Kinross Gold Corp. (TSX: T.K, Stock Forum) (NYSE: KGC, Stock Forum) said Monday it will not proceed with further development of its Fruta del Norte project in Ecuador, a move that will result in a charge of approximately $720 million in the second quarter, the company said.
Approximately $700 million of the charge is expected to be non-cash, reflecting the company’s entire net carrying value of the FDN project, Kinross said in a release.
When it was acquired in 2008 for US$1 billion, Fruta del Norte was expected to be a key operation for Kinross.
But the Toronto-based company said it has been unable to agree on certain key economic and legal terms, which balance the interests of all stakeholders. Therefore, it has concluded that any further investment is not in the best interests of shareholders.
The announcement came after the close of trading Monday, when Kinross shares rose 1.1% to $6.44, leaving the company with a market cap of $7.35 billion, based on 1.14 billion shares outstanding. The 52-week range is $10.98 and $5.11.