UPDATE: Analyst Actions: Canaccord Downgrades Kinross Gold On Ecuador Write Down; Shares Down 4%

By MidnightTrader.com Staff,

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Canaccord has cut Kinross Gold Corporation (K.TO, KGC) to a Hold rating from Buy and eased its price target to $7.70 from $8 on news of its writedown, resulting from an update on operations in Ecuador.

Kinross last night announced that it will not proceed with further development of the Fruta del Norte ( FDN ) project in Ecuador. The company also informed the Government of Ecuador of this decision, and requested its cooperation in ensuring an orderly transition that respects the interests of both parties.

It said: "After more than two years of negotiations on exploitation and investment protection agreements for the project, the Government of Ecuador and Kinross have been unable to agree on certain key economic and legal terms which balance the interests of all stakeholders. Therefore, despite pending legislative amendments to the mining and tax law regime in Ecuador, Kinross has concluded that it is not in the interests of the company and its shareholders to invest further in developing FDN."

Kinross' decision to cease the development of FDN will result in a charge of approximately $720 million in the second quarter. Approximately $700 million of the charge is expected to be non-cash, reflecting the Company's entire net carrying value of the FDN project(2), and approximately $20 million represents accrued severance and closure costs.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing Commodities
Referenced Stocks: FDN

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