Tom Elliott - Senior Vice-President, Investor Relations and Corporate Development Paul Rollinson - President and Chief Executive Officer Tony Giardini - Executive Vice-President and Chief Financial Officer Lauren Roberts - Senior Vice-President and Chief Operating Officer Paul Tomory - Senior Vice-President and Chief Technical Officer

David Haughton - CIBC World Markets Greg Barnes - TD Securities Yuriy Vlasov - Berenberg Metals & Mining Andrew Kaip - BMO Capital Markets Frank Duplak - Prudential Financial, Inc. Scott MacDonald - Scotiabank Matthew Fields - Bank of America Merrill Lynch John Tumazos - John Tumazos Very Independent Research, LLC

Thank you for standing by. This is the conference operator. Welcome to the Kinross Gold Corporation Q1 2017 Financial Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Tom Elliott, Senior Vice President, Investor Relations and Corporate Development. Please go ahead, Mr. Elliott.

Thank you, and good morning. With us today, we have Paul Rollinson, Chief Executive Officer; Tony Giardini, Chief Financial Officer; Lauren Roberts, Chief Operating Officer; and Paul Tomory, Chief Technical Officer. Before we begin, let me bring your attention 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 financial results and performance being different from estimates contained in our forward-looking information. Please refer to Page 2 of this presentation, our news release dated May 2, 2017, the MD&A for the period ended March 31, 2017 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. On our call last quarter, I [Technical Difficulty] key priorities for 2017. I'd like to start today by giving you a brief progress report on those four priorities before turning the call over to Tony, Lauren and Paul for further details in their respective areas. Our first priority for the year is to continue our track record of delivering strong operating results and to maintain our financial strength and flexibility. In short, to continue doing what we have been doing for the past five years. As you can see from the results we released last night, we're off to a good start in 2017 on both fronts. We had another strong quarter at our operations, hitting our targets for production and costs. Our U.S. and Russian assets performed well, as did Tasiast, where we achieved the lowest cost of sales per ounce since 2012. During the first quarter, we also further strengthened our balance sheet with the agreement to sell our 25% interest in Cerro Casale and 100% of Quebrada Seca. When you factor in the upfront $260 million in proceeds from the sale, our pro forma cash balance is approximately $1.1 billion. The sale of these assets was a strategic decision that achieves a number of objectives. It surfaces [ph] value for shareholders on assets that were not part of our near term development plan. It further strengthens our balance sheet. And it allows us to redeploy capital to near-term organic growth opportunities that are expected to lower cost and enhance the company's production profile. Overall, we continue to be in a strong financial position with pro forma liquidity of approximately $2.5 billion and no debt maturities until 2020. This liquidity gives us the financial flexibility to invest in our strategic priorities and development projects. Our second priority for the year is to continue to advance our two-phased Tasiast expansion, our largest and most significant project. In a moment, Paul Tomory, our Chief Technical Officer, will provide further detail on Phase One, which is expected to double Tasiast annual production to approximately 400,000 ounces and significantly reduce all-in sustaining cost. Phase One is moving along well. The project is on schedule and on budget, and is expected to reach full production in approximately one year. As for Phase Two, work on the feasibility study is continuing and we expect to share the results with you in the third quarter. At that time, we expect to be in a position to make a decision on the Phase Two expansion, which is forecast to, again, nearly double annual production to approximately 800,000 ounces and further reduce all-in sustaining cost. This would make Tasiast one of the lowest cost mines in our portfolio, while also significantly reducing Kinross' all-in sustaining cost on a company-wide basis. Our third priority is to further realize the benefits of the acquisition of Bald Mountain. Last year when we took ownership of Bald, we predicted that we would double reserves in the year ahead. On our year-end call in February, we announced that we delivered what we said we would. We had doubled the gold reserve estimate to 2.1 million ounces and added resources to fill the pipeline. This year we have stated that, we expect Bald's production to double compared to 2016, while at the same time reducing cost. And we're off to a good start with Bald producing approximately 47,000 ounces and reducing cost from Q4, keeping in mind that we expect production to be heavily weighted to the second-half of the year. We're also advancing engineering work on the Vantage Complex. This project includes the potential addition of a heap leach facility, and associated processing and mining infrastructure. And we are targeting the startup of major construction in the first-half of 2018. And finally, our fourth priority is to continue advancing our pipeline of additional organic projects, which I am pleased to report are all proceeding on schedule. In Nevada, the feasibility study for the Round Mountain Phase W, which could potentially extend mine life at one of our most consistently strong operations, is progressing well and we expect to share the results in Q3. In Russia, we completed the development of September Northeast, on time and on budget. We expect to begin processing September ore through the Kupol mill in June. At Moroshka, the portals are complete and underground development is underway. Construction of surface infrastructure is currently above 50% complete. So overall, with our first quarter results we are well on target with our four priorities for 2017. Our portfolio of mines continues to deliver solid results and we further enhanced our strong balance sheet with the sale of Cerro Casale. Phase One is on budget and on schedule. We continue to realize the benefits of the addition of Bald into our portfolio. And we are making excellent progress at our other development projects. I'll now turn the call over to Tony for a review of our financial results.

Thanks, Paul. Financially Q1 was a strong quarter. We generated approximately $250 million in adjusted operating cash flow, an increase of 21% compared to Q1 2016. During the quarter spot gold prices averaged above our budgeted gold price assumption of $1,200 per announce and we realized an average price of $1,220 per ounce. We ended the quarter with approximately $820 million in cash and cash equivalents on the balance sheet. This was only slightly lower than our yearend 2016 balance of $827 million after paying down $75 million of accounts payable and accrued liabilities. During the quarter, we recorded a gain of $97 million as a result of our agreement to sell our 25% interest in Cerro Casale. We also received a $17.5 million insurance recovery, primarily related to the weather event at Maricunga in 2015. These two factors, combined with higher operating earnings, resulted in an increase to reported net earnings compared with the same quarter last year. Adjusted net earnings for the quarter were $23 million, representing a 10% increase quarter-over-quarter. These solid results reflect a number of factors: A higher realized gold price, a continued focus on operational delivery and financial discipline. For example, we reduced our overhead spending in 2016 by 18%. And in the first quarter of this year, it was down again by another 7%. A few other items of note from the quarter, capital expenditures for the quarter were $179 million. We remain on track to meet our expected capital spend of $900 million, plus or minus 5% as we expect capital spending to ramp up through the year. In terms of oil and foreign exchange rates, we benefited by approximately $4 per ounce on our cost of sales year-to-date versus our budget assumptions. Our overall FX exposure for the year is approximately 32% hedged at favorable rates compared to spot. We will continue to monitor our FX and oil exposure, and look for opportunities to establish additional input cost hedges if market conditions are favorable. As Paul highlighted, our balance sheet is expected to be further strengthened through the sale of our interest in Cerro Casale and Quebrada Seca. On a pro forma basis, our cash balance at March 31 was approximately $1.1 billion. With a strong liquidity position, manageable debt and a pro forma trailing net debt to EBITDA ratio of 0.6, we continue to have one of the strongest balance sheets relative to our peers. In short, we remained focused on maximizing returns, surfacing value and continuing to strengthen our balance sheet. I'll now turn the call over to Lauren for a review of operating highlights.

Thank you, Tony. Our operational track record continues to be strong, as we delivered solid results during the first quarter in each of our three operating regions. Our mines in the Americas region produced approximately 411,000 ounces for the quarter at a cost of sales of $749 per ounce. Fort Knox had another strong quarter, thanks to good mill grades. This combined with lower labor and contractor cost, contributed to the cost of sales of just over $600 per ounce for the quarter. Turning to our Nevada assets, Round Mountain is firing on all cylinders, with higher recovery from the leach pads, fueling strong production and lower cost compared to the previous quarter. At Bald Mountain, we saw production more than double from Q1 of last year as a result of an increase in mining activity and higher grades. We have enhanced heap leach operations in areas where we see potential, including blending ores to improve percolation rates and releaching older areas of the pads. On the cost side, we've succeeded in reducing cost of sales significantly compared to 2016. Rounding out the U.S., Kettle River, which was originally slated for closure in 2015, will now conclude mining in the second quarter of this year. I would like to take a moment to acknowledge and thank the Kettle River team for their hard work and dedication through the years, consistently delivered strong performance while exemplifying Kinross core values. We're retaining some of our key personnel as we are continuing to assess opportunities in the area including our exploration work in the Curlew District. Moving to Paracatu, we encountered lower than anticipated grades near the periphery of the ore body and redirected mining to a bench with harder ore in the same phase in order to maintain the mining sequence. This delayed access to a higher-grade area in another phase, and resulted in lower mill throughput and grade in the first quarter. This, combined with the strengthening of the Brazilian Real against the U.S. dollar by 5%, contributed to higher costs for the quarter. We have since accessed the higher-grade area in the other phase and expect to see improved grades in Q2. The region of Brazil where Paracatu is located, received only 66% of the historical average rainfall year-to-date. We are implementing additional mitigation measures, including drilling more groundwater wells and working to acquire additional surface water rights. We had factored the potential for drought related production curtailments into our production guidance. We now estimate that this is likely to occur early in the third quarter, but we continue to expect that we'll meet our production guidance for the year. We plan to provide an update on the weather situation at Paracatu with our Q2 results. As for Maricunga, we continue to rinse the material placed on the heaps before we suspended operations, and expect minimal production in the coming quarters. Turning to Africa, Tasiast continues to improve its performance quarter-over-quarter. Mill throughput is now averaging at least 8,000 tonnes per day, while mill grade hit 2.4 grams per tonne for the quarter, the highest since Kinross first acquired the asset in 2010. Production as a result has continued to increase. And cost declined to $711 per ounce, the lowest level since Q3 2012. The mining and processing unit costs and volumes continue to outperform assumptions in the Phase One feasibility study, providing benefits both to Tasiast's performance this year and reinforcing our confidence in Tasiast's future. Moving to Chirano, we are currently mining the Tano open pit and the underground deposit of Paboase and Akoti. We have ramped up production, with grades increasing compared to 2016. Cost of sales increased however compared to Q4, largely due to higher labor costs and increased operating waste to mine from the Tano pit. Turning now to Russia, a planned reduction in grades resulted in decreased production. Even with the lower grades, the region remains a strong performer, generating good margins and cash flow. And we're continuing to pursue opportunities to extend mine life. Our two development projects in the area, Moroshka and September Northeast, advanced according to plan during the quarter. At September Northeast development is complete, and we expect the first ore to be processed at the Kupol Mill in June. At Moroshka, the portals are installed, underground development is progressing in the twin declines, and construction of the surface infrastructure is well underway. As well, the new filter cake plant now is in operation. This provides additional tailings capacity at Kupol over and above the regional mine plan and allows for potential mine life extensions. Overall, it was a strong start to the year. And we expect to continue to deliver in the coming quarters. I'll now turn over the call to Paul Tomory for an update on our development projects.

Thanks a lot, Lauren. As Paul mentioned earlier, we got a lot on the go right now in our organic development portfolio. And some of our key activities include the construction of the Tasiast Phase One, Tasiast Phase Two feasibility study, further expansion and upgrading of resources at Bald Mountain, advancing engineering at Vantage Complex, also at Bald, the feasibility study at Round Mountain Phase W, and last but not least, work on our priority exploration targets at Kupol, Fort Knox, Kettle River and Tasiast. For the past three months, we made significant progress on all of these projects and we anticipate the next quarter to be one of the busiest periods of the year as we work towards key milestones. I'll briefly talk about a couple of our biggest projects, starting with the Tasiast Phase One expansion. I was just at site last week, and I'm very happy with how things are progressing. As Paul mentioned earlier, construction is now approximately 35% complete. And at the current rate of development, we anticipate reaching 50% completion on construction by the end of June. Some of the other key highlights include, we've now completed engineering, concrete work is approximately 60% complete, all major installation contracts have been awarded and procurement of major equipment is essentially complete with more than 80% of equipment and materials now on site. And the slides on screen have a couple of pictures from work ongoing at the current time. The four major fronts of work include: the primary crusher, where concrete work remains a major focus; the conveyor and stockpile area, where structural work is approaching completion on the recline tunnel; at the SAG mill, and there's a couple of pictures of the pedestal up there, where all concrete work is complete and mill installation has begun; and most recently, within the existing mill, where we started installation work on additional leach tanks, cyclone towers and an oxygen plant. And to reiterate Paul's earlier comment, the project is on budget and on schedule for full production in Q2 of next year. At the same time, we continue to advance the Phase Two feasibility study and we remain on track to deliver those results in the third quarter. So let's move on now to Bald Mountain. As we announced in the last quarter, the PFS was completed on the Vantage Complex, resulting in the conversion of approximately 577,000 ounces to reserves. The estimated capital cost for development of the project is expected to be $105 million. We are now advancing detailed engineering and we're approximately 60% complete on engineering. The scope of works for the Vantage Complex includes the addition of a heap leach facility, sites for 68 million tonnes, and all associated processing and mining infrastructure to support the development of known resources in the south area of Bald. We made allowance on the leach pad for future potential production from other pits in the south. We are targeting to begin major construction in the first half of the next year. In summary, we're making excellent progress on all of our projects. And we look forward to updating you on a number of important milestones later in the year, including the results of both the Tasiast Phase Two and the Round Mountain Phase W feasibility studies. And I'll turn it back over to Paul now.

Thanks, Paul. Overall, with our first quarter results, we're off to a great start for the year. Our portfolio of mines continues to deliver solid results. Our balance sheet remains one of the best in the business and we continue to make excellent progress on a number of exciting development projects. We continue to have good momentum and we're excited about the year ahead. And we look forward to updating you on our progress throughout the year. With that, operator, I'd like to open up the line for questions.

Certainly. We'll now begin the question-and-answer session. [Operator Instructions] The first question comes from David Haughton with CIBC. Please go ahead.

Good morning, Paul and team. Thank you very much for the update. Perhaps, I could start with a bit of a strategic question with regards to your intention in the Maricunga district. Now that you've closed Maricunga or on that process, you sold Cerro Casale, what implication does that have for the future for La Coipa and other assets in that part of the world for you?

Yes, thanks, David. Yes, look, I think the bottom line is we're not seeking to exit Chile. The Maricunga - and the story is a little different with each asset. In the case of Maricunga, as we pointed out on our previous call, there's great optionality there. We've got over 6 million ounces defined in the ground up in the hills there. And it was really for us competition for finite capital. And we prioritized Nevada and Tasiast with our finite capital. And we're happy with that. We're happy to just leave it as it is for now. La Coipa, slightly different story. As you know, it's been - to me, it's been a great success. Back in 2013, it was our highest cost asset. Our objective is to make cash flow, not just produce ounces. We suspended La Coipa, because we had a theory about higher-grade satellite deposits. We went out, we drilled those satellite deposits, and our thesis proved correct. So we actually have a pretty attractive possibility of reopening La Coipa. The only negative for me on La Coipa is we've got short a mine life. It's currently about five years. So we're not in a rush to reopen a five year mine life. What we're continuing to do is advance permitting, seeking additional resources and it's in our development pipeline, and we're working our way at it. And then the last asset we have in Chile, I should remind, is Lobo-Marte. Again, the key point there is Lobo is one of the highest-grade undeveloped assets in Region III in the Maricunga district. So again, we see great optionality with our remaining assets in the region. One of the things we also got of the Cerro Casale sale was a water supply agreement, such that if water is ever desalinated and pumped up the hill, we can access that through our sale arrangement. So we're not leaving Chile. There was an opportunity that came in on Casale. It made sense to us. But for the time being, we're quite happy to continue as we are.

Okay. Thank you, Paul. It paints a good picture. And before I leave Cerro Casale - maybe over to Tony - I saw the write-back of some impairment. What does that mean for when you actually record the sale? Will you be recording a gain or loss or did you write back sufficient assets that it's kind of a wash?

David, thanks for the question. With respect to Cerro, there's no further impact. I mean, the only impact that actually could come through in the second quarter, assuming that we do close in the second quarter as planned, would be costs associated with the transaction, which we might not have accrued. With Quebrada Seca, which is a separate asset, we had a write-down previously there with respect to goodwill. And as a result, you can't write that back up until the transaction closes. So when that transaction closes, we'll book a small gain with respect to the allocation of Quebrada Seca. And we've allocated about $20 million of proceeds there. And I think the gain will be less than $10 million in aggregate. So that will be the only adjustment that we expect to see come through once the transaction closes.

Thank you, Tony. Maybe over to Lauren if I may, Bald Mountain ramp up, is that a function of just getting more ore onto the leach pads or is there an element of grade to make that production back-end loaded this year?

Hi, David. Yes, let me remind you of a few things that we mentioned in the previous call. 2016 was a heavy stripping year for us, both at Bald and in terms of developing the Redbird pits. And that was all done in preparation for being able to deliver consistent flow of good grade ore to the leach pads in 2017, and so we're well into that work. The ore is coming off the mountain, we're stacking it on the pads, and we'll continue to do so through the course of the year. And you'll appreciate that as we stack and then apply leach solution, there's some delay in time before the solution reports for processing. So what I would say is everything is on track. We're seeing improved production compared to the previous year and the previous quarter. The momentum is there and we're happy with we're going.

Okay. Thank you everybody.

Thank you, David.

The next question is from Greg Barnes with TD Securities.

Yes. Thank you. I just wanted to ask a few questions around the Fort Knox potential east and south wall resource additions. What are you seeing there and what's the potential for the mine itself?

Well, thank you, Greg. This is Lauren. We're really pleased and are proud of our Fort Knox operation it's been a consistent deliverer for us. And of course, we're interested in what the future might hold. And so we continue to assess the full potential of our holdings and those in the surrounding area of Fort Knox. And as part of that, the team undertook an effort to better understand what was going on in the east and south walls of the pit. And we did some drilling last year and the drilling was favorable. I'd say, we're not quite done with the work, but it's looking good, and it's the kind of thing that we would anticipate provide some sort of incremental addition to mine life at Fort Knox, very pleased.

It is a leach ore or a mill?

Be a combination of the two.

Just secondly, Chirano, doesn't get a lot of attention. I think you got of about 3.5 or 4 years of mine life left there. Are you seeing potential to extend that?

Yes, we have an exploration program underway at the moment. We are testing deep potential of some of the high grade, and we continue to work in the district. So I would say we've got some more work to do, and we're conducting that work this year.

Okay. Thanks, Lauren.

The next question is from Yuriy Vlasov of Berenberg. Please go ahead. Mr. Vlasov, your line is open.

Hello, good afternoon, gentlemen. Congratulation with good set of results. Two question. One is on your CapEx on the Bald Mountains, you mentioned a number of $105 million. Could you give us approximate breakdown, how it's going to be spread across the years or is it just for one year? And the second question is on potential collaboration with some of the Russian gold miners. There was some information in the press that you could discuss the potential JV with one - with some of the gold producers who have mines around Dvoinoye and Kupol? Thank you.

Thanks, Yuriy. Paul, maybe you can address the capital and I'll come back on the Russia question.

Yes. The construction works at Bald-Vantage will begin in early 2018. And most the capital will be spent in 2018 but also going into 2019.

And on the Russia question, I mean, we obviously saw some of the media speculation. We don't really comment on media speculation. We obviously are aware of assets in that region. We have really nothing to report. If we did, we'd come out and say something, but I guess, all I'd say is we saw the media. We're aware of the asset, it's about 180 kilometers from our facility. And that's really all, I'd be willing to say at this point.

Okay. All very clear. Many thanks.

Thank you.

[Operator Instructions] And the next question is from Rene Cartier of BMO. Please go ahead. Mr. Cartier, your line is open.

Hi, it's Andrew Kaip. Paul, I've got a question about Maricunga. The rinsing produced quite a number of ounces this quarter. You still have some inventory to sell. And I'm just wondering how we better - would better understand the contribution of continued rinsing, and how many more ounces you think or you'll be able to unlock through this process?

Sure, I mean, we're coming to the end, Andrew, I think, from an overall impact and relative contribution. This is going to be good, but small. But maybe, Lauren, you could expand a bit there.

Thank you, Paul. Hi, Andrew, so we've produced essentially what we expected to produce at Maricunga so far already this year. And we're seeing favorable pregnant solution grades coming off the heap. But you have to appreciate that this heap was constructed over a 20-year period of time, and we're rinsing and managing down solution inventory, and it's getting difficult to predict exactly what would happen. So we're pleasantly surprised, and as long as those ounces turn an economic return for us, we'll continue to produce them. But I would not anticipate them to material to the corporation this year.

Okay. Thanks very much. And those - that inventory that was produced yet not sold, do we expect that to come out in the second quarter?

Yes, Andrew, it's Tony. What we're doing is - as Lauren said, we've had better performance of the asset than we expected, and we're probably likely to keep that level of inventory through the rest of the year with respect to Maricunga, although we may change our plans, depending on how things go third and fourth quarter. But right now, we're targeting probably solid net inventory in 2018, and it's really related to our ability to recover some taxes by having sales revenue in 2018. So you will likely continue to see that inventory, probably similar number of ounces that we were showing at the end of our first quarter going forward, with the idea that we'd sell it in 2018. That may change if circumstances change, but that's what we're sort of planning right now.

Okay. Thank you very much, Tony.

The next question is from Frank Duplak of Prudential. Please go ahead.

Good morning, guys. I'm just curious if you could talk about kind of your overall gross debt level. And is that at a level where you guys are comfortable? Could you see it coming down over time, going up over time? Just how you kind of think about that.

Well, yes, as the balance sheet is the key. Balance sheet strength is a key priority for us. And one of the things that I'm most proud of is what's been a bit of a challenging gold price environment over the last five years, we actually paid off over a $1 billion of debt. We have strengthened our balance sheet in what's been a challenging gold price environment. So on the spectrum, our DNA is always leaning towards less debt is better. But maybe, Tony, you can talk a little bit more specifically about what we're thinking about actual levels.

Sure. Yes, I think Paul's pretty much summed it up. I mean, philosophically, the way we look at our debt position is really we're a single commodity producer, we're a price taker in terms of gold, so we want to maintain conservative credit metrics going forward that gives us the flexibility to be able to take advantage of opportunities like Bald Mountain last year, which we purchased for cash. So having a strong balance sheet, having strong liquidity, access to capital is a very important consideration for us going forward. And just to give you a bit of color in terms of how we're set up on the debt side, right now. We've got about $1.7 billion of gross debt, and our next maturities are in 2020, where we have $500 million of term loan. And then we also have an additional term loan or a bond repayment in 2021. So we have flexibility in terms of no near-term payments for the next several years. And we're going through our expansion on Phase One on Tasiast, which we'll be able to fund out of cash flow. And we'll make a decision on Phase Two. So overall, we're in a great position. And when you look at our metrics on a net debt to EBITDA, and I made the comment during my comments that, on a pro forma basis, we're at 0.6 going forward. If that's not the best with our peer group, it's pretty close to being the best in our peer group. So we feel really good about our financial position. We don't see any short-term increase in debt levels at this point. We've got the ability to fund our expansion opportunities out of operating cash flow and the cash that we have in the balance sheet. So yes, we feel very confident about our ability to execute on our strategy with respect to our current assets within the portfolio.

And you talked about having access to capital. Does getting to investment grade from at least one more agency sort of the high priority for you to be able to access those markets? How do you kind of think about the ratings?

I think, we're pretty comfortable, obviously, we'd like to be back in investment grade. And the way we're setup right now is that, of the three agencies that rate us, one has us at investment grade, one has on a positive outlook and the other one has us on stable. When we look at our credit metrics and measure them against our peer group, they're investment grade credit metrics, there's no doubt about it. It's just a question of the agencies looking at gold price and factoring in those considerations and other considerations that they track in terms of how they look at the credit. But the good thing is we have lots of access to capital in terms of the debt capital markets if that's where we want to go. And also in having an undrawn credit facility that, at this point, has a four-year life. And we're well within any covenants that we have within that. So would we like to go back to investment grade, absolutely. We think we've demonstrated, based on the actions that we've taken over the last several years that we're serious about managing our balance sheet and sustaining balance sheet strength going forward.

Thank you. I appreciate the commentary, guys.

The next question is from Scott MacDonald of Scotiabank. Please go ahead.

Hi, guys, good morning, and congrats on the solid quarter. Just a few questions on outlook for a few of the assets for the remainder of the year. Just starting in Russia, with September Northeast, you say the ore will start going through the mill in June. Is that mainly going to go through in June? Or is a lot of that going to go into Q3?

Hi, Scott. This is Lauren. Yes, the first batch will go to the mill in June. And there will be subsequent batches that occur between June and into Q3.

Okay, so we'll see a little.

But the entirety of the September Northeast goes through the mill this year.

Right. So mainly Q2 and Q3 though?

Yes, there might be a tail into Q4, but it's going to be in that time span.

Okay. So we'll probably see a little pickup in grade a little bit over those quarters.

Well, the way I would look at the grade is we batched the Dvoinoye ore and the September Northeast ore separately from the other feed streams. But we account for that when we're scheduling the mill over the course of the year. So in an individual few-week run or a month, you might see a bit of an uptick in the grade, but we balance the production over the course of the year and quarter-by-quarter. So I wouldn't expect a significant increase.

Okay, great. Thank you. That's helpful. And then just a quick one on Kettle River-Buckhorn. And you say the mining is done in Q2. Is the processing also to be done in Q2, so no production after Q2?

I would say maybe in July, we might be drawing down mill whip, but the mill run will be done in June.

Okay. But Q2 is a relatively full quarter?

Well, the way I would look at that is I would say it's going to be comparable to a bit less than Q1. It's pleasant that we got a little more ore coming from Kettle, but again, it's not needle mover in terms of the overall portfolio.

Right, right. Okay. That's helpful. Thanks. And then finally, last one, just at Paracatu. Can you give us any kind of sense what the impact of the production curtailment might look like? I know you say you'll give more fulsome update with Q2, but is it kind of a similar scale curtailment that you considered in your guidance?

Yes, Scott, thank you. We were seeing about 66% of annual precipitation so far this year. And one thing I need to remind you of is, we have two rainy seasons in Brazil. There's an early one which runs into April, and then a late one that starts in Q3. And that as in previous drought years, and we do have some experience with this, we've looked at the puts and takes in the portfolio, when we established our guidance. And I should also point out that by curtailment, we do mean curtailment. We don't mean suspension or stoppage of operations. So there will be some incremental production that occurs even though in the dry season, which is a function of good mitigation measures we put in last year, and additional mitigation measures that we're putting in this year, coupled with the potential for dry season rain, which does happen. So we're still feeling confident with our guidance. And we're on the right path. The team is very focused on minimizing cost, and maximizing production during this period of time. And we're feeling good about things today.

Okay, great. Thank you very much, guys.

The next question is from Matthew Fields of Bank of America. Please go ahead.

Hey, guys. I just wanted to follow-up on Frank's question about ratings and the sort of transition to investment grade. I'm a little perplexed by the piece of the rating agency moves, I guess. I think Moody's sort of put you on stable outlook in March of 2016 and then affirmed that in March 2017, despite credit improvement over the year. Is there some reason that they're hesitant to increase their outlook for you or sort of note the positive improvement in your performance, and especially your debt levels?

Well, it's a great question. And I really can't speak on behalf of Moody's in the sense that that's probably a question that you best ask their credit analysts directly. What I would say is that Moody's was really first out of the block last year in 2016 to really downgrade not just the precious metal sector but commodities across the board. So as you recall, they basically slashed ratings on all commodity producers, including base metal and energy producers. And they've been slow to reassess their price assumptions. So for long-term pricing purposes, I might not have the right number, but my sense is that Moody's right now is using around $1,150 compared to current price, is closer to $1,250 and had edged the towards $1,300. So I think those are some of the considerations. And I think it's nothing more than a year-ago, having gone back and really slashed ratings across the board, looking to reassess that going forward. But I think in terms of how we look at our credit metrics, we think they're very strong not just for ourselves in terms of ratings for - or metrics for our ratings, but also relative to the peer group and other companies within the sector. So Matthew, my suggestion would be to contact Moody's directly and have that conversation in terms of how they look at the metrics. But I think it does relate back to how they looked at the sector overall in 2016.

Okay. And then S&P hasn't opined on you since September. When do you anticipate meeting with them again?

Well, they typically do an annual review. So I think the latest that we would meet with them would be September. It's possible that they could look at the ratings prior to that. But at this point, it would likely be September at the latest.

Okay. Thanks very much.

You're welcome.

The next question is from Yuriy Vlasov of Berenberg. Please go ahead.

Many thanks. Two extra questions to follow. One on Round Mountain, if we exclude the Phase W development, which I expect that feasibility study should be ready by the middle of this year, what would be the life of mine of Round Mountain? And if feasibility study is going to be ready quite soon, can you give us any indication on how - what's the resource base and how much gold you're going to be producing from this project? And the second question is on Moroshka. Any indication on ore, the feasibility study on Moroshka again. Would be very interesting to know what sort of resource base you are targeting, and what's the grade you hoping to achieve there? Thank you.

Thanks, Yuriy. I'll maybe take the lead and hand off to Lauren and Paul on some of the technical detail. Look, I think the message I would leave you with on Phase W is the work is going very well. This is an asset that's a consistent strong performer, and we're very confident in our understanding of it. The feasibility study is progressing well. We've, in the last year, drilled out an aggregate of 3 million ounces at depth. And the feasibility study is really just focused on the economics of doing the layback to access those ounces. And we did indicate that that work would be completed by the third quarter, so it is progressing well. But Lauren, maybe just to get into some of other questions about Round Mountain.

Thank you, Paul. So Yuriy, without Phase W, we mine into 2019, I would say. And we're milling into 2021, 2022. We have a substantial stockpile of material that we would work through. And we would look to see leaching continue until 2023. But we might see an extended tail off of the leach pads. There is 1 billion tonnes of material under leach there, so that we might see some tail. In terms of what we would expect to produce without Phase W 2P reserves stand at about 1.3 million ounces.

That's - sorry. Just to clarify. If we take Phase W aside, then the Round Mountains would be 1.3 million ounces.

2P reserve, yes.

Yes, okay.

And Paul, would you like to comment on Moroshka?

So what was the question again?

Just really, I think Yuriy's question was really about just the resource that we're circling at Moroshka.

Right.

Again, I would just say, I'm hopeful. We're putting the decline in. The good news here is we had a technical success on an exploration hypothesis, where we found a parallel vein structure to Kupol. We're now getting down to that vein structure and once we get down there, I'm hopeful we'll see additional things once we're underground. But Paul, maybe the specific.

Yes. So with Moroshka, what we upgraded to 2P was 180,000 ounces. And as Paul mentioned, we've talked about before, we're very encouraged by the possibility of further exploration success at Kupol. And we're currently drilling in the South in the 650 zone, the north extension in a couple parallel vein structures as well. So just to reiterate, 180,000 ounces of 2P at Moroshka.

High-grade 2P. I mean, Russia has been a really great replacer of ounces through the course of the year. When we first bought that asset many, many years ago, the mine life was 2017, this year. Then it was 2018, 2019, 2020. It's currently 2021. And through the course of the year, as we mine underground, we keep finding additional ounces and extending mine life, so it's been a really good story. And yes, I'm hopeful once we get into the Moroshka vein structure, we can see the same affect.

And just a little bit more on exploration. I mean, in our Q1 our biggest focus of exploration company-wise was in fact Kupol, where we drilled just over 20,000 meters. So we are very active at Kupol and our exploration efforts.

Okay. Many thanks, gentlemen.

Thank you.

The next question is from John Tumazos from John Tumazos Very Independent Research. Please go ahead.

Could you explain the dollar magnitudes in the water supply agreement in the Cerro Casale transaction? It's hard to tell if it's a small item [or a bigger one for business] [ph].

Yes, I mean, look, it's - I think the bottom line is it's a contingent opportunity. I think, Gold Corp was very clear on their call that they're certainly thinking about a de-sal and a pipeline up the hill. And all we've done is secured an opportunity to tap into that pipeline, at our cost. Our linkup, our connection would be at our cost that would be sufficient for what we might need, say, to - like I think the actual specifics we've secured is something like 70 liters per second. So I guess it's - we don't really allocate value, like the question you're asking from a dollar point of view. To us, this is just part of a contingent opportunity we negotiated as part of the sale, if that's helpful, John.

Yes. And John, it's Tony. One other thing that I'd just point out, and it's not just with respect to the water agreement, but with respect to the royalty and the contingent payment, we haven't allocated any additional value to that at this point in time. So assuming that we receive some royalty payments in the future and/or contingent payment in terms of the construction start up, we would expect to book those at future dates. Whereas if you look at the other party's disclosure that sold the other portion to Gold Corp, they actually in fact did allocate a value to the royalty and the payment on the construction decision.

Mr. Tumazos, do you have any other question?

No. Thank you very much.

Thank you. This concludes the question-and-answer session. I would now like to turn the conference back over to Mr. Rollinson for any closing remarks.

Thank you, Operator. And thanks, everyone, for joining us this morning. I'll reiterate our excitement about the year ahead, and we look forward to updating you on future calls. Thank you.

This concludes today's conference call. You may now disconnect your lines. Thank you for participating. And have a pleasant day.