BISHKEK (TCA) — Canada-based Centerra Gold Inc., the largest Western-based gold producer in Central Asia which is also developing the Kumtor gold deposit in Kyrgyzstan, on February 4 announced that the Mongolian Parliament had passed a resolution setting the state ownership interest in the Gatsuurt Project at 34% and authorizing the Mongolian government to complete negotiations with Centerra on the terms of such ownership.
In October 2015, Centerra and the Mongolian Government agreed to a 3% special royalty in place of the state 34% ownership interest in the project (such royalty being in addition to the existing Mongolian mineral royalty and tax regime).
“The parliamentary resolution is a very important next step in advancing the Gatsuurt Project,” said Scott Perry, Centerra’s Chief Executive Officer. “The Gatsuurt Project represents an exciting opportunity to use Centerra’s existing Boroo mill and other infrastructure to develop the 1.6 million ounce Gatsuurt deposit with very modest initial capital investment. The Company will now focus on finalizing the investment agreements with the Government of Mongolia. We look forward to developing Gatsuurt so we can continue to operate in Mongolia for many more years to come.”
The Company expects to proceed with negotiating definitive agreements (including a deposit development agreement and an investment agreement) with the Mongolian Government.
Following the successful completion of such agreements, the Company will undertake economic and technical studies to update the existing studies on the project, which were completed and published in May 2006. As part of such work, the Company will undertake a program of exploration drilling, aimed at substantially expanding the Gatsuurt oxide resource, and additional hydrogeological drilling.
The Gatsuurt Project is located approximately 55 kilometres by road from the Company’s Boroo mine. The Gatsuurt Project’s estimated mineral reserves as at December 31, 2014 were 17.1 million tonnes at an average grade of 2.9 grams of gold per tonne containing 1.6 million ounces of gold using a cut-off grade of 1.4 grams per tonne, Centerra said.
The company said it plans to mine the ore at Gatsuurt and truck it approximately 55 kilometres to the existing Boroo mill to be processed.
Centerra is advancing its projects in Mongolia as the company has been in talks with the Kyrgyz government for almost two years on a deal that would swap Kyrgyzstan’s 32.7 percent stake in Centerra for half of a joint venture that would control the Kumtor gold deposit in Kyrgyzstan.
Late in December, Kyrgyzstan’s Prime Minister Temir Sariyev said that the Government of Kyrgyzstan will prepare new proposals on the restructuring of the Kumtor gold mining project with the focus on protection of the country’s economic and ecological interests.