The gold miner (TSX:K) has been planning a US$2.7-billion expansion of the open pit gold mine, with a feasibility study slated for release in the first quarter of 2014.
But because of the steady decline in gold prices in the past few months, the company said it's putting the plan on ice.
"Given the high degree of volatility and uncertainty we've experienced recently, we chose to make the balance sheet a priority," chief executive Paul Rollinson told analysts during a conference call Thursday.
"Frankly, the decision to not make a decision is really a consequence, more than anything, of a focus on the balance sheet."
The expansion would turn the 8,000 tpd mill into a 38,000 tpd mill, producing approximately 830,000 ounces of gold per year over the first five years.
The Tasiast mine has been a headache for Kinross in the past. The miner took a $3.2-billion impairment charge in the fourth quarter of 2012, mostly on its Tasiast mine.
Kinross also booked a $2.49-billion charge related to Tasiast in the fourth quarter of 2011.
The gold miner, which keeps its books in U.S. dollars, said Thursday that it's chopping $180 million from its expenses in the remainder of 2013.
It will reduce capital spending at the Tasiast mine by about $85 million this year, with further cost cutting expected at the facility next year.
"We are exploring opportunities to optimize the existing 8,000-ton per day mill," said president and chief operating officer Brant Hinze.
"With a lot of the infrastructure development largely complete, we will be accelerating our continuous improvement programs and focusing on ways to improve efficiencies at the operation."
Kinross has also suspended its semi-annual dividend to preserve liquidity in the company.
"We will continue to re-evaluate the dividend based on a number of factors, including market conditions, operational performance and the impact of ongoing cost reduction measures," Rollinson said.
"It was a tough decision, but we believe it is the right decision in the current environment."
Kinross reported a second-quarter net loss of US$3.2 billion, largely due to an impairment charge stemming from lower gold price assumptions.
The company said the $3.2 billion loss compares with a profit of $153.8 million in the same period a year ago. The earnings amount to a loss of $2.81 per basic and diluted share, compared with a profit of 13 cents in the second quarter of 2012.
Meanwhile, revenue was down to $968 million for the period ended June 30, compared with $1 billion year over year.
On average, analysts had been expecting a loss of $394.2 million, or six cents a share, on revenue of $961 million, according to Thomson Reuters.Suggest a correction