at least the $1 billion charge is behind us. unless there are some more $1 billion write-offs lurking, the future looks very good for kinross. i thought the question-and-answer session at the conference call was more revealing than the news release itself. one analyst asked if the operations turn out better than expected, if they could recapture the goodwill written off, but the accountants don't allow that.

someone asked if their might be a writeoff coming from the aurelian transaction, but they said that was an asset purchase, not a business combination like bema. i guess that was more diplomatic than telling him they committed grand larceny when they stole aurelian...but i digress.

as far as ecuador is concerned, they are still in the process of obtaining the permits needed for drilling. if all goes well (when is the last time that happened in ecuador?) kinross will spend $45 million this year, of which $25 million is for drilling and pre-feasibility work, including $10 million on infill drilling to move the resource from inferred to the m+i categories. the other $20 million is for overhead and staffing. they are not planning to do a lot of step out drilling or work on the regional targets this year. in 2009 the goal is to advance fruta del norte, and then exploratory drilling in 2010. the royalty and tax rates are still to be negotiated, and that will be on a company by company basis, as will the windfall tax levels. so for now the priorities are permitting and whatever metallurgy and technical work is needed to move fdn to feasibility.

the next project will be lobo marte, which is more advanced than cerro casale or fdn. my concern about cerro casale is the capex requirement, which i thought would be at least $1 billion. according to the pre-feas work to be released in the next 45 days, the total capex will be $3.5-3.6 billion, of which the kinross share would be close to $1.8 billion. that is a rough figure, and they may be able to optimize some things in the feasibility study due in the third quarter. but no matter how much they sharpen their pencils, i would rather build fdn before cerro casale.

tye burt said he is willing to undertake another joint venture in russia, but he likes the diversification of the company portfolio the way it is. so if they can increase production in the americas, he may be willing to invest in another project in russia later.

overall i think kinross is on track. of all the larger gold companies, kinross has the least exposure to base metals, and right now, that's a big plus. the operations have been well managed, and even though the average price of gold was about the same in the fourth quarters of 2007 and 2008, the 2008 results were an increase of 71% in revenue due to more ounces produced, while costs were down 11% from last year. if they can bring lobo marte and either fdn or cerro casale into production, and they don't go losing another billion dollars here or there, kinross will do very well.