Kinross settles shareholder lawsuit tied to Mauritania debacle
By Euan Rocha and Jonathan Stempel
TORONTO/NEW YORK, March 26 (Reuters) - Kinross Gold Corp has agreed pay $33 million to settle a shareholder lawsuit that had accused the Canadian gold miner of defrauding investors through an ill-advised mine acquisition in Mauritania that has resulted in over $6 billion in writedowns.
According to documents filed with the U.S. District Court for the Southern District of New York late on Thursday, Kinross said it settled the matter to eliminate the burden and expense of continued litigation but denied any wrongdoing.
The Toronto-based miner and the lead plaintiff, the City of Austin Police Retirement System, have asked the court to approve the preliminary settlement.
Kinross had tried and failed to get the case dismissed two years ago.
Shareholders led by the Texas pension fund accused Kinross of inflating its share price by misleading them about the quality of its due diligence for, and timetable to develop, the Tasiast mine that it acquired via its $7.1 billion acquisition of Red Back Mining Inc in 2010.
The mine has failed to live up to expectations and the big pullback in the price of gold over the last few years nly exacerbated issues for the miner. Last month, Kinross said it would not go ahead with a $1.6 billion expansion of Tasiast in Africa's northwest because of bullion prices.
Kinross' shares have also taken a pounding in the last few years, with its share price now having fallen some 85 percent to $2.36 in New York, since the time the takeover was announced in August, 2010.
The case is City of Austin Police Retirement System v. Kinross Gold Corp et al, U.S. District Court, Southern District of New York, No. 12-01203.
(Reporting by Euan Rocha; Editing by Cynthia Osterman)
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