Kinross Gold Corporation (KGC Quick QuoteKGC - Free Report) has temporarily suspended its mining and processing operations at the Tasiast mine in Mauritania. The company was forced to take the decision as it could not fully operate the mine safely due to changes in the regulations laid down by the Mauritanian Ministry of Labor. The Ministry had prohibited certain expatriate employees from working at the site due to alleged invalid work permits. 

 

The Canadian gold miner has complied with all requisite formalities including the filing of requests and applications set forth by the Ministry. The company has also ensured valid work permits of all employees under the Mauritanian law. Other companies and organizations in Mauritania too are facing these issues with the Ministry of Labor. Discussions to resolve the matter are underway. Kinross does not expect the expansion of Tasiast Phase One to be affected by the current situation. 

 

The company aims to increase the number of local skilled employees at the mine. Currently, roughly 88% of the workforce comprises Mauritanian nationals. Kinross follows the same policy of increasing the number of locals working at all its sites.

 

In May 2016, the Tasiast employee union went on strike. Post negotiations with the union leaders, the strike ended three weeks later. However, the development of the Tasiast Phase One expansion was not affected during the strike and management does not expect it to impact the annual regional guidance either. 

 

Shares of Kinross fell around 5.6% in the trading session on Monday, closing the day around 2% lower at $4.88. 

 

During its first-quarter 2016 earnings release, Kinross stated that the Tasiast Phase One expansion was underway. The development is expected to double production levels and halve the cost of sales.

 

The company reported a net loss of $13.9 million for the first quarter of 2016, wider than a net loss of $6.7 million in the year-ago quarter. Loss widened particularly due to lower gold prices. The figure includes one-time items including foreign exchange losses of $2.8 million, and acquisition-related costs of $7.6 million.

 

Adjusted earnings (excluding one-time items) were $1.4 million or a breakeven, compared with adjusted earnings of $15.3 million or a penny per share recorded in the year-ago quarter. Analysts polled by Zacks were expecting a loss of a penny per share on an average.

 

Revenues of $782.6 million were almost in line with the year-ago quarter as higher gold sales were partly offset by lower average realized gold prices. Revenues, however, missed the Zacks Consensus Estimate of $796 million.

 

Kinross currently carries a Zacks Rank #3 (Hold).

 

Some better-ranked mining companies are B2Gold Corp. (BTG Quick QuoteBTG - Free Report) and Golden Star Resources Ltd. , both sporting a Zacks Rank #1 (Strong Buy), as well as Harmony Gold Mining Company Limited (HMY Quick QuoteHMY - Free Report) , carrying a Zacks Rank #2 (Buy).

 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>