Kinross Gold Corp. has abruptly changed its tune amid the escalating invasion of Ukraine, announcing plans to suspend its Russian operations a little more than a week after insisting those assets were operating “according to plan” and were unaffected by sanctions imposed upon Moscow.

In a news release issued late Wednesday, Kinross said it came to the decision out of consideration of “the safety and well-being of its more than 2,000 employees and in recognition of its obligations to manage and mitigate the mine's environmental impact on an ongoing basis.”

The news release added that Kinross “intends to adhere to all sanctions and legal restrictions that have, or will be, announced by relevant governments.”

Kinross had stated on Feb. 23 that it remained unaffected by Russia’s invasion of Ukraine, but did note that it would “closely monitor” sanction developments. Since that announcement, Western nations have ramped up the pressure on the Kremlin, announcing curbs aimed at Russia’s central bank and some major financial institutions.

Kinross operates the Kupol mine in remote Siberia, about 7,000 km from the Ukrainian border. That mine produced 481,108 gold equivalent ounces in fiscal 2021, about 23 per cent of Kinross’ total output. Overall, the company said in its year-end report that Russia was expected to account for 13 per cent of total production in 2022.

Kinross also owns the Udinsk development project north of Mongolia, which it purchased for US$283 million less than three years ago. According to the company’s pre-feasibility study released last November, that project was expected to produce about two million ounces of gold over a seven-year mine life, at an extremely low all-in sustaining cost per ounce of US$580. Production was forecast to begin in the fourth quarter of 2025.

Kinross is the only Canadian senior miner operating in Russia, with about 10 per cent of its net asset value tied to the country. The Toronto-based miner has operated in the company for more than 25 years.

The jurisdictional risk has not escaped the watchful eye of the investment community, with analysts noting the company’s Russian exposure has been an overhang on share price performance.

In a note to clients Tuesday, RBC analyst Josh Wolfson said that Kinross’ Russia exposure could continue to cast a dark shadow over shares of the company, but would not ultimately threaten its overall health.

“We view ongoing geopolitical events as a key overhang for shares and at risk of impacting prior-outlined capital allocation, but presenting low fundamental risks to Kinross' business and appropriately reflected in valuation today,” he said.

“Given this ongoing exposure, a prolonged valuation discount may be justifiable from both a risk and ESG perspective, reinforced by recent updates from companies with Russian exposure announcing high profile exits at high costs, and major investors/indices announcing dispositions in Russian-linked companies.”

Kinross is just the latest multinational company to be caught in the furor over Russia’s invasion of Ukraine, after the likes of BP Plc and Shell Plc announced plans to extricate themselves from their Russian operations.

Nor is geopolitical risk out of the norm for the gold mining industry – just last year, Centerra Gold Inc.’s Kumtor mine was essentially nationalized by the Kyrgyz government, a stark reminder for investors of the risks faced by miners operating in far-afield jurisdictions.