next batter up KRY?

Kinross Gold gets Ecuador green light

NEW YORK (Reuters) - Kinross Gold (K.TO: Quote, Profile, Research, Stock Buzz) will invest around $45 million in Ecuador this year drilling and developing a potentially rich gold deposit, its CEO said on Wednesday, one day after the South American country lifted its ban on the Canadian miner's activities there.

"Ecuador basically shut down our mining operations in April of 2008, pending passage of a new law," Tye Burt told the Reuters Global Mining and Steel Summit.

"It took nine or 10 months for the new constitution to be passed. We think it clarified the mining law very significantly...(and) sets the framework quite clearly for future development."

On Tuesday, a top Ecuadorean mining official told Reuters the country will immediately lift a mining ban on Kinross and other companies that are part of a handful of projects considered "priority" by the Andean nation.

Last year, Canada's Kinross acquired Aurelian Resources and its Fruta del Norte gold deposit in Ecuador.

"We spent $800 million to acquire Aurealian and we'll spend in Ecuador, assuming all the lights are green in terms of permits as they appear to be, about $45 million this year on drilling, development and staffing costs," said Burt.

He told Reuters the key point to the new law was that the Ecuadorean government's financial participation was set at just over 50 percent. "It's roughly in line with other mining jurisdictions in South America like Chile or Brazil," he said.

Ecuador, which in recent years has moved toward taking more control over its natural resources, is an emerging economy, which needs growth to balance its shrinking energy and agricultural exports, Burt said.

"They've been very clear in the need to develop a responsible mining industry. We think we can be a significant contributor to that.

"Ecuador has mineral resources and a commitment to doing the right thing for the mining industry and the people of Ecuador. That fits with our philosophy and obviously we have made a significant investment in developing that," said Burt.

(For summit blog: blogs.reuters.com/summits/)

(Reporting by Steve James, additional reporting by Pat Fitzgibbons, Cameron French, Mike Erman and Euan Rocha, editing by Dave Zimmerman)