Exclusive: Kinross to retreat from Chile, puts unit on the block

Thu Aug 18, 2016 3:29pm EDT
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By John Tilak and Rosalba O'Brien

TORONTO/SANTIAGO (Reuters) - Canada's Kinross Gold Corp is looking to retreat from Chile and has put its main assets in that country up for sale, according to people familiar with the process.

The move comes at a time Toronto-based Kinross has suspended operations at Maricunga, its major mine in Chile, because of environmental concerns raised by the Chilean regulator.

The world's fifth-largest gold miner by output has hired Bank of Nova Scotia to help find buyers for its two main Chilean gold mines, the sources said. They requested anonymity because the matter is not public.

Interest has been very strong, with bids coming from mining companies from Canada, Chile and other parts of the world, the sources said.

"We have received expressions of interest for Maricunga and La Coipa, as we do for our other assets from time to time, and we continue to keep our options open," said Kinross spokesman Louie Diaz. He declined to comment on whether the company has begun a formal process to sell its Chilean mines.

Kinross shares turned positive after the Reuters report and climbed 1.2 percent before paring some gains. The stock was up 0.5 percent at C$6.48 by mid-afternoon.

Citing environmental damage that has been disputed by Kinross, Chile's environmental regulator in March shut down the water system linked to the Maricunga mine. In 2015, that mine accounted for about 15 percent of the country's gold production.

After a suspension in May, mining resumed in July, subject to ongoing regulatory proceedings. Diaz said the mine was suspended again that month, following pressure from the regulator.   Continued...

People look on during the Kinross Gold Corporation annual general meeting for shareholders in Toronto, May 9, 2012.  REUTERS/Mark Blinch