BUSINESS

Kinross shares down after halting Fruta del Norte project in Ecuador

06/11/2013 11:10 EDT | Updated 08/11/2013 05:12 EDT
TORONTO - Shares of Kinross Gold Corp. (TSX:K) were lower Tuesday morning after the company announced it's halting development of its Fruta del Norte project in Ecuador.

The gold miner said after the close of markets Monday it would stop work on the project after it was unable to reach an agreement with the government of Ecuador on "key economic and legal terms."

Kinross concluded that investing further in Fruta del Norte was not in the best interests of the company and its shareholders.

The miner says it will incur a $720-million charge in the second quarter for abandoning the project.

Shares of Kinross were down 28 cents, or 4.35 per cent, to $6.16 on the Toronto Stock Exchange Tuesday morning.

Last year, Kinross replaced high-profile president and chief executive Tye Burt with Paul Rollinson in a bid to improve its lagging performance.

"We have said that we will exert strict capital discipline across our company, that we will allocate our capital only to projects which meet our investment criteria, and that we will only enter into agreements that are in the best interests of the company and its shareholders," Rollinson in a statement.

"After a great deal of effort to arrive at a mutually agreeable outcome, it is unfortunate that the parties were unable to reach an agreement on FDN which would have met those criteria."