1 Good morning. My name is Ursula and I will be your conference operator today. At this time, I would like to welcome everyone to the Kinross Gold Corporation Fourth Quarter and Year-End 2019 Results Conference Call and Webcast. All participants are in a listen-only mode to prevent any background noise. After the speaker’s 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 all four members of the Kinross senior leadership team, Paul Rollinson, 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 the 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 two news release dated February 12, 2020, the MD&A for the period ended December 31, 2019, 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 thanks, everyone for joining us today. This morning I'll briefly recap some 2019 highlights before I discuss our outlook for 2020 and then I'll turn it over to Andrea and Paul for more details. As we reported yesterday, 2019 was an excellent year for Kinross and we had a strong finish in the quarter. Production was higher and unit costs were lower year-over-year. We generated robust cash flow and increased liquidity. Internally, we strengthened our portfolio and future production profile while adding life at our existing mines. Externally, we continue to generate value through our disciplined approach to corporate development and we maintained our strong performance in ESG. We take pride in our track record as dependable operators and 2019 marked the eight straight year that we have met/or exceeded guidance for production, cost and capital. Our mines delivered strong results with production of 2.5 million ounces and cost of $706 per ounce. Our three largest mines Paracatu, Tasiast, and Kupol continued to lead the way, accounting for over 60% of our total production with the lowest unit cost in the portfolio averaging $626 per ounce. Paracatu set a new production record of 620,000 ounces and reduced its average cost of sales by more than $150 per ounce to $666 per ounce. Later this quarter, we plan to publish our new technical report on Paracatu, providing our long-term view of this cornerstone asset. Tasiast also had a great 2019 with the first full operating year of the Phase One expansion and also had an outstanding Q4 with a new record for throughput, production and cost per ounce. Kupol, a consistently strong performer had another good year and a strong fourth quarter with the lowest average cost per ounce in the portfolio. Round Mountain performed well and was…

Thanks Paul. I'll begin with a few financial highlights from an excellent quarter and full year. Looking first at Q4 we produced approximately 645,000 attributable gold equivalent ounces at an average cost of sales of $744 per ounce and an all-in sustaining cost of $1050 per ounce. We sold approximately 20,000 ounces more than we produced in the quarter largely due to sales of inventory at Maricunga. The quarter had some impressive improvements in financial performance compared with Q4 of 2018. Margins were up by 53% versus a 21% increase in the gold price. Adjusted operating cash flow nearly tripled to $388 million. Adjusted net earnings increased from $14 million to $156 million and from $0.01 per share to $0.13 per share. And net earnings went from a net loss of $28 million to net earnings of $522 million. For the full year 2019, we produced 2.5 million ounces and saw some key improvements over the full year of 2018. We reduced our cost of sales to $706 per ounce which was at the low end of our guidance range. We increased margins by 27% outpacing a 10% increase in the average realized gold price. Adjusted operating cash flow increased 40% to more than $1.2 billion. Adjusted net earnings went from $128 million to $423 million and $0.10 per share to $0.34 per share and earnings went from a net loss of $24 million to net earnings of approximately $720 million. Capital expenditures were $298 million for the quarter and $1.1 billion for the full year, at the high end of our guidance range as we noted in November. This is mainly due to decisions during the year to capitalize on value enhancing opportunities including the 24k project at Tasiast. In 2019 we reported non-cash impairment reversals totaling $294 million…

Thanks very much Andrea. I'll review our operations site-by-site with some observations of full year and Q4 performance and we look out to the next year. Along the way I'll give updates on development projects and highlights from our 2019 exploration and 2020 exploration drilling plan. As Paul mentioned, we had one of the best safety records in our industry and I want to thank our employees for a focus on first priorities. 2019 was a strong year at our operations with outstanding performance from our three largest mines of Paracatu, Tasiast, and Kupol. It was a big year for our projects as we launched the Tasiast 24k project. We started production of Phase W and Vantage advanced Gilmore and completed the La Coipa IFS. Finally, it was a strong year for mineral reserve and resource additions and mine life extensions as a result of exploration engineering and acquisitions. We have a long record of success in maintaining reserves and extending mine life across the portfolio through our strong brownfield exploration program. And based on the sizable additions to our resource inventory over the past several years we see significant continued potential to see success in the coming years. In 2019, Paracatu benefited from a full year of multiple performance improvements including our asset optimization project which has led to better ability to predict grade or hardness recovery and throughput. Continuous improvement efforts that have increased mine and mill efficiencies and investments in site infrastructure, such as water and renewable energy. Paracatu was the company's largest producer in 2019 with the record output of nearly 620,000 ounces and a 19% year-over-year reduction in cost of sales to $666 per ounce. In Q4, production of Paracatu was slightly lower unit costs were higher compared with the previous quarter due to a…

Thanks, Paul. Look to conclude, I just want to start by saying I'm really proud of what our team accomplished in 2019 and I'm excited about our future. I do want to leave you though with a few key points to bear in mind. Over the past eight years, our ASIC has gone down by approximately $100 per ounce and over the next three years we expect ASIC to decrease further, increasing our potential for strong free cash flow. Over that same eight-year period, we have a proven track record of extending mine life and adding reserves across our portfolio while maintaining production at the 2.5 million ounce level. Going forward, with our large resource inventory, we are strongly positioned to continue extending mine life and maintain production at the 2.5 million ounce level. And finally, we are very comfortable with our geographic footprint, based on our strong local relationships and a long history of steady successful operations in all of our regions, including nearly 10 years in Mauritania and 25 years in Russia. We believe these trends among others bode very well for Kinross in 2020 and beyond. With that Ursula, I'd like to now open up the call to questions.

Good morning. Thanks for taking my question. I have two of them please Paul and Paul. Firstly at Paracatu, we're seeing more normalization of production levels which you've telegraphed. Where -- can you tell me where you are on the mobile fleet investment? And are we going to see incremental benefits in 2020 on productivity despite being lower on production year-over-year?

Yes. So Ralph that's a good question. We're investing in the fleet. The shovel is being prepared right now. So we haven't yet benefited from the full impacts of the new fleet, but in the technical report which we will publish next month. You will see the benefits of that ramped up mining rate. Really the drive there is to push more waste stripping west where we see better confidence in grade and recovery. And what you're going to see in the technical part is consistent average production over the next 10 years of about 550,000 ounces a year that will be up and down but it has been one of the results of our asset optimization.

I see. Okay. Yes. And on Chulbatkan, it seems like this is aligning nicely, sort of, after La Coipa spending and ahead of depletion at Kupol. Is that the right way to think about this asset fitting into the strategy? And is the next two to three years of drilling ahead of us really getting comfortable with the geology of the resource model and the mine plan?

Sure. Ralph, it's Paul. I'll start and hand off to Paul Tomory. Yes. Look I think generally you're right. The only point I wanted to add is I wouldn't necessarily assume that we're coming to the end of the Kupol mine life. We've had an excellent track record. It is an underground mine. We still see a lot of potential and certainly when you look in the rearview mirror and what we've been able to achieve year-after-year. I'm obviously very hopeful and expecting that we'll continue that trend. So at a minimum, I would say, it's perhaps a bridge from one to the other, but I'm hoping we'll do better than that Paul.

Our strategy at Kupol over the last four, five years has been paying off on the exploration side where we've been focused both on reserve and resource additions. And as you saw we brought in new resources at Kupol as well. And as we have for the last couple of years our intent is to work towards converting those potential mineral reserves next year. And as I said in my prepared remarks our intention is to bridge Kupol to Chulbatkan with the potential even for concurrent production. On Chulbatkan we are advancing the study based on the resource that we posted with our year-end the approximately four million ounces, but we are also advancing drilling to see if we can grow that deposit. And we've allocated quite a budget of Chulbatkan for drilling and better understanding the orebody. We have $10 million in the exploration budget and another $10 million of study funds to focus on better delineating characterizing the orebody, but we got a lot of work ahead of us there. And we like what we see thus far. You also put a La Coipa and the mix there. La Coipa will be parallel to Kupol production we'll be ramping up La Coipa in 2022. And it will -- at least with the current Phase 7 reserve that will bridge us to the end of 2024. But as I mentioned again in my prepared remarks even at La Coipa we've initiated studies on to three satellite pits that could or at least our intent is to bring them into the mine plan there.

I see. Yeah. That’s good clarity. Thank you.

Your next question comes from Greg Barnes with TD Securities.

Yes. Thank you. Sticking with Chulbatkan, Paul Tomory these higher grade structures particularly that one hole. What is your sense of what's going on there? And how likely do you think there are other additional structures like that?

Well, that's a very good question. I mean the numbers on that hole are obviously very encouraging. But we've taken a conservative approach there. And not factored that into our resource estimate. That was an infill hole and it was designed to intersect a known part of the resource in between two wider space holes. And it has impressive visible gold in that hole. And our plan right now this year is to put more holes in there to better understand the geology and the structure in that area. Our hypothesis is that there are high-grade structures in there but we need to do more drilling to prove that out.

Are you seeing anything from geophysical geochem that outlines additional structures like that?

In short yes. And that's part of what drove the hypothesis.

Okay. And just turning to Andrea I might be pushing my luck but you talked about 2021 CapEx coming down by about $100 million versus 2020. So what should we think about on 2022 order of magnitude?

Hi, Greg. So yes, our CapEx for 2020 as we noted is $900 million, which is a decrease from what we – from what we spent in 2019. So as you said we've noted that we expect to bring that down another $100 million in 2021. And that's just really as we come out of the heavier stripping year at Tasiast in 2020. And as we complete the U.S. project. So beyond that as we sit here today, we'd expect 2022 to be even lower than that. One of the factors being will be coming out of the spending at La Coipa that's significant in 2021.

Okay. And what about capitalized interest spend Andrea, what ballpark number are we looking at for that for the next several years?

Well, I mean our interest – our total interest the total amount of interest we expect to pay in 2020 is about $100 million and we said about $55 million of that would be capitalized. And then going forward obviously it's going to depend on how much debt we have outstanding but that's not a bad estimate to just consider stays in line going forward.

The $55 million of capitalized?

Yes I mean I would expect it to continue to be about half.

Okay, okay. That’s great. Thank you.

Your next question comes from the line of Fahad Tariq with Credit Suisse.

Hi, good morning. Thanks for taking my question. I think you partially answered the question but I'd like to just come back to the reserve kind of profile and potential moving forward. As you look at across the portfolio, if you were to rank the different mines in terms of where you see the most reserve upside. How would you think about that? Is it really trying to squeeze a bit more out of Kupol, is it Chulbatkan, is it La Coipa satellites? Like just trying to get a sense of like where how you would rank in terms of where you see the most reserve upside in the call it mid-term.

Yes. So where – the way I would look at that is where have we allocated the most money. And definitely Russia is number one there and that's split between Kupol, Chulbatkan. And as I mentioned in my remarks, we're now doing some grassroots work in and around Kupol but I wouldn't – I'd be remiss not to mention Chirano. We have a good budget there. We have a good track record of reserve additions. We also added quite a bit of resources. So our focus, if I were to summarize it, our real focus is on extending at Kupol and Chirano, obviously because those have the nearest mine life end. But we're also focused in the U.S. at Bald Mountain, we have some exploration at Round and as you pointed out those satellite deposits at La Coipa. However, the satellite deposits at La Coipa are drilled inventory and the work required to bring those in the plan. It's not necessarily associated with drilling but rather with studies permitting and in the case of Puren commercial discussions. So to summarize, our focus really is Russia and Chirano from a high priority perspective and we're quite confident that we'll be able to continue our track record of reserve addition.

Just to add as well I mean, that does not preclude the fact that we see a lot of potential at other sites where we have existing longer life resources such as Tasiast.

Yes. That's a good point. Yes.

I expect we'll have substantial increases there. Stay tuned as we get through the Lobo feasibility study and for some conversion to reserve there. So there's a number – certainly that's the exploration budget priority but there's still depth in the portfolio to keep adding.

And I would just also highlight the three very large land packages we have a Kupol, Chulbatkan and Bald Mountain, a very large land packages with lots of untested targets.

Okay, great. That's helpful. And just a quick follow-up on your -- on Tasiast, because you reminded me any update on the government discussions and where that is?

Sure. I'll take that in. Look I think again that's just a -- in short, we have engagement with this new administration that was put in place in September. We've had a pretty positive dialogue and we feel we're moving in the right direction. And I'm confident we're going to get an amicable successful resolution in the near term. I think what's important though here is context. And as I said in my opening remarks, from a context point of view, we've been active operating now for 10 years really without incident, we've produced over 2 million ounces. We successfully built on time, on budget a major capital project in the Phase One. We've had CLA unionized negotiations with our employees. We've just approved another expansion. And as Andrea pointed out, we brought in four new partners as into the asset with the project financing with -- certainly with IFC, EDC and a couple of commercial banks all that on top of the fact that the mine is firing on all cylinders and breaking records, we're feeling really good about the state of play and the future in Mauritania.

Thank you.

[Operator Instructions] Your next question comes from Carey MacRury with Canaccord Genuity.

Hi, good morning. A question on La Coipa, it looks like about a three-year mine life after the FS I think the PFS was more like five years. Just wondering if you can provide a little color on what's changed at La Coipa?

Right. So the PFS incorporated two deposits Phase Seven and Puren. This FS is Phase Seven only. Puren remains in the reserve and has resources as well. And in the case of Puren, we have to advance some permitting work as well as finalize a commercial agreement with our partner there with -- we're the 65% owner in that deposit.

And then maybe on Tasiast, you mentioned the grade variability from the front half of the year to the back half of the year when you're in the stockpiles. Can you give us a little more granularity on what sort of grades we should expect and what the grade profile looks like?

Yes this is actually an important point of view for the equity research crowd here because we are in this -- just the geometry of the Tasiast orebody. It has big strips and then we're into the really good grade material. So we will be mining out the base of its West Branch three midyear. One of the things we did with the approval of the 24k project last year is, we actually accelerated the mining rate. That's partly what drove our CapEx to the high-end of the range in the year. And then, we will be relying on stockpiles into the back half of the year and that will continue on until about I'd say late Q2 of next year. So what we're seeing in terms of grades is, we're up in the high-2s over the next couple of quarters. And as we get into the stockpiles, we'll be probably at two or just below. And then, in Q3 of 2021 will be ramping back up in the two-plus grade. So it's not a dramatic drop. But it's not just that it's a reduction in grade, it will be more variable as we rely on stockpile some of which are older and the inventories are less certain. But the average grade will be just under two in there.

Okay, great. And then maybe one last question on Kupol. You mentioned Dvoinoye reaching end of life, or should we expect a drop-off in tonnes from Dvoinoye, or do you think you can make up the tonnage from Kupol?

Again that's a good question. So we will be finishing ore feed from Dvoinoye this year. There will be some stockpiles that remain at Dvoinoye. So the mine will end in 2020 and early 2021 but there is a remaining stockpile. In terms of feeding the mill at Kupol, we will have sufficient mill feed to keep that mill full, particularly as we move into narrower veins slightly lower grade material.

Okay. Thank you very much.

There are no further questions at this time.

Okay. Well thank you Ursula. Thank you everyone for joining us this morning. We look forward to catching up with you all in person in the coming weeks. Thank you.

Thank you for participating in today's conference. You may now disconnect.