Canadian Kinross Gold Corp. (TSX:K, NYSE:KGC) said on Wednesday that workers at its Tasiast gold mine in Mauritania, West Africa, have initiated an unlawful work stoppage, halting mining and processing activity.
In a statement, Canada’s number 3 gold miner by output said management is in discussions with workers hoping to achieve a prompt settlement and a return to normal operations.
The Tasiast mine, which produced approximately 200,000 gold equivalent ounces in 2011, is Kinross Gold’s key development, but also a recent source of worries.
The company’s stock price has been hammered of late due to a $4.6 billion writedown and alleged violations of securities laws.
In April, the company was forced to writedown the value of its Tasiast project, in connection to the company’s 2010 acquisition of Red Back Mining and its Tasiast mine for $7.1 billion, of which $4.6 billion was recorded as goodwill.
Shortly after, US securities litigation firm Holzer Holzer & Fistel announced it was investigating potential violations of federal securities laws by Kinross, specifically whether the miner knowingly overstated gold grades at its Tasiast property over the last year. Both factors led to a selloff in Kinross stock. The $11 billion Canadian company with projects around the world has lost some $3 billion of its worth on the Toronto stock market since the beginning of the year.
Kinross stocks were unaffected by the announcement on Wednesday in trading on both the Toronto Stock Exchange and the New York Stock Exchange.