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Kumtor Gold announces 2021 financial results

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Global Mining Review,

Kumtor Gold Company (KGC) has announced its financial results for the fiscal year ending December 2021, with US$856 million in revenue and having met all its extraction, efficiency, and income targets for the year.

Of this, US$621 million was generated following the installation of interim management by the government of Kyrgyzstan in May. This move was in response to longstanding concerns about environmental damage, labour law violations, corruption, and other operational issues around the mine during its management by Centerra Gold Inc. of Canada.

Under the interim management, the mine also successfully reduced overall gold production costs by US$220/oz for the 14 561 kg extracted in 2021 in total. By improving efficiency and cutting costs, the mine’s interim management were able to effectively ensure profitability despite the anticipated for reduction in the overall volume of gold extracted due to the lower concentration of gold in the ore extracted.

2021 also saw the mine achieve full compliance with the Kyrgyzstan tax regime for the first time since its inception. In total, US$160 400 000 was paid by Kumtor Gold Mine Company in taxes, 150% more than in previous years. This included a payment of 4% of its revenue to support further mineral resource exploration and management in the country, a legal requirement for all companies working with natural resources in the country since 1993 but a payment never previously made by the mine.

The mine is now set to implement its development plans for 2022. These include increasing its annual gold production to 17 t by implementing sustainable development projects that will improve mineral processing technology, increase gold recovery, and reduce mine tailings. Key to this will be commencing underground mining operations, moving the mine away from its current open-cast setup.

Tengiz Bolturuk, Interim External Manager of KGC, added: “Despite certain difficulties that arose during the transition to external management, and the obstacles placed before us by Centerra, the KGC team achieved robust results. Operations remain uninterrupted and production is stable. All taxes and mandatory contributions have been paid on time and in full.”

Bolturuk presented the financial report during the first Cabinet meeting of the Kyrgyz Republic in January 2022. Bolturuk’s report came amid negotiations by the government of Kyrgyzstan and Centerra to reach an amicable settlement to the dispute over the ownership of the Kumtor mine.

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