KINROSS GOLD CORPORATION

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the three months ended March 31, 2015

This management's discussion and analysis ("MD&A"), prepared as of May 5, 2015, relates to the financial condition and results of operations of Kinross Gold Corporation together with its wholly owned subsidiaries, as of March 31, 2015 and for the three months then ended, and is intended to supplement and complement Kinross Gold Corporation’s unaudited interim condensed consolidated financial statements for the three months ended March 31, 2015 and the notes thereto (the “interim financial statements”).  Readers are cautioned that the MD&A contains forward-looking statements about expected future events and financial and operating performance of the Company, and that actual events may vary from management's expectations.  Readers are encouraged to read the Cautionary Statement on Forward Looking Information included with this MD&A and to consult Kinross Gold Corporation's annual audited consolidated financial statements for 2014 and corresponding notes to the financial statements which are available on the Company's web site at www.kinross.com and on www.sedar.com. The interim financial statements and MD&A are presented in U.S. dollars.  The interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board (“IASB”). This discussion addresses matters we consider important for an understanding of our financial condition and results of operations as at and for the three months ended March 31, 2015, as well as our outlook.

This section contains forward-looking statements and should be read in conjunction with the risk factors described in "Risk Analysis". In certain instances, references are made to relevant notes in the interim financial statements for additional information.

Where we say "we", "us", "our", the "Company" or "Kinross", we mean Kinross Gold Corporation or Kinross Gold Corporation and/or one or more or all of its subsidiaries, as it may apply. Where we refer to the "industry", we mean the gold mining industry.

1.           DESCRIPTION OF THE BUSINESS

Kinross is engaged in gold mining and related activities, including exploration and acquisition of gold-bearing properties, the extraction and processing of gold-containing ore, and reclamation of gold mining properties. Kinross’ gold production and exploration activities are carried out principally in Canada, the United States, the Russian Federation, Brazil, Chile, Ghana and Mauritania.  Gold is produced in the form of doré, which is shipped to refineries for final processing.  Kinross also produces and sells silver.

The profitability and operating cash flow of Kinross are affected by various factors, including the amount of gold and silver produced, the market prices of gold and silver, operating costs, interest rates, regulatory and environmental compliance, the level of exploration activity and capital expenditures, general and administrative costs, and other discretionary costs and activities.  Kinross is also exposed to fluctuations in currency exchange rates, political risks, and varying levels of taxation that can impact profitability and cash flow.  Kinross seeks to manage the risks associated with its business operations; however, many of the factors affecting these risks are beyond the Company’s control.

Commodity prices continue to be volatile as economies around the world continue to experience economic challenges.  Volatility in the price of gold and silver impacts the Company's revenue, while volatility in the price of input costs, such as oil, and foreign exchange rates, particularly the Brazilian real, Chilean peso, Russian rouble, Mauritanian ouguiya, Ghanaian cedi, and Canadian dollar, may have an impact on the Company's operating costs and capital expenditures.

Consolidated Financial and Operating Highlights

 

	Three months ended March 31,
(in millions, except ounces, per share amounts and  per ounce amounts)	2015			2014		Change			% Change
Operating Highlights from Continuing Operations (d)
Total gold equivalent ounces (a)
Produced (c)		636,128			672,180		(36,052	)		(5	%)
Sold (c)		641,752			628,637		13,115			2	%
Attributable gold equivalent ounces (a)
Produced (c)		629,360			664,690		(35,330	)		(5	%)
Sold (c)		634,565			621,531		13,034			2	%
Financial Highlights from Continuing Operations (d)
Metal sales	$	781.4		$	817.4	$	(36.0	)		(4	%)
Production cost of sales	$	454.6		$	456.0	$	(1.4	)		(0	%)
Depreciation, depletion and amortization	$	206.2		$	196.4	$	9.8			5	%
Operating earnings	$	42.5		$	81.4	$	(38.9	)		(48	%)
Net earnings (loss) attributable to common shareholders	$	(6.7	)	$	31.8	$	(38.5	)		(121	%)
Basic earnings (loss) per share attributable to common shareholders	$	(0.01	)	$	0.03	$	(0.04	)		(133	%)
Diluted earnings (loss) per share attributable to common shareholders	$	(0.01	)	$	0.03	$	(0.04	)		(133	%)
Adjusted net earnings attributable to common shareholders(b)	$	15.3		$	34.1	$	(18.8)			(55	%)
Adjusted net earnings per share (b)	$	0.01		$	0.03	$	(0.02	)		(67	%)
Net cash flow provided from operating activities	$	250.1		$	210.5	$	39.6			19	%
Adjusted operating cash flow (b)	$	214.8		$	242.2	$	(27.4	)		(11	%)
Capital expenditures	$	149.5		$	168.9	$	(19.4	)		(11	%)
Average realized gold price per ounce	$	1,218		$	1,299	$	(81	)		(6	%)
Consolidated production cost of sales per equivalent ounce(c) sold(b)	$	708		$	725	$	(17	)		(2	%)
Attributable(a) production cost of sales per equivalent ounce (c) sold(b)	$	709		$	727	$	(18	)		(2	%)
Attributable(a) production cost of sales per ounce sold on a by-product basis(b)	$	696		$	708	$	(12	)		(2	%)
Attributable(a) all-in sustaining cost per ounce sold on a by-product basis(b)	$	957		$	991	$	(34	)		(3	%)
Attributable(a) all-in sustaining cost per equivalent ounce (c) sold (b)	$	964		$	1,001	$	(37	)		(4	%)
Attributable(a) all-in cost per ounce sold on a by-product basis(b)	$	1,050		$	1,103	$	(53	)		(5	%)
Attributable(a) all-in cost per equivalent ounce (c) sold (b)	$	1,054		$	1,110	$	(56	)		(5	%)

(a)	"Total" includes 100% of Chirano production.  "Attributable" includes Kinross' share of Chirano (90%) production.
(b)	The definition and reconciliation of these non-GAAP financial measures is included in Section 11 of this document.
(c)	"Gold equivalent ounces" include silver ounces produced and sold converted to a gold equivalent based on a ratio of the average spot market prices for the commodities for each period. The ratio for the first quarter of 2015 was72.91:1 (first quarter of 2014 - 63.15:1).
(d)	On June 10, 2013, the Company announced its decision to cease development of Fruta del Norte ("FDN").  As a result, FDN was reclassified as a discontinued operation.  On December 17, 2014, the Company disposed of its interest in FDN.

Consolidated Financial Performance

First quarter 2015 vs. First quarter 2014

During the first quarter of 2015, Kinross’ attributable production decreased by 5% compared with the same period in 2014, primarily due to lower production from the Kupol segment and Chirano as a result of a decline in grades and at Tasiast due to a decrease in ounces recovered from the heap leach pad and timing of ounces processed through the mill.  In addition, production at Round Mountain was lower due to a decrease in ounces produced from the mill as a result of the mill fire in October 2014. The mill was re-commissioned in March 2015.

Metal sales decreased by 4% compared with the first quarter of 2014, primarily due to a decrease in the metal prices realized, partially offset by an increase in gold equivalent ounces sold.  The average gold price realized decreased from $1,299 per ounce in the first quarter of 2014 to $1,218 per ounce in the first quarter of 2015.  Gold equivalent ounces sold in the first quarter of 2015 increased to 641,752 ounces compared with 628,637 ounces in the same period of 2014, primarily due to timing of shipments at Kupol.

Production cost of sales was $454.6 million in the first quarter of 2015 compared with $456.0 million in the first quarter of 2014 as a result of lower energy costs and favourable foreign exchange movements, offset by the increase in gold equivalent ounces sold from the Kupol segment.

During the first quarter of 2015, depreciation, depletion and amortization increased by 5% compared with the first quarter of 2014, primarily due to the increase in gold equivalent ounces sold from the Kupol segment and a decrease in mineral reserves at Round Mountain, partially offset by a decline in the depreciable asset base at Kettle River-Buckhorn.

Operating earnings were $42.5 million in the first quarter of 2015 compared with $81.4 million in the same period of 2014.  The change was primarily due to the decrease in metal sales.

During the first quarter of 2015, net loss from continuing operations attributable to common shareholders was $6.7 million, or $0.01 per share, compared with net earnings from continuing operations attributable to common shareholders of $31.8 million, or $0.03 per share, in the same period of 2014.  The change was primarily a result of the decrease in operating earnings described above.  In addition, the Company recorded a tax expense of $25.3 million in the first quarter of 2015 compared with $31.1 million in the first quarter of 2014.  Excluding the impact of items that are not reflective of the underlying operating performance of our business, such as foreign exchange translation, the Company’s adjusted effective tax rate for the first quarter of 2015 was 34.1%, compared with an adjusted effective tax rate of 54.3% for the first quarter of 2014.  The decrease in the Company’s adjusted effective tax rate for the first quarter of 2015, compared with the same period in 2014, was largely due to differences in the level of income in the Company’s operating jurisdictions from one period to the next.

Adjusted net earnings attributable to common shareholders decreased to $15.3 million, or $0.01 per share, for the first quarter of 2015 compared with $34.1 million, or $0.03 per share, for the same period in 2014.  The decrease in adjusted net earnings attributable to common shareholders was mainly due to the decline in operating earnings as described above.

Net cash flow of continuing operations provided from operating activities increased to $250.1 million in the first quarter of 2015 compared with $210.5 million in the first quarter of 2014, primarily due to favourable working capital changes, partially offset by the decrease in metal sales.

During the first quarter of 2015, adjusted operating cash flow decreased to $214.8 million compared with $242.2 million in the same period of 2014, primarily due to the decrease in metal sales.

Capital expenditures decreased to $149.5 million in the first quarter of 2015 compared with $168.9 million in the same period of 2014, primarily due to reduced spending at Dvoinoye and Tasiast, partially offset by increased spending at Fort Knox.

Attributable production cost of sales per equivalent ounce sold decreased to $709 in the first quarter of 2015 from $727 in the first quarter of 2014, primarily due to lower energy costs and favourable foreign exchange movements and the increase in attributable gold equivalent ounces sold.

During the first quarter of 2015, attributable all-in sustaining cost per equivalent ounce sold and per ounce sold on a by-product basis decreased compared with the first quarter of 2014, primarily due to the increase in attributable ounces sold, decreases in energy costs and sustaining capital expenditures, and favourable foreign exchange movements.

2.           IMPACT OF KEY ECONOMIC TRENDS

Kinross’ 2014 annual MD&A contains a discussion of key economic trends that affect the Company and its financial statements. Included in this MD&A is an update reflecting significant changes since the preparation of the 2014 annual MD&A.

Price of Gold

The price of gold is the largest single factor in determining profitability and cash flow from operations, therefore, the financial performance of the Company has been, and is expected to continue to be, closely linked to the price of gold.  During the first quarter of 2015, the average price of gold was $1,218 per ounce, with gold trading between $1,147 and $1,296 per ounce based on the London PM Fix gold price.  This compares to an average of $1,293 per ounce during the first quarter of 2014, with a low of $1,221 and a high of $1,385 per ounce.

During the first quarter of 2015, Kinross realized an average price of $1,218 per ounce compared with $1,299 for the corresponding period in 2014.

Major influences on the gold price during the first quarter of 2015 included the strengthening of the U.S. dollar and improved economic data from the U.S.  Gold prices also declined as a result of lower physical demand and the U.S. Federal Reserve indicating it may accelerate the timing of interest rate increases this year.

Cost Pressures

The Company’s profitability is subject to industry wide cost pressures on development and operating costs with respect to labour, energy, capital expenditures and consumables in general.  Since mining is generally an energy intensive activity, especially in open pit mining, energy prices can have a significant impact on operations.  In order to mitigate the impact of higher consumable prices, the Company continues to focus on continuous improvement, both by promoting more efficient use of materials and supplies, and by pursuing more advantageous pricing, while increasing performance and without compromising operational integrity.  The Company’s operations have experienced modest decreases in fuel costs in the second half of 2014 and the first quarter of 2015, reflecting global oil and fuel price decreases that occurred during the second half of 2014.  Kinross manages its exposure to energy costs by entering, from time to time, into various hedge positions – refer to Section 6 Liquidity and Capital Resources for details.

Currency Fluctuations

At the Company’s non-U.S. mining operations and exploration activities, which are primarily located in Brazil, Chile, Ghana, Mauritania, the Russian Federation, and Canada, a portion of operating costs and capital expenditures are denominated in their respective local currencies.  Generally, as the U.S. dollar strengthens, these currencies weaken, and as the U.S. dollar weakens, these foreign currencies strengthen.  During the three months ended March 31, 2015, the U.S. dollar, on average, was stronger relative to the Russian rouble, Canadian dollar, Chilean peso, Brazilian real, Ghanaian cedi and Mauritanian ouguiya compared with the same period in 2014.  As at March 31, 2015, the U.S. dollar was also stronger compared to the December 31, 2014 spot exchange rates of the Russian rouble, Canadian dollar, Chilean peso, Brazilian real, Ghanaian cedi and Mauritanian ouguiya. In order to manage this risk, the Company uses currency hedges for certain foreign currency exposures – refer to Section 6 Liquidity and Capital Resources for details.

3.           OUTLOOK

The following section of this MD&A represents forward-looking information and users are cautioned that actual results may vary. We refer to the risks and assumptions contained in the Cautionary Statement on Forward-Looking Information on pages 40 - 41 of this MD&A.

Unless otherwise stated "attributable" production includes only Kinross' share of Chirano production (90%).  Production cost of sales per attributable gold equivalent ounce is defined as production cost of sales as per the interim financial statements divided by the number of gold equivalent ounces sold, reduced for Chirano (10%) sales attributable to third parties.

Approximately 60%-70% of the Company’s costs are denominated in U.S. dollars.

A 10% change in foreign exchange could result in an approximate $14 impact on production cost of sales per ounce1.

Specific to the Russian rouble, a 10% change in the exchange rate would be expected to result in an approximate $11 impact on Russian production cost of sales per ounce.

A $10 per barrel change in the price of oil could result in an approximate $1 impact on production cost of sales per ounce.

A $100 change in the price of gold would be expected to result in an approximate $3 impact on production cost of sales per ounce as a result of a change in royalties.

Operational Outlook

In 2015, Kinross expects to produce approximately 2.4 to 2.6 million gold equivalent ounces from its current operations, lower than the 2014 production of 2.71 million gold equivalent ounces.

Production cost of sales per gold equivalent ounce is expected to be in the range of $720 to $780 for 2015.

The Company has forecast an all-in sustaining cost for 2015 of $1,000 to $1,100 per gold equivalent ounce sold and per ounce sold on a by-product basis.

Total capital expenditures for 2015 are forecast to be approximately $725 million (including estimated capitalized interest of approximately $40 million).  Of this amount, sustaining capital expenditures are expected to be approximately $505 million.

Exploration expenditures are forecast to be approximately $95 million, none of which is expected to be capitalized.  2015 overhead (general and administrative expenses and business development) is expected to be approximately $205 million.

Other operating costs are forecast to be approximately $50 million, including $11 million for care and maintenance costs at La Coipa. The above forecast expenses include approximately $30 million related to expected equity-based compensation.

Income tax expenses are expected to be $55 million based on our assumed gold price plus approximately 24% of any profit resulting from higher gold prices.  Depreciation, depletion and amortization is forecast to be approximately $330 per gold equivalent ounce.

 

1 Refers to all of the currencies in the countries where the Company has mining operations, fluctuating simultaneously by 10% in the same direction, either appreciating or depreciating, taking into consideration the impact of hedging and the weighting of each currency within our consolidated cost structure.

4.           PROJECT UPDATES AND NEW DEVELOPMENTS

Project update and organic production initiatives

La Coipa Phase 7 update

A pre-feasibility study (“PFS”), begun in the second quarter of 2014, to explore potential re-start options at La Coipa, remains on track to be completed during the third quarter of 2015.  Metallurgical test work continues to be a major component of the study. Results to date confirm similar characteristics to past ores, with more tests to follow in an effort to optimize the process.  A scoping study focused on processing options for known near-surface sulfide mineralization in the district was completed; however, results indicate processing of near-surface sulfides would not be economic at current gold prices.  Exploration continues at several district targets with the assessment of some attractive opportunities to extend the mine life beyond what the PFS will contemplate.

Paracatu Santo Antonio tailings reprocessing

In the fourth quarter of 2015, a new continuous improvement project is expected to launch at Paracatu to reprocess tailings from the Santo Antonio tailings facility.  The initiative, which has an estimated capital cost of $20 million, is expected to produce approximately 34,000 additional gold ounces per year at a production cost of sales of $400 per ounce for a minimum of nine years.  The tailings will be reprocessed through Plant 1, with an expected production of approximately 11,000 gold ounces in the fourth quarter of 2015.

Chirano mine life extension

The Company is moving forward with plans to profitably extend Chirano’s estimated mine life by one year to 2020 by unlocking estimated additional ounces at two known mineral deposits: Paboase, and Akoti, where a third underground mine is expected to open.  The anticipated mine life extension will also provide additional time to pursue the exploration potential at Chirano, which is one of Kinross’ most cost competitive operations and is located in a highly prospective and low cost mining area.

Other developments

Class action lawsuits update

In April 2015, Kinross reached an agreement to settle for CDN$12.5 million a proposed securities class action lawsuit filed against it in 2012 in the Ontario Superior Court of Justice. This settlement follows a separate $33 million agreement reached in March 2015 to settle a securities class action lawsuit pending against the Company in U.S. federal court in New York. Subject to the respective approvals of the Ontario and U.S. federal courts, these agreements will result in the dismissal of both actions in their entirety, and all members of the classes bound by the settlements will be prohibited from bringing further actions relating to the same subject matters of the respective lawsuit.

Assuming that these two proposed settlements receive final court approval and the conditions of the settlement agreements are fulfilled, Kinross will have resolved these lawsuits related to the acquisition and development of Tasiast without any admission of fault or direct payout of funds from the Company for the settlement amounts.  In both cases the settlement amounts will be funded from insurance coverage.  We expect the Ontario court to consider approval of the Canadian settlement in June 2015 and the U.S. federal court to consider approval of the U.S. settlement by the end of the third quarter of 2015.

These settlements, if approved, will shield Kinross shareholders from the continuing risks and costs of the ongoing litigation in these proceedings while allowing the Company to continue to focus on its strategic objectives without the distraction of this litigation – refer to Section 6 Other legal matters for more detail on these lawsuits.

Temporary suspension of operations at Maricunga mine

On March 24, 2015, Chile’s northern Atacama region experienced an extreme weather event, with heavy rains resulting in mining and crushing operations to be temporarily suspended at Maricunga.  The facilities at Maricunga did not sustain any damage.  Alternate routes to the mine have now been established.  Mining and crushing operations are expected to re-start in June 2015 using an additional backup power plant, with main power lines expected to be back in operation in September 2015.  The Adsorption, Desorption, and Recovery (“ADR”) plant, which produces gold from the heap leach, has been running at 80% capacity during this period.

Temporary suspension of mill at Round Mountain mine

Mill operations at Round Mountain were temporarily suspended as of October 1, 2014, following a fire in the mill building.  The Mill was re-commissioned in March 2015 and is now operating at full capacity.

Board of Directors update

Mr. Kenneth Irving resigned from the Kinross Board of Directors, effective February 10, 2015.

Mr. Terence Reid, Mr. John Keyes and Ms. Ruth Woods have decided not to stand for re-election to the board of directors of the Company.
 

5.           CONSOLIDATED RESULTS OF OPERATIONS

(in millions, except ounces and per ounce amounts)	Three months ended March 31,
	2015			2014		Change			% Change
Operating Statistics from Continuing Operations (c)
Total gold equivalent ounces (a)
Produced (b)		636,128			672,180		(36,052	)		(5	%)
Sold (b)		641,752			628,637		13,115			2	%
Attributable gold equivalent ounces (a)
Produced (b)		629,360			664,690		(35,330	)		(5	%)
Sold (b)		634,565			621,531		13,034			2	%
Gold ounces - sold		625,018			610,158		14,860			2	%
Silver ounces - sold (000's)		1,220			1,167		53			5	%
Average realized gold price per ounce	$	1,218		$	1,299	$	(81	)		(6	%)
Financial Data from Continuing Operations (c)
Metal sales	$	781.4		$	817.4	$	(36.0	)		(4	%)
Production cost of sales	$	454.6		$	456.0	$	(1.4	)		(0	%)
Depreciation, depletion and amortization	$	206.2		$	196.4	$	9.8			5	%
Operating earnings	$	42.5		$	81.4	$	(38.9	)		(48	%)
Net earnings (loss) attributable to common shareholders	$	(6.7	)	$	31.8	$	(38.5	)		(121	%)

(a)	"Total" includes 100% of Chirano production.  "Attributable" includes Kinross' share of Chirano (90%) production.
(b)	"Gold equivalent ounces" include silver ounces produced and sold converted to a gold equivalent based on a ratio of the average spot market prices for the commodities for each period. The ratio for the first quarter of 2015 was 72.91:1 (first quarter of 2014 - 63.15:1).
(c)	On June 10, 2013, the Company announced its decision to cease development of FDN.  As a result, FDN was reclassified as a discontinued operation.  On December 17, 2014, the Company disposed of its interest in FDN.

Operating Earnings (Loss) by Segment

	Three months ended March 31,
(in millions)	2015			2014			Change			% Change (d)
Operating segments (a)
Fort Knox	$	19.7		$	52.8		$	(33.1	)		(63	%)
Round Mountain		5.6			12.9			(7.3	)		(57	%)
Kettle River-Buckhorn		1.0			6.1			(5.1	)		(84	%)
Paracatu		13.3			13.8			(0.5	)		(4	%)
Maricunga		6.1			6.5			(0.4	)		(6	%)
Kupol (b)		74.3			55.2			19.1			35	%
Tasiast		(13.8	)		(2.1	)		(11.7	)	nm
Chirano		(7.2	)		3.1			(10.3	)	nm
Non-operating segments
Corporate and Other (c)		(56.5	)		(66.9	)		10.4			16	%
Total	$	42.5		$	81.4		$	(38.9	)		(48	%)
Discontinued operations
Fruta del Norte	$	-		$	(2.2	)	$	2.2			100	%

(a)	On June 10, 2013, the Company announced its decision to cease development of FDN.  As a result, FDN was reclassified as a discontinued operation.  On December 17, 2014, the Company disposed of its interest in FDN.
(b)	The Kupol segment includes the Kupol and Dvoinoye mines.
(c)	"Corporate and Other" includes operating costs which are not directly related to individual mining properties such as overhead expenses, gains and losses on disposal of assets and investments, and other costs relating to non-operating assets (including La Coipa, Lobo-Marte and White Gold).
(d)	"nm" means not meaningful.

Mining operations

Fort Knox (100% ownership and operator) – USA

	Three months ended March 31,
	2015			2014			Change			% Change (c)
Operating Statistics
Tonnes ore mined (000's)		5,814			3,655			2,159			59	%
Tonnes processed (000's) (a)		6,920			6,097			823			13	%
Grade (grams/tonne)(b)		0.64			0.66			(0.02	)		(3	%)
Recovery(b)		82.2	%		84.3	%		(2.1	%)		(2	%)
Gold equivalent ounces:
Produced		82,673			83,588			(915	)		(1	%)
Sold		82,003			112,711			(30,708	)		(27	%)
Financial Data (in millions)
Metal sales	$	100.1		$	145.7		$	(45.6	)		(31	%)
Production cost of sales		55.1			64.2			(9.1	)		(14	%)
Depreciation, depletion and amortization		24.6			28.5			(3.9	)		(14	%)
		20.4			53.0			(32.6	)		(62	%)
Exploration and business development		0.6			0.2			0.4		nm
Other		0.1			-			0.1			100	%
Segment operating earnings	$	19.7		$	52.8		$	(33.1	)		(63	%)

(a)	Includes 3,554,000tonnes placed on the heap leach pads during the first quarter of 2015 (first quarter of 2014 - 2,790,000 tonnes).
(b)	Amount represents mill grade and recovery only.  Ore placed on the heap leach pads had an average grade of0.29grams per tonne during the first quarter of 2015 (first quarter of 2014 - 0.27 grams per tonne).  Due to the nature of heap leach operations, point-in-time recovery rates are not meaningful.
(c)	"nm" means not meaningful.

First quarter 2015 vs. First quarter 2014

During the first quarter of 2015, tonnes of ore mined increased by 59% compared with the same period in 2014, primarily due to mine sequencing, which involved mining activities focused on Phase 7 South.  Tonnes of ore processed were 13% higher compared with the first quarter of 2014 as a result of milder weather conditions that allowed for additional stacking of ore on the heap leach pads.  Mill grades and recoveries decreased by 3% and 2%, respectively, compared with the first quarter of 2014 as a result of planned mine sequencing.  Gold equivalent ounces produced decreased slightly compared with the first quarter of 2014, primarily due to lower mill recoveries and timing of ounces processed through the mill, partially offset by an increase in ounces recovered from the heap leach pads, which was a result of an increase in the quantity and grades of ore previously placed on the pads.  During the first quarter of 2015, gold equivalent ounces sold decreased by 27% compared with the same period in 2014 mainly due to timing of shipments as ounces produced at the end of 2013 were sold in the first quarter of 2014.

Metal sales declined by 31% compared with the first quarter of 2014 due to decreases in gold equivalent ounces sold and metal prices realized.  During the first quarter of 2015, production cost of sales decreased by 14% compared with the same period in 2014, primarily due to a decrease in the cost of diesel and lower gold equivalent ounces sold, partially offset by higher labour costs.  Depreciation, depletion and amortization decreased by 14% in the first quarter of 2015 compared with the same period in 2014, primarily due to the decrease in gold equivalent ounces sold, partially offset by an increase in the depreciable asset base.

Round Mountain (50% ownership and operator; Barrick 50% ownership) – USA

	Three months ended March 31,
	2015			2014			Change			% Change
Operating Statistics
Tonnes ore mined (000's)(a)		7,494			6,670			824			12	%
Tonnes processed (000's)(a)		6,872			6,376			496			8	%
Grade (grams/tonne)(b)		0.65			1.02			(0.37	)		(36	%)
Recovery(b)		66.8	%		82.1	%		(15.3	%)		(19	%)
Gold equivalent ounces:
Produced		40,262			45,054			(4,792	)		(11	%)
Sold		40,447			41,390			(943	)		(2	%)
Financial Data (in millions)
Metal sales	$	50.6		$	54.9		$	(4.3	)		(8	%)
Production cost of sales		36.0			37.3			(1.3	)		(3	%)
Depreciation, depletion and amortization		9.0			4.6			4.4			96	%
		5.6			13.0			(7.4	)		(57	%)
Exploration and business development		-			0.1			(0.1	)		(100	%)
Segment operating earnings	$	5.6		$	12.9		$	(7.3	)		(57	%)

(a)	Tonnes of ore mined/processed represent 100% of operations. Includes6,726,000 tonnes placed on the heap leach pads during the first quarter of 2015 (first quarter of 2014 - 5,466,000 tonnes).
(b)	Amount represents mill grade and recovery only.  Ore placed on the heap leach pads had an average grade of 0.40 grams per tonne during the first quarter of 2015 (first quarter of 2014 - 0.32 grams per tonne).  Due to the nature of heap leach operations, point-in-time recovery rates are not meaningful.

First quarter 2015 vs. First quarter 2014

During the first quarter of 2015, tonnes of ore mined increased by 12% compared with the same period in 2014, primarily due to planned mine sequencing.  Tonnes of ore processed were 8% higher compared with the first quarter of 2014, primarily due to an increase in tonnage placed on the Gold Hill pad.  Mill grades decreased by 36% compared with the first quarter of 2014, primarily due to lower grade ore being processed as the mill was re-commissioned in March 2015 after having been suspended in the fourth quarter of 2014 due to the fire.  Mill recoveries were 19% lower compared with the first quarter of 2014, primarily due to the decrease in mill grades.  Gold equivalent ounces produced were 11% lower compared with first quarter of 2014, primarily due to the decrease in ounces produced from the mill.  This decrease was partially offset by an increase in ounces recovered from the heap leach pads, largely a result of higher grade ore recently placed on the pads.  During the first quarter of 2015, gold equivalent ounces sold exceeded production as ounces produced at the end of 2014 were sold in the first quarter of 2015.

Metal sales declined by 8% compared with the first quarter of 2014 due to decreases in metal prices realized and gold equivalent ounces sold.  Production cost of sales decreased by 3% compared with the first quarter of 2014, primarily due to a decrease in gold equivalent ounces sold and lower diesel costs, partially offset by increased consumption of reagents and labour costs.  During the first quarter of 2015, depreciation, depletion and amortization increased to $9.0 million from $4.6 million in the first quarter of 2014, primarily due to a decrease in the mineral reserves at December 31, 2014 and an increase in the depreciable asset base.

Kettle River–Buckhorn (100% ownership and operator) – USA

	Three months ended March 31,
	2015			2014			Change			% Change
Operating Statistics
Tonnes ore mined (000's)		93			97			(4	)		(4	%)
Tonnes processed (000's)		111			102			9			9	%
Grade (grams/tonne)		6.02			10.93			(4.91	)		(45	%)
Recovery		91.3	%		91.7	%		(0.4	%)		(0	%)
Gold equivalent ounces:
Produced		24,265			25,917			(1,652	)		(6	%)
Sold		24,167			25,829			(1,662	)		(6	%)
Financial Data (in millions)
Metal sales	$	29.5		$	33.3		$	(3.8	)		(11	%)
Production cost of sales		24.3			16.4			7.9			48	%
Depreciation, depletion and amortization		4.1			9.7			(5.6	)		(58	%)
		1.1			7.2			(6.1	)		(85	%)
Exploration and business development		0.1			0.4			(0.3	)		(75	%)
Other		-			0.7			(0.7	)		(100	%)
Segment operating earnings	$	1.0		$	6.1		$	(5.1	)		(84	%)

First quarter 2015 vs. First quarter 2014

Tonnes of ore mined decreased by 4% compared with the first quarter of 2014, primarily due to planned mine sequencing, with the mine expected to continue production until 2016.  During the first quarter of 2015, tonnes of ore processed increased by 9% compared with the same period in 2014, primarily due to increased processing of stockpile ore.  Grades decreased by 45% compared with the first quarter of 2014 consistent with plan.  Gold equivalent ounces produced and sold decreased by 6% compared with the first quarter of 2014, primarily due to the decrease in grades, partially offset by the timing of ounces processed through the mill.

During the first quarter of 2015, metal sales declined by 11% compared with the same period in 2014 due to decreases in metal prices realized and gold equivalent ounces sold.  Production cost of sales increased by 48% compared with the first quarter of 2014, primarily due to an increase in the tonnes of lower grade ore processed.  Depreciation, depletion and amortization decreased to $4.1 million in the first quarter of 2015 from $9.7 million in the first quarter of 2014, primarily due to decreases in the depreciable asset base and gold equivalent ounces sold.

Paracatu (100% ownership and operator) – Brazil

	Three months ended March 31,
	2015			2014			Change			% Change
Operating Statistics
Tonnes ore mined (000's)		11,616			16,083			(4,467	)		(28	%)
Tonnes processed (000's)		11,825			15,047			(3,222	)		(21	%)
Grade (grams/tonne)		0.43			0.35			0.08			23	%
Recovery		76.6	%		67.9	%		8.7	%		13	%
Gold equivalent ounces:
Produced		124,685			127,085			(2,400	)		(2	%)
Sold		124,929			115,776			9,153			8	%
Financial Data (in millions)
Metal sales	$	150.7		$	150.0		$	0.7			0	%
Production cost of sales		93.9			100.1			(6.2	)		(6	%)
Depreciation, depletion and amortization		37.8			33.9			3.9			12	%
		19.0			16.0			3.0			19	%
Other		5.7			2.2			3.5			159	%
Segment operating earnings	$	13.3		$	13.8		$	(0.5	)		(4	%)

First quarter 2015 vs. First quarter 2014

During the first quarter of 2015, tonnes of ore mined and processed decreased by 28% and 21%, respectively, compared with the same period in 2014, primarily due to planned mine sequencing, which involved processing, at a reduced throughput, an increased proportion of higher grade B2 ore.  Grades and recoveries were higher by 23% and 13%, respectively, compared with the first quarter of 2014, primarily due to the characteristics of the ore mined.  Gold equivalent ounces produced decreased by 2% in the first quarter of 2015 compared with the same period in 2014, primarily due to lower mill throughput, partially offset by higher grades and recoveries.  During the first quarter of 2015, gold equivalent ounces sold exceeded production as ounces produced at the end of 2014 were sold in the first quarter of 2015.

Metal sales were consistent with the first quarter of 2014 due to an increase in gold equivalent ounces sold, largely offset by a decrease in metal prices realized.  During the first quarter of 2015, production cost of sales decreased by 6% compared with the same period in 2014, primarily due to a decrease in power, diesel and reagent costs, and favourable foreign exchange movements, partially offset by an increase in gold equivalent ounces sold.  Depreciation, depletion and amortization were 12% higher compared with the first quarter of 2014, primarily due to increases in the depreciable asset base and gold equivalent ounces sold.

Maricunga (100% ownership and operator) – Chile

	Three months ended March 31,
	2015		2014		Change			% Change
Operating Statistics (a)
Tonnes ore mined (000's)		2,695		4,491		(1,796	)		(40	%)
Tonnes processed (000's)		2,912		3,860		(948	)		(25	%)
Grade (grams/tonne)		0.69		0.74		(0.05	)		(7	%)
Gold equivalent ounces:
Produced		56,822		52,729		4,093			8	%
Sold		54,376		55,857		(1,481	)		(3	%)
Financial Data (in millions)
Metal sales	$	67.5	$	73.0	$	(5.5	)		(8	%)
Production cost of sales		56.0		58.6		(2.6	)		(4	%)
Depreciation, depletion and amortization		5.4		4.6		0.8			17	%
		6.1		9.8		(3.7	)		(38	%)
Other		-		3.3		(3.3	)		(100	%)
Segment operating earnings	$	6.1	$	6.5	$	(0.4	)		(6	%)

(a) Due to the nature of heap leach operations, point-in-time recovery rates are not meaningful.

First quarter 2015 vs. First quarter 2014

Tonnes of ore mined and processed decreased by 40% and 25%, respectively, compared with the first quarter of 2014, primarily due to the planned stockpile tower replacement and the extreme weather event in March 2015 that caused mining and crushing operations to be temporarily suspended.  During the first quarter of 2015, grades decreased by 7% compared with the same period in 2014 as a result of planned mine sequencing.  Gold equivalent ounces produced increased by 8% compared with the first quarter of 2014, primarily due to better performance of the heap leach and increased efficiency of the Adsorption, Desorption, and Recovery plant.  Gold equivalent ounces sold decreased by 3% compared with the first quarter of 2014, due to timing of shipments.

During the first quarter of 2015, metal sales declined by 8% compared with the same period in 2014 due to decreases in metal prices realized and gold equivalent ounces sold.  Production cost of sales decreased by 4% compared with the first quarter of 2014, primarily due to a decrease in gold equivalent ounces sold and lower labour and diesel costs, partially offset by an increase in cyanide consumption.  Depreciation, depletion and amortization increased by 17% compared with the first quarter of 2014, primarily due to a decrease in the mineral reserves at December 31, 2014 and an increase in depreciable asset base, partially offset by the decrease in gold equivalent ounces sold.

Kupol (100% ownership and operator) – Russian Federation (a)

		Three months ended March 31,
		2015			2014			Change			% Change
Operating Statistics
Tonnes ore mined (000's) (b)			464			440			24			5	%
Tonnes processed (000's)			418			409			9			2	%
Grade (grams/tonne):
	Gold		13.20			13.81			(0.61	)		(4	%)
	Silver		95.64			106.40			(10.76	)		(10	%)
Recovery:
	Gold		94.9	%		94.4	%		0.5	%		1	%
	Silver		85.3	%		83.7	%		1.6	%		2	%
Gold equivalent ounces: (c)
	Produced		185,729			191,238			(5,509	)		(3	%)
	Sold		192,167			138,286			53,881			39	%
Silver ounces:
	Produced (000's)		1,045			1,234			(189	)		(15	%)
	Sold (000's)		1,061			1,018			43			4	%
Financial Data (in millions)
Metal sales		$	232.7		$	181.3		$	51.4			28	%
Production cost of sales			91.5			66.5			25.0			38	%
Depreciation, depletion and amortization			63.9			56.4			7.5			13	%
			77.3			58.4			18.9			32	%
Exploration and business development			3.0			3.2			(0.2	)		(6	%)
Segment operating earnings		$	74.3		$	55.2		$	19.1			35	%

(a)	The Kupol segment includes the Kupol and Dvoinoye mines.
(b)	Includes130,000 tonnes of ore mined from Dvoinoye during the first quarter of 2015 (first quarter of 2014 - 106,000).
(c)	"Gold equivalent ounces" include silver ounces produced and sold converted to a gold equivalent based on a ratio of the average spot market prices for the commodities for each period. The ratio for the first quarter of 2015 was 72.91:1 (first quarter of 2014 - 63.15:1).

First quarter 2015 vs. First quarter 2014

During the first quarter of 2015, tonnes of ore mined and processed increased by 5% and 2%, respectively, compared with the same period in 2014, primarily due to increased mining activity at Dvoinoye, which resulted in higher mill throughput.  Gold grades decreased by 4% compared with the first quarter of 2014 largely due to the processing of lower grade ore from both the Kupol and Dvoinoye mines.  Gold equivalent ounces produced were 3% lower compared with the first quarter of 2014, primarily due to the lower grades and a less favourable gold equivalent ratio, partially offset by the increase in mill throughput and recoveries. During the first quarter of 2015, gold equivalent ounces sold increased by 39% compared with the same period in 2014, primarily due to timing of shipments.

Metal sales in the first quarter of 2015 increased by 28% compared with the same period in 2014 due to an increase in gold equivalent ounces sold, partially offset by a decrease in metal prices realized.  Production cost of sales increased by 38% compared with the first quarter of 2014, primarily due to an increase in gold equivalent ounces sold, partially offset by a decrease in labour costs due to favourable foreign exchange movements.  Depreciation, depletion and amortization increased by 13% compared with the first quarter of 2014, primarily due to increases in gold equivalent ounces sold and depreciable asset base, partially offset by an increase in the mineral reserves of the Kupol mine at December 31, 2014.

Tasiast (100% ownership and operator) – Mauritania

	Three months ended March 31,
	2015			2014			Change			% Change (c)
Operating Statistics
Tonnes ore mined (000's)		1,009			7,333			(6,324	)		(86	%)
Tonnes processed (000's) (a)		696			2,948			(2,252	)		(76	%)
Grade (grams/tonne) (b)		2.00			2.15			(0.15	)		(7	%)
Recovery (b)		89.4	%		89.1	%		0.3	%		0	%
Gold equivalent ounces:
Produced		54,009			71,671			(17,662	)		(25	%)
Sold		51,790			66,386			(14,596	)		(22	%)
Financial Data (in millions)
Metal sales	$	62.9		$	85.9		$	(23.0	)		(27	%)
Production cost of sales		51.9			67.5			(15.6	)		(23	%)
Depreciation, depletion and amortization		16.2			15.9			0.3			2	%
		(5.2	)		2.5			(7.7	)	nm
Exploration and business development		4.7			3.2			1.5			47	%
Other		3.9			1.4			2.5			179	%
Segment operating loss	$	(13.8	)	$	(2.1	)	$	(11.7	)	nm

(a)	Includes 66,000  tonnes placed on the dump leach pads during the first quarter of 2015 (first quarter of 2014 - 2,289,000 tonnes).
(b)	Amount represents mill grade and recovery only.  Ore placed on the dump leach pads had an average grade of 0.97 grams per tonne during the first quarter of 2015 (first quarter of 2014 - 0.63 grams per tonne).  Due to the nature of dump leach operations, point-in-time recovery rates are not meaningful.
(c)	"nm" means not meaningful.

First quarter 2015 vs. First quarter 2014

Tonnes of ore mined decreased by 86% compared with the first quarter of 2014, primarily due to planned mine sequencing, which involved mining the West Branch deposit during the first quarter of 2015.  Tonnes of ore processed decreased by 76% in the first quarter of 2015 compared with the same period in 2014, largely due to fewer tonnes being available to be placed on the dump leach pads as a result of the planned mine sequencing.  During the first quarter of 2015, mill grades decreased by 7% compared with the same period in 2014, primarily due to planned mine sequencing.  Gold equivalent ounces produced in the first quarter of 2015 decreased by 25% compared with the same period in 2014, primarily due to the lower mill grades, a decrease in ounces recovered from the dump leach pads, and timing of ounces processed through the mill.  Gold equivalent ounces sold decreased by 22% compared with the first quarter of 2014 mainly due to lower gold equivalent ounces produced.

Metal sales declined by 27% compared with the first quarter of 2014 due to decreases in metal prices realized and gold equivalent ounces sold.  During the first quarter of 2015, production cost of sales decreased by 23% compared with the same period in 2014, primarily due to a decrease in gold equivalent ounces sold and lower fuel costs, partially offset by an increase in the cost of maintenance and general operating supplies.  Depreciation, depletion and amortization increased by 2% compared with the first quarter of 2014, primarily due to an increase in the depreciable asset base.

Chirano (90% ownership and operator) – Ghana(a)

	Three months ended March 31,
	2015			2014			Change			% Change (b)
Operating Statistics
Tonnes ore mined (000's)		739			902			(163	)		(18	%)
Tonnes processed (000's)		899			817			82			10	%
Grade (grams/tonne)		2.62			3.06			(0.44	)		(14	%)
Recovery		89.4	%		92.0	%		(2.6	%)		(3	%)
Gold equivalent ounces:
Produced		67,683			74,898			(7,215	)		(10	%)
Sold		71,873			71,058			815			1	%
Financial Data (in millions)
Metal sales	$	87.4		$	91.6		$	(4.2	)		(5	%)
Production cost of sales		45.9			43.8			2.1			5	%
Depreciation, depletion and amortization		43.6			40.5			3.1			8	%
		(2.1	)		7.3			(9.4	)		(129	%)
Exploration and business development		3.9			2.8			1.1			39	%
Other		1.2			1.4			(0.2	)		(14	%)
Segment operating earnings (loss)	$	(7.2	)	$	3.1		$	(10.3	)	nm

(a)	Operating and financial data are at 100% for all periods.
(b)	"nm" means not meaningful.

First quarter 2015 vs. First quarter 2014

During the first quarter of 2015, tonnes of ore mined decreased by 18% compared with the same period in 2014, primarily due to lower tonnes of ore mined from the Akwaaba underground deposit and as a result of the Obra open pit having been fully mined in the first quarter of 2014, partially offset by an increase in mining activity at the Tano open pit.  Tonnes of ore processed increased by 10% compared with the first quarter of 2014, primarily due to mill repairs that occurred in the prior year.  Grades were 14% lower compared with the first quarter of 2014, largely due to declining grades at the Akwaaba underground deposit.  Gold equivalent ounces produced in the first quarter of 2015 decreased by 10% compared with the same period in 2014, primarily due to the lower grades, partially offset by the increase in tonnes processed.  During the first quarter of 2015, gold equivalent ounces sold exceeded production as ounces produced at the end of 2014 were sold in the first quarter of 2015.

Metal sales declined by 5% compared with the first quarter of 2014 due to a decrease in metal prices realized.  During the first quarter of 2015, production cost of sales increased by 5% compared with the same period in 2014, primarily due to higher underground mobile equipment maintenance costs and an increase in gold equivalent ounces sold.  Depreciation, depletion and amortization increased by 8% compared with the first quarter of 2014, largely due to an increase in the depreciable asset base attributable to the equipment acquired to self-perform underground mining operations and a decrease in mineral reserves at December 31, 2014.

Exploration and business development

	Three months ended March 31,
(in millions)	2015		2014		Change		% Change
Exploration and business development	$	22.8	$	22.7	$	0.1		0	%

Exploration and business development expenses were $22.8 million compared with $22.7 million in the first quarter of 2014.  Of the total exploration and business development expense, expenditures on exploration totaled $15.8 million compared with $15.3 million in the first quarter of 2014.  Capitalized exploration expenses, including capitalized evaluation expenditures, totaled $nil compared with $0.4 million for the first quarter of 2014.

Kinross was active on more than 18 mine sites, near-mine and greenfield initiatives during the first quarter of 2015, with a total of 100,689 metres drilled.  During the first quarter of 2014, Kinross was active on more than 15 mine sites, near-mine and greenfield initiatives, with a total of 44,160 metres drilled.

General and administrative

	Three months ended March 31,
(in millions)	2015		2014		Change			% Change
General and administrative	$	39.0	$	43.2	$	(4.2	)		(10	%)

General and administrative costs include expenses related to the overall management of the business which are not part of direct mine operating costs. These are costs that are incurred at corporate offices located in Canada, the United States, Brazil, the Russian Federation, Chile, and the Canary Islands.

Other income (expense) – net

During the first quarter of 2015, other income (expense) was an expense of $1.9 million compared with an expense of $6.2 million in the same period of 2014.  The discussion below details the significant changes in other income (expense) for the first quarter of 2015 compared with the same period in 2014.

	Three months ended March 31,
(in millions)	2015			2014			Change			% Change (a)
Gains (losses) on sale of other assets - net	$	(1.2	)	$	0.4		$	(1.6	)	nm
Foreign exchange losses		(1.0	)		(8.3	)		7.3			88	%
Net non-hedge derivative losses		(1.9	)		(3.4	)		1.5			44	%
Other		2.2			5.1			(2.9	)		(57	%)
	$	(1.9	)	$	(6.2	)	$	4.3			69	%

(a)  "nm" means not meaningful.

Foreign exchange losses

Foreign exchange losses in the first quarter of 2015 were $1.0 million compared with losses of $8.3 million in the first quarter of 2014.  The foreign exchange loss of $1.0 million was primarily due to the translation of net monetary assets denominated in foreign currencies to the U.S. dollar, with the U.S. dollar having strengthened against the Brazilian real, Ghanaian cedi, Chilean peso, Russian rouble, Canadian dollar and Mauritanian ouguiya at March 31, 2015 relative to December 31, 2014.

The foreign exchange loss of $8.3 million in the first quarter of 2014 was due primarily to the translation of net monetary assets denominated in foreign currencies to the U.S. dollar, with the U.S. dollar having strengthened against the Russian rouble, Canadian dollar, Ghanaian cedi and Chilean peso at March 31, 2014 relative to December 31, 2013, partially offset by the weakening of the U.S. dollar against the Brazilian real and Mauritanian ouguiya.

Finance expense

	Three months ended March 31,
(in millions)	2015		2014		Change		% Change
Finance expense	$	24.0	$	12.8	$	11.2		88	%

Finance expense includes accretion on reclamation and remediation obligations and interest expense.

Finance expense in the first quarter of 2015 increased by $11.2 million compared with the same period in 2014, primarily due to an increase in interest expense.  During the first quarter of 2015, interest expense increased by $11.3 million compared with the same period in 2014, primarily due to a decrease in interest capitalized and the additional interest recognized on the $500.0 million senior notes issued in March 2014.  During the first quarter of 2015, interest capitalized was $9.6 million compared with $18.6 million in the first quarter of 2014, with the decrease primarily due to lower qualifying capital expenditures.

Income and mining taxes

Kinross is subject to tax in various jurisdictions including Canada, the United States, Brazil, Chile, the Russian Federation, Mauritania, and Ghana.

During the first quarter of 2015, the Company recorded a tax expense of $25.3 million on income from continuing operations before taxes of $17.8 million, compared with a tax expense of $31.1 million on earnings from continuing operations before taxes of $62.5 million in the same period of 2014.  Excluding the impact of items that are not reflective of the underlying operating performance of our business, such as foreign exchange translation, the Company’s adjusted effective tax rate for the first quarter of 2015 was 34.1%, compared with an adjusted effective tax rate of 54.3% for the first quarter of 2014.  The decrease in the Company’s adjusted effective tax rate for the first quarter of 2015, compared with the same period in 2014, was largely due to differences in the level of income in the Company’s operating jurisdictions from one period to the next.  Kinross' combined federal and provincial statutory tax rate for the first quarter of 2015 was 26.5% (2014 – 26.5%).

There are a number of factors that can significantly impact the Company's effective tax rate, including the geographic distribution of income, varying rates in different jurisdictions, the non-recognition of tax assets, mining allowance, foreign currency exchange rate movements, changes in tax laws, and the impact of specific transactions and assessments.

Due to the number of factors that can potentially impact the effective tax rate and the sensitivity of the tax provision to these factors, as discussed above, it is expected that the Company's effective tax rate will fluctuate in future periods.

6.           LIQUIDITY AND CAPITAL RESOURCES

The following table summarizes Kinross’ cash flow activity:

	Three months ended March 31,
(in millions)	2015			2014			Change			% Change
Cash flow
Of continuing operations provided from operating activities	$	250.1		$	210.5		$	39.6			19	%
Of continuing operations used in investing activities		(169.6	)		(196.7	)		27.1			14	%
Of continuing operations used in financing activities		(51.0	)		(35.1	)		(15.9	)		(45	%)
Of discontinued operation (a)		1.0			(2.4	)		3.4			142	%
Effect of exchange rate changes on cash and cash equivalents of continuing operations		(3.5	)		(6.8	)		3.3			49	%
Increase (decrease) in cash and cash equivalents		27.0			(30.5	)		57.5			189	%
Cash and cash equivalents, beginning of period		983.5			734.5			249.0			34	%
Cash and cash equivalents, end of period	$	1,010.5		$	704.0		$	306.5			44	%

(a) On June 10, 2013, the Company announced its decision to cease development of FDN.  As a result, FDN was classified as a discontinued operation.  On December 17, 2014, the Company sold its interest in FDN.

During the first quarter of 2015, cash and cash equivalent balances increased by $27.0 million compared with a decrease of $30.5 million in the first quarter of 2014.  Detailed discussions regarding cash flow movements from continuing operations are noted below.

Operating Activities

First quarter 2015 vs. First quarter 2014

Net cash flow provided from operating activities increased by $39.6 million in the first quarter of 2015 compared with the same period in 2014.  The increase in cash flows was largely the result of favourable working capital changes, partially offset by the decrease in metal sales.

Investing Activities

First quarter 2015 vs. First quarter 2014

Net cash flow used in investing activities was $169.6 million compared with $196.7 million in the first quarter 2014.  During the first quarter of 2015 and 2014, the primary use of cash was for capital expenditures of $149.5 million and $168.9 million, respectively.

The following table presents a breakdown of capital expenditures on a cash basis:

	Three months ended March 31,
(in millions)	2015		2014		Change			% Change (c)
Operating segments
Fort Knox	$	41.4	$	29.7	$	11.7			39	%
Round Mountain		11.2		6.6		4.6			70	%
Kettle River - Buckhorn		0.6		1.6		(1.0	)		(63	%)
Paracatu		16.3		16.8		(0.5	)		(3	%)
Maricunga		7.5		9.4		(1.9	)		(20	%)
Kupol (a)		15.5		39.5		(24.0	)		(61	%)
Tasiast		36.4		51.3		(14.9	)		(29	%)
Chirano		7.3		10.7		(3.4	)		(32	%)
Non-operating segment
Corporate and Other (b)		13.3		3.3		10.0		nm
Total	$	149.5	$	168.9	$	(19.4	)		(11	%)

(a) Includes $2.8 million of capital expenditures at Dvoinoye during the first quarter of 2015 (first quarter of 2014 - $22.2 million).

(b)  "Corporate and Other" includes corporate and other non-operating assets (including La Coipa, Lobo-Marte and White Gold).

(c)  "nm" refers to not meaningful.

Capital expenditures in the first quarter of 2015 decreased by $19.4 million compared with the same period in 2014.  The decrease in capital expenditures was mainly due to reduced spending related to the Tasiast expansion project and at Dvoinoye, partially offset by increased spending at Fort Knox, largely related to the purchase of additional haulage trucks.

Financing Activities

First quarter 2015 vs. First quarter 2014

During the first quarter of 2015, net cash flow used in financing activities was $51.0 million compared with $35.1 million for the same period in 2014.  The increase was due to interest paid of $21.0 million and the $30.0 million payment on the Kupol loan in the first quarter of 2015, compared with a net repayment of debt of $31.6 million in the same period of 2014.  The net repayment of debt of $31.6 million in the first quarter of 2014 included repayments of $500.0 million of the term loan and $30.0 million of the Kupol loan, partially offset by net proceeds of $492.9 million received from the issuance of senior notes on March 6, 2014.

Balance Sheet

	As at,
(in millions)	March 31, 2015		December 31, 2014
Cash and cash equivalents	$	1,010.5	$	983.5
Current assets	$	2,544.6	$	2,587.1
Total assets	$	8,803.4	$	8,951.4
Current liabilities, including current portion of long-term debt	$	522.6	$	604.4
Total long-term financial liabilities(a)	$	2,778.9	$	2,779.0
Total debt, including current portion	$	2,029.1	$	2,058.1
Total liabilities	$	3,933.8	$	4,059.6
Common shareholders' equity	$	4,821.6	$	4,843.0
Non-controlling interest	$	48.0	$	48.8
Statistics
Working capital (b)	$	2,022.0	$	1,982.7
Working capital ratio (c)	4.87:1		4.28:1

(a) Includes long-term debt, provisions, and unrealized fair value of derivative liabilities.

(b) Calculated as current assets less current liabilities.

(c) Calculated as current assets divided by current liabilities.

At March 31, 2015, Kinross had cash and cash equivalents of $1.0 billion, an increase of $27.0 million from the balance as at December 31, 2014, primarily due to net operating cash flows of $250.1 million, partially offset by cash outflows of $149.5 million used in the purchase of property, plant and equipment and the periodic repayment of $30.0 million on the Kupol loan.  Current assets decreased to $2,544.6 million, primarily due to decreases in accounts receivable and inventories, partially offset by the increase in cash and cash equivalents.  Total assets decreased by $148.0 million to $8,803.4 million, primarily due to decreases in current assets, property, plant and equipment and other long term assets.  Current liabilities decreased to $522.6 million, largely due to a decrease in accounts payable and accrued liabilities.  Total debt decreased by $29.0 million to $2,029.1 million, primarily due to the $30.0 million periodic repayment of the Kupol loan.

As of May 4, 2015, there were 1,146.2 million common shares of the Company issued and outstanding.  In addition, at the same date, the Company had 16.5 million share purchase options outstanding under its share option plan.

Financings and Credit Facilities

Senior notes

On August 22, 2011, the Company completed a $1.0 billion offering of debt securities, consisting of $250.0 million principal amount of 3.625% senior notes due 2016, $500.0 million principal amount of 5.125% senior notes due 2021 and $250.0 million principal amount of 6.875% senior notes due 2041.  Kinross received net proceeds of $980.9 million from the offering, after discount and payment of fees and expenses related to the offering.

On March 6, 2014, the Company completed a $500.0 million offering of debt securities consisting of 5.950% senior notes due 2024.  Kinross received net proceeds of $492.9 million from the offering, after discount and payment of fees and expenses related to the offering.

The senior notes referred to above (collectively, the “notes”) pay interest semi-annually.  Except as noted below, the notes are redeemable by the Company, in whole or part, for cash at any time prior to maturity, at a redemption price equal to the greater of 100% of the principal amount or the sum of the present value of the remaining scheduled principal and interest payments on the notes discounted at the applicable treasury rate, as defined in the indentures, plus a premium of between 40 and 50 basis points, plus accrued interest, if any.  Within three months of maturity of the notes due in 2021 and 2024 and within six months of maturity of the notes due in 2041, the Company can only redeem the notes in whole at 100% of the principal amount plus accrued interest, if any.  In addition, the Company is required to make an offer to repurchase the notes prior to maturity upon certain fundamental changes at a repurchase price equal to 101% of the principal amount of the notes plus accrued and unpaid interest to the repurchase date, if any.

Kupol loan

On December 21, 2011, the Company completed a $200.0 million non-recourse loan from a group of international financial institutions.  The non-recourse loan carries a term of five years, maturing on September 30, 2016 and bears annual interest of LIBOR plus 2.5%.  Semi-annual principal repayments of $30.0 million commenced in March 2013 and will continue through September 30, 2015.  Principal repayments due on March 31, 2016 and September 30, 2016 are reduced to $13.0 million and $7.0 million, respectively.  The Company may prepay the loan in whole or in part, without penalty, but subject to customary break costs, if any.  The agreement contains various requirements that include limits on distributions if certain minimum debt service coverage levels are not achieved.  Property, plant and equipment with a carrying amount of $135.1 million (December 31, 2014 - $170.7 million) are pledged as security as part of the Kupol loan.

As at March 31, 2015, cash of $34.0 million (December 31, 2014 - $34.0 million) was restricted for payments related to the loan.

Corporate revolving credit and term loan facilities

In August 2012, the Company completed a new unsecured term loan facility for $1,000.0 million.  The facility was set to mature on August 10, 2015, with the full amount having been drawn on August 22, 2012.  Also, in August 2012, under the same agreement, the Company amended the revolving credit facility increasing the available amount to $1,500.0 million and extending the maturity date from March 2015 to August 2017.

On June 10, 2013, the Company amended its $1,500.0 million revolving credit facility and $1,000.0 million term loan to extend the respective maturity dates and remove the minimum tangible net worth covenant.  The revolving credit facility’s term was extended by one year to August 10, 2018 from August 10, 2017, and the term loan was extended by two years to mature on August 10, 2017 from August 10, 2015.

On March 10, 2014, the Company repaid $500.0 million of the term loan, leaving a balance of $500.0 million outstanding.  On July 28, 2014, the Company extended the maturity dates of the term loan and revolving credit facility by one year to August 10, 2018 and August 10, 2019, respectively.  As at March 31, 2015, the Company had utilized $32.1 million (December 31, 2014 – $32.1 million) of the amended revolving credit facility.  The amount utilized was entirely for letters of credit.

Loan interest for both the amended revolving credit facility and the amended term loan is variable, set at LIBOR plus an interest rate margin which is dependent on the Company’s credit rating.  Based on the Company’s credit rating at March 31, 2015, interest charges and fees, are as follows:

Type of credit
Dollar based LIBOR loan:
Term Loan	LIBOR plus 1.65%
Revolving credit facility	LIBOR plus 1.70%
Letters of credit		1.13-1.70	%
Standby fee applicable to unused availability		0.34	%

When the term loan was originally arranged in August 2012, the Company entered into interest rate swaps to swap the underlying 1-month LIBOR interest rate into a fixed rate of 0.49% for the original three year term ending August 10, 2015.  During the second quarter of 2013, the term loan maturity was extended to August 2017.  Accordingly, the interest rate swaps only hedged the term loan’s interest rate exposure until the original maturity of August 2015.  Concurrent with the repayment of $500.0 million of the term loan on March 10, 2014, the Company closed out 60% of the interest rate swaps.  The remaining outstanding interest rate swaps continue to hedge 80% of the remaining underlying floating rate term loan to August 10, 2015.  Based on the Company’s credit rating at March 31, 2015, the fixed rate on the hedged portion of the term loan is 2.14%.

The amended revolving credit facility and unsecured term loan were arranged under one credit agreement, which contains various covenants including limits on indebtedness, asset sales and liens.  The significant financial covenant is a ratio of net debt to EBITDA, as defined in the agreement, of no more than 3.5:1.  The Company is in compliance with this covenant at March 31, 2015.

Other

On June 15, 2012, the Company entered into an amendment to increase the amount of its Letter of Credit guarantee facility with EDC from $136.0 million to $200.0 million and to extend the maturity date to March 31, 2015.  On July 17, 2014, the Company further amended this facility to increase the amount from $200.0 million to $250.0 million.  Effective March 31, 2015, the maturity date for this facility was extended to June 30, 2016.  Letters of credit guaranteed by this facility are solely for reclamation liabilities at Fort Knox, Round Mountain, and Kettle River–Buckhorn.  Fees related to letters of credit under this facility are 1.00% to 1.25%.  As at March 31, 2015, $208.3 million (December 31, 2014 - $207.2 million) was utilized under this facility.

In addition, at March 31, 2015, the Company had $36.4 million (December 31, 2014 - $49.3 million) in letters of credit outstanding in respect of its operations in Brazil, Mauritania and Ghana.  These letters of credit have been issued pursuant to arrangements with certain international banks.

From time to time, the Company’s operations in Brazil may borrow U.S. dollars from Brazilian banks on a short-term unsecured basis to meet working capital requirements.  As at March 31, 2015, $nil (December 31, 2014 - $nil) was outstanding under such borrowings.

The following table outlines the credit facility utilization and availability:

	As at,
(in millions)	March 31, 2015			December 31, 2014
Utilization of revolving credit facility	$	(32.1	)	$	(32.1	)
Utilization of EDC facility		(208.3	)		(207.2	)
Borrowings	$	(240.4	)	$	(239.3	)
Available under revolving credit facility	$	1,467.9		$	1,467.9
Available under EDC credit facility		41.7			42.8
Available credit	$	1,509.6		$	1,510.7

Total debt of $2,029.1 million at March 31, 2015 consists of $1,481.4 million for the senior notes, $498.2 million for the corporate term loan facility, and $49.5 million for the Kupol loan.  The current portion of this debt is $43.0 million at March 31, 2015.

Liquidity Outlook

In 2015, the Company expects to repay $60.0 million of debt in cash, of which $30.0 million was repaid during the first quarter.

We believe that the Company’s existing cash and cash equivalents balance of $1,010.5 million, available credit of $1,509.6 million, and expected operating cash flows based on current assumptions (noted in Section 3 of this MD&A) will be sufficient to fund operations, our forecasted exploration and capital expenditures (noted in Section 3 of this MD&A), debt repayments noted above, and reclamation and remediation obligations currently estimated for 2015.  Prior to any capital investments, consideration is given to the cost and availability of various sources of capital resources.

With respect to longer term capital expenditure funding requirements, the Company continues to have discussions with lending institutions that have been active in the jurisdictions in which the Company’s development projects are located.  Some of the jurisdictions in which the Company operates have seen the participation of lenders including export credit agencies, development banks and multi-lateral agencies.  The Company believes the capital from these institutions combined with traditional bank loans and capital available through debt capital market transactions may fund a portion of the Company’s longer term capital expenditure requirements.  Another possible source of capital could be proceeds from the sale of non-core assets.  These capital sources together with operating cash flow and the Company’s active management of its operations and development activities will enable the Company to maintain an appropriate overall liquidity position.

Contractual Obligations and Commitments

The Company manages its exposure to fluctuations in input commodity prices, currency exchange rates and interest rates, by entering into derivative financial instruments from time to time, in accordance with the Company's risk management policy.

The following table provides a summary of derivative contracts outstanding at March 31, 2015:

	2015		2016
Foreign currency
Brazilian real forward buy contracts
(in millions of U.S. dollars)		151.1	$	30.0
Average price		2.52	$	3.70
Chilean peso forward buy contracts
(in millions of U.S. dollars)		54.0	$	-
Average price		604.96	$	-
Russian rouble forward buy contracts
(in millions of U.S. dollars)		36.0	$	-
Average price		36.01	$	-
Canadian dollar forward buy contracts
(in millions of U.S. dollars)		70.2	$	-
Average price		1.16	$	-
Energy
Oil swap contracts (barrels)		318,034		-
Average price		73.34		-
Gasoil swap contracts (tonnes)		26,730		-
Average price		559.98		-

The following new derivative contracts were engaged during the three months ended March 31, 2015:

·           $35.0 million Canadian dollars at an average rate of 1.24 maturing in 2015;
·           $25.7 million Chilean pesos at an average rate of 634.28 maturing in 2015;

·           $30.0 million Brazilian reais at an average rate of 3.70 maturing in 2016;

·           133,120 barrels of crude oil at an average rate of $50.77 per barrel maturing in 2015; and

·           25,168 tonnes of gasoil at an average rate of $488.59 per tonne maturing in 2015

When the term loan was originally arranged in August 2012, the Company entered into interest rate swaps to swap the underlying 1-month LIBOR interest rate into a fixed rate of 0.49% for the original three year term ending August 10, 2015.  During the second quarter of 2013, the term loan maturity was extended to August 2017.  Accordingly, the interest rate swaps only hedged the term loan’s interest rate exposure until the original maturity of August 2015.  Concurrent with the repayment of $500.0 million of the term loan on March 10, 2014, the Company closed out 60% of the interest rate swaps. The remaining outstanding interest rate swaps continue to hedge 80% of the remaining underlying floating rate term loan to August 10, 2015.

The Company enters into total return swaps (“TRS”) as economic hedges of the Company’s deferred share units (“DSUs”) and cash-settled restricted share units (“RSUs”).  Hedge accounting was not applied to the TRSs.

At March 31, 2015, 5,695,000 TRS units were outstanding.  The following TRS contracts were entered into during the three months ended March 31, 2015:

·           79,000 units at an average price of CDN$3.52 to hedge DSUs.
·           3,000,000 units at an average price of CDN$3.47 to hedge cash-settled RSUs.

Fair value of derivative instruments

The fair values of derivative instruments are noted in the table below:

	As at
(in millions)	March 31, 2015			December 31, 2014
Asset (liability)
Interest rate swaps	$	(0.5	)		$	(0.7	)
Foreign currency forward contracts		(59.5	)			(48.8	)
Energy swap contracts		(7.7	)			(9.9	)
Total return swap contracts		(2.5	)			(0.6	)
	$	(70.2	)		$	(60.0	)

Contingencies

The Company is obligated to pay $20.0 million to Barrick if a positive production decision is made relating to the Cerro Casale project.

Other legal matters

The Company is from time to time involved in legal proceedings, arising in the ordinary course of its business. Typically, and currently, except in the case of the actions described below, the amount of ultimate liability with respect to these actions will not, in the opinion of management, materially affect Kinross' financial position, results of operations or cash flows.

A putative securities class action complaint was filed on February 16, 2012 (the “U.S. Complaint”), entitled Bo Young Cha v. Kinross Gold Corporation et al., in the United States District Court for the Southern District of New York (the “Court”).  The U.S. Complaint named as defendants the Company, Tye Burt, former President and CEO, Paul Barry, former Executive Vice President and Chief Financial Officer, Glen Masterman, former Senior Vice President, Exploration and Kenneth Thomas, former Senior Vice President, Projects.  On May 31, 2012, the Court selected the City of Austin Police Retirement System (“City of Austin”) to be lead plaintiff.  Pursuant to an order of the Court, City of Austin filed an amended Complaint on July 23, 2012 (the “Amended U.S. Complaint”).  The Amended U.S. Complaint alleges among other things, that, between August 2, 2010 and January 17, 2012, the defendants inflated Kinross’s share price by knowingly or recklessly making material misrepresentations concerning (i) the extent and quality of the due diligence Kinross performed prior to its acquisition of Red Back and (ii) Kinross’s schedule for developing the Tasiast mine.  The defendants filed a motion to dismiss the Amended U.S. Complaint on September 7, 2012 and oral argument on the motion to dismiss took place on November 30, 2012.  On March 22, 2013, the Court issued an order (the “Order”) significantly narrowing the Amended U.S. Complaint to the defendants’ allegedly fraudulent statements about the Tasiast development schedule during the period of August 10, 2011 to January 17, 2012. On April 5, 2013, the defendants filed a motion for reconsideration of the portions of the Order that denied the defendants’ motion to dismiss, which the Court denied on June 6, 2013.  On July 8, 2013, the defendants filed their answer to the Amended U.S. Complaint.  In July 2014, the parties largely completed fact discovery, which included the production of information and documents (which was substantially completed on January 10, 2014) and the oral depositions of 21 witnesses.  On July 30, 2014, lead plaintiff filed a motion to certify a class of plaintiffs.  The defendants opposed the motion.  On September 18 and October 20, 2014, the parties exchanged expert reports and rebuttal expert reports, respectively, addressing the merits of the surviving claims of the Amended U.S. Complaint.  The parties completed the expert discovery phase of the litigation, and engaged in the submission of requests for admission, contention interrogatories, and motions to exclude opposing expert witnesses.  The lead plaintiff and the Company reached an agreement to settle all the claims in the action for $33 million, without admission of liability by the defendants and with the Company’s insurance carriers directly funding the full settlement.  The settlement is subject to the approval of the Court. On March 26, 2015, the parties filed the settlement papers with the Court, and we expect the Court to consider approval of the settlement by the end of the third quarter of 2015.

A notice of action in a proposed class proceeding under Ontario’s Class Proceedings Act, 1992, was filed in the Ontario Superior Court of Justice (the “Ontario Court”) on March 12, 2012, entitled Trustees of the Musicians’ Pension Fund of Canada v. Kinross Gold Corporation et al. (the “Ontario Action”).  A statement of claim in the Ontario Action was subsequently served on April 11, 2012.  The Ontario Action named as defendants the Company, Tye Burt, former President and CEO, Paul Barry, former Executive Vice President and Chief Financial Officer, Glen Masterman, former Senior Vice President, Exploration, and Kenneth Thomas, former Senior Vice President, Projects.  The Ontario Action alleges, among other things, that Kinross made a number of misrepresentations relating to the quantity and quality of gold ore at the Tasiast mine, and that Kinross and the individual defendants knew that such misrepresentations were false or misleading when made.  In a motion to the Ontario Court, the plaintiffs sought certification of the action as a class proceeding and leave to proceed under the statutory civil liability provisions of Ontario’s Securities Act.  In their written argument on the motion, the plaintiffs also sought leave and certification of a claim based on allegations that Kinross made a number of misrepresentations relating to the schedule for the Tasiast expansion project, and that Kinross and the individual defendants knew that such misrepresentations were false or misleading when made.  These claims were added to the plaintiffs’ statement of claim in January 2014.   A hearing on the plaintiffs’ leave and certification motions was held from October 22–24, 2013.  On November 5, 2013, the Ontario Court issued Reasons For Decision dismissing the leave motion in respect of the statutory claims and dismissing the certification motion in respect of both the statutory claims and the common law negligent misrepresentation claims.  The plaintiffs appealed the Order of the Ontario Court to the Ontario Court of Appeal.  The plaintiffs’ appeal was dismissed in its entirety by the Ontario Court of Appeal on December 17, 2014.  On February 11, 2015, the plaintiffs filed an application for leave to appeal the Court of Appeal’s decision to the Supreme Court of Canada.  That application has not been decided.  The Company and the plaintiffs reached an agreement to settle all of the claims in the Ontario Action for CDN$12.5 million, without any admission of liability by the defendants and with the Company’s insurance carriers directly funding the full settlement.  The settlement is subject to the approval of the Ontario Court.  On April 22, 2015, the parties provided the Ontario Court with the mutually agreed forms of the settlement documentation, and, following a hearing on April 27, 2015, the Ontario Court issued an order approving notice of the proposed settlement to potential class members. A motion is scheduled for June 17, 2015, at which the Ontario Court will be asked to approve the settlement.

On January 16, 2015, a notice of action in a proposed class proceeding under Ontario’s Class Proceedings Act, 1992 was filed in the Ontario Court, entitled Frankfurt-Trust Invest Luxemburg AG v. Kinross Gold Corporation (the “Frankfurt Action”).  A statement of claim in the Frankfurt Action was subsequently filed on February 13, 2015 but not served on the defendants until March 31, 2015.  The Frankfurt Action alleges, among other things, that Kinross made a number of misrepresentations, or failed to disclose material changes or material facts, relating to the schedule of the expansion project at the Tasiast mine.  If the settlement in the Musicians’ Ontario Action is approved and its conditions fulfilled, the plaintiffs in the Frankfurt Action will be bound by that settlement, unless they elect to opt out and pursue individually the claims they purport to assert in the Frankfurt Action.  Kinross believes that the claims in the Frankfurt Action are without merit and intends to vigorously defend against them, if required to do so.

7.           SUMMARY OF QUARTERLY INFORMATION

	2015			2014												2013
(in millions, except per share amounts)		Q1			Q4			Q3			Q2			Q1			Q4			Q3			Q2
Metal sales	$	781.4		$	791.3		$	945.7		$	911.9		$	817.4		$	877.1		$	876.3		$	968.0
Net earnings (loss) from continuing operations attributable to common shareholders	$	(6.7	)	$	(1,473.5	)	$	(4.3	)	$	46.0		$	31.8		$	(740.0	)	$	46.9		$	(2,481.9	)
Net earnings (loss) from  discontinued operation after-tax (a)	$	-		$	238.4		$	(0.8	)	$	(1.9	)	$	(2.2	)	$	(2.1	)	$	(5.0	)	$	(721.1	)
Basic earnings (loss) per share from continuing operations attributable to common shareholders	$	(0.01	)	$	(1.29	)	$	-		$	0.04		$	0.03		$	(0.65	)	$	0.04		$	(2.17	)
Diluted earnings (loss) per share from continuing operations attributable to common shareholders	$	(0.01	)	$	(1.29	)	$	-		$	0.04		$	0.03		$	(0.65	)	$	0.04		$	(2.17	)
Net cash flow of continuing operations provided from operating activities	$	250.1		$	179.2		$	304.5		$	163.9		$	210.5		$	187.2		$	137.7		$	106.4

(a) On June 10, 2013, the Company announced its decision to cease development of FDN.  As a result, FDN was classified as a discontinued operation.  On December 17, 2014, the Company sold its interest in FDN.

The Company’s results over the past several quarters have been driven primarily by fluctuations in the gold price, input costs and changes in the gold equivalent ounces sold.  Fluctuations in the silver price have also affected results.

During the first quarter of 2015, revenue decreased to $781.4 million on gold equivalent ounces sold of 641,752 compared with $817.4 million on sales of 628,637 gold equivalent ounces during the first quarter of 2014.  The average gold price realized in the first quarter of 2015 was $1,218 per ounce compared with $1,299 per ounce in the first quarter of 2014.

Production cost of sales was $454.6 million in the first quarter of 2015 compared with $456.0 million in the same period of 2014 as a result of lower input costs, such as energy, and favourable foreign exchange movements.  These decreases were partially offset by an increase in gold equivalent ounces sold.

Fluctuations in the foreign exchange rates have also affected results.  Depreciation, depletion and amortization varied between each of the above quarters largely due to changes in gold equivalent ounces sold and depreciable asset bases.  In addition, changes in mineral reserves during each year affected depreciation, depletion and amortization for quarters in the subsequent year.

In the fourth quarter of 2014, the Company recorded after-tax impairment charges of $932.2 million relating to several of its cash generating units (“CGUs”), net of a tax recovery of $127.9 million and non-controlling interest of $23.7 million.

During the fourth quarter of 2014, the Company completed the sale of its FDN project for gross cash proceeds of $150.0 million and $90.0 million of Lundin Gold common shares, resulting in an after-tax recovery of $238.0 million.

In the fourth quarter of 2013, the Company recorded after-tax impairment charges of $544.8 million, which included $376.0 million relating to property, plant and equipment at Maricunga, net of a tax recovery of $49.2 million, and $168.8 million relating to goodwill at Quebrada Seca.

During the second quarter of 2013, the Company recognized impairment charges of $2,289.3 million at several of its CGUs, net of a tax recovery of $108.7 million.

Also in the second quarter of 2013, the Company announced that it would not proceed with further development of the FDN project in Ecuador as the Government of Ecuador and Kinross were unable to agree on certain key economic and legal terms, which balanced the interests of all stakeholders.  Kinross' decision to cease the development of FDN resulted in a charge of $720.0 million in the second quarter of 2013.

Operating cash flows increased to $250.1 million in the first quarter of 2015, compared with $210.5 million in the same period of 2014, primarily due to favourable working capital changes, partially offset by the decrease in metal sales.

8.           DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING

Pursuant to regulations adopted by the U.S. Securities and Exchange Commission, under the Sarbanes-Oxley Act of 2002 and those of the Canadian Securities Administrators, Kinross' management evaluates the effectiveness of the design and operation of the Company's disclosure controls and procedures, and internal controls over financial reporting. This evaluation is done under the supervision of, and with the participation of, the Chief Executive Officer and the Chief Financial Officer.

For the quarter ended March 31, 2015, the Chief Executive Officer and the Chief Financial Officer concluded that Kinross’ disclosure controls and procedures, and internal control over financial reporting are designed to provide reasonable assurance regarding the reliability of information disclosed in its filings, including its interim financial statements prepared in accordance with IFRS.  There has been no change in the Company’s internal control over financial reporting during the quarter ended March 31, 2015 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Limitations of Controls and Procedures

Kinross’ management, including the Chief Executive Officer and the Chief Financial Officer, believes that any disclosure controls and procedures and internal controls over financial reporting, no matter how well designed and operated, can have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance that the objectives of the control system are met.

9.           CRITICAL ACCOUNTING POLICIES, ESTIMATES AND ACCOUNTING CHANGES

Critical Accounting Policies and Estimates

The preparation of the Company’s consolidated financial statements requires management to make judgments, estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.  The critical estimates, assumptions and judgments applied in the preparation of the Company’s interim financial statements are consistent with those applied and disclosed in Note 5 of the Company’s annual audited consolidated financial statements for the year ended December 31, 2014.

Accounting Changes

The accounting policies applied in the preparation of the Company’s interim financial statements are consistent with those used in the Company’s annual audited consolidated financial statements for the year ended December 31, 2014.

Recent Accounting Pronouncements

Revenue recognition

In May 2014, the IASB issued IFRS 15 “Revenue from Contracts with Customers” (“IFRS 15”). The standard replaces IAS 11 “Construction Contracts”, IAS 18 “Revenue”, IFRIC 13 “Customer Loyalty Programmes”, IFRIC 15 “Agreements for the Construction of Real Estate”, IFRIC 18 “Transfer of Assets From Customers” and SIC 31 “Revenue – Barter Transactions Involving Advertising Services”.  IFRS 15 establishes principles for reporting the nature, amount, timing, and uncertainty of revenue and cash flows arising from an entity’s contract with customers.  This standard is effective for annual periods beginning on or after January 1, 2017, and permits early adoption.  The Company is in the process of determining the impact of IFRS 15 on its consolidated financial statements.

Financial instruments

In July 2014, the IASB issued the final version of IFRS 9 “Financial Instruments” (“IFRS 9”).  This standard is effective for annual periods beginning on or after January 1, 2018, and permits early adoption. IFRS 9 provides a revised model for recognition and measurement and impairment of financial instruments.  IFRS 9 also includes a substantially reformed approach to hedge accounting.  The Company is in the process of determining the impact of IFRS 9 on its consolidated financial statements.

10.           RISK ANALYSIS

The business of Kinross contains significant risk due to the nature of mining, exploration, and development activities.  Certain risk factors, including but not limited to those listed below, are related to the mining industry in general while others are specific to Kinross.  For an additional discussion of risk factors, please refer to the MD&A for the year ended December 31, 2014 and for additional information please refer to the Annual Information Form for the year ended December 31, 2014, each of which is available on the Company's website www.kinross.com and on www.sedar.com or is available upon request from the Company.

Kinross’ ability to access capital markets is dependent upon its credit ratings

The Company’s ability to access debt markets and the related cost of debt financing is dependent upon its credit ratings.  The Company has investment grade credit ratings from Fitch Ratings and Standard & Poor’s.  On March 16, 2015, Moody’s announced a downgrade of the Company’s senior unsecured ratings from Baa3 to Ba1 in light of the Moody’s downgrade of the Russian Federation’s sovereign rating to Ba1 and the Company’s concentration of cash flows from its operations in the Russian Federation.  There is no assurance that these credit ratings will remain in effect for any given period of time or that any such ratings will not be revised or withdrawn entirely by a rating agency.  Real or anticipated changes in credit ratings can affect the price of the Company’s existing debt as well as the Company’s ability to access the capital markets and the cost of such debt financing.

Tasiast CGU recoverability

If the Company ultimately selects a processing option or combination of options other than the current 38,000 tonne per day mill case, the Company will determine at that time whether an impairment test is required with respect to the carrying value of the Tasiast CGU.  In accordance with IFRS, the Company would be required, as of the end of the quarterly reporting period in which such a selection is made, to conduct an impairment analysis of the valuation of the Tasiast CGU if the economics of the selected processing option or combination of options appears to have a significant impact on the recoverability of the carrying value of the CGU.  An analysis of the recoverable amount would otherwise only be done as and when any other relevant indications of changes in value are identified.

11.           SUPPLEMENTAL INFORMATION

Reconciliation of non-GAAP financial measures

The Company has included certain non-GAAP financial measures in this document.  These measures are not defined under IFRS and should not be considered in isolation.  The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company.  The inclusion of these measures is meant to provide additional information and should not be used as a substitute for performance measures prepared in accordance with IFRS.  These measures are not necessarily standard and therefore may not be comparable to other issuers.

Adjusted Net Earnings Attributable to Common Shareholders and Adjusted Net Earnings per Share

Adjusted net earnings attributable to common shareholders and adjusted net earnings per share are non-GAAP measures which determine the performance of the Company, excluding certain impacts which the Company believes are not reflective of the Company’s underlying performance for the reporting period, such as the impact of foreign exchange gains and losses, reassessment of prior year taxes and/or taxes otherwise not related to the current period, impairment charges, gains and losses and other one-time costs related to acquisitions, dispositions and other transactions, and non-hedge derivative gains and losses.  Although some of the items are recurring, the Company believes that they are not reflective of the underlying operating performance of its current business and are not necessarily indicative of future operating results.  Management believes that these measures, which are used internally to assess performance and in planning and forecasting future operating results, provide investors with the ability to better evaluate underlying performance, particularly since the excluded items are typically not included in public guidance.  However, adjusted net earnings and adjusted net earnings per share measures are not necessarily indicative of net earnings and earnings per share measures as determined under IFRS.

The following table provides a reconciliation of net earnings from continuing operations to adjusted net earnings from continuing operations for the periods presented:

	Three months ended March 31,
(in millions, except share and per share amounts)	2015			2014
Net earnings (loss) from continuing operations attributable to common shareholders - as reported	$	(6.7	)	$	31.8
Adjusting items:
Foreign exchange losses		1.0			8.3
Non-hedge derivatives losses - net of tax		2.0			3.0
Losses (gains) on sale of other assets - net of tax		0.9			(0.2	)
Foreign exchange losses (gains) on translation of tax basis and foreign exchange on deferred income taxes within income tax expense		17.7			(9.5	)
Taxes in respect of prior years		0.4			0.7
		22.0			2.3
Adjusted net earnings from continuing operations attributable to common shareholders	$	15.3		$	34.1
Weighted average number of common shares outstanding - Basic		1,145.1			1,143.8
Adjusted net earnings from continuing operations per share	$	0.01		$	0.03

Adjusted Operating Cash Flow

The Company makes reference to a non-GAAP measure for adjusted operating cash flow.  Adjusted operating cash flow is defined as cash flow from operations excluding certain impacts which the Company believes are not reflective of the Company’s regular operating cash flow and excluding changes in working capital.  Working capital can be volatile due to numerous factors, including the timing of tax payments, and in the case of Kupol, a build-up of inventory due to transportation logistics.  The Company uses adjusted operating cash flow internally as a measure of the underlying operating cash flow performance and future operating cash flow-generating capability of the Company.  However, the adjusted operating cash flow measure is not necessarily indicative of net cash flow from operations as determined under IFRS.

The following table provides a reconciliation of adjusted cash flow from continuing operations for the periods presented:

	Three months ended March 31,
(in millions)	2015			2014
Net cash flow of continuing operations provided from operating activities - as reported	$	250.1		$	210.5
Adjusting items:
Working capital changes:
Accounts receivable and other assets		(40.8	)		(50.0	)
Inventories		(50.7	)		23.4
Accounts payable and other liabilities, including taxes		56.2			58.3
		(35.3	)		31.7
Adjusted operating cash flow from continuing operations	$	214.8		$	242.2

Consolidated and Attributable Production Cost of Sales per Equivalent Ounce Sold

Consolidated production cost of sales per gold equivalent ounce sold is a non-GAAP measure and is defined as production cost of sales as reported on the interim condensed consolidated statement of operations divided by the total number of gold equivalent ounces sold.  This measure converts the Company’s non-gold production into gold equivalent ounces and credits it to total production.

Attributable production cost of sales per gold equivalent ounce sold is a non-GAAP measure and is defined as attributable production cost of sales divided by the attributable number of gold equivalent ounces sold.  This measure converts the Company’s non-gold production into gold equivalent ounces and credits it to total production.

Management uses these measures to monitor and evaluate the performance of its operating properties.

The following table provides a reconciliation of consolidated and attributable production cost of sales per equivalent ounce sold for the periods presented:

	Three months ended March 31,
(in millions, except ounces and production cost of sales per equivalent ounce)	2015			2014
Production cost of sales - as reported	$	454.6		$	456.0
Less: portion attributable to Chirano non-controlling interest		(4.6	)		(4.4	)
Attributable production cost of sales	$	450.0		$	451.6
Gold equivalent ounces sold		641,752			628,637
Less: portion attributable to Chirano non-controlling interest		(7,187	)		(7,106	)
Attributable gold equivalent ounces sold		634,565			621,531
Consolidated production cost of sales per equivalent ounce sold	$	708		$	725
Attributable production cost of sales per equivalent ounce sold	$	709		$	727

Attributable Production Cost of Sales per Ounce Sold on a By-Product Basis

Attributable production cost of sales per ounce sold on a by-product basis is a non-GAAP measure which calculates the Company’s non-gold production as a credit against its per ounce production costs, rather than converting its non-gold production into gold equivalent ounces and crediting it to total production, as is the case in co-product accounting.  Management believes that this measure provides investors with the ability to better evaluate Kinross’ production cost of sales per ounce on a comparable basis with other major gold producers who routinely calculate their cost of sales per ounce using by-product accounting rather than co-product accounting.

The following table provides a reconciliation of attributable production cost of sales per ounce sold on a by-product basis for the periods presented:

	Three months ended March 31,
(in millions, except ounces and production cost of sales per ounce)	2015			2014
Production cost of sales - as reported	$	454.6		$	456.0
Less: portion attributable to Chirano non-controlling interest		(4.6	)		(4.4	)
Less: attributable silver revenues		(20.2	)		(24.5	)
Attributable production cost of sales net of silver by-product revenue	$	429.8		$	427.1
Gold ounces sold		625,018			610,158
Less: portion attributable to Chirano non-controlling interest		(7,167	)		(7,085	)
Attributable gold ounces sold		617,851			603,073
Attributable production cost of sales per ounce sold on a by-product basis	$	696		$	708

Attributable All-In Sustaining Cost and All-In Cost per Ounce Sold on a By-Product Basis

In June 2013, the World Gold Council (“WGC”) published its guidelines for reporting all-in sustaining costs and all-in costs.  The WGC is a market development organization for the gold industry and is an association whose membership comprises leading gold mining companies including Kinross.  Although the WGC is not a mining industry regulatory organization, it worked closely with its member companies to develop these non-GAAP measures.  Adoption of the all-in sustaining cost and all-in cost metrics is voluntary and not necessarily standard, and therefore, these measures presented by the Company may not be comparable to similar measures presented by other issuers.  The Company believes that the all-in sustaining cost and all-in cost measures complement existing measures reported by Kinross.

All-in sustaining cost includes both operating and capital costs required to sustain gold production on an ongoing basis.  The value of silver sold is deducted from the total production cost of sales as it is considered residual production.  Sustaining operating costs represent expenditures incurred at current operations that are considered necessary to maintain current production.  Sustaining capital represents capital expenditures at existing operations comprising mine development costs and ongoing replacement of mine equipment and other capital facilities, and does not include capital expenditures for major growth projects or enhancement capital for significant infrastructure improvements at existing operations.

All-in cost is comprised of all-in sustaining cost as well as operating expenditures incurred at locations with no current operation, or costs related to other non-sustaining activities, and capital expenditures for major growth projects or enhancement capital for significant infrastructure improvements at existing operations.

Attributable all-in sustaining cost and all-in cost per ounce sold on a by-product basis are calculated by adjusting total production cost of sales, as reported on the interim condensed consolidated statement of operations, as follows:

	Three months ended March 31,
(in millions, except ounces and costs per ounce)	2015			2014
Production cost of sales - as reported	$	454.6		$	456.0
Less: portion attributable to Chirano non-controlling interest (a)		(4.6	)		(4.4	)
Less: attributable (b) silver revenues (c)		(20.2	)		(24.5	)
Attributable (b) production cost of sales net of silver by-product revenue	$	429.8		$	427.1
Adjusting items on an attributable (b) basis:
General and administrative (d)		39.0			43.2
Other operating expense - sustaining (e)		11.7			8.0
Reclamation and remediation - sustaining (f)		14.5			14.5
Exploration and business development - sustaining (g)		13.3			13.6
Additions to property, plant and equipment - sustaining (h)		83.0			91.0
All-in Sustaining Cost on a by-product basis - attributable (b)	$	591.3		$	597.4
Other operating expense - non-sustaining (e)		4.5			10.9
Exploration - non-sustaining (g)		9.1			9.7
Additions to property, plant and equipment - non-sustaining (h)		43.8			47.2
All-in Cost on a by-product basis - attributable (b)	$	648.7		$	665.2
Gold ounces sold		625,018			610,158
Less: portion attributable to Chirano non-controlling interest (i)		(7,167	)		(7,085	)
Attributable (b) gold ounces sold		617,851			603,073
Attributable (b) all-in sustaining cost per ounce sold on a by-product basis	$	957		$	991
Attributable (b) all-in cost per ounce sold on a by-product basis	$	1,050		$	1,103

Attributable All-In Sustaining Cost and All-In Cost per Equivalent Ounce Sold

The Company also assesses its all-in sustaining cost and all-in cost on a gold equivalent ounce basis. Under these non-GAAP measures, the Company’s production of silver is converted into gold equivalent ounces and credited to total production.

Attributable all-in sustaining cost and all-in cost per equivalent ounce sold are calculated by adjusting total production cost of sales, as reported on the interim condensed consolidated statement of operations, as follows:

	Three months ended March 31,
(in millions, except ounces and costs per equivalent ounce)	2015			2014
Production cost of sales - as reported	$	454.6		$	456.0
Less: portion attributable to Chirano non-controlling interest (a)		(4.6	)		(4.4	)
Attributable (b) production cost of sales	$	450.0		$	451.6
Adjusting items on an attributable (b) basis:
General and administrative (d)		39.0			43.2
Other operating expense - sustaining (e)		11.7			8.0
Reclamation and remediation - sustaining (f)		14.5			14.5
Exploration and business development - sustaining (g)		13.3			13.6
Additions to property, plant and equipment - sustaining (h)		83.0			91.0
All-in Sustaining Cost - attributable (b)	$	611.5		$	621.9
Other operating expense - non-sustaining (e)		4.5			10.9
Exploration - non-sustaining (g)		9.1			9.7
Additions to property, plant and equipment - non-sustaining (h)		43.8			47.2
All-in Cost - attributable (b)	$	668.9		$	689.7
Gold equivalent ounces sold		641,752			628,637
Less: portion attributable to Chirano non-controlling interest (i)		(7,187	)		(7,106	)
Attributable (b) gold equivalent ounces sold		634,565			621,531
Attributable (b) all-in sustaining cost per equivalent ounce sold	$	964		$	1,001
Attributable (b) all-in cost per equivalent ounce sold	$	1,054		$	1,110

(a) Portion attributable to Chirano non-controlling interest represents the non-controlling interest (10%) in the production cost of sales for the Chirano mine.

(b) “Attributable” includes Kinross' share of Chirano (90%) production.

(c) “Attributable silver revenues” represents the attributable portion of metal sales realized from the production of the secondary or by-product metal (i.e. silver).  Revenue from the sale of silver, which is produced as a by-product of the process used to produce gold, effectively reduces the cost of gold production.

(d) “General and administrative” expenses is as reported on the interim condensed consolidated statement of operations, net of certain severance expenses.  General and administrative expenses are considered sustaining costs as they are required to be absorbed on a continuing basis for the effective operation and governance of the Company.

(e) “Other operating expense – sustaining” is calculated as “Other operating expense” as reported on the interim condensed consolidated statement of operations, less other operating and reclamation and remediation expenses related to non-sustaining activities as well as  other items not reflective of the underlying operating performance of our business.  Other operating expenses are classified as either sustaining or non-sustaining based on the type and location of the expenditure incurred.  The majority of other operating expenses that are incurred at existing operations are considered costs necessary to sustain operations, and are therefore classified as sustaining.  Other operating expenses incurred at locations where there is no current operation or related to other non-sustaining activities are classified as non-sustaining.

(f) “Reclamation and remediation - sustaining” is calculated as current period accretion related to reclamation and remediation obligations plus current period amortization of the corresponding reclamation and remediation assets, and is intended to reflect the periodic cost of reclamation and remediation for currently operating mines.  Reclamation and remediation costs for development projects or closed mines are excluded from this amount and classified as non-sustaining.

(g) “Exploration and business development – sustaining” is calculated as “Exploration and business development” expenses as reported on the interim condensed consolidated statement of operations, less non-sustaining exploration expenses.  Exploration expenses are classified as either sustaining or non-sustaining based on a determination of the type and location of the exploration expenditure.  Exploration expenditures within the footprint of operating mines are considered costs required to sustain current operations and so are included in sustaining costs.  Exploration expenditures focused on new ore bodies near existing mines (i.e. brownfield), new exploration projects (i.e. greenfield) or for other generative exploration activity not linked to existing mining operations are classified as non-sustaining.  Business development expenses are considered sustaining costs as they are required for general operations.

(h) “Additions to property, plant and equipment – sustaining” represents the majority of capital expenditures at existing operations including capitalized exploration costs, capitalized stripping and underground mine development costs, ongoing replacement of mine equipment and other capital facilities and other capital expenditures and is calculated as total additions to property, plant and equipment (as reported on the interim condensed consolidated statements of cash flows), less capitalized interest and non-sustaining capital.  Non-sustaining capital represents capital expenditures for major growth projects as well as enhancement capital for significant infrastructure improvements at existing operations. Non-sustaining capital expenditures during the three months ended March 31, 2015 relate to projects at Tasiast, Chirano and La Coipa.

(i) “Portion attributable to Chirano non-controlling interest” represents the non-controlling interest (10%) in the ounces sold from the Chirano mine.

Cautionary Statement on Forward-Looking Information

All statements, other than statements of historical fact, contained or incorporated by reference in this MD&A including, but not limited to, any information as to the future financial or operating performance of Kinross, constitute ‘‘forward-looking information’’ or ‘‘forward-looking statements’’ within the meaning of certain securities laws, including the provisions of the Securities Act (Ontario) and the provisions for ‘‘safe harbour’’ under the United States Private Securities Litigation Reform Act of 1995 and are based on expectations, estimates and projections as of the date of this MD&A.  Forward-looking statements contained in this MD&A, include, but are not limited to, those under the headings “Outlook”, “Project Updates and New Developments”, “Liquidity Outlook”, “Contingencies”, “Other legal matters”, and “Risk Analysis”, and include, without limitation, statements with respect to our guidance for production, production costs of sales, all-in sustaining cost and capital expenditures; and continuous improvement initiatives,  as well as references to other possible events, the future price of gold and silver, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of projects, and new deposits, success of exploration, development and mining activities, currency fluctuations, capital requirements, project studies, mine life extensions, restarting suspended operations; continuous improvement initiatives; and resolution of pending litigation. The words “anticipate”, “believe”, “estimates”, ‘‘expects’’, ‘‘forecasts”, “focus”, “guidance”, “indicate”, “initiative”, “on track”, “options”, “outlook”, “plan”, “possible”, “potential”, “prospective”, “pursue”, “study”, or “target”, or variations of or similar such words and phrases or statements that certain actions, events or results may, could, should or ‘will be achieved, received or taken, or will occur or result and similar such expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Kinross as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The estimates, models and assumptions of Kinross referenced, contained or incorporated by reference in this MD&A, which may prove to be incorrect, include, but are not limited to, the various assumptions set forth herein and in our most recently filed Annual Information Form and our MD&A as well as: (1) there being no significant disruptions affecting the operations of the Company, whether due to extreme weather events and other or related natural disasters, labour disruptions, supply disruptions, power disruptions, damage to equipment or otherwise, including but not limited to the recent extreme weather, and related flash floods and mudslides, impacting the Company’s Maricunga mine, and required remediation being consistent with the Company’s expectations; (2) permitting, development and operations at Paracatu (including, without limitation, land acquisitions and permitting for the construction and operation of the new tailings facility, power supply and launch of the new tailings reprocessing facility) being consistent with our current expectations; (3) political and legal developments in any jurisdiction in which the Company operates being consistent with its current expectations including, without limitation, the impact of escalating political tensions and uncertainty in the Russian Federation and Ukraine or any related sanctions and any other similar restrictions or penalties imposed, or actions taken, by any government, including but not limited to potential power rationing in Brazil and potential amendments to the Brazilian Mining Code, the Chilean Water Code and/or other water use restrictions in Chile, the Minerals and Mining Act (2006) and dam safety regulation in Ghana, the Customs Code and Mining Code (including but not limited amendments to the VAT regime pursuant to the 2015 Budget Law) in Mauritania and Tax Code in Russia (including, but not limited to, the interpretation, implementation and application of any such amendments), being consistent with Kinross’ current expectations; (4) the exchange rate between the Canadian dollar, Brazilian real, Chilean peso, Russian rouble, Mauritanian ouguiya, Ghanaian cedi and the U.S. dollar being approximately consistent with current levels; (5) certain price assumptions for gold and silver; (6) prices for diesel, natural gas, fuel oil, electricity and other key supplies being approximately consistent with current levels; (7) production and cost of sales forecasts for the Company meeting expectations; (8) the accuracy of the current mineral reserve and mineral resource estimates of the Company (including but not limited to ore tonnage and ore grade estimates); (9) labour and materials costs increasing on a basis consistent with Kinross’ current expectations; (10) the development of, operations at and production from the Company’s operations, being consistent with Kinross’ current expectations; (11) the terms and conditions of the legal and fiscal stability agreements for the Tasiast and Chirano operations being interpreted and applied in a manner consistent with their intent and Kinross’ expectations; (12) goodwill and/or asset impairment potential; and (13) access to capital markets, including but not limited to maintaining an investment grade debt rating and, as required, maintaining partial project financing for Dvoinoye and Kupol being consistent with the Company’s current expectations. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: sanctions (any other similar restrictions or penalties) now or subsequently imposed, other actions taken, by, against, in respect of or otherwise impacting any jurisdiction in which the Company is domiciled or operates (including but not limited to the Russian Federation, Canada, the European Union and the United States), or any government or citizens of, persons or companies domiciled in, or the Company’s business, operations or other activities in, any such jurisdiction; litigation commenced, or other claims or actions brought, against the Company (and/or any of its directors, officers or employees) in respect of the cessation by the Company of investment in and development of FDN and its sale, or any of the Company’s prior activities on or in respect thereof or otherwise in Ecuador; fluctuations in the currency markets; fluctuations in the spot and forward price of gold or certain other commodities (such as fuel and electricity); changes in the discount rates applied to calculate the present value of net future cash flows based on country-specific real weighted average cost of capital; changes in the market valuations of peer group gold producers and the Company, and the resulting impact on market price to net asset value multiples; changes in various market variables, such as interest rates, foreign exchange rates, gold or silver prices and lease rates, or global fuel prices, that could impact the mark-to-market value of outstanding derivative instruments and ongoing payments/receipts under any financial obligations; risks arising from holding derivative instruments (such as credit risk, market liquidity risk and mark-to-market risk); changes in national and local government legislation, taxation (including but not limited to income tax, advance income tax, stamp tax, withholding tax, capital tax, tariffs, value-added or sales tax, capital outflow tax, capital gains tax, windfall or windfall profits tax, royalty, excise tax, customs/import or export taxes/duties, asset taxes, asset transfer tax, property use or other real estate tax, together with any related fine, penalty, surcharge, or interest imposed in connection with such taxes), controls, policies and regulations; the security of personnel and assets; political or economic developments in Canada, the United States, Chile, Brazil, Russia, Ecuador, Mauritania, Ghana, or other countries in which Kinross does business or may carry on business; business opportunities that may be presented to, or pursued by, us; our ability to successfully integrate acquisitions and complete divestitures; operating or technical difficulties in connection with mining or development activities; employee relations; litigation or other claims against, or regulatory investigations and/or any enforcement actions or sanctions in respect of the Company (and/or its directors, officers, or employees) including, but not limited to, securities class action litigation in Canada and/or the United States, or any investigations, enforcement actions and/or sanctions under any applicable anti-corruption, international sanctions and/or anti-money laundering laws and regulations in Canada, the United States or any other applicable jurisdiction; the speculative nature of gold exploration and development including, but not limited to, the risks of obtaining necessary licenses and permits; diminishing quantities or grades of reserves; adverse changes in our credit rating; and contests over title to properties, particularly title to undeveloped properties. In addition, there are risks and hazards associated with the business of gold exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance, or the inability to obtain insurance, to cover these risks). Many of these uncertainties and contingencies can directly or indirectly affect, and could cause, Kinross’ actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Kinross,including but not limited to resulting in an impairment charge on goodwill and/or assets. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management’s expectations and plans relating to the future. All of the forward-looking statements made in this MD&A are qualified by these cautionary statements and those made in our other filings with the securities regulators of Canada and the United States including, but not limited to, the cautionary statements made in the ‘‘Risk Factors’’ section of our most recently filed Annual Information Form and the “Risk Analysis” section of our full year 2014 MD&A. These factors are not intended to represent a complete list of the factors that could affect Kinross. Kinross disclaims any intention or obligation to update or revise any forward-looking statements or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law.

Key Sensitivities

Approximately 60%-70% of the Company's costs are denominated in U.S. dollars.

A 10% change in foreign exchange could result in an approximate $14 impact on production cost of sales per ounce2.

Specific to the Russian rouble, a 10% change in the exchange rate would be expected to result in an approximate $11 impact on Russian production cost of sales per ounce.

A $10 per barrel change in the price of oil could result in an approximate $1 impact on production cost of sales per ounce.

A $100 change in the price of gold would be expected to result in an approximate $3 impact on production cost of sales per ounce as a result of a change in royalties.

Other information

Where we say ‘‘we’’, ‘‘us’’, ‘‘our’’, the ‘‘Company’’, or ‘‘Kinross’’ in this MD&A, we mean Kinross Gold Corporation and/or one or more or all of its subsidiaries, as may be applicable.

The technical information about the Company’s mineral properties contained in this MD&A has been prepared under the supervision of Mr. John Sims, an officer of the Company, who is a “qualified person” within the meaning of National Instrument 43-101.  The technical information about the Company’s exploration activities contained in this MD&A has been prepared under the supervision of Mr. Sylvain Guerard, an officer of the Company who is a “qualified person” within the meaning of NI 43-101.

 

2Refers to all of the currencies in the countries where the Company has mining operations, fluctuating simultaneously by 10% in the same direction, either appreciating or depreciating, taking into consideration the impact of hedging and the weighting of each currency within our consolidated cost structure.

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited expressed in millions of United States dollars, except share amounts)

		As at
		March 31,			December 31,
		2015			2014
Assets
Current assets
Cash and cash equivalents	Note 5	$	1,010.5		$	983.5
Restricted cash	Note 5		41.1			41.3
Accounts receivable and other assets	Note 5		148.7			170.4
Current income tax recoverable			105.8			115.2
Inventories	Note 5		1,238.5			1,276.7
			2,544.6			2,587.1
Non-current assets
Property, plant and equipment	Note 5		5,345.8			5,409.4
Goodwill	Note 5		162.7			162.7
Long-term investments	Note 5		97.7			111.0
Investments in associate and joint venture	Note 6		156.2			156.8
Other long-term assets	Note 5		390.2			417.9
Deferred tax assets			106.2			106.5
Total assets		$	8,803.4		$	8,951.4
Liabilities
Current liabilities
Accounts payable and accrued liabilities	Note 5	$	337.6		$	421.9
Current income tax payable			27.2			19.2
Current portion of long-term debt	Note 9		43.0			60.0
Current portion of provisions	Note 10		43.3			43.1
Current portion of unrealized fair value of derivative liabilities	Note 7		71.5			60.2
			522.6			604.4
Non-current liabilities
Long-term debt	Note 9		1,986.1			1,998.1
Provisions	Note 10		792.8			780.9
Other long-term liabilities			197.1			207.2
Deferred tax liabilities			435.2			469.0
Total liabilities			3,933.8			4,059.6
Equity
Common shareholders' equity
Common share capital	Note 11	$	14,598.5		$	14,587.7
Contributed surplus			231.9			239.0
Accumulated deficit			(9,944.3	)		(9,937.6	)
Accumulated other comprehensive income (loss)	Note 5		(64.5	)		(46.1	)
Total common shareholders' equity			4,821.6			4,843.0
Non-controlling interest			48.0			48.8
Total equity			4,869.6			4,891.8
Commitments and contingencies	Note 15
Subsequent events	Note 15
Total liabilities and equity		$	8,803.4		$	8,951.4
Common shares
Authorized		Unlimited			Unlimited
Issued and outstanding	Note 11		1,146,210,681			1,144,576,474

The accompanying notes are an integral part of these interim condensed consolidated financial statements

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited expressed in millions of United States dollars, except share and per share amounts)

		Three months ended
		March 31,			March 31,
		2015			2014
Revenue
Metal sales		$	781.4		$	817.4
Cost of sales
Production cost of sales			454.6			456.0
Depreciation, depletion and amortization			206.2			196.4
Total cost of sales			660.8			652.4
Gross profit			120.6			165.0
Other operating expense			16.3			17.7
Exploration and business development			22.8			22.7
General and administrative			39.0			43.2
Operating earnings			42.5			81.4
Other income (expense) - net	Note 5		(1.9	)		(6.2	)
Equity in earnings (losses) of associate and joint venture	Note 5		(1.0	)		(1.3	)
Finance income			2.2			1.4
Finance expense	Note 5		(24.0	)		(12.8	)
Earnings before tax			17.8			62.5
Income tax expense - net			(25.3	)		(31.1	)
Earnings (loss) from continuing operations after tax			(7.5	)		31.4
Loss from discontinued operation after tax	Note 4		-			(2.2	)
Net earnings (loss)		$	(7.5	)	$	29.2
Net earnings (loss) from continuing operations attributable to:
Non-controlling interest		$	(0.8	)	$	(0.4	)
Common shareholders		$	(6.7	)	$	31.8
Net earnings (loss) attributable to:
Non-controlling interest		$	(0.8	)	$	(0.4	)
Common shareholders		$	(6.7	)	$	29.6
Earnings (loss) per share from continuing operations attributable to common shareholders
Basic		$	(0.01	)	$	0.03
Diluted		$	(0.01	)	$	0.03
Earnings (loss) per share attributable to common shareholders
Basic		$	(0.01	)	$	0.03
Diluted		$	(0.01	)	$	0.03
Weighted average number of common shares outstanding (millions)	Note 13
Basic			1,145.1			1,143.8
Diluted			1,145.1			1,151.1

The accompanying notes are an integral part of these interim condensed consolidated financial statements

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited expressed in millions of United States dollars)

		Three months ended
		March 31,			March 31,
		2015			2014
Net earnings (loss)		$	(7.5	)	$	29.2
Other comprehensive income (loss), net of tax:	Note 5
Other comprehensive income (loss) to be reclassified to profit or loss in subsequent periods:
Change in fair value of investments (a)			(13.6	)		6.6
Changes in fair value of derivative financial instruments designated as cash flow hedges (b)			(20.1	)		1.5
Accumulated other comprehensive income related to derivatives settled (c)			15.3			8.9
			(18.4	)		17.0
Total comprehensive income (loss)		$	(25.9	)	$	46.2
Comprehensive income (loss) from continuing operations		$	(25.9	)	$	48.4
Comprehensive loss from discontinued operation	Note 4		-			(2.2	)
Total comprehensive income (loss)		$	(25.9	)	$	46.2
Attributable to non-controlling interest		$	(0.8	)	$	(0.4	)
Attributable to common shareholders		$	(25.1	)	$	46.6

(a)   Net of tax of $nil (2014 - $nil)

(b) Net of tax of $(7.8) million (2014 - $5.3 million)

(c)   Net of tax of $4.1 million (2014 - $2.8 million)

The accompanying notes are an integral part of these interim condensed consolidated financial statements

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited expressed in millions of United States dollars)

	Three months ended
	March 31,			March 31,
	2015			2014
Net inflow (outflow) of cash related to the following activities:
Operating:
Earnings (loss) from continuing operations	$	(7.5	)	$	31.4
Adjustments to reconcile net earnings (loss) from continuing operations to net cash provided from (used in) operating activities:
Depreciation, depletion and amortization		206.2			196.4
Losses (gains) on sale of other assets - net		1.2			(0.4	)
Equity in losses (earnings) of associate and joint venture		1.0			1.3
Non-hedge derivative losses - net		1.0			3.4
Share-based compensation expense		4.6			7.2
Finance expense		24.0			12.8
Deferred tax expense (recovery)		(29.8	)		28.8
Foreign exchange (gains) losses and other		14.1			(38.7	)
Changes in operating assets and liabilities:
Accounts receivable and other assets		40.8			50.0
Inventories		50.7			(23.4	)
Accounts payable and accrued liabilities		(27.6	)		(14.0	)
Cash flow provided from operating activities		278.7			254.8
Income taxes paid		(28.6	)		(44.3	)
Net cash flow of continuing operations provided from operating activities		250.1			210.5
Net cash flow of discontinued operations used in operating activities		-			(2.4	)
Investing:
Additions to property, plant and equipment		(149.5	)		(168.9	)
Net additions to long-term investments and other assets		(21.7	)		(29.5	)
Net proceeds from the sale of property, plant and equipment		0.3			1.1
Decrease (increase) in restricted cash		0.2			(0.8	)
Interest received and other		1.1			1.4
Net cash flow of continuing operations used in investing activities		(169.6	)		(196.7	)
Net cash flow of discontinued operations provided from investing activities		1.0			-
Financing:
Issuance of common shares on exercise of options		-			0.1
Proceeds from issuance of debt		19.5			622.4
Repayment of debt		(49.5	)		(654.0	)
Interest paid		(21.0	)		(1.9	)
Settlement of derivative instruments		-			(2.1	)
Other		-			0.4
Net cash flow of continuing operations used in financing activities		(51.0	)		(35.1	)
Net cash flow of discontinued operations used in financing activities		-			-
Effect of exchange rate changes on cash and cash equivalents of continuing operations		(3.5	)		(6.8	)
Increase (decrease) in cash and cash equivalents		27.0			(30.5	)
Cash and cash equivalents, beginning of period		983.5			734.5
Cash and cash equivalents, end of period	$	1,010.5		$	704.0

The accompanying notes are an integral part of these interim condensed consolidated financial statements

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited expressed in millions of United States dollars)

	Three months ended
	March 31,			March 31,
	2015			2014
Common share capital and common share purchase warrants
Balance at the beginning of the period	$	14,587.7		$	14,737.1
Transfer from contributed surplus on exercise of options and restricted shares		10.8			13.9
Options exercised, including cash		-			0.1
Balance at the end of the period	$	14,598.5		$	14,751.1
Contributed surplus
Balance at the beginning of the period	$	239.0		$	84.5
Share-based compensation		4.6			7.2
Transfer of fair value of exercised options and restricted shares		(11.7	)		(16.4	)
Balance at the end of the period	$	231.9		$	75.3
Accumulated deficit
Balance at the beginning of the period	$	(9,937.6	)	$	(8,771.1	)
Net earnings (loss) attributable to common shareholders		(6.7	)		29.6
Balance at the end of the period	$	(9,944.3	)	$	(8,741.5	)
Accumulated other comprehensive income (loss)
Balance at the beginning of the period	$	(46.1	)	$	(36.5	)
Other comprehensive income (loss)		(18.4	)		17.0
Balance at the end of the period	$	(64.5	)	$	(19.5	)
Total accumulated deficit and accumulated other comprehensive income (loss)	$	(10,008.8	)	$	(8,761.0	)
Total common shareholders' equity	$	4,821.6		$	6,065.4
Non-controlling interest
Balance at the beginning of the period	$	48.8		$	75.9
Net earnings (loss) attributable to non-controlling interest		(0.8	)		(0.4	)
Balance at the end of the period	$	48.0		$	75.5
Total equity	$	4,869.6		$	6,140.9

The accompanying notes are an integral part of these interim condensed consolidated financial statements

1. DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS

Kinross Gold Corporation and its subsidiaries and joint arrangements (collectively, "Kinross" or the "Company") are engaged in gold mining and related activities, including exploration and acquisition of gold-bearing properties, extraction and processing of gold-containing ore and reclamation of gold mining properties. Kinross Gold Corporation, the ultimate parent, is a public company incorporated and domiciled in Canada with its registered office at 25 York Street, 17th floor, Toronto, Ontario, Canada, M5J 2V5.  Kinross' gold production and exploration activities are carried out principally in Canada, the United States, the Russian Federation, Brazil, Chile, Ghana and Mauritania.   Gold is produced in the form of doré, which is shipped to refineries for final processing.  Kinross also produces and sells a quantity of silver.   The Company is listed on the Toronto Stock Exchange and the New York Stock Exchange.

The interim condensed consolidated financial statements of the Company for the period ended March 31, 2015 were authorized for issue in accordance with a resolution of the board of directors on May 5, 2015.

2. BASIS OF PRESENTATION

These unaudited interim condensed consolidated financial statements (“interim financial statements”) have been prepared in accordance with IAS 34 “Interim Financial Reporting” (“IAS 34”). The accounting policies applied in these interim financial statements are consistent with those used in the annual audited consolidated financial statements for the year ended December 31, 2014.

These interim financial statements do not include all disclosures required by International Financial Reporting Standards (“IFRS”) for annual audited consolidated financial statements and accordingly should be read in conjunction with the Company’s annual audited consolidated financial statements for the year ended December 31, 2014 prepared in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”).

3. SIGNIFICANT ESTIMATES AND ASSUMPTIONS AND RECENT ACCOUNTING PRONOUNCEMENTS

Significant Judgments, Accounting Estimates and Assumptions

The preparation of these interim financial statements requires the use of certain significant accounting estimates and judgments by management in applying the Company’s accounting policies. The areas involving significant judgments and estimates have been set out in and are consistent with Note 5 of the Company’s annual audited consolidated financial statements for the year ended December 31, 2014.

Recent Accounting Pronouncements

Revenue recognition

In May 2014, the IASB issued IFRS 15 “Revenue from Contracts with Customers” (“IFRS 15”). The standard replaces IAS 11 “Construction Contracts”, IAS 18 “Revenue”, IFRIC 13 “Customer Loyalty Programmes”, IFRIC 15 “Agreements for the Construction of Real Estate”, IFRIC 18 “Transfer of Assets From Customers” and SIC 31 “Revenue – Barter Transactions Involving Advertising Services”.  IFRS 15 establishes principles for reporting the nature, amount, timing, and uncertainty of revenue and cash flows arising from an entity’s contract with customers.  This standard is effective for annual periods beginning on or after January 1, 2017, and permits early adoption.  The Company is in the process of determining the impact of IFRS 15 on its consolidated financial statements.

Financial instruments

In July 2014, the IASB issued the final version of IFRS 9 “Financial Instruments” (“IFRS 9”).  This standard is effective for annual periods beginning on or after January 1, 2018, and permits early adoption. IFRS 9 provides a revised model for recognition, measurement and impairment of financial instruments. IFRS 9 also includes a substantially reformed approach to hedge accounting. The Company is in the process of determining the impact of IFRS 9 on its consolidated financial statements.

4. DISPOSITION

Disposition of interest in Fruta del Norte

On December 17, 2014, the Company completed the sale of its interest in Aurelian Resources Inc. (“Aurelian”) and the Fruta del Norte project in Ecuador to Lundin Gold Inc., a member of the Lundin Group of Companies, for gross cash proceeds of $150.0 million and $90.0 million in Lundin Gold Inc. common shares, resulting in an after-tax recovery of $238.0 million. Prior to the disposition, the Company’s interest in Aurelian was classified as a discontinued operation. For the three months ended March 31, 2014 the Company recognized a loss from discontinued operations after tax of $2.2 million related to Aurelian.

5. INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENT DETAILS

Interim Condensed Consolidated Balance Sheets

i.           Cash and cash equivalents:

	March 31,		December 31,
	2015		2014
Cash on hand and balances with banks	$	627.8	$	503.2
Short-term deposits		382.7		480.3
	$	1,010.5	$	983.5

Restricted cash:

	March 31,		December 31,
	2015		2014
Restricted cash (a)	$	41.1	$	41.3

 (a)   Restricted cash relates to restricted payments for the Kupol loan (see Note 9 (iii)), loan escrow judicial deposits and letters of guarantee for default protection and environmental indemnity related to Chirano and certain other sites.

ii.       Accounts receivable and other assets:

	March 31,		December 31,
	2015		2014
Trade receivables	$	2.9	$	4.8
Prepaid expenses		30.3		32.3
VAT receivable		58.4		72.5
Deposits		34.6		36.3
Unrealized fair value of derivative assets		0.8		0.2
Other		21.7		24.3
	$	148.7	$	170.4

iii.       Inventories:

	March 31,			December 31,
	2015			2014
Ore in stockpiles (a)	$	345.2		$	331.8
Ore on leach pads (b)		426.0			434.6
In-process		83.6			82.0
Finished metal		41.4			78.9
Materials and supplies		759.8			793.3
		1,656.0			1,720.6
Provision for impairment of inventory (c)		(267.3	)		(299.9	)
		1,388.7			1,420.7
Long-term portion of ore in stockpiles and ore on leach pads (a),(b)		(150.2	)		(144.0	)
	$	1,238.5		$	1,276.7

(a)   Ore in stockpiles relates to the Company’s operating mines. Ore in stockpiles includes low-grade material not scheduled for processing within the next twelve months which is included in other long-term assets on the interim condensed consolidated balance sheet. See Note 5 vii.

(b)   Ore on leach pads relates to the Company's Maricunga, Tasiast, Fort Knox, and 50% owned Round Mountain mines. Based on current mine plans, the Company expects to place the last tonne of ore on its leach pads at Maricunga in 2019, Tasiast in 2019, Fort Knox in 2019, and 50% owned Round Mountain in 2018. Ore on leach pads includes material not scheduled for processing within the next twelve months which is included in other long-term assets on the interim condensed consolidated balance sheet. See Note 5 vii.

(c)   Provision for impairment of inventory relates to impairment charges recorded within cost of sales in 2013 and 2014 to reduce the carrying value of inventory to its net realizable value.

iv.           Property, plant and equipment:

				Mineral Interests (a)
	Land, plant and equipment			Development and operating properties			Pre-development properties			Total
Cost
Balance at January 1, 2015	$	7,020.1		$	7,462.2		$	168.8		$	14,651.1
Additions		70.5			64.4			-			134.9
Acquisitions		-			-			-			-
Capitalized interest		1.5			8.1			-			9.6
Disposals		(4.5	)		-			(0.6	)		(5.1	)
Other		9.1			(2.2	)		-			6.9
Balance at March 31, 2015		7,096.7			7,532.5			168.2			14,797.4
Accumulated depreciation, depletion, amortization and impairment
Balance at January 1, 2015	$	(4,191.8	)	$	(4,970.7	)	$	(79.2	)	$	(9,241.7	)
Depreciation, depletion and amortization		(107.4	)		(104.4	)		-			(211.8	)
Disposals		2.6			-			-			2.6
Other		(0.7	)		-			-			(0.7	)
Balance at March 31, 2015		(4,297.3	)		(5,075.1	)		(79.2	)		(9,451.6	)
Net book value	$	2,799.4		$	2,457.4		$	89.0		$	5,345.8
Amount included above as at March 31, 2015:
Assets under construction	$	269.5		$	107.4		$	-		$	376.9
Assets not being depreciated (b)	$	428.2		$	305.2		$	89.0		$	822.4

(a)   At March 31, 2015, the significant development and operating properties include Fort Knox, Round Mountain, Paracatu, Maricunga, Kupol, Kettle River-Buckhorn, Tasiast, Chirano, and Lobo-Marte. Included in pre-development properties are White Gold and other exploration properties.

(b)   Assets not being depreciated relate to land, capitalized exploration and evaluation costs, assets under construction, which relate to expansion projects, and other assets that are in various stages of being readied for use.

				Mineral Interests(a)
	Land, plant and equipment			Development and operating properties			Pre-development properties			Total
Cost
Balance at January 1, 2014	$	6,699.3		$	8,172.3		$	177.4		$	15,049.0
Additions		352.7			272.8			-			625.5
Acquisitions		-			-			-			-
Capitalized interest		26.9			35.8			-			62.7
Disposals (b)		(77.8	)		(998.5	)		(8.6	)		(1,084.9	)
Other		19.0			(20.2	)		-			(1.2	)
Balance at December 31, 2014		7,020.1			7,462.2			168.8			14,651.1
Accumulated depreciation, depletion, amortization and impairment
Balance at January 1, 2014	$	(3,589.9	)	$	(4,876.4	)	$	-		$	(8,466.3	)
Depreciation, depletion and amortization		(422.8	)		(453.3	)		-			(876.1	)
Impairment charge (c)		(218.9	)		(640.4	)		(79.2	)		(938.5	)
Disposals (b)		43.2			998.5			-			1,041.7
Other		(3.4	)		0.9			-			(2.5	)
Balance at December 31, 2014		(4,191.8	)		(4,970.7	)		(79.2	)		(9,241.7	)
Net book value	$	2,828.3		$	2,491.5		$	89.6		$	5,409.4
Amount included above as at December 31, 2014:
Assets under construction	$	320.2		$	88.8		$	-		$	409.0
Assets not being depreciated (d)	$	476.4		$	287.2		$	89.6		$	853.2

(a)   At December 31, 2014, the significant development and operating properties include Fort Knox, Round Mountain, Paracatu, Maricunga, Kupol, Kettle River-Buckhorn, Tasiast, Chirano, and Lobo-Marte. Included in pre-development properties are White Gold and other exploration properties.

(b)   On December 17, 2014, the Company disposed of its interest in FDN for gross proceeds of $240.0 million. See Note 4.

(c)   At December 31, 2014, an impairment charge was recorded against property, plant and equipment at Tasiast, Chirano, Kettle River-Buckhorn, Lobo-Marte, and White Gold.

(d)   Assets not being depreciated relate to land, capitalized exploration and evaluation costs, assets under construction, which relate to expansion projects, and other assets that are in various stages of being readied for use.

Property, plant and equipment with a carrying amount of $135.1 million (December 31, 2014 - $170.7 million) are pledged as security as part of the Kupol loan. See Note 9 (iii).

Capitalized interest primarily relates to capital expenditures at Fort Knox, Round Mountain, Kupol, and La Coipa and had a weighted average borrowing rate of 1.18% and 1.01% during the three months ended March 31, 2015 and 2014, respectively.

At March 31, 2015, $281.4 million of exploration and evaluation (“E&E”) assets were included in mineral interests (December 31, 2014 - $281.4 million).  During the three months ended March 31, 2015, the Company acquired $nil of E&E assets, capitalized $nil in E&E costs and transferred $nil from E&E assets to capitalized development. During the three months ended March 31, 2014, the Company acquired $nil of E&E assets, capitalized $nil in E&E costs and transferred $nil from E&E assets to capitalized development. During the three months ended March 31, 2015, the Company expensed $0.8 million (three months ended March 31, 2014 - $0.9 million), of E&E expenditures.

The Company had cash expenditures for E&E included in operating cash flows for the three months ended March 31, 2015 of $0.8 million (three months ended March 31, 2014 – $0.9 million), and investing cash flows for the three months ended March 31, 2015 of $nil (three months ended March 31, 2014 – $nil).

v.           Goodwill:

The goodwill allocated to the Company's cash generating units (“CGUs”) and included in the respective operating segment assets is shown in the table below:

	Round Mountain			Paracatu			La Coipa			Kettle River - Buckhorn			Kupol			Maricunga			Tasiast			Chirano			Other Operations (a)			Total
Cost
Balance at January 1, 2015	$	145.9		$	164.9		$	190.3		$	20.9		$	827.2		$	396.1		$	4,620.4		$	918.6		$	278.2		$	7,562.5
Acquisitions		-			-			-			-			-			-			-			-			-			-
Disposals		-			-			-			-			-			-			-			-			-			-
Balance at March 31, 2015	$	145.9		$	164.9		$	190.3		$	20.9		$	827.2		$	396.1		$	4,620.4		$	918.6		$	278.2		$	7,562.5
Accumulated impairment
Balance at January 1, 2015	$	(145.9	)	$	(164.9	)	$	(190.3	)	$	(20.9	)	$	(668.4	)	$	(396.1	)	$	(4,620.4	)	$	(918.6	)	$	(274.3	)	$	(7,399.8	)
Impairment loss		-			-			-			-			-			-			-			-			-			-
Disposals		-			-			-			-			-			-			-			-			-			-
Balance at March 31, 2015	$	(145.9	)	$	(164.9	)	$	(190.3	)	$	(20.9	)	$	(668.4	)	$	(396.1	)	$	(4,620.4	)	$	(918.6	)	$	(274.3	)	$	(7,399.8	)
Carrying amount at March 31, 2015	$	-		$	-		$	-		$	-		$	158.8		$	-		$	-		$	-		$	3.9		$	162.7

	Round Mountain			Paracatu			La Coipa			Kettle River - Buckhorn			Kupol			Maricunga									Other Operations (a)			Total
																			Tasiast			Chirano
Cost
Balance at January 1, 2014	$	145.9		$	164.9		$	190.3		$	20.9		$	827.2		$	396.1		$	4,620.4		$	918.6		$	278.2		$	7,562.5
Acquisitions		-			-			-			-			-			-			-			-			-			-
Disposals		-			-			-			-			-			-			-			-			-			-
Balance at December 31, 2014	$	145.9		$	164.9		$	190.3		$	20.9		$	827.2		$	396.1		$	4,620.4		$	918.6		$	278.2		$	7,562.5
Accumulated impairment
Balance at January 1, 2014	$	(145.9	)	$	(164.9	)	$	(65.9	)	$	-		$	(668.4	)	$	(396.1	)	$	(4,620.4	)	$	(918.6	)	$	(274.3	)	$	(7,254.5	)
Impairment loss (b)		-			-			(124.4	)		(20.9	)		-			-			-			-			-			(145.3	)
Disposals		-			-			-			-			-			-			-			-			-			-
Balance at December 31, 2014	$	(145.9	)	$	(164.9	)	$	(190.3	)	$	(20.9	)	$	(668.4	)	$	(396.1	)	$	(4,620.4	)	$	(918.6	)	$	(274.3	)	$	(7,399.8	)
Carrying amount at December 31, 2014	$	-		$	-		$	-		$	-		$	158.8		$	-		$	-		$	-		$	3.9		$	162.7

(a)   At March 31, 2015 and December 31, 2014, other operations includes goodwill related to Jiboia.

(b)   At December 31, 2014, as part of the annual impairment test for goodwill, it was determined that the carrying amounts of La Coipa and Kettle River-Buckhorn exceeded their recoverable amounts.

vi.           Long-term investments:

Unrealized gains and losses on investments classified as available-for-sale are recorded in accumulated other comprehensive income (“AOCI”) as follows:

	March 31, 2015					December 31, 2014
	Fair value		Gains (losses) in AOCI			Fair value		Gains (losses) in AOCI
Investments in an unrealized gain position	$	12.5	$	3.3		$	103.6	$	3.9
Investments in an unrealized loss position		85.2		(15.1	)		7.4		(2.1	)
	$	97.7	$	(11.8	)	$	111.0	$	1.8

vii.           Other long-term assets:

	March 31,		December 31,
	2015		2014
Long-term portion of ore in stockpiles and ore on leach pads (a)	$	150.2	$	144.0
Deferred charges, net of amortization		6.2		6.5
Long-term receivables		187.4		209.0
Advances for the purchase of capital equipment		9.4		20.7
Unrealized fair value of derivative assets		0.5		-
Other		36.5		37.7
	$	390.2	$	417.9

(a)   Ore in stockpiles and on leach pads represents low-grade material not scheduled for processing within the next twelve months.  At March 31, 2015, long-term ore in stockpiles was at the Company’s Fort Knox, Kupol, Tasiast, Maricunga and Paracatu mines, and long-term ore on leach pads was at the Company’s Fort Knox, Round Mountain and Tasiast mines.

viii.           Accounts payable and accrued liabilities:

	March 31,		December 31,
	2015		2014
Trade payables	$	75.5	$	86.9
Accrued liabilities		179.1		223.2
Employee related accrued liabilities		83.0		111.8
	$	337.6	$	421.9

ix.           Accumulated other comprehensive income (loss):

	Long-term Investments			Derivative Contracts			Total
Balance at December 31, 2013	$	(0.6	)	$	(35.9	)	$	(36.5	)
Other comprehensive income (loss) before tax		2.4			(7.8	)		(5.4	)
Tax		-			(4.2	)		(4.2	)
Balance at December 31, 2014	$	1.8		$	(47.9	)	$	(46.1	)
Other comprehensive income (loss) before tax		(13.6	)		(8.5	)		(22.1	)
Tax		-			3.7			3.7
Balance at March 31, 2015	$	(11.8	)	$	(52.7	)	$	(64.5	)

Interim Condensed Consolidated Statements of Operations

x.           Other income (expense)  – net:

	Three months ended March 31,
	2015			2014
Gains (losses) on sale of other assets - net	$	(1.2	)	$	0.4
Foreign exchange losses		(1.0	)		(8.3	)
Net non-hedge derivative losses		(1.9	)		(3.4	)
Other		2.2			5.1
	$	(1.9	)	$	(6.2	)

xi.           Equity in earnings (losses) of associate and joint venture:

	Three months ended March 31,
	2015			2014
Cerro Casale(a)	$	(0.9	)	$	(1.4	)
Puren (a)		(0.1	)		0.1
	$	(1.0	)	$	(1.3	)

(a)    Represents Kinross’ share of the net earnings (loss) and other comprehensive income (loss).

xii.           Finance expense:

	Three months ended March 31,
	2015			2014
Accretion on reclamation and remediation obligation	$	(6.9	)	$	(7.0	)
Interest expense, including accretion on debt (a)		(17.1	)		(5.8	)
	$	(24.0	)	$	(12.8	)

(a)   During the three months ended March 31, 2015, $9.6 million (three months ended March 31, 2014 - $18.6 million) of interest was capitalized to property, plant and equipment. See Note 5 iv.

Total interest paid, including interest capitalized, during the three months ended March 31, 2015 was $43.0 million (three months ended March 31, 2014 - $31.8 million).

6.           INVESTMENTS IN ASSOCIATE AND JOINT VENTURE

The investments in associate and joint venture are accounted for under the equity method and had the following carrying values:

	March 31,		December 31,
	2015		2014
Cerro Casale	$	139.2	$	139.7
Puren		17.0		17.1
	$	156.2	$	156.8

There are no publicly quoted market prices for Cerro Casale and Puren.

7.           FAIR VALUE MEASUREMENT

(a)           Recurring fair value measurement:

Carrying values for financial instruments, including cash and cash equivalents, short-term investments, accounts receivable, and accounts payable and accrued liabilities approximate fair values due to their short-term maturities.

Fair value estimates for derivative contracts are based on quoted market prices for comparable contracts and represent the amount the Company would have received from, or paid to, a counterparty to unwind the contract at the market rates in effect at the consolidated balance sheet date.

The Company categorizes each of its fair value measurements in accordance with a fair value hierarchy. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value.  Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (for example, interest rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value currency and commodity contracts and volatility measurements used to value option contracts), or inputs that are derived principally from or corroborated by observable market data or other means.  Level 3 inputs are unobservable (supported by little or no market activity). The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.

For financial instruments that are recognized at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing their classification (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

Assets (liabilities) measured at fair value on a recurring basis as at March 31, 2015 include:

	Level 1		Level 2			Level 3		Aggregate Fair Value
Available-for-sale investments	$	97.7	$	-		$	-	$	97.7
Derivative contracts:
Interest rate swaps		-		(0.5	)		-		(0.5	)
Foreign currency forward contracts		-		(59.5	)		-		(59.5	)
Energy swap contracts		-		(7.7	)		-		(7.7	)
Total return swap contracts		-		(2.5	)		-		(2.5	)
	$	97.7	$	(70.2	)	$	-	$	27.5

During the three months ended March 31, 2015, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into or out of Level 3 fair value measurements.

The valuation techniques that are used to measure fair value are as follows:

Available-for-sale investments:

The fair value of available-for-sale investments is determined based on a market approach reflecting the closing price of each particular security at the consolidated balance sheet date. The closing price is a quoted market price obtained from the exchange that is the principal active market for the particular security, and therefore available-for-sale investments are classified within Level 1 of the fair value hierarchy.

Derivative contracts:

The Company’s derivative contracts are valued using pricing models and the Company generally uses similar models to value similar instruments. Such pricing models require a variety of inputs, including contractual cash flows, market prices, applicable yield curves and credit spreads. The fair value of derivative contracts is based on quoted market prices for comparable contracts and represents the amount the Company would have received from, or paid to, a counterparty to unwind the contract at the quoted market rates in effect at the consolidated balance sheet date and therefore derivative contracts are classified within Level 2 of the fair value hierarchy.

The following table summarizes information about derivative contracts outstanding at March 31, 2015 and December 31, 2014:

	March 31, 2015						December 31, 2014
	Asset / (Liability)			AOCI			Asset / (Liability)			AOCI
	Fair Value						Fair Value
Interest rate contracts
Interest rate swaps (a)	$	(0.5	)	$	(0.6	)	$	(0.7	)	$	(0.9	)
Currency contracts
Foreign currency forward contracts (b)		(59.5	)		(45.9	)		(48.8	)		(39.1	)
Commodity contracts
Energy swap contracts (c)		(7.7	)		(6.2	)		(9.9	)		(7.9	)
Other contracts
Total return swap contracts		(2.5	)		-			(0.6	)		-
Total all contracts	$	(70.2	)	$	(52.7	)	$	(60.0	)	$	(47.9	)
Unrealized fair value of derivative assets
Current		0.8						0.2
Non-current		0.5						-
	$	1.3					$	0.2
Unrealized fair value of derivative liabilities
Current		(71.5	)					(60.2	)
Total net fair value	$	(70.2	)				$	(60.0	)

(a)   Of the total amount recorded in AOCI at March 31 2015, $(0.6) million will be reclassified to net earnings within the next 12 months.

(b)   Of the total amount recorded in AOCI at March 31, 2015, $(45.9) million will be reclassified to net earnings within the next 12 months as a result of  settling the contracts.

(c)   Of the total amount recorded in AOCI at March 31, 2015, $(6.2) million will be reclassified to net earnings within the next 12 months as a result of  settling the contracts.

Interest rate swaps

When the floating rate term loan was originally arranged in August 2012 (see Note 9(i)), the Company entered into interest rate swaps to swap the underlying 1-month LIBOR interest rate into a fixed rate of 0.49% for the original three year term ending August 10, 2015.  Concurrent with the repayment of $500.0 million of the term loan on March 10, 2014, the Company closed out 60% of the interest rate swaps. The remaining outstanding interest rate swaps continue to hedge 80% of the remaining underlying floating rate term loan to August 10, 2015.

(b)           Fair value of financial assets and liabilities not measured and recognized at fair value:

Long-term debt is measured at amortized cost. The fair value of long-term debt is primarily measured using market determined variables, and therefore was classified within Level 2 of the fair value hierarchy. See Note 9.

8.           CAPITAL AND FINANCIAL RISK MANAGEMENT

The Company manages its capital to ensure that it will be able to continue to meet its financial and operational strategies and obligations, while maximizing the return to shareholders through the optimization of debt and equity financing. The Board of Directors has established a number of quantitative measures related to the management of capital. Management continuously monitors its capital position and periodically reports to the Board of Directors.

The Company’s operations are sensitive to changes in commodity prices, foreign exchange and interest rates.  The Company manages its exposure to changes in currency exchange rates, energy and interest rates by periodically entering into derivative contracts in accordance with the formal risk management policy approved by the Company’s Board of Directors. The Company’s practice is to not hedge metal sales. However, in certain circumstances the Company may use derivative contracts to hedge against the risk of falling prices for a portion of its forecasted metal sales. The Company may also assume derivative contracts as part of a business acquisition or they may be required under financing arrangements.

All of the Company’s hedges are cash flow hedges. The Company applies hedge accounting whenever hedging relationships exist and have been documented.

Capital management

The Company’s objectives when managing capital are to:

·     Ensure the Company has sufficient cash available to support the mining, exploration, and other areas of the business in any gold price environment;

·     Ensure the Company has the capital and capacity to support a long-term growth strategy;

·     Provide investors with a superior rate of return on their invested capital;

·     Ensure compliance with all bank covenant ratios; and

·     Minimize counterparty credit risk.

Kinross adjusts its capital structure based on changes in forecasted economic conditions and based on its long-term strategic business plan.  Kinross has the ability to adjust its capital structure by issuing new equity, drawing on existing credit facilities, issuing new debt, and by selling or acquiring assets.  Kinross can also control how much capital is returned to shareholders through dividends and share buybacks.

The Company is not subject to any externally imposed capital requirements.

The Company’s quantitative capital management objectives are largely driven by the requirements under its debt agreements as well as a target total debt to total debt and common shareholders’ equity ratio as noted in the table below:

	March 31,			December 31,
	2015			2014
Long-term debt	$	1,986.1		$	1,998.1
Current portion of long-term debt		43.0			60.0
Total debt		2,029.1			2,058.1
Common shareholders' equity		4,821.6			4,843.0
Total debt / total debt and common shareholders' equity ratio		29.6	%		29.8	%
Company target		0 – 30	%		0 – 30	%

9.           LONG-TERM DEBT AND CREDIT FACILITIES

		March 31, 2015															December 31, 2014
		Interest Rates			Nominal Amount			Deferred Financing Costs			Carrying Amount (a)			Fair Value (b)			Carrying Amount (a)			Fair Value (b)
Corporate term loan facility	(i)	Variable			$	500.0		$	(1.8	)	$	498.2		$	498.2		$	498.0		$	498.0
Senior notes	(ii)		3.625%-6.875	%		1,493.6			(12.2	)		1,481.4			1,436.5			1,480.8			1,416.9
Kupol loan	(iii)	Variable				50.0			(0.5	)		49.5			49.5			79.3			79.3
						2,043.6			(14.5	)		2,029.1			1,984.2			2,058.1			1,994.2
Less: current portion						(43.0	)		-			(43.0	)		(43.0	)		(60.0	)		(60.0	)
Long-term debt					$	2,000.6		$	(14.5	)	$	1,986.1		$	1,941.2		$	1,998.1		$	1,934.2

(a)    Includes transaction costs on debt financings.
(b)   The fair value of debt is primarily determined using quoted market determined variables. See Note 7 (b).

(i)           Corporate revolving credit and term loan facilities

In August 2012, the Company completed a new unsecured term loan facility for $1,000.0 million.  The facility was set to mature on August 10, 2015, with the full amount having been drawn on August 22, 2012.  Also, in August 2012, under the same agreement, the Company amended the revolving credit facility, increasing the available amount to $1,500.0 million and extending the maturity date from March 2015 to August 2017. 

On June 10, 2013, the Company amended its $1,500.0 million revolving credit facility and $1,000.0 million term loan to extend the respective maturity dates and remove the minimum tangible net worth covenant.  The revolving credit facility’s term was extended by one year to August 10, 2018 from August 10, 2017, and the term loan was extended by two years to mature on August 10, 2017 from August 10, 2015. 

On March 10, 2014, the Company repaid $500.0 million of the term loan, leaving a balance of $500.0 million outstanding. On July 28, 2014, the Company extended the maturity dates of the term loan and revolving credit facility by one year to August 10, 2018 and August 10, 2019, respectively.  As at March 31, 2015, the Company had utilized $32.1 million (December 31, 2014 – $32.1 million) of the amended revolving credit facility.  The amount utilized was entirely for letters of credit. 

Loan interest for both the amended revolving credit facility and the amended term loan is variable, set at LIBOR plus an interest rate margin which is dependent on the Company’s credit rating.  Based on the Company’s credit rating at March 31, 2015, interest charges and fees, are as follows:

Type of credit
Dollar based LIBOR loan:
Term Loan	LIBOR plus 1.65%
Revolving credit facility	LIBOR plus 1.70%
Letters of credit	1.13-1.70%
Standby fee applicable to unused availability	0.34%

When the term loan was originally arranged in August 2012, the Company entered into interest rate swaps to swap the underlying 1-month LIBOR interest rate into a fixed rate of 0.49% for the original three year term ending August 10, 2015.  During the second quarter of 2013, the term loan maturity was extended to August 2017.  Accordingly, the interest rate swaps only hedged the term loan’s interest rate exposure until the original maturity of August 2015.  Concurrent with the repayment of $500.0 million of the term loan on March 10, 2014, the Company closed out 60% of the interest rate swaps. The remaining outstanding interest rate swaps continue to hedge 80% of the remaining underlying floating rate term loan to August 10, 2015.

Based on the Company’s credit rating at March 31, 2015, the fixed rate on the hedged portion of the term loan is 2.14%.

The amended revolving credit facility and amended unsecured term loan were arranged under one credit agreement, which contains various covenants including limits on indebtedness, asset sales and liens.  The significant financial covenant is a ratio of net debt to EBITDA, as defined in the agreement, of no more than 3.5:1. The Company is in compliance with this covenant at March 31, 2015.

(ii)           Senior notes

On August 22, 2011, the Company completed a $1.0 billion offering of debt securities consisting of $250.0 million principal amount of 3.625% senior notes due 2016, $500.0 million principal amount of 5.125% senior notes due 2021 and $250.0 million principal amount of 6.875% senior notes due 2041.  Kinross received net proceeds of $980.9 million from the offering, after discount and payment of fees and expenses related to the offering.

On March 6, 2014, the Company completed a $500.0 million offering of debt securities consisting of 5.950% senior notes due 2024.  Kinross received net proceeds of $492.9 million from the offering, after discount and payment of fees and expenses related to the offering.

The senior notes referred to above (collectively, the “notes”) pay interest semi-annually.   Except as noted below, the notes are redeemable by the Company, in whole or part, for cash at any time prior to maturity, at a redemption price equal to the greater of 100% of the principal amount or the sum of the present value of the remaining scheduled principal and interest payments on the notes discounted at the applicable treasury rate, as defined in the indentures, plus a premium of between 40 and 50 basis points, plus accrued interest, if any.  Within three months of maturity of the notes due in 2021 and 2024 and within six months of maturity of the notes due in 2041, the Company can only redeem the notes in whole at 100% of the principal amount plus accrued interest, if any.   In addition, the Company is required to make an offer to repurchase the notes prior to maturity upon certain fundamental changes at a repurchase price equal to 101% of the principal amount of the notes plus accrued and unpaid interest to the repurchase date, if any.

(iii)           Kupol loan

On December 21, 2011, the Company completed a $200.0 million non-recourse loan from a group of international financial institutions. The non-recourse loan carries a term of five years, maturing on September 30, 2016 and bears annual interest of LIBOR plus 2.5%. Semi-annual principal repayments of $30.0 million commenced in March 2013 and will continue through September 30, 2015. Principal repayments due on March 31, 2016 and September 30, 2016 are reduced to $13.0 million and $7.0 million, respectively. The Company may prepay the loan in whole or in part, without penalty, but subject to customary break costs, if any. The agreement contains various requirements that include limits on distributions if certain minimum debt service coverage levels are not achieved. Property, plant and equipment with a carrying amount of $135.1 million (December 31, 2014 - $170.7 million) are pledged as security as part of the Kupol loan.

As at March 31, 2015, cash of $34.0 million (December 31, 2014 - $34.0 million) was restricted for payments related to this loan.

(iv)           Other

On June 15, 2012, the Company entered into an amendment to increase the amount of its Letter of Credit guarantee facility with Export Development Canada (“EDC”) from $136.0 million to $200.0 million and to extend the maturity date to March 31, 2015.  On July 17, 2014, the Company further amended this facility to increase the amount from $200.0 million to $250.0 million. Effective March 31, 2015, the maturity date for this facility was extended to June 30, 2016. Letters of credit guaranteed by this facility are solely for reclamation liabilities at Fort Knox, Round Mountain, and Kettle River–Buckhorn.  Fees related to letters of credit under this facility are 1.00% to 1.25%.  As at March 31, 2015, $208.3 million (December 31, 2014 - $207.2 million) was utilized under this facility.

In addition, at March 31, 2015, the Company had $36.4 million (December 31, 2014 - $49.3 million) in letters of credit outstanding in respect of its operations in Brazil, Mauritania and Ghana.  These letters of credit have been issued pursuant to arrangements with certain international banks.

From time to time, the Company’s operations in Brazil may borrow US dollars from Brazilian banks on a short-term unsecured basis to meet working capital requirements.  As at March 31, 2015 and December 31, 2014, $nil was outstanding under such borrowings.

10.           PROVISIONS

	Reclamation and remediation obligations (i)			Other			Total
Balance at January 1, 2015	$	773.6		$	50.4		$	824.0
Additions		-			9.5			9.5
Reductions		-			(2.0	)		(2.0	)
Reclamation spending		(2.3	)		-			(2.3	)
Accretion		6.9			-			6.9
Reclamation expenses		-			-			-
Balance at March 31, 2015	$	778.2		$	57.9		$	836.1
Current portion		33.1			10.2			43.3
Non-current portion		745.1			47.7			792.8
	$	778.2		$	57.9		$	836.1

(i)           Reclamation and remediation obligations

The Company conducts its operations so as to protect the public health and the environment, and to comply with all applicable laws and regulations governing protection of the environment. Reclamation and remediation obligations arise throughout the life of each mine. The Company estimates future reclamation costs based on the level of current mining activity and estimates of costs required to fulfill the Company’s future obligations. The above table details the items that affect the reclamation and remediation obligations.

Regulatory authorities in certain jurisdictions require that security be provided to cover the estimated reclamation and remediation obligations. As at March 31, 2015, letters of credit totaling $244.7 million (December 31, 2014 – $243.6 million) had been issued to various regulatory agencies to satisfy financial assurance requirements for this purpose. The letters of credit were issued against the Company's Letter of Credit guarantee facility with EDC, the corporate revolving credit facility, and pursuant to arrangements with certain international banks. The Company is in compliance with all applicable requirements under these facilities.

11.           COMMON SHARE CAPITAL

The authorized share capital of the Company is comprised of an unlimited number of common shares without par value. A summary of common share transactions for the three months ended March 31, 2015 and year ended December 31, 2014 is as follows:

	Three months ended March 31, 2015				Year ended December 31, 2014
	Number of shares		Amount ($)		Number of shares			Amount ($)
	(000's)				(000's)
Common shares
Balance at January 1,		1,144,576	$	14,587.7		1,143,428		$	14,575.1
Under share option and restricted share plans		1,635		10.8		1,112			12.0
Under Red Back options		-		-		36			0.6
Balance at end of period		1,146,211	$	14,598.5		1,144,576		$	14,587.7
Common share purchase warrants
Balance at January 1,		-	$	-		25,759		$	162.0
Expiry of warrants		-		-		(25,759	)		(162.0	)
Balance at end of period		-	$	-		-		$	-
Total common share capital and common share purchase warrants			$	14,598.5				$	14,587.7

i.           Dividends on common shares

No dividends were paid during the three months ended March 31, 2015. There were no dividends declared but unpaid at March 31, 2015.

12.           SHARE-BASED PAYMENTS

i.           Share option plan

The following table summarizes information about the share options outstanding and exercisable at March 31, 2015:

	Three months ended March 31, 2015
	Number of options (000's)			Weighted average exercise price (CDN$)
Outstanding at January 1, 2015		14,175		$	10.66
Granted		3,412			3.73
Exercised		-			-
Forfeited		(228	)		9.23
Expired		(887	)		19.23
Outstanding at end of period		16,472		$	8.78
Exercisable at end of period		9,572		$	11.36

The following weighted average assumptions were used in computing the fair value of share options using the Black-Scholes option pricing model granted during the three months ended March 31, 2015:

Weighted average share price  (CDN$)	$	3.73
Expected dividend yield		0.0	%
Expected volatility		43.3	%
Risk-free interest rate		0.6	%
Expected option life (in years)		4.5
Weighted average fair value per share option granted (CDN$)	$	1.35

The expected volatility used in the Black-Scholes option pricing model is based primarily on the historical volatility of the Company’s shares.

ii.           Restricted share plan

(a)   Restricted share units (“RSUs”)

The following table summarizes information about the RSUs outstanding at March 31, 2015:

	Three months ended March 31, 2015
	Number of units (000's)			Weighted average fair value (CDN$/unit)
Outstanding at January 1, 2015		6,657		$	6.47
Granted		5,965			3.73
Reinvested		-			-
Redeemed		(2,366	)		7.42
Forfeited		(228	)		6.32
Outstanding at end of period		10,028		$	4.62

As at March 31, 2015, the Company had recognized a liability of $2.3 million (December 31, 2014 - $3.5 million) in respect of its cash-settled RSUs.

(b)   Restricted performance share units (“RPSUs”)

The following table summarizes information about the RPSUs outstanding at March 31, 2015:

	Three months ended March 31, 2015
	Number of units (000's)			Weighted average fair value (CDN$/unit)
Outstanding at January 1, 2015		2,425		$	7.12
Granted		2,404			3.69
Reinvested		-			-
Redeemed		(244	)		9.59
Forfeited		(160	)		8.51
Outstanding at end of period		4,425		$	5.07

iii.           Deferred share unit (“DSU”) plan

The number of DSUs granted by the Company was 142,000 and the weighted average fair value per unit issued was $2.81 for the three months ended March 31, 2015.

There were 1,337,418 DSUs outstanding, for which the Company had recognized a liability of $3.0 million, as at March 31, 2015 (December 31, 2014 - $3.6 million).

iv.           Employee share purchase plan

The compensation expense related to the employee Share Purchase Plan for the three months ended March 31, 2015 was $0.6 million (three months ended March 31, 2014 - $0.7 million).

13.           EARNINGS (LOSS) PER SHARE

Basic and diluted net earnings (loss) from continuing operations attributable to common shareholders of Kinross for the three months ended March 31, 2015 was $(6.7) million (three months ended March 31, 2014 - $31.8 million). Basic and diluted net earnings (loss) attributable to common shareholders of Kinross for the three months ended March 31, 2015 was $(6.7) million (three months ended March 31, 2014 - $29.6 million).

(Number of common shares in thousands)	Three months ended March 31,
	2015		2014
Basic weighted average shares outstanding:		1,145,141		1,143,763
Weighted average shares dilution adjustments:
Share options (a)		-		17
Restricted shares		-		5,377
Restricted performance shares		-		1,940
Diluted weighted average shares outstanding		1,145,141		1,151,097
Weighted average shares dilution adjustments - exclusions: (b)
Share options (a)		16,434		17,269
Restricted shares		3,637		-
Restricted performance shares	3,251
Common share purchase warrants (a)		-		25,759

(a)   Dilutive share options and warrants were determined using the Company’s average share price for the period. For the three months ended March 31, 2015, the average share price used was $2.91 (three months ended March 31, 2014: $4.79).

(b)   These adjustments were excluded, as they are anti-dilutive.

14.           SEGMENTED INFORMATION

The Company operates primarily in the gold mining industry and its major product is gold. Its activities include gold production, acquisition, exploration and development of gold properties. The Company’s primary mining operations are in the United States, the Russian Federation, Brazil, Chile, Ghana and Mauritania.

The reportable segments are those operations whose operating results are reviewed by the Chief Executive Officer to make decisions about resources to be allocated to the segment and assess its performance provided those operations pass certain quantitative thresholds. Operations whose revenues, earnings or losses or assets exceed 10% of the total consolidated revenue, earnings or losses or assets are reportable segments.

In order to determine reportable operating segments, management reviewed various factors, including geographical location and managerial structure. It was determined by management that a reportable operating segment generally consists of an individual mining property managed by a single general manager and management team. Certain properties that are in development or have not reached commercial production levels are considered reportable segments because they have reached quantitative thresholds. These have been identified as non-operating segments. Finance income, finance expense, other income (expense) - net, and equity in earnings (losses) of associate and joint venture are managed on a consolidated basis and are not allocated to operating segments.

Non-mining and other operations are reported in Corporate and other.

Operating segments

The following tables set forth operating results by reportable segment for the following periods:

	Operating segments																		Non-operating segments (a)
Three months ended March 31, 2015:	Fort Knox		Round Mountain		Paracatu		Maricunga		Kupol		Kettle River-Buckhorn		Tasiast			Chirano			Corporate and other (b)			Total
Revenue
Metal sales	$	100.1		50.6		150.7		67.5		232.7		29.5		62.9			87.4			-		$	781.4
Cost of sales
Production cost of sales		55.1		36.0		93.9		56.0		91.5		24.3		51.9			45.9			-			454.6
Depreciation, depletion and amortization		24.6		9.0		37.8		5.4		63.9		4.1		16.2			43.6			1.6			206.2
Total cost of sales		79.7		45.0		131.7		61.4		155.4		28.4		68.1			89.5			1.6			660.8
Gross profit (loss)	$	20.4		5.6		19.0		6.1		77.3		1.1		(5.2	)		(2.1	)		(1.6	)	$	120.6
Other operating expense		0.1		-		5.7		-		-		-		3.9			1.2			5.4			16.3
Exploration and business development		0.6		-		-		-		3.0		0.1		4.7			3.9			10.5			22.8
General and administrative		-		-		-		-		-		-		-			-			39.0			39.0
Operating earnings (loss)	$	19.7		5.6		13.3		6.1		74.3		1.0		(13.8	)		(7.2	)		(56.5	)	$	42.5
Other income (expense) - net																							(1.9	)
Equity in earnings (losses) of associate and joint venture																							(1.0	)
Finance income																							2.2
Finance expense																							(24.0	)
Earnings from continuing operations before tax																						$	17.8

	Operating segments																	Non-operating segments (a)
Three months ended March 31, 2014:	Fort Knox		Round Mountain		Paracatu		Maricunga		Kupol		Kettle River-Buckhorn		Tasiast			Chirano		Corporate and other (b)			Total
Revenue
Metal sales	$	145.7		54.9		150.0		73.0		181.3		33.3		85.9			91.6		1.7		$	817.4
Cost of sales
Production cost of sales		64.2		37.3		100.1		58.6		66.5		16.4		67.5			43.8		1.6			456.0
Depreciation, depletion and amortization		28.5		4.6		33.9		4.6		56.4		9.7		15.9			40.5		2.3			196.4
Total cost of sales		92.7		41.9		134.0		63.2		122.9		26.1		83.4			84.3		3.9			652.4
Gross profit (loss)	$	53.0		13.0		16.0		9.8		58.4		7.2		2.5			7.3		(2.2	)	$	165.0
Other operating expense		-		-		2.2		3.3		-		0.7		1.4			1.4		8.7			17.7
Exploration and business development		0.2		0.1		-		-		3.2		0.4		3.2			2.8		12.8			22.7
General and administrative		-		-		-		-		-		-		-			-		43.2			43.2
Operating earnings (loss)	$	52.8		12.9		13.8		6.5		55.2		6.1		(2.1	)		3.1		(66.9	)	$	81.4
Other income (expense) - net																						(6.2	)
Equity in earnings (losses) of associate and joint venture																						(1.3	)
Finance income																						1.4
Finance expense																						(12.8	)
Earnings from continuing operations before tax																					$	62.5

	Operating segments																Non-operating segments(a)
	Fort Knox		Round Mountain		Paracatu		Maricunga		Kupol		Kettle River-Buckhorn		Tasiast		Chirano		Corporate and other (b)		Total
Property, plant and equipment at:
March 31, 2015	$	482.0		189.9		1,778.0		138.7		940.0		10.4		828.2		604.5		374.1	$	5,345.8
Total assets at:
March 31, 2015	$	723.6		253.9		2,047.7		416.3		1,961.6		32.4		1,264.4		774.0		1,329.5	$	8,803.4
Capital expenditures for three months ended March 31, 2015 (c)	$	42.5		10.5		9.8		7.5		14.9		0.5		34.8		10.9		13.1	$	144.5

	Operating segments																Non-operating segments(a)
	Fort Knox		Round Mountain		Paracatu		Maricunga		Kupol		Kettle River-Buckhorn		Tasiast		Chirano		Corporate and other (b)		Total
Property, plant and equipment at:
December 31, 2014	$	467.0		189.1		1,806.2		138.0		990.2		11.7		809.5		634.4		363.3	$	5,409.4
Total assets at:
December 31, 2014	$	703.3		262.0		2,058.7		416.4		1,956.6		38.9		1,465.4		796.9		1,253.2	$	8,951.4
Capital expenditures for year ended December 31, 2014 (c)	$	85.2		44.3		105.0		29.7		87.9		6.4		147.7		61.1		38.4	$	605.7

(a) Non-operating segments include development properties.

(b) Corporate and other includes corporate, Cerro Casale, shutdown and other non-operating assets (including La Coipa, Lobo-Marte and White Gold).

(c) Segment capital expenditures are presented on an accrual basis. Additions to property, plant and equipment in the interim condensed consolidated statement of cash flows are presented on a cash basis.

15.           COMMITMENTS AND CONTINGENCIES

i.           Commitments

Operating leases

The Company has a number of operating lease agreements involving office space and equipment. The operating leases for equipment provide that the Company may, after the initial lease term, renew the lease for successive yearly periods or may purchase the equipment at its fair market value. The operating leases for certain office facilities contain escalation clauses for increases in operating costs and property taxes. A majority of these leases are cancelable and are renewable on a yearly basis.

ii.           Contingencies

General

Estimated losses from contingencies are accrued by a charge to earnings when information available prior to the issuance of the financial statements indicates that it is likely that a future event will confirm that an asset has been impaired or a liability incurred at the date of the financial statements and the amount of the loss can be reasonably estimated.

Cerro Casale contingency

The Company is obligated to pay $20 million to Barrick if a positive production decision is made relating to the Cerro Casale project.

Other legal matters

The Company is from time to time involved in legal proceedings, arising in the ordinary course of its business. Typically, and currently, except in the case of the actions described below, the amount of ultimate liability with respect to these actions will not, in the opinion of management, materially affect Kinross' financial position, results of operations or cash flows.

A putative securities class action complaint was filed on February 16, 2012 (the “U.S. Complaint”), entitled Bo Young Cha v. Kinross Gold Corporation et al., in the United States District Court for the Southern District of New York (the “Court”).  The U.S. Complaint named as defendants the Company, Tye Burt, former President and CEO, Paul Barry, former Executive Vice President and Chief Financial Officer, Glen Masterman, former Senior Vice President, Exploration and Kenneth Thomas, former Senior Vice President, Projects.  On May 31, 2012, the Court selected the City of Austin Police Retirement System (“City of Austin”) to be lead plaintiff.  Pursuant to an order of the Court, City of Austin filed an amended Complaint on July 23, 2012 (the “Amended U.S. Complaint”).  The Amended U.S. Complaint alleges among other things, that, between August 2, 2010 and January 17, 2012, the defendants inflated Kinross’s share price by knowingly or recklessly making material misrepresentations concerning (i) the extent and quality of the due diligence Kinross performed prior to its acquisition of Red Back and (ii) Kinross’s schedule for developing the Tasiast mine.  The defendants filed a motion to dismiss the Amended U.S. Complaint on September 7, 2012 and oral argument on the motion to dismiss took place on November 30, 2012.  On March 22, 2013, the Court issued an order (the “Order”) significantly narrowing the Amended U.S. Complaint to the defendants’ allegedly fraudulent statements about the Tasiast development schedule during the period of August 10, 2011 to January 17, 2012. On April 5, 2013, the defendants filed a motion for reconsideration of the portions of the Order that denied the defendants’ motion to dismiss, which the Court denied on June 6, 2013.  On July 8, 2013, the defendants filed their answer to the Amended U.S. Complaint.  In July 2014, the parties largely completed fact discovery, which included the production of information and documents (which was substantially completed on January 10, 2014) and the oral depositions of 21 witnesses.  On July 30, 2014, lead plaintiff filed a motion to certify a class of plaintiffs.  The defendants opposed the motion.  On September 18 and October 20, 2014, the parties exchanged expert reports and rebuttal expert reports, respectively, addressing the merits of the surviving claims of the Amended U.S. Complaint.  The parties completed the expert discovery phase of the litigation, and engaged in the submission of requests for admission, contention interrogatories, and motions to exclude opposing expert witnesses.  The lead plaintiff and the Company reached an agreement to settle all the claims in the action for $33 million, without admission of liability by the defendants and with the Company’s insurance carriers directly funding the full settlement.  The settlement is subject to the approval of the Court.  On March 26, 2015, the parties filed the settlement papers with the Court, and we expect the Court to consider approval of the settlement by the end of the third quarter of 2015.

A notice of action in a proposed class proceeding under Ontario’s Class Proceedings Act, 1992, was filed in the Ontario Superior Court of Justice (the “Ontario Court”) on March 12, 2012, entitled Trustees of the Musicians’ Pension Fund of Canada v. Kinross Gold Corporation et al. (the “Ontario Action”).  A statement of claim in the Ontario Action was subsequently served on April 11, 2012.  The Ontario Action named as defendants the Company, Tye Burt, former President and CEO, Paul Barry, former Executive Vice President and Chief Financial Officer, Glen Masterman, former Senior Vice President, Exploration, and Kenneth Thomas, former Senior Vice President, Projects.  The Ontario Action alleges, among other things, that Kinross made a number of misrepresentations relating to the quantity and quality of gold ore at the Tasiast mine, and that Kinross and the individual defendants knew that such misrepresentations were false or misleading when made.  In a motion to the Ontario Court, the plaintiffs sought certification of the action as a class proceeding and leave to proceed under the statutory civil liability provisions of Ontario’s Securities Act.  In their written argument on the motion, the plaintiffs also sought leave and certification of a claim based on allegations that Kinross made a number of misrepresentations relating to the schedule for the Tasiast expansion project, and that Kinross and the individual defendants knew that such misrepresentations were false or misleading when made.  These claims were added to the plaintiffs’ statement of claim in January 2014.   A hearing on the plaintiffs’ leave and certification motions was held from October 22–24, 2013.  On November 5, 2013, the Ontario Court issued Reasons For Decision dismissing the leave motion in respect of the statutory claims and dismissing the certification motion in respect of both the statutory claims and the common law negligent misrepresentation claims.  The plaintiffs appealed the Order of the Ontario Court to the Ontario Court of Appeal.  The plaintiffs’ appeal was dismissed in its entirety by the Ontario Court of Appeal on December 17, 2014.  On February 11, 2015, the plaintiffs filed an application for leave to appeal the Court of Appeal’s decision to the Supreme Court of Canada.  That application has not been decided.  The Company and the plaintiffs reached an agreement to settle all of the claims in the Ontario Action for CDN$12.5 million, without any admission of liability by the defendants and with the Company’s insurance carriers directly funding the full settlement.  The settlement is subject to the approval of the Ontario Court.  On April 22, 2015, the parties provided the Ontario Court with the mutually agreed forms of the settlement documentation, and, following a hearing on April 27, 2015, the Ontario Court issued an order approving notice of the proposed settlement to potential class members.  A motion is scheduled for June 17, 2015, at which the Ontario Court will be asked to approve the settlement.

On January 16, 2015, a notice of action in a proposed class proceeding under Ontario’s Class Proceedings Act, 1992 was filed in the Ontario Court, entitled Frankfurt-Trust Invest Luxemburg AG v. Kinross Gold Corporation (the “Frankfurt Action”).  A statement of claim in the Frankfurt Action was subsequently filed on February 13, 2015 but not served on the defendants until March 31, 2015.  The Frankfurt Action alleges, among other things, that Kinross made a number of misrepresentations, or failed to disclose material changes or material facts, relating to the schedule of the expansion project at the Tasiast mine.  If the settlement in the Musicians’ Ontario Action is approved and its conditions fulfilled, the plaintiffs in the Frankfurt Action will be bound by that settlement, unless they elect to opt out and pursue individually the claims they purport to assert in the Frankfurt Action.  Kinross believes that the claims in the Frankfurt Action are without merit and intends to vigorously defend against them, if required to do so.

Income taxes

The Company operates in numerous countries around the world and accordingly is subject to, and pays, annual income taxes under the various regimes in countries in which it operates.  These tax regimes are determined under general corporate income tax laws of the country.  The Company has historically filed, and continues to file, all required income tax returns and to pay the taxes reasonably determined to be due.  The tax rules and regulations in many countries are complex and subject to interpretation.  Changes in tax law or changes in the way that tax law is interpreted may also impact the Company’s effective tax rate as well as its business and operations. From time to time the Company will undergo a review of its historic tax returns and in connection with such reviews disputes can arise with the taxing authorities over the Company’s interpretation of the country’s income tax rules.

16.           CONSOLIDATING FINANCIAL STATEMENTS

The obligations of the Company under the senior notes are guaranteed by the following 100% owned subsidiaries of the Company (the “guarantor subsidiaries”): Round Mountain Gold Corporation, Kinross Brasil Mineração S.A., BGO (Bermuda) Ltd., Crown Resources Corporation, Fairbanks Gold Mining, Inc., Melba Creek Mining, Inc., Compania Minera Mantos de Oro, Compania Minera Maricunga, Red Back Mining Inc., and Red Back Mining Mauritania No. 2 Ltd.  All guarantees by the guarantor subsidiaries are joint and several, and full and unconditional; subject to certain customary release provisions contained in the indenture governing the senior notes.

The following tables contain separate financial information related to the guarantor subsidiaries as set out in the consolidating balance sheets as at March 31, 2015 and December 31, 2014 and the consolidating statements of operations, statements of comprehensive income (loss) and statements of cash flows for the three months ended March 31, 2015 and 2014.  For purposes of this information, the financial statements of Kinross Gold Corporation and of the guarantor subsidiaries reflect investments in subsidiary companies on an equity accounting basis.

Consolidating balance sheet as at March 31, 2015

	Guarantors												Non-guarantors			Eliminations			Consolidated
	Kinross Gold Corp.			Guarantor Subsidiaries			Guarantor Adjustments				Total Guarantors
Assets
Current assets
Cash and cash equivalents	$	202.2		$	155.1		$	-		$	357.3		$	653.2		$	-		$	1,010.5
Restricted cash		-			3.4			-			3.4			37.7			-			41.1
Accounts receivable and other assets		5.0			45.8			-			50.8			97.9			-			148.7
Intercompany receivables		514.1			1,041.7			(208.2	)		1,347.6			4,802.1			(6,149.7	)		-
Current income tax recoverable		-			74.6			-			74.6			31.2			-			105.8
Inventories		3.9			467.6			-			471.5			767.0			-			1,238.5
		725.2			1,788.2			(208.2	)		2,305.2			6,389.1			(6,149.7	)		2,544.6
Non-current assets
Property, plant and equipment		27.2			2,884.2			-			2,911.4			2,434.4			-			5,345.8
Goodwill		-			-			-			-			162.7			-			162.7
Long-term investments		94.4			-			-			94.4			3.3			-			97.7
Investments in associate and joint venture		-			17.1			-			17.1			139.1			-			156.2
Intercompany investments		4,737.0			(1,042.7	)		(2,692.2	)		1,002.1			7,953.5			(8,955.6	)		-
Other long-term assets		6.2			159.6			-			165.8			224.4			-			390.2
Long-term intercompany receivables		2,408.2			2,609.0			(1,745.2	)		3,272.0			4,630.8			(7,902.8	)		-
Deferred tax assets		-			5.9			-			5.9			100.3			-			106.2
Total assets	$	7,998.2		$	6,421.3		$	(4,645.6	)	$	9,773.9		$	22,037.6		$	(23,008.1	)	$	8,803.4
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	37.8		$	132.7		$	-		$	170.5		$	167.1		$	-		$	337.6
Intercompany payables		200.7			609.5			(208.2	)		602.0			5,552.2			(6,154.2	)		-
Current income tax payable		-			7.3			-			7.3			19.9			-			27.2
Current portion of long-term debt		-			-			-			-			43.0			-			43.0
Current portion of provisions		-			22.4			-			22.4			20.9			-			43.3
Current portion of unrealized fair value of derivative liabilities		24.9			41.2			-			66.1			5.4			-			71.5
		263.4			813.1			(208.2	)		868.3			5,808.5			(6,154.2	)		522.6
Non-current liabilities
Long-term debt		1,979.6			-			-			1,979.6			6.5			-			1,986.1
Provisions		10.7			516.1			-			526.8			266.0			-			792.8
Unrealized fair value of derivative liabilities		13.6			-			-			13.6			(13.6	)		-			-
Other long-term liabilities		-			113.1			-			113.1			84.0			-			197.1
Long-term intercompany payables		909.3			2,109.5			(1,745.2	)		1,273.6			6,624.7			(7,898.3	)		-
Deferred tax liabilities		-			177.3			-			177.3			257.9			-			435.2
Total liabilities		3,176.6			3,729.1			(1,953.4	)		4,952.3			13,034.0			(14,052.5	)		3,933.8
Equity
Common shareholders' equity
Common share capital	$	14,598.5		$	3,221.0		$	(3,221.0	)	$	14,598.5		$	15,987.9		$	(15,987.9	)	$	14,598.5
Contributed surplus		231.9			82.9			(82.9	)		231.9			2,843.2			(2,843.2	)		231.9
Accumulated deficit		(9,944.3	)		(585.5	)		585.5			(9,944.3	)		(9,852.7	)		9,852.7			(9,944.3	)
Accumulated other comprehensive income (loss)		(64.5	)		(26.2	)		26.2			(64.5	)		(22.8	)		22.8			(64.5	)
Total common shareholders' equity		4,821.6			2,692.2			(2,692.2	)		4,821.6			8,955.6			(8,955.6	)		4,821.6
Non-controlling interest		-			-			-			-			48.0			-			48.0
Total equity		4,821.6			2,692.2			(2,692.2	)		4,821.6			9,003.6			(8,955.6	)		4,869.6
Total liabilities and equity	$	7,998.2		$	6,421.3		$	(4,645.6	)	$	9,773.9		$	22,037.6		$	(23,008.1	)	$	8,803.4

Consolidating balance sheet as at December 31, 2014

	Guarantors												Non-guarantors			Eliminations			Consolidated
	Kinross Gold Corp.			Guarantor Subsidiaries			Guarantor Adjustments				Total Guarantors
Assets
Current assets
Cash and cash equivalents	$	315.1		$	131.0		$	-		$	446.1		$	537.4		$	-		$	983.5
Restricted cash		-			3.5			-			3.5			37.8			-			41.3
Accounts receivable and other assets		6.5			50.8			-			57.3			113.1			-			170.4
Intercompany receivables		492.4			1,038.3			(190.1	)		1,340.6			4,852.3			(6,192.9	)		-
Current income tax recoverable		-			76.3			-			76.3			38.9			-			115.2
Inventories		3.7			458.1			-			461.8			814.9			-			1,276.7
		817.7			1,758.0			(190.1	)		2,385.6			6,394.4			(6,192.9	)		2,587.1
Non-current assets
Property, plant and equipment		20.6			2,891.6			-			2,912.2			2,497.2			-			5,409.4
Goodwill		-			-			-			-			162.7			-			162.7
Long-term investments		109.4			0.1			-			109.5			1.5			-			111.0
Investments in associate and joint venture		-			17.2			-			17.2			139.6			-			156.8
Intercompany investments		4,705.7			(1,029.5	)		(2,703.0	)		973.2			7,954.0			(8,927.2	)		-
Other long-term assets		6.5			186.4			-			192.9			225.0			-			417.9
Long-term intercompany receivables		2,403.3			2,610.7			(1,744.8	)		3,269.2			4,599.3			(7,868.5	)		-
Deferred tax assets		-			6.7			-			6.7			99.8			-			106.5
Total assets	$	8,063.2		$	6,441.2		$	(4,637.9	)	$	9,866.5		$	22,073.5		$	(22,988.6	)	$	8,951.4
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	74.7		$	160.1		$	-		$	234.8		$	187.1		$	-		$	421.9
Intercompany payables		201.4			598.1			(190.1	)		609.4			5,646.2			(6,255.6	)		-
Current income tax payable		-			5.5			-			5.5			13.7			-			19.2
Current portion of long-term debt		-			-			-			-			60.0			-			60.0
Current portion of provisions		-			23.4			-			23.4			19.7			-			43.1
Current portion of unrealized fair value of derivative liabilities		23.0			26.8			-			49.8			10.4			-			60.2
		299.1			813.9			(190.1	)		922.9			5,937.1			(6,255.6	)		604.4
Non-current liabilities
Long-term debt		1,978.8			-			-			1,978.8			19.3			-			1,998.1
Provisions		11.2			506.6			-			517.8			263.1			-			780.9
Unrealized fair value of derivative liabilities		9.2			-			-			9.2			(9.2	)		-			-
Other long-term liabilities		-			125.2			-			125.2			82.0			-			207.2
Long-term intercompany payables		921.9			2,109.3			(1,744.8	)		1,286.4			6,519.4			(7,805.8	)		-
Deferred tax liabilities		-			183.2			-			183.2			285.8			-			469.0
Total liabilities		3,220.2			3,738.2			(1,934.9	)		5,023.5			13,097.5			(14,061.4	)		4,059.6
Equity
Common shareholders' equity
Common share capital	$	14,587.7		$	3,221.0		$	(3,221.0	)	$	14,587.7		$	16,431.8		$	(16,431.8	)	$	14,587.7
Contributed surplus		239.0			82.8			(82.8	)		239.0			2,401.1			(2,401.1	)		239.0
Accumulated deficit		(9,937.6	)		(582.0	)		582.0			(9,937.6	)		(9,878.4	)		9,878.4			(9,937.6	)
Accumulated other comprehensive income (loss)		(46.1	)		(18.8	)		18.8			(46.1	)		(27.3	)		27.3			(46.1	)
Total common shareholders' equity		4,843.0			2,703.0			(2,703.0	)		4,843.0			8,927.2			(8,927.2	)		4,843.0
Non-controlling interest		-			-			-			-			48.8			-			48.8
Total equity		4,843.0			2,703.0			(2,703.0	)		4,843.0			8,976.0			(8,927.2	)		4,891.8
Total liabilities and equity	$	8,063.2		$	6,441.2		$	(4,637.9	)	$	9,866.5		$	22,073.5		$	(22,988.6	)	$	8,951.4

Consolidating statement of operations for the three months ended March 31, 2015

	Guarantors												Non-guarantors			Eliminations			Consolidated
	Kinross Gold Corp.			Guarantor Subsidiaries			Guarantor Adjustments				Total Guarantors
Revenue
Metal sales	$	396.8		$	361.8		$	(360.2	)	$	398.4		$	383.0		$	-		$	781.4
Cost of sales
Production cost of sales		389.5			240.9			(359.9	)		270.5			184.1			-			454.6
Depreciation, depletion and amortization		1.5			76.9			(0.3	)		78.1			128.1			-			206.2
Total cost of sales		391.0			317.8			(360.2	)		348.6			312.2			-			660.8
Gross profit		5.8			44.0			-			49.8			70.8			-			120.6
Other operating expense		2.0			8.6			-			10.6			5.7			-			16.3
Exploration and business development		5.2			1.0			-			6.2			16.6			-			22.8
General and administrative		26.7			1.0			-			27.7			11.3			-			39.0
Operating earnings (loss)		(28.1	)		33.4			-			5.3			37.2			-			42.5
Other income (expense) - net		(3.6	)		(4.1	)		-			(7.7	)		5.8			-			(1.9	)
Equity in earnings (losses) of associate, joint venture and intercompany investments		35.2			(21.2	)		3.4			17.4			(1.0	)		(17.4	)		(1.0	)
Finance income		7.2			0.9			(0.5	)		7.6			9.9			(15.3	)		2.2
Finance expense		(16.3	)		(5.8	)		0.5			(21.6	)		(17.7	)		15.3			(24.0	)
Earnings (loss) before tax		(5.6	)		3.2			3.4			1.0			34.2			(17.4	)		17.8
Income tax expense - net		(1.1	)		(6.6	)		-			(7.7	)		(17.6	)		-			(25.3	)
Earnings (loss) from continuing operations after tax		(6.7	)		(3.4	)		3.4			(6.7	)		16.6			(17.4	)		(7.5	)
Loss from discontinued operations after tax		-			-			-			-			-			-			-
Net earnings (loss)	$	(6.7	)	$	(3.4	)	$	3.4		$	(6.7	)	$	16.6		$	(17.4	)	$	(7.5	)
Net earnings (loss) from continuing operations attributable to:
Non-controlling interest	$	-		$	-		$	-		$	-		$	(0.8	)	$	-		$	(0.8	)
Common shareholders	$	(6.7	)	$	(3.4	)	$	3.4		$	(6.7	)	$	17.4		$	(17.4	)	$	(6.7	)
Net earnings (loss)  attributable to:
Non-controlling interest	$	-		$	-		$	-		$	-		$	(0.8	)	$	-		$	(0.8	)
Common shareholders	$	(6.7	)	$	(3.4	)	$	3.4		$	(6.7	)	$	17.4		$	(17.4	)	$	(6.7	)

Consolidating statement of operations for the three months ended March 31, 2014

	Guarantors												Non-guarantors			Eliminations			Consolidated
	Kinross Gold Corp.			Guarantor Subsidiaries			Guarantor Adjustments				Total Guarantors
Revenue
Metal sales	$	131.7		$	422.1		$	(128.5	)	$	425.3		$	392.1		$	-		$	817.4
Cost of sales
Production cost of sales		128.2			261.8			(128.5	)		261.5			194.5			-			456.0
Depreciation, depletion and amortization		1.7			75.1			-			76.8			119.6			-			196.4
Total cost of sales		129.9			336.9			(128.5	)		338.3			314.1			-			652.4
Gross profit		1.8			85.2			-			87.0			78.0			-			165.0
Other operating expense		0.7			11.5			-			12.2			5.5			-			17.7
Exploration and business development		5.5			1.9			-			7.4			15.3			-			22.7
General and administrative		25.3			1.1			-			26.4			16.8			-			43.2
Operating earnings (loss)		(29.7	)		70.7			-			41.0			40.4			-			81.4
Other income (expense) - net		(0.5	)		0.3			-			(0.2	)		114.0			(120.0	)		(6.2	)
Equity in earnings (losses) of associate, joint venture and intercompany investments		61.3			(4.5	)		(58.2	)		(1.4	)		(1.4	)		1.5			(1.3	)
Finance income		7.2			0.5			(0.5	)		7.2			13.6			(19.4	)		1.4
Finance expense		(6.2	)		(6.5	)		0.5			(12.2	)		(20.0	)		19.4			(12.8	)
Earnings (loss) before tax		32.1			60.5			(58.2	)		34.4			146.6			(118.5	)		62.5
Income tax expense - net		(0.3	)		(2.3	)		-			(2.6	)		(28.5	)		-			(31.1	)
Earnings (loss) from continuing operations after tax		31.8			58.2			(58.2	)		31.8			118.1			(118.5	)		31.4
Loss from discontinued operations after tax		(2.2	)		(2.2	)		2.2			(2.2	)		(2.2	)		2.2			(2.2	)
Net earnings (loss)	$	29.6		$	56.0		$	(56.0	)	$	29.6		$	115.9		$	(116.3	)	$	29.2
Net earnings (loss) from continuing operations attributable to:
Non-controlling interest	$	-		$	-		$	-		$	-		$	(0.4	)	$	-		$	(0.4	)
Common shareholders	$	31.8		$	58.2		$	(58.2	)	$	31.8		$	118.5		$	(118.5	)	$	31.8
Net earnings (loss) attributable to:
Non-controlling interest	$	-		$	-		$	-		$	-		$	(0.4	)	$	-		$	(0.4	)
Common shareholders	$	29.6		$	56.0		$	(56.0	)	$	29.6		$	116.3		$	(116.3	)	$	29.6

Consolidating statement of comprehensive income (loss) for the three months ended March 31, 2015

	Guarantors											Non-guarantors			Eliminations			Consolidated
	Kinross Gold Corp.			Guarantor Subsidiaries			Guarantor Adjustments			Total Guarantors
Net earnings (loss)	$	(6.7	)	$	(3.4	)	$	3.4	$	(6.7	)	$	16.6		$	(17.4	)	$	(7.5	)
Other comprehensive income (loss), net of tax:
Other comprehensive income (loss) to be reclassified to profit or loss in subsequent periods:
Change in fair value of investments (a)		(15.3	)		(0.1	)		-		(15.4	)		1.8			-			(13.6	)
Changes in fair value of derivative financial instruments designated as cash flow hedges (b)		(3.2	)		(16.5	)		-		(19.7	)		(0.4	)		-			(20.1	)
Accumulated other comprehensive income related to derivatives settled (c)		4.6			8.2			-		12.8			2.5			-			15.3
		(13.9	)		(8.4	)		-		(22.3	)		3.9			-			(18.4	)
Equity in other comprehensive income (loss) of intercompany investments		(4.5	)		-			8.4		3.9			-			(3.9	)		-
Total comprehensive income (loss)	$	(25.1	)	$	(11.8	)	$	11.8	$	(25.1	)	$	20.5		$	(21.3	)	$	(25.9	)
Comprehensive income (loss) from continuing operations	$	(25.1	)	$	(11.8	)	$	11.8	$	(25.1	)	$	20.5		$	(21.3	)	$	(25.9	)
Comprehensive loss from discontinued operations		-			-			-		-			-			-			-
Total comprehensive income (loss)	$	(25.1	)	$	(11.8	)	$	11.8	$	(25.1	)	$	20.5		$	(21.3	)	$	(25.9	)
Attributable to non-controlling interest	$	-		$	-		$	-	$	-		$	(0.8	)	$	-		$	(0.8	)
Attributable to common shareholders	$	(25.1	)	$	(11.8	)	$	11.8	$	(25.1	)	$	21.3		$	(21.3	)	$	(25.1	)
(a) Net of tax of	$	-		$	-		$	-	$	-		$	-		$	-		$	-
(b) Net of tax of	$	-		$	(7.9	)	$	-	$	(7.9	)	$	0.1		$	-		$	(7.8	)
(c) Net of tax of	$	-		$	3.4		$	-	$	3.4		$	0.7		$	-		$	4.1

Consolidating statement of comprehensive income (loss) for the three months ended March 31, 2014

	Guarantors												Non-guarantors			Eliminations			Consolidated
	Kinross Gold Corp.			Guarantor Subsidiaries			Guarantor Adjustments				Total Guarantors
Net earnings (loss)	$	29.6		$	56.0		$	(56.0	)	$	29.6		$	115.9		$	(116.3	)	$	29.2
Other comprehensive income (loss), net of tax:
Other comprehensive income (loss) to be reclassified to profit or loss in subsequent periods:
Change in fair value of investments (a)		7.7			-			-			7.7			(1.1	)		-			6.6
Reclassification to earnings for impairment charges		-			-			-			-			-			-			-
Changes in fair value of derivative financial instruments designated as cash flow hedges (b)		(6.9	)		11.0			-			4.1			(2.6	)		-			1.5
Accumulated other comprehensive income (loss) related to derivatives settled (c)		3.4			5.5			-			8.9			-			-			8.9
		4.2			16.5			-			20.7			(3.7	)		-			17.0
Equity in other comprehensive income (loss) of intercompany investments		12.8			-			(16.5	)		(3.7	)		-			3.7			-
Total comprehensive income (loss)	$	46.6		$	72.5		$	(72.5	)	$	46.6		$	112.2		$	(112.6	)	$	46.2
Comprehensive income (loss) from continuing operations	$	48.8		$	74.7		$	(74.7	)	$	48.8		$	114.4		$	(114.8	)	$	48.4
Comprehensive loss from discontinued operations		(2.2	)		(2.2	)		2.2			(2.2	)		(2.2	)		2.2			(2.2	)
Total comprehensive income (loss)	$	46.6		$	72.5		$	(72.5	)	$	46.6		$	112.2		$	(112.6	)	$	46.2
Attributable to non-controlling interest	$	-		$	-		$	-		$	-		$	(0.4	)	$	-		$	(0.4	)
Attributable to common shareholders	$	46.6		$	72.5		$	(72.5	)	$	46.6		$	112.6		$	(112.6	)	$	46.6
(a) Net of tax of	$	-		$	-		$	-		$	-		$	-		$	-		$	-
(b) Net of tax of	$	-		$	6.1		$	-		$	6.1		$	(0.8	)	$	-		$	5.3
(c) Net of tax of	$	-		$	2.8		$	-		$	2.8		$	-		$	-		$	2.8

Consolidating statement of cash flows for the three months ended March 31, 2015

	Guarantors												Non-guarantors			Eliminations			Consolidated
	Kinross Gold Corp.			Guarantor Subsidiaries			Guarantor Adjustments				Total Guarantors
Net inflow (outflow) of cash related to the following activities:
Operating:
Earnings (loss) from continuing operations	$	(6.7	)	$	(3.4	)	$	3.4		$	(6.7	)	$	16.6		$	(17.4	)	$	(7.5	)
Adjustments to reconcile net earnings (loss) from continuing operations to net cash provided from (used in) operating activities:
Depreciation, depletion and amortization		1.5			76.9			(0.3	)		78.1			128.1			-			206.2
Losses (gains) on sale of other assets - net		(0.3	)		-			-			(0.3	)		1.5			-			1.2
Equity in losses (earnings) of associate, joint venture and   intercompany investments		(35.2	)		21.2			(3.4	)		(17.4	)		1.0			17.4			1.0
Non-hedge derivative losses - net		6.9			(0.5	)		-			6.4			(5.4	)		-			1.0
Share-based compensation expense		4.6			-			-			4.6			-			-			4.6
Finance Expense		16.3			5.8			(0.5	)		21.6			17.7			(15.3	)		24.0
Deferred tax expense (recovery)		-			(0.1	)		-			(0.1	)		(29.7	)		-			(29.8	)
Foreign exchange (gains) losses and other		0.3			11.2			-			11.5			2.6			-			14.1
Changes in operating assets and liabilities:
Accounts receivable and other assets		1.6			19.6			-			21.2			19.6			-			40.8
Inventories		(0.3	)		1.1			0.3			1.1			49.6			-			50.7
Accounts payable and accrued liabilities		(19.1	)		(22.3	)		-			(41.4	)		13.8			-			(27.6	)
Cash flow provided from (used in) operating activities		(30.4	)		109.5			(0.5	)		78.6			215.4			(15.3	)		278.7
Income taxes paid		-			(3.2	)		-			(3.2	)		(25.4	)		-			(28.6	)
Net cash flow of continuing operations provided from (used in) operating activities		(30.4	)		106.3			(0.5	)		75.4			190.0			(15.3	)		250.1
Net cash flow of discontinued operations used in operating activities		-			-			-			-			-			-			-
Investing:
Additions to property, plant and equipment		(9.1	)		(80.2	)		-			(89.3	)		(60.2	)		-			(149.5	)
Net additions to long-term investments and other assets		(0.3	)		(9.0	)		-			(9.3	)		(12.4	)		-			(21.7	)
Net proceeds from the sale of property, plant and   equipment		-			0.1			-			0.1			0.2			-			0.3
Decrease (increase) in restricted cash		-			0.2			-			0.2			-			-			0.2
Interest received and other		-			0.9			-			0.9			0.2			-			1.1
Net cash flow of continuing operations used in investing activities		(9.4	)		(88.0	)		-			(97.4	)		(72.2	)		-			(169.6	)
Net cash flow of discontinued operations provided from investing activities		1.0			-			-			1.0			-			-			1.0
Financing:
Issuance of common shares on exercise of options		-			-			-			-			-			-			-
Proceeds from issuance of debt		-			19.5			-			19.5			-			-			19.5
Repayment of debt		-			(19.5	)		-			(19.5	)		(30.0	)		-			(49.5	)
Interest paid		(20.6	)		0.2			-			(20.4	)		(0.6	)		-			(21.0	)
Dividends received from (paid to) common shareholders and   subsidiaries		-			-			-			-			-			-			-
Settlement of derivative instruments		-			-			-			-			-			-			-
Intercompany advances		(53.5	)		5.7			0.5			(47.3	)		32.0			15.3			-
Other		-			-			-			-			-			-			-
Net cash flow of continuing operations provided from (used in) financing activities		(74.1	)		5.9			0.5			(67.7	)		1.4			15.3			(51.0	)
Net cash flow of discontinued operations used in financing activities		-			-			-			-			-			-			-
Effect of exchange rate changes on cash and cash equivalents of continuing operations		-			-			-			-			(3.5	)		-			(3.5	)
Increase (decrease) in cash and cash equivalents		(112.9	)		24.1			-			(88.8	)		115.8			-			27.0
Cash and cash equivalents, beginning of period		315.1			131.0			-			446.1			537.4			-			983.5
Cash and cash equivalents, end of period	$	202.2		$	155.1		$	-		$	357.3		$	653.2		$	-		$	1,010.5

Consolidating statement of cash flows for the three months ended March 31, 2014

	Guarantors												Non-guarantors			Eliminations			Consolidated
	Kinross Gold Corp.			Guarantor Subsidiaries			Guarantor Adjustments				Total Guarantors
Net inflow (outflow) of cash related to the following activities:
Operating:
Earnings (loss) from continuing operations	$	31.8		$	58.2		$	(58.2	)	$	31.8		$	118.1		$	(118.5	)	$	31.4
Adjustments to reconcile net earnings (loss) to net cash provided from (used in) operating activities:
Depreciation, depletion and amortization		1.7			75.1			-			76.8			119.6			-			196.4
Losses (gains) on sale of other assets - net		-			(1.0	)		-			(1.0	)		0.6			-			(0.4	)
Equity in losses (earnings) of associate, joint venture and intercompany investments		(61.3	)		4.5			58.2			1.4			1.4			(1.5	)		1.3
Non-hedge derivative losses - net		2.0			0.8			-			2.8			0.6			-			3.4
Share-based compensation expense		7.2			-			-			7.2			-			-			7.2
Finance Expense		6.2			6.5			(0.5	)		12.2			20.0			(19.4	)		12.8
Deferred tax expense (recovery)		-			(3.2	)		-			(3.2	)		32.0			-			28.8
Foreign exchange (gains) losses and other		1.1			(8.3	)		-			(7.2	)		(31.5	)		-			(38.7	)
Changes in operating assets and liabilities:
Accounts receivable and other assets		1.8			19.6			-			21.4			28.6			-			50.0
Inventories		(0.5	)		(6.7	)		-			(7.2	)		(16.2	)		-			(23.4	)
Accounts payable and accrued liabilities		(15.5	)		(25.9	)		-			(41.4	)		27.4			-			(14.0	)
Cash flow provided from (used in) operating activities		(25.5	)		119.6			(0.5	)		93.6			300.6			(139.4	)		254.8
Income taxes paid		-			(6.6	)		-			(6.6	)		(37.7	)		-			(44.3	)
Net cash flow of continuing operations provided from (used in) operating activities		(25.5	)		113.0			(0.5	)		87.0			262.9			(139.4	)		210.5
Net cash flow of discontinued operations used in operating activities		-			-			-			-			(2.4	)		-			(2.4	)
Investing:
Additions to property, plant and equipment		(2.4	)		(62.9	)		-			(65.3	)		(103.6	)		-			(168.9	)
Net additions to long-term investments and other assets		-			(7.4	)		-			(7.4	)		(22.1	)		-			(29.5	)
Net proceeds from the sale of property, plant and   equipment		-			1.1			-			1.1			-			-			1.1
Decrease (increase) in restricted cash		-			(0.8	)		-			(0.8	)		-			-			(0.8	)
Interest received and other		0.1			0.4			-			0.5			0.9			-			1.4
Net cash flow of continuing operations used in investing activities		(2.3	)		(69.6	)		-			(71.9	)		(124.8	)		-			(196.7	)
Net cash flow of discontinued operations provided from investing activities		-			-			-			-			-			-			-
Financing:
Issuance of common shares on exercise of options		0.1			-			-			0.1			-			-			0.1
Proceeds from issuance of debt		492.9			129.5			-			622.4			-			-			622.4
Repayment of debt		(500.0	)		(124.0	)		-			(624.0	)		(30.0	)		-			(654.0	)
Interest paid		(0.7	)		(0.2	)		-			(0.9	)		(1.0	)		-			(1.9	)
Dividends received from (paid to) common shareholders and   subsidiaries		60.0			-			-			60.0			(180.0	)		120.0			-
Settlement of derivative instruments		(2.1	)		-			-			(2.1	)		-			-			(2.1	)
Intercompany advances		(10.8	)		(71.9	)		0.5			(82.2	)		62.8			19.4			-
Other		0.4			-			-			0.4			-			-			0.4
Net cash flow of continuing operations provided from (used in) financing activities		39.8			(66.6	)		0.5			(26.3	)		(148.2	)		139.4			(35.1	)
Net cash flow of discontinued operations used in financing activities		-			-			-			-			-			-			-
Effect of exchange rate changes on cash and cash equivalents of continuing operations		-			-			-			-			(6.8	)		-			(6.8	)
Increase (decrease) in cash and cash equivalents		12.0			(23.2	)		-			(11.2	)		(19.3	)		-			(30.5	)
Cash and cash equivalents, beginning of period		218.3			118.9			-			337.2			397.3			-			734.5
Cash and cash equivalents, end of period	$	230.3		$	95.7		$	-		$	326.0		$	378.0		$	-		$	704.0