Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Canada’s third main gold miner Kinross Gold (TSX:K) is selling its stake in the Crixas gold mine (Serra Grande), in Brazil, to South Africa’s AngloGold Ashanti for $220-million.
AngloGold Ashanti already holds, through its subsidiaries, the other 50% of the project and is the operator of the mine.
Toronto-based Kinross president and chief executive, Tye Burt, said the mine was a non-core asset for the company.
“Its divestiture is consistent with our strategy of portfolio optimization and focusing our resources on the company’s core operations and priority projects,” Burt said in a statement.
The sale is expected to close in the second quarter of 2012 and Kinross will update production guidance for 2012 when reporting second-quarter earnings.
Earlier this month, Kinross said it expected to produce between 2.6 million and 2.8 million gold-equivalent ounces from current operations this year.
The company, which has been bludgeoned in the markets after taking a $2.5 billion writedown in February, produced 6% less gold during the first quarter of 2012 compared to the same period last year.
Shares in Kinross were up 16 cents to $8.58 after the announcement on Tuesday morning.
