Centerra Gold Comments on Kyrgyz Republic Developments - Seite 2

Fourth, further to the Company’s March 18, 2021 news release, the Company has now received the results of the tax audits and re-audits conducted by the Kyrgyz Republic State Tax Service in respect of tax years 2015 through 2020. The results from the State Tax Service are preliminary and still being analyzed by KGC; however, on their face they assert additional taxes owing by KGC in excess of U.S.$170 million. Such amounts are allegedly owing on the same grounds as the previous tax claims received by the Company for withholding taxes on dividends, certain payroll deductions and social insurance contributions, though it is unclear whether the amounts noted in the latest audit results overlap the previously claimed amounts.

As the Company has noted many times, the 2009 restated Kumtor project agreements provide a solid foundation for Kumtor’s operations and were approved by the Kyrgyz Republic Parliament and Constitutional Court in 2009. Those agreements were re-affirmed by the Government of the Kyrgyz Republic in 2017 when it entered into the Strategic Agreement on Environmental Protection and Investment Promotion which was completed and became effective in 2019. KGC’s operations and activities have always carefully adhered to those agreements and applicable laws. Furthermore, the Strategic Agreement included a release of the Company and KGC by the Kyrgyz Republic Government of all outstanding claims at such time, including damages for harm allegedly caused to the environment from storing production tails on glaciers. The Company therefore believes strongly that the claims advanced by the State Tax Service and such individual Kyrgyz Republic claimants are entirely meritless and the new and draft Kyrgyz Republic laws noted above, if implemented, would clearly violate the 2009 restated project agreements and the 2009 Kyrgyz Republic laws which confirmed such agreements. Furthermore, the Kumtor Mine’s environmental performance adheres to international standards, including those of the European Bank for Reconstruction and Development, and have been audited multiple times by, among others, the Kyrgyz Government’s own environmental consultant, AMEC Foster Wheeler. AMEC’s reports have confirmed that the Kumtor Mine is operated in accordance with international best practice and its recommendations for improvements have been fully implemented by the Company. Furthermore, in terms of Kumtor’s safety record, the mine recently achieved, one year of operations free of any lost time injuries.