* Company shifts focus to development projects
* Tasiast feasibility study on track for mid-year 2011
* Shares up 2.4 pct at C$14.53
TORONTO, May 4 (Reuters) - Kinross Gold (K.TO) will shift its focus to development from acquisition as it pushes to get production from the projects it has bought over the past few years, the company’s chief executive said on Wednesday.
The Canadian gold miner reported a higher quarterly profit after the market close on Tuesday, as rising gold prices pushed revenues to a record high. [ID:nN03126800]
Shares rose as much as 2.71 percent to C$14.57 on Wednesday morning on the Toronto Stock Exchange, and were up 2.4 percent at C$14.53 at midday.
With numerous new projects in the pipeline, Kinross plans to boost gold production from around 2.7 million ounces this year to up to 4.9 million ounces a year in 2015, Chief Executive Tye Burt said on a conference call with investors.
“We have spent the last few years consolidating interests in excellent mines in promising districts,” he said. “The focus now is on building our new projects and optimizing existing operations to deliver the growth.”
Key to that growth is the development of the Tasiast project in Mauritania in western Africa, which Kinross acquired through its purchase of Red Back Mining last year.
A feasibility study is due at mid-year and Kinross has already ordered certain long-lead time items. With infill drilling almost complete, the company plans to expand exploration drilling at the site.
“The exploration at Tasiast is going to start to take off now,” said Stifel Nicolaus mining analyst George Topping. “So this could be quite exciting.”
He noted that the project, which is targeting annual production of 1.5 million ounces, is shaping up to be as good as expected, but warned that its location in Mauritania is a risk factor.
Topping added that with gold prices near record highs, it is a good time to focus on internal growth.
“It’s a good plan,” he said. “The market does not like companies that have to make acquisitions in the middle of bull market.”
In March, Kinross said it would spend $1.1 billion to develop its Fruta del Norte project in Ecuador. A feasibility study is due in the second half of the year, with annual production expected to be around 410,000 ounces.
The company has also started talks with the Ecuadorean government on a stability agreement, which CEO Burt characterized as “positive”.
“I’d say it is going to still take a few months yet until we’re going to see this through,” he said. “I wouldn’t expect an end to negotiations in the May timetable, we’d look well beyond that.”
Kinross also has development and exploration projects in Chile, Russia and Alaska.
$1=$0.96 Canadian Reporting by Julie Gordon; editing by Peter Galloway