Centerra outlines expected settlement terms with Kyrgyz government

Seized mine settlement?

The Canadian Press - Jan 3, 2022 / 

Photo: Centerra

Centerra Gold Inc. has outlined its expected terms to settle a dispute with the Kyrgyz Republic over a gold mine the country seized last year.

The government took over the Kumtor mine in May 2021 citing environmental and safety concerns, though the country has also long accused the company of not paying enough taxes.

The Toronto-based gold miner has denied those allegations and says it is in ongoing negotiations with government representatives to settle matters.

It says it expects any settlement to include Centerra receiving the 26.1 per cent of its shares held by Kyrgyzaltyn JSC, a state-owned company, and for the two nominees from that company on Centerra's board to resign.

Centerra says it also expects the Kyrgyz Republic to take all responsibility for the Kumtor mine and to release the company of any claims and to stop all legal proceedings.

It says as part of a settlement it will pay the cash dividends to the Kyrgyz company that it did not pay last year.

Centerra reported a US$926.4 million loss last August on the change of control of Kumtor, while the company continues to operate mines in British Columbia and Turkey.

Centerra Gold confirms talks with Kyrgyzstan for out-of-court settlement over mine dispute

Reuters | January 3, 2022 

Canada’s Centerra Gold on Monday confirmed it was in talks with the Kyrgyzstan government for an out-of-court settlement over a dispute in which the state seized the company’s Kumtor mine.


In May 2021, Centerra kicked off arbitration against the former Soviet republic after it took over the country’s biggest mine for allegedly posing danger to human lives or the environment. The company has denied all the allegations.

The company also froze the government’s stake when it seized the mine, meaning it does not have voting rights, nor is it entitled to dividends.

Centerra on Monday laid out a framework for any resolution of the dispute, saying it should receive around 26.1% of its common stock held by state-owned Kyrgyzaltyn JSC.

It also said the state should assume all responsibility for the company’s two Kyrgyz subsidiaries as well as the Kumtor mine.

“At present, the parties are finalizing the discussion of an amicable agreement, including, among other things, the condition for the full transfer of the Kumtor Gold Company to the Kyrgyz Republic,” Kyrgyzstan President Sadyr Zhaparov said in a statement dated Jan. 2.

In December, a source close to the government told Reuters that Kyrgyzstan was pushing for an out-of-court settlement over the dispute.

Centerra and Kyrgyzstan have a long history of disputes over how to share profit from the 550,000-ounce gold mine.

(By Rithika Krishna; Editing by Ramakrishnan M.)