last year and as Paul mentioned earlier, free cash flow during the quarter was approximately $110 million, which is in line with the fourth quarter. We expect free cash flow for each of the remaining quarters of this year to be higher depending on gold prices and other external factors. Specific items that affected our quarter end cash balance included our $100 million revolver repayment in February, and then the subsequent $750 million draw towards the end of March and the interest payment of approximately $50 million. The first payment on our Chulbatkan acquisition, which was approximately $130 million and a tax payment of approximately $44 million in Brazil, considerably higher than last year reflecting Paracatu outstanding performance and profitability in 2019. Turning to income tax, during…

Thanks, Andrea. First, I will spend a few minutes discussing some of the key COVID-related initiatives and contingencies we've put in place. Then I'll move on to a summary of how operations are performing. We acted quickly with the establishment of our pandemic task force and took several immediate measures across the operation. There's minimal impact on our Q1 results, but there are likely to be minor challenges over the next few months. In the area of supply chain, our six contain [ph] to review all key consumables and critical supply channels in order to assess potential disruptions and to identify mitigating actions, including finding alternative sources of supply. Or possible, we've been working to increase stock of key consumables to three months. The one obvious standout in the portfolio is Russia, where supplies come in once a year on a seasonal ice road. For this reason, Kupol-Dvoinoye have roughly 12 months of inventory, including fuel and other critical items. While we effectively mitigated any material business interruption during the quarter, we could see some negative complications if current pandemic related restrictions extend into the summer months. Now moving to a summary of operating the projects. As Paul indicated, our three biggest producers continued the strong performance and accounted for 62% of first quarter production. Paracatu is our largest producer and continues to see good results, reflective of the asset optimization program, which was completed last year. Recoveries were lower compared with previous quarters due to anticipated variations in ore characteristics, which accounted for the decrease in production compared with Q4. Recoveries are expected to improve as we move into higher-grade ore in the fourth quarter of this year and into 2021. Throughput was also lower in the quarter due to unplanned downtime to replace an Apron feeder in one…

Thanks Paul. To conclude, while the world continues to work through this pandemic as a company, we have come together with our employees in our local communities to work together to mitigate the impacts of COVID. I'm proud to say that our employees remain safe and all of our sites remained operational during the quarter. This would not have been possible without the good relationships we have with our suppliers, communities, and host governments. I'd like to thank our employees, who despite their own challenges, have stepped up and enabled Kinross to manage through the situation. Even with the impacts of COVID, we feel we delivered a good quarter. Our projects continue to advance and we remain in a very strong financial position. With that operator can we now open up the call for questions? Thank you.

Yes sir. [Operator Instructions] We do have a question from Jackie Przybylowski from BMO Capital Markets.

Hi, good morning. I was just wondering if maybe you could give us a little bit more color on the situation at Tasiast. I mean, I know it's difficult for you. It is impacting the project that you are working on there, the expansion. And do you have any idea how long this might last or is there's going to have to be any kind of other intervention, government’s intervention or whatever in order to get the workers back on the job?

Well, I think, I’ll let Paul comment on the project side of it, but no, I think – I think Paul was trying to give some context. This isn't the first time we've had a situation like this. We are disappointed. It does feel opportunistic. But history would suggest these tend to be short-lived. And we’ll work through it as we have in the past. Paul maybe to comment a little bit more specifically as to the project side of it.

Yes, as of right now, the project remains un-impacted. Contractors associated with both the 24k project, as well as contractor supporting the operations are not off the job. The project is continuing. However, depending on the length of the strike, there could be impacts but that would come after likely the couple of weeks scenario, but as of right now, the project is un-impacted.

Thanks. And maybe it's a question for Andrea on the liquidity side, I know you've drawn down some cash from your three credit lines. How long do you expect to hold that cash in your balance sheet? Or when do you think you will be comfortable with the COVID situation or the global situation to bring that back down?

Thanks, Jackie. We would expect to repay the $750 million once we're comfortable, but enough uncertainty has lifted from this COVID environment. But it's just tough to predict when that will be. I would say we haven’t used those funds and we don't currently plan to. So it's just a matter of having enough time pass and that being more comfortable as far as the uncertainty is listed.

Yes, this is a difficult situation to predict all around really.

Yes.

That’s all I have. Thanks very much.

Our next question is from Carey MacRury of Canaccord Genuity.

Hi, good morning. You mentioned oil prices and FX rate, I'm just wondering based on what you think that can do on the dollar ground spaces and when we could see that?

Sure. I would say I'll hand that off to Andrea, but we are getting a greater sensitivity on currency than oil right now because of some infrastructural arrangements we have in place as it relates to oil. But Andrea, why don't you take a crack at that?

Sure. So we did see some benefit in Q1 related to currencies and oil. Our forecast for the year based on current spot prices for FX and oil is somewhere in the range of $30 to $40 an ounce. So, we are not a hundred percent exposed to fluctuations in WTI. And I'd also point out that forward prices haven't dropped significantly as the spot price.

Okay. And then maybe just some capital Q1 was relatively low compared to your previous guidance. I'm just wondering with COVID impacts, should we expect capital to sort of be down back to more towards the guidance range or do you think there is an opportunity to reduce that this year?

I can start and then Tomory may want to jump in. What I say is the CapEx for Q1 is not atypical for Q1 to be a little slower to ramp up on CapEx. And we've withdrawn on our guidance, but…

And now I’ll add a couple points on the side of your CapEx that’s happening here. A large amount of our capital finishers this year are stripping related and two impacts there that are moving CapEx down, one of course is the oil price, a large proportion of the stripping dollars associated with sleep movement. So there's an oil price impact. But in the case of a couple of our sites, Fort Knox and Tasiast, our mining rates were impacted as a result of COVID related restrictions, meaning we didn't have as many people at site as we would have liked and so mining rates were lower in the second half of March. Some of those conditions persist, particularly at Tasiast. So there might be a trend showing up on Tasiast capital stripping that is lower than we would have planned. The other, factor driving capital this year will be potential impacts to our large capital projects stripping aside. So for example, La Coipa, we've already signaled a three-month delay on that project, primarily related to inability to get the workforce ramped up to free stripping due to COVID-related restrictions. And so there will be some slide out of the capital and liquid from this year to the next year. And the other one is Tasiast is the project itself. We haven't signaled it the way yet, but some of these restrictions, particularly around the ability to move experts, technical experts around the world of course right now nobody is swinging anywhere should those restrictions persists for a long period of time, we will see a slippage in the schedule of Tasiast and an associated pull out of CapEx. So the way I characterize it is we're probably going to end up lighter than we had budgeted on CapEx, but it's really too early to say where that number will land given the uncertainties that I have described.

Okay. And then maybe one last one on Tasiast the 16,000 tons a day, is that a function of just how the mill is performing or is there a bit of ore hardness mix in that?

It's all about mill performance. The mill is doing exceptionally well. We're getting used to operating it at these higher throughputs. And what we are going to start to see over the coming months and quarters is continued incremental ramp up and throughput as we start to complete element with the 21K project for incremental debottlenecking, but it's not an ore – it's not primarily an ore related thing rather than really good performance out of that mill as we get used to running it.

Great. Thanks guys.

My next question is from Tanya Jakusconek of Scotiabank.

Yes, good morning everybody. Paul, just continuing on Tasiast. You mentioned that should we continue to see travel restrictions upon expats crisis for a long time that we sort of will start slipping on that schedule. What sort – is the persisting for a long time? Are we talking about months here, or are we talking that we would need to see by the end of this year, just the timeframe for what would cause slippage on that front.

If we were not able to get ex-pats into Mauritania, say by July, August, we will start to see at first weeks and then potentially months being added to the schedule. However, as I alluded to in the last question, there are certain element. This project is not all or nothing project there are various de-bottlenecking stages. Say for example, we're right now working on a tailings booster pump that will allow us to get rid of that bottleneck lead, bringing in new interstate screens. Those two elements will come online really your perspective of restrictions won't they get term incremental throughput upside. But to specifically answer your question, if we can't get ex-pats to site by July, August, September, we're starting to see some slippage in the project.

And in terms of other slippage how are you doing on the pre-strip there? I mean, I would assume that less people on site, maybe less people.

Yes, correct.

Yes.

.: So as I mentioned earlier to Carey, we do see some lower CapEx as a result of that at Tasiast. Now what is the impact of that? The impact isn't huge because one way or another regarding mine at Tasiast we have internal stockpiles. So should there be a delay of access to the next phase of high grade ore out of the pit, it just means you have to subsist on these lower grade stockpiles for a longer period of time. We’re into those stockpiles anyway in the back end of Q2 this year. It would just mean that stockpile periods are extended.

Okay. Thanks for that color. And maybe just a higher level question, I appreciate, I mean, some of these things are fluid so may not have all of the answers, but when you look at what the productivity of your workforces have been with this COVID would you say that your productivity is still intact?

Yes. I think, go ahead Paul. Keep stepped up and go ahead.

Yes, productivities we keep a very close eye on that. We do weekly COVID response meetings and we do track productivities. We have some really good things. So, for example, Paracatu just set a record, 18 straight days without any downtime. It's first time that a site has done that length of a period of time. So we do see spotlights in the company where we're performing really well. But there will be an impact to productivity. So for example, at Bald Mountain, the crew buses that go down from Elko previously, you could put 55 people on one of those buses, now you can only do 12, 12. So if Nevada doesn't relax some of those restrictions, then yes, we'll start to have these little impacts, we characterize them as paper cuts pretty soon. They start to add up to something that could be a little bit more material. But as of right now, though we have stresses on the productivity across the company, we are not terribly worried about them at this stage.

Well that's good. And if I could just ask one last question on just like the additional costs from COVID, I mean it appears that they are being more than offset by the FX and oil tailwinds. Is that a fair comment?

Yes, absolutely.

Okay, great. Thank you and good luck.

Thanks. [Operator Instructions] Once again, if you would like to ask a question, please press star then one. Our next question comes from Anita Soni of CIBC World Market.

Hi, good morning everyone. Question just following up on the capital, but the free cash flow that you mentioned that current spot prices, I think, you said $700 million for the year that's assuming the full capital spend that you had originally guided to?

Yes, and the existing hedges in place, it's just continuing as per our budget this year. But just with that higher commodity price yes.

Okay. And then just a second question on the capitalized interest. Is that a good go forward rate, the $22 million – that went through investing activities this quarter?

Andrea, do you want to take that one?

Yes, what – we've provided guidance on capitalized interest at the start of the year. So that still stands. But yes, what you're seeing in the quarter is basically what you can expect for the year.

Okay, great. Thank you.

And we have no further questions at this time.

Okay. Well thank you operator. And thank you everyone for joining us today. Keep safe everyone, and we'll keep our heads down, and keep running our business and we're looking forward to getting on the other side of this and catching up with you all in the future. Thanks for joining us this morning. Thanks.

Ladies and gentlemen, thank you for joining us today. You may now disconnect.