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Kinross Gold Corporation’s Expected Write-down Resembles Charge From 2008

|Includes:Kinross Gold Corporation (KGC)

On 16-Jan-12, Kinross Gold Corporation (NYSE: KGC) reported that it expects to record a “material non-cash accounting charge” primarily related to goodwill attributed to the Tasiast mine in connection with its Sep-10 acquisition of Red Back. The company reported that the charge is the result of its evolving understanding of the Tasiast project parameters as well as market conditions, including industry-wide increases in capital and operating costs. While the total amount of the charge is yet to be known, KGC reported that as of 30-Sep-11 the book value of Tasiast’s total assets was $7.1 billion, of which $4.6 billion was goodwill.

A quick look back at recent history shows that this isn’t the first time KGC has recorded impairments resulting from previously completed acquisitions. In 2008, the company recorded a goodwill impairment charge of $994 million, the majority of which primarily related to goodwill recorded as part of its Feb-07 acquisition of Bema Gold Corporation.

Stocks: KGC