The worse dealmaker ever, former Kinross CEO Tye Burt, Aurelian Resources takeover for Fruta del Norte in Ecuador of all places for $1.2 Billion Failed and $7.2 billion acquisition of Red Back Mining of which more than $4 billion was written off.

Kinross Announces it Will Cease Development of Fruta del Norte

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TORONTO, ONTARIO--(Marketwired - June 10, 2013) - Kinross Gold Corporation
(TSX:K)(NYSE:KGC) announced today that the Company will not proceed with further
development of the Fruta del Norte (FDN) project in Ecuador. The Company also
informed the Government of Ecuador of this decision, and requested its
cooperation in ensuring an orderly transition that respects the interests of
both parties.
After more than two years of negotiations on exploitation and
investment protection agreements for the project, the Government of Ecuador and
Kinross have been unable to agree on certain key economic and legal terms which
balance the interests of all stakeholders. Therefore, despite pending
legislative amendments to the mining and tax law regime in Ecuador, Kinross has
concluded that it is not in the interests of the Company and its shareholders to
invest further in developing FDN.
"We have said that we will exert strict capital discipline
across our Company, that we will allocate our capital only to projects which
meet our investment criteria, and that we will only enter into agreements that
are in the best interests of the Company and its shareholders," said CEO J. Paul
Rollinson. "After a great deal of effort to arrive at a mutually agreeable
outcome, it is unfortunate that the parties were unable to reach an agreement on
FDN which would have met those criteria. That said, we respect the Government of
Ecuador's sovereign authority and its right to determine how its resources are
developed," he added.
Although Ecuadorian law permits an extension of the economic
evaluation phase of the project for up to 18 months, or the suspension of the
commencement of the exploitation phase, either of which would have enabled
negotiations to continue beyond the current August 1, 2013 deadline, the
government has indicated that it will not agree to such an extension or
suspension. Any possible sale of the project is currently subject to the prior
approval of the government, and the government has also indicated it will not
support efforts by Kinross to solicit a potential new partner, or a buyer. As
previously disclosed, when the current economic evaluation phase of the project
expires on August 1, 2013, the La Zarza concession, which contains the entire
FDN mineral resource, will revert to the government.(1)
The Company intends to focus on assisting its employees and its
local stakeholders during a transition period as it reduces its level of
activities in Ecuador in the coming months. "I want to acknowledge our
outstanding team in Ecuador for their dedicated efforts in establishing FDN as a
model for responsible mining," Mr. Rollinson said. "I also want to thank our
local stakeholders and the communities of Zamora-Chinchipe, including members of
the Shuar Federation, who have partnered with us on a wide range of training,
business development and community investment initiatives over the past several
years as we worked together to advance this project," he added.


Kinross' decision to cease the development of FDN will result in a charge of
approximately $720 million in the second quarter. Approximately $700 million of
the charge is expected to be non-cash, reflecting the Company's entire net
carrying value of the FDN project(2), and approximately $20 million represents
accrued severance and closure costs.



About Kinross Gold Corporation



Kinross is a Canadian-based gold mining company with mines and projects in
Brazil, Canada, Chile, Ecuador, Ghana, Mauritania, Russia and the United States,
employing approximately 9,000 people worldwide. Kinross maintains listings on
the Toronto Stock Exchange (symbol:K) and the New York Stock Exchange
(symbol:KGC).