UPDATE 3-Kinross to buy Aurelian in friendly C$1 bln deal

(Adds comments from Kinross CEO, analysts)

By Cameron French

TORONTO, July 24 (Reuters) - Kinross Gold Corp (K.TO: Quote, Profile, Research) will buy Aurelian Resources Inc ARU.TO for just over C$1 billion ($990 million) in a friendly deal that will give the Canadian mid-tier gold miner ownership of the big Fruta del Norte gold discovery in Ecuador, the companies said on Thursday.

With an inferred resource of 13.7 million ounces of gold and 22 million ounces of silver Fruta del Norte is considered one of the world's largest gold deposits.

However, work at the site has been halted since Ecuador froze mining in April as it rewrites its mineral laws, and uncertainty surrounding the project contributed to a 9 percent drop in Kinross' share price after the deal was unveiled.

"From a strategic prospective, this is right across the plate for us. It's in a country where we've been operating on the exploration side for a couple of years," Kinross Chief Executive Tye Burt said in an interview.

"This mining mandate in Ecuador has put some uncertainty around the future of the mining regime there, but we think the signs are positive that it's trending in the right direction," he said.

Aurelian's concessions have been suspended since April after a government-run assembly banned exploration and revoked hundreds of concessions to bring order to a sector that has suffered from sometimes violent clashes between anti-mining communities and companies' workers in southern Ecuador.

Dozens of foreign mining companies exploring for precious metals in the Andean country are anxious for details of the new mining law. But worries about conditions that could be placed on miners have kept valuations low.