Kyrgyzstan: Centerra calls proposal to sell Kumtor mine ‘market speculation’


BISHKEK (TCA) — Centerra Gold Inc., the Canadian-based gold mining company which operates the Kumtor gold mine in Kyrgyzstan, has commented on a news release issued on April 24 by Chaarat Gold Holdings Limited and called it “market speculation”.

Chaarat, the AIM quoted exploration and development company with assets in the Kyrgyz Republic, has made a proposal in relation to the potential acquisition of the Kumtor mine from Centerra.

Chaarat said the potential acquisition would form part of a proposed three-way transaction between Chaarat, Centerra and the Kyrgyz state consortium, Kyrgyzaltyn OJSC. Chaarat has proposed that Chaarat and Kyrgyzaltyn will acquire Kumtor from Centerra, in an arrangement that will give Chaarat ownership of Kumtor’s common equity, as well as management and operation of the mine; while Kyrgyzaltyn will own Kumtor’s preferred equity and be entitled to 50% of the economic benefits of Kumtor.

Chaarat also said it intends, as part of the proposed deal, to invest up to $600 million into two other projects in the country’s mining sector over the next five to seven years.

Later on April 24, Centerra said that in March 2018, it received an unsolicited, non-binding proposal from Chaarat concerning Centerra’s Kumtor Mine located in the Kyrgyz Republic. Centerra promptly communicated to Chaarat’s advisers that it has no interest in the transaction proposed by Chaarat. In recent meetings with the Kyrgyz Republic Government, senior Kyrgyz Republic officials have confirmed to Centerra that the Government is also not interested in pursuing the transaction proposed by Chaarat.

Centerra notes that the Kumtor Mine is directly held through Centerra’s wholly-owned, direct subsidiary, Kumtor Gold Company CJSC, and the transaction proposed by Chaarat could not occur without the participation of both Centerra and the Kyrgyz Republic Government.

Centerra Gold Inc. is a Canadian-based gold mining company focused on operating, developing, exploring and acquiring gold properties in North America, Asia and other markets worldwide. Centerra operates two flagship assets, the Kumtor Mine in the Kyrgyz Republic and the Mount Milligan Mine in British Columbia, Canada and is the largest Western-based gold producer in Central Asia. Centerra’s shares trade on the Toronto Stock Exchange (TSX) under the symbol CG. The Company is based in Toronto, Ontario, Canada.

Sergey Kwan