Centerra Gold Comments on Kyrgyz Republic Developments
TORONTO, May 07, 2021 (GLOBE NEWSWIRE) -- Centerra Gold Inc. (“Centerra”) (TSX: CG) (NYSE: CGAU) announced today that it has become aware of a number of legal and political developments in the
Kyrgyz Republic which may affect Centerra’s ownership of the Kumtor Mine and its rights under the 2009 restated project agreements which govern the Kumtor Mine.
First, the Company understands that a law has been passed by the Kyrgyz Republic Parliament which would enable the Kyrgyz Republic Government to impose “external management” on companies in the Kyrgyz Republic operating under concession agreements. The law was proposed, passed three readings and was adopted by Parliament in a single day and will now be referred to the President of the Kyrgyz Republic for signature. The sponsor of the law, Mr. Akylbek Japarov, notes that the only project operating under a concession agreement in the Kyrgyz Republic is the Kumtor Mine.
Accordingly, the Company understands that this newly adopted law on external management would apply in circumstances where Kumtor Gold Company (KGC) violates certain Kyrgyz laws relating to safety and thereby creates an immediate threat to the life or health of people: (i) prohibits KGC’s managers from managing the mine (or else face criminal sanctions); and (ii) enables the Prime Minister of the Kyrgyz Republic to appoint an external manager to take control of all management activities of KGC, including its bank accounts.
Centerra notes that Mr. A. Japarov is also the Chairman of the Kyrgyz Republic State Commission which was formed in February 2021 to review the activities of the Kumtor Mine and is expected to report its findings shortly.
Second, the Company is aware of other draft laws and decrees in the Kyrgyz Republic which seek to undermine the 2009 restated Kumtor project agreements and the tax and fiscal regime under which the Kumtor Mine has operated since 2009. It is unclear whether such drafts have progressed past the proposal stage.
Third, in March 2021, four Kyrgyz Republic private citizens commenced a civil claim against KGC requesting that KGC’s past practice of placing waste rock on glaciers be determined to be illegal. This week the claimants have recently amended their claim to demand over U.S.$3 billion in environmental damages in favour of the Kyrgyz Republic. The Company notes that one of the claimants, Mr. Kutmanov, is the son of Ms. Dinara Kutmanova, the Director of the Kyrgyz Republic State Agency for Environment Protection and Forestry.