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The Tasiast mine in north-western Mauritania. Kinross has tried to move beyond the disastrous acquisition and is focusing on lowering expenses.

Kinross Gold Corp. took an impairment charge on a mine in Chile and slashed its gold reserves by 33 per cent, partly because it decided to use a new method of calculating unmined bullion.

The Toronto-based gold miner was not expected to cut its reserves since it already used an ultralow bullion price assumption of $1,200 (U.S.) an ounce last year to determine the amount of its unmined gold. The lower the price, the less economical it becomes to mine the gold.

But this year, Kinross chief executive officer J. Paul Rollinson decided to incorporate other expenses related to digging up an ounce of gold. On top of operating costs, Kinross added expenses related to mine waste management, sustaining capital and other factors in the calculation.

"The result is a reduction" in reserves, Mr. Rollinson said in a statement announcing the company's fourth-quarter results. He noted that the new methodology would increase the value of the unmined resource.

The lower reserves is the latest piece of bad news to stem from the precipitous drop in the gold price. Gold topped $1,900 an ounce in 2011 but is now trading closer to $1,300. That has forced companies to cut costs and take a dramatically more conservative approach to mining.

Other gold companies such as Agnico Eagle Mines Ltd. and Barrick Gold Corp. used a much higher bullion price than Kinross's $1,200 to determine their reserves and are also expected to reduce their stockpiles when they report year-end results this week.

Kinross's new methodology and decision to kill its Fruta del Norte project in Ecuador will cut the company's reserves to 39.7 million ounces from 59.6 million ounces the previous year.

It is a surprise move from Mr. Rollinson that shows how serious the company is about its fiscal prudence.

Since Mr. Rollinson became CEO in a management shakeup in August, 2012, Kinross has cut its dividend, reduced capital expenditures and delayed making a decision on expanding the company's troubled Tasiast mine in the Mauritanian desert.

The company lost $740-million or 65 cents a share in the fourth quarter, which includes an after-tax, non-cash impairment charge of $544.8-million related to its Maricunga mine in Chile.

That is narrower than the previous year's loss of $2.98-billion or $2.62 a share when Kinross wrote down part of Tasiast, which the miner acquired when it bought Red Back Mining Inc. near the top of the market.

The company has tried to move beyond the disastrous Tasiast acquisition and is focusing on lowering expenses. For the year, Kinross forecast capital expenditures of about $675-million this year. That is down from the $1.26-billion last year.

Kinross said it would cost between $950 and $1,050 to produce an ounce of gold this year, which is slightly less than the $1,063-per-ounce cost in 2013.

The company expects to produce about 2.5 to 2.7 million ounces of the precious metal.

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