GOLD: Centerra reaches settlement with Kyrgyz government

KYRGYZ REPUBLIC – Centerra Gold of Toronto, its subsidiaries (Kumtor Gold Company and Kumtor Operating Company), and the government of this Asian nation have reached a settlement following long standing disputes between the two concerning Centerra’s Kumtor gold mine. [caption id="attachment_1003719934" align="alignleft" width="300"] The Kumtor gold mine, operated by Centerra Gold in Kyrgyzstan, is one of central Asia’s largest producers. (Credit: Centerra Gold)[/caption] The mine is the largest owned by Centerra as well as being the biggest in Kyrgyzstan. The government had leveled environmental claims, gone to court, and ordered that Centerra not transfer any money out of the country. Kyrgyzstan has agreed to drop all environmental claims, other proceedings and court orders against the mine. It will also allow Centerra to transfer funds out of the country. The company had about US$299 million frozen before then agreement. Centerra has made a one-time US$50 million payment to the government’s Nature Development Fund, and a further US$7 million donation to the Cancer Care Support Fund. Annual payments of US$2.7 million will also be made to the Nature Development Fund. "First and foremost, this agreement is a comprehensive resolution to all of the outstanding matters affecting the Kumtor project,” said Centerra CEO Scott Perry. “Our arrangement provides for the lifting of all restrictions on the freedom of movement of KGC employees as well as the restrictions on the ability of Kumtor to distribute funds to Centerra. The agreement also provides business certainty for future mining operations at the Kumtor project, as it preserves all rights of the company, KGC and KOC under the Kumtor Project Agreements and, in order to receive full payment, requires continued compliance by the government with a number of conditions precedent that are designed to protect Centerra, KGC and KOC.” More information about the settlement as available at www.CenterraGold.com.