Levi & Korsinsky announces that a class action lawsuit has been commenced in the United States District Court for the Southern District of New York on behalf of investors who purchased Kinross Gold Corporation (“Kinross” or the “Company”) (NYSE: KGC) stock between February 16, 2011 and January 17, 2012.
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The complaint alleges that, throughout the Class Period, defendants issued materially false and misleading statement regarding the Company’s business and prospects. Specifically, defendants misrepresented and/or failed to disclose the following adverse facts: (a) that the drilling results at the Kinross Tasiast property had exhibited high amounts of low-grade ores and that because of this the Company would need to modify its mining processes to help minimize operating costs and maximize profitability; (b) that, as a result of the foregoing circumstances, applicable accounting standards required the Company to record an impairment in the value of goodwill that Kinross attributed to the Tasiast property; (c) that the Company’s financial statements were not fairly presented in conformity with International Financial Reporting Standards and were materially false and misleading; and (d) that, based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company, its business prospects and the Tasiast property during the Class Period.
On January 16, 2012, Kinross issued a press release announcing its preliminary 2011 results and 2012 outlook. The press release noted that the Company’s three major growth projects would require significant capital expenditures and that as a result of the Company’s increased understanding of the Tasiast orebody, Kinross had elected to conduct a comprehensive capital and project optimization process to efficiently advance development of the project and generate enhanced returns on capital. The press release also disclosed that “the Company expects to record a material non-cash accounting charge, primarily relating to the goodwill recorded for the Tasiast mine,” which totaled $4.6 billion by September 30, 2011. In response to the Company’s announcement, the price of Kinross common stock plummeted nearly 19%, from $12.65 per share on January 13, 2012 to $10.27 on January 17, 2012.