November 3, 2009 / 3:45 PM / 8 years ago

Kinross sees Ecuador go-ahead, shares fall on loss

* Sees green light for Ecuador drilling this year

* Stock drops 3.7 percent on weak results

* Paracatu mine problems boost Q3 costs (In U.S. dollars, unless noted)

By Cameron French

TORONTO, Nov 3 (Reuters) - Kinross Gold (K.TO) expects approval in the next few weeks to begin developing its prized Fruta del Norte deposit in Ecuador, the company’s chief executive said on Tuesday, but its shares fell 3.7 percent after the gold miner posted a surprise quarterly loss.

Kinross acquired the 13.7 million-ounce Fruta del Norte deposit last year, but had to stop development after the Ecuadorean government froze mining activity to rewrite its mining law.

The government said in March it planned to lift the ban on high-priority projects such as Fruta. Kinross has since obtained water and drilling permits, but has is still waiting for the final go-ahead.

Speaking on a conference call, CEO Tye Burt said Ecuadorean officials told him a few weeks ago that final regulations would be published in early November, and that the green light for development would come soon after that.

“We’re standing by, we have four rigs poised on site. This is one of the best ore bodies in a generation, so we’re anxious to get drilling,” he said.

“Bottom line, this is country which is gingerly exploring its new mining framework.”

Fruta del Norte is one of Toronto-based Kinross’s key development projects, along with Cerro Casale and Lobo Marte, which are both in Chile.

STOCK FALLS

About 45 minutes into trading on Tuesday, the company’s shares were down 73 Canadian cents at C$19.03 on an otherwise strong day for Toronto-listed gold stocks as the precious metal pushed above $1,060 an ounce.

Late on Monday, Kinross reported a net loss of $21.5 million, or 3 cents a share, as problems ramping up its Paracatu mine expansion in Brazil drove costs higher.

On an adjusted basis, the company earned nil per share, which missed analysts’ expectations of a profit of 11 cents per share.

Genuity Capital Markets cut its 12-month price target on Kinross shares to C$24 from C$27 following the results, and kept its “buy” recommendation on the shares.

$1=$1.08 Canadian Reporting by Cameron French; editing by Peter Galloway

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