Kinross records $3.2bn writedown on Tasiast gold project in West Africa
Canadian mining company Kinross Gold has reported a total non-cash impairment charge of $3.2bn in 2012.
The writedown relates to its Tasiast gold project in Mauritania, West Africa, and the Chirano gold mine in Ghana.
The writedown follows a $2.49bn charge in 2011, also related to Red Back Mining assets acquired in 2010 for $7.99bn.
The writedown resulted from a revision in an expansion plan at the Tasiast mine and escalation of operating costs, reports Bloomberg.
Kinross, on account of the impairment charges, reported a net loss of $2.57bn for the 2012 financial year, compared to the $2.1bn loss in 2011.
Kinross CEO Paul Rollinson said that the company remained focused on operational fundamentals in the second half of 2012 and exceeding its full-year production guidance at the end of the year.
"While we recorded a non-cash impairment charge related to our Tasiast project, our pre-feasibility study work and recent exploration results continue to increase our confidence in Tasiast's potential, and confirm its importance as part of our long-term future," Rollinson said.
Revenues for the year soared to $4.3m in 2012, compared to $3.8m in 2011, with production increasing 3% to 2.6 million ounces.
Looking ahead to 2013, the company is planning to focus on cost control, margin improvement and free cash flow.
"Although our 2013 operating costs are expected to increase due to higher consumable costs and anticipated lower grades, we are pursuing every opportunity for cost reduction. We are also forecasting a reduction in capital expenditures of approximately $325 million over 2012," outlined Rollison.
Kinross expects to deliver first ore from the company's high-grade Dvoinoye deposit in Russia to the Kupol mill after July 2013.
"At Kupol, our site exploration team has identified a new structure with strong potential as a result of the discovery of additional mineralisation at the Moroshka target," Rollinson added.
Image: Tasiast mine, Mauritania. Photo: Kinross Gold Corporation.