Centerra Gold, Kyrgyz Republic close to leaving differences behind www.mining.com
Canada’s Centerra Gold (TSX:CG) and the Kyrgyz Republic have finally completed all conditions included in a deal signed in Sept. 2017 ending long-dragged out environmental and economic disputes over the company’s Kumtor gold mine, the country’s largest.
The agreement, first expected to close in May 2018, but delayed multiple times, also cancels mutual lawsuits, including the government’s environmental claims against Centerra and its subsidiary.
In return, the company has allocated more than $10 million in additional contributions above those required in the strategic settlement to “strengthen its social license to operate.”
The Toronto-based miner has also promised at least $16 million in exploration expenditures at the Kumtor project over a two-year period.
Centerra said it’s now working on cancelling remaining legal proceedings affecting the project, including international proceedings at the Permanent Court of Arbitration as well as certain civil proceedings.
A second completion date, when arbitration and civil proceedings are terminated, is expected to occur in the third quarter of this year. By then, Centerra’s Kyrgyz subsidiary, Kumtor Gold Company, would make payments required under the strategic agreement, including to the Kyrgyz Republic Nature Development Fund and Cancer Care Support Fund.
Kumtor, which lies near the Chinese border at an altitude of 4,000 metres, has produced around 11 million ounces of gold since inception and remaining reserves are pegged at 5.6 million ounces.
The Kyrgyz government owns just under a third of Kumtor and the mine contributes nearly 10% of the country’s GDP.
Published Date:2019-08-08