After failing to come to an agreement with the Ecuadorian government on legal and economic terms, Kinross Gold announced that it is scrapping plans to develop the Fruta del Norte gold mining project.

Kinross will take a charge of about $720 million in the second quarter, the Toronto-based company said in a statement. The company informed the government of its decision ahead of the expiry of the exploration concession on Aug. 1, chief executive officer J. Paul Rollinson told Bloomberg.

“We’ve been at the negotiating table for two years,” Rollinson said. “Sometimes the best deal is the one you don’t sign, and we believe that’s the case here.”

Kinross bought the Fruta del Norte project in 2008 when it acquired Aurelian Resources Inc. for C$614 million ($602 million) in shares.

Discussions with the government were hampered by authorities’ “hardline” approach on a proposed 70 percent, revenue-based windfall profits tax that Kinross wasn’t prepared to agree to, Rollinson said. The government indicated it would not extend the concession or agree to Kinross seeking a partner or buyer for the project, the company said.

Ecuador's Non-Renewable Natural Resources Minister Pedro Merizalde said the government will “accelerate”' the development of Fruta del Norte without Kinross, according to a statement from the ministry to Bloomberg.

“We haven’t ceded in the face of the transnationals’ proposals,” Merizalde said in the statement. “The state maintains sovereignty over the management of its natural reserves.”