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Centerra Gold takes further action in response to seizure of Kumtor Mine

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Global Mining Review,

Centerra Gold Inc. has announced additional actions to protect its interests and stakeholders in response to the seizure of the Kumtor Mine by the Government of the Kyrgyz Republic.

According to Centerra’s latest company statement:

The actions are designed to preserve the value of Centerra’s wholly owned subsidiaries that own and operate the Kumtor Mine, Kumtor Gold Company (KGC) and Kumtor Operating Company (KOC), and prevent any further efforts by the Kyrgyz Government to strip KGC of its assets or otherwise improperly dispose of the Kumtor Mine in violation of its investment agreements with the company.

Consistent with these objectives, KGC and KOC have commenced a filing in the Southern District of New York under Chapter 11 of the federal US Bankruptcy Code. The court-supervised process provides, among other things, for a worldwide automatic stay of all claims against KGC and KOC. Centerra hopes that this internationally recognised, orderly restructuring process will facilitate potential negotiations with the Kyrgyz Government. The Chapter 11 proceeding will not impact any other areas of the company’s business, including the Mount Milligan Mine in Canada, the Öksüt Mine in Turkey and the molybdenum business in North America.

The company also announced that it is conducting a strategic review related to its ownership of KGC and KOC that will consider alternatives available to enhance value to Centerra’s stakeholders in light of recent events involving the Kumtor Mine.

Scott Perry, President and Chief Executive Officer of Centerra, said: “We have repeatedly asked the Kyrgyz Government to discuss its concerns with us, yet it has refused to engage with us in any way. While we remain willing and available to hold a constructive dialogue with the Kyrgyz authorities, we will continue to use all available legal and financial means to protect the interests of Centerra and its stakeholders from the Government’s concerted and premeditated effort to take control of the Kumtor Mine. In particular, we will continue to pursue arbitration proceedings to enforce the longstanding agreements with the Kyrgyz Republic that give Centerra, KGC and KOC the right to own and operate the Kumtor Mine. Those agreements are governed by New York law, and we expect the US court proceedings will serve to further protect Centerra’s interests under their terms pending a restructuring or other resolution of the dispute.”

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