Kinross Gold fails to end to U.S. shareholder lawsuit

Fri Mar 22, 2013 5:01pm EDT
 
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* Company said to mislead over mine's development schedule

* Judge lets part of case against Kinross, ex-CEO proceed

* Kinross calls surviving claims without merit

By Jonathan Stempel

NEW YORK, March 22 (Reuters) - Kinross Gold Corp failed on Friday to win dismissal of a U.S. lawsuit accusing the Canadian gold miner of defrauding shareholders over a mine in Mauritania, in West Africa, that has contributed to more than $6 billion of company writedowns.

The decision by U.S. District Judge Paul Engelmayer in Manhattan stems from Kinross's $7.1 billion acquisition of Red Back Mining Inc in 2010, which gave it control of the Tasiast gold mine in Mauritania and the Chirano gold mine in Ghana. The suit relates to the Tasiast mine.

While calling the matter a "close question," the judge said shareholders may sue over losses between Aug. 10, 2011, when Kinross delayed a feasibility study for the Tasiast mine, and Jan. 17, 2012, a day after it took a $2.94 billion noncash, goodwill writedown related to the Red Back mines.

Kinross took a separate $3.21 billion writedown related to the mines on Feb. 13, 2013.

The judge also let shareholders pursue claims against four Kinross executives including Tye Burt, who was ousted as chief executive last August.   Continued...