* New CEO to clamp down on capital, operating costs
* Company to slow mine development, focus on value
* No timetable for expansion decision on Tasiast
* Shares close up 2.57 percent at C$7.97 on TSX
By Julie Gordon
TORONTO, Aug 9 Kinross Gold Corp's new
chief executive laid out a strategy to cut costs on Thursday,
but did not provide any clarity on expansion plans for the
underperforming Tasiast mine in Mauritania.
On his first conference call since being promoted to the top
job, J. Paul Rollinson said his mandate is to manage for value
and focus on enhancing performance while reducing costs.
"We're going to try to be much more aggressive on
controlling capital, operating costs and looking for ways to
optimize the assets," he told analysts and investors.
Rollinson, a corporate development executive and former
investment banker, replaced Tye Burt as CEO in a management
shake-up last week.
Burt, who championed Kinross's $7.1 billion takeover of Red
Back Mining in 2010, took the fall for setbacks at Tasiast, the
acquisition's centerpiece. The deal, which also included the
Chirano mine in Ghana, led to a $2.94 billion writedown earlier
The company grew rapidly under Burt's leadership, but
soaring cost inflation in the mining industry has led to massive
budget overruns on projects around the world, prompting Kinross
to shift to a more measured approach to mine building.
Part of that approach includes sequencing its main
development projects, with Tasiast remaining Kinross's top focus
for the foreseeable future.
Kinross was expected to outline the details of its Tasiast
expansion plan in its quarterly earnings release on Wednesday,
but the gold miner instead said it is now studying a smaller
mill option, even as it continues to review the original 60,000
tonne a day option and a heap leach plan.
The company has also slowed development at its Fruta del
Norte project in Ecuador and Lobo-Marte project in Chile as it
reviews plans to better balance capital spending with returns.
Rollinson, answering analysts' questions on the conference
call, avoided setting a clear timetable for making a decision on
the processing options at Tasiast.
"I guess the answer to that is: when we've finished our
work," he said. "We haven't finished our work and as a result
we're not in a position to make a recommendation."
Studies at the underperforming West African mine are
expected to continue into 2013 and the lack of clarity did
little to calm analysts' jitters, with a number of them cutting
their price targets for the stock.
"They're still disorganized on Tasiast," said George
Topping, an analyst at Stifel Nicolaus who has a "hold" rating
on the stock. "They are spending, this year, $800 million on
Tasiast - without a plan - it's hard to fathom."
Topping noted the mine has been on Kinross's books since
2010 and said the expansion should be further advanced at this
Rollinson, who plans to visit the company's various projects
in the Americas, West Africa and Russia over the coming weeks,
has moved quickly to make his mark on the embattled company,
with numerous management changes announced on Thursday.
Brant Hinze, Kinross' chief operating officer, was given the
added role of company president. Geoffrey Gold, chief legal
officer, added corporate development to his portfolio, while
James Crossland, formely head of external relations and
corporate responsibility, became head of corporate affairs.
Kinross's shares closed 2.57 percent higher at C$7.97 on
Thursday on the Toronto Stock Exchange, outperforming its peers,
which also rose on higher gold prices.
The stock has fallen more than 30 percent so far this year,
and is down 60 percent since September 2010, when the Red Back