Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

Kinross Gold Corporation shares slid on Monday amid a stock selloff in Russia.

Mark Blinch/REUTERS

Shares in Kinross Gold Corp. fell the most in 17 months, amid a widespread stock market selloff in Russia.

The Toronto-based senior gold producer operates the Kupol and Dvoinoye gold mines in Russia, which accounted for about a fifth of Kinross’s gold production last year.

On Friday, the United States imposed sanctions on a number of Russian oligarchs, freezing their assets and banning any U.S. business dealings with them. The move is an attempt to reprimand Russian President Vladimir Putin’s business allies for what the U.S. Treasury Department calls “malign activity,” including supporting Bashar al-Assad’s regime in Syria, and for allegedly tampering with the U.S. election in 2016.

Story continues below advertisement

The broader Russian stock market and the Russian ruble came under heavy selling pressure on Monday, as investors fled from companies with exposure to the country.

Shares in Kinross closed down 8.7 per cent on the Toronto Stock Exchange Monday, its worst showing since November 2016.

“It’s always been the Achilles heel, their heavy exposure to Russia,” said John Ing, veteran gold analyst with Maison Placements Canada Inc., of Kinross’s exposure to the country.

Kinross is increasingly diversifying outside of Russia, in part to insulate itself from potential geopolitical shocks, but its execution has fallen short at times. The company spent billions to develop a gold mine in Mauritania in West Africa, but ended up incurring significant writedowns on the asset. Kinross still has plans to invest heavily to expand the operation over the next few years.

Kinross predicts that 20 per cent of its 2018 production will come from Russia. Sixty per cent of its production will come from the Americas, and 20 per cent from Africa.

“Kinross’s mining operations in Russia continue to operate according to plan and remain unaffected by the new sanctions,” spokesperson Louie Diaz wrote in an e-mail to The Globe and Mail on Monday.

He added that the company will closely monitor sanction legislation so that it remains in compliance.

Story continues below advertisement

Increasingly, Canadian mining companies are being blindsided by geopolitical events abroad.

Last month, the Zambia Revenue Authority slapped First Quantum Minerals Ltd. with a US$7.9-billion tax bill, claiming the miner had drastically underpaid certain import duties over a period of five years. The Canadian copper producer refutes the assessment.

Late last year, junior gold company Eldorado Gold halted development of a key copper and gold mine in Greece after the government objected to its processing plans for metal concentrates. Last week, Eldorado won an arbitration case against Greece, but uncertainty remains over whether additional mine permits will be forthcoming.

Last year, Tanzania accused Barrick Gold Corp. subsidiary Acacia Mining PLC of underpaying its taxes, handing it a US$190-billion tax bill. Acacia is currently subject to a gold-concentrate export ban as Barrick tries to negotiate a settlement with the Tanzanian government.

Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Comments are closed

We have closed comments on this story for legal reasons or for abuse. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies