Centerra confirms negotiations with Kyrgyzstan over Kumtor mine

By Sarah Lizee

Olympia, Wash., Jan. 5 – Centerra Gold Inc. confirmed that it is engaged in negotiations with representatives of the Kyrgyz Republic to resolve their disputes related to Centerra’s Kumtor mine and the seizure of control of the mine by the Kyrgyz government in May 2021.

As previously reported, Centerra said it put subsidiary Kumtor Gold Co. CJSC into Chapter 11 in May in order to protect the interests of itself and its stakeholders in response to the seizure of the Kumtor mine by the government of the Kyrgyz Republic.

Centerra said in a Monday press release that it expects that the framework for any resolution would involve the following principal terms:

• Centerra receiving the roughly 26.1% in Centerra common shares held by Kyrgyzaltyn JSC, an instrumentality of the Kyrgyz Republic. Upon receipt, Centerra would cancel the shares surrendered by Kyrgyzaltyn;

• The Kyrgyz Republic receiving, and assuming all responsibility for, the company’s two Kyrgyz subsidiaries and the Kumtor mine;

• Payment by Centerra of a cash amount equal to the net amount of the three dividends paid by Centerra in 2021 that Kyrgyzaltyn did not receive as a result of the seizure of the mine and certain other financial consideration associated with the settlement of inter-company balances between Centerra and its two Kyrgyz subsidiaries;

• The resignation from Centerra’s board of directors of Kyrgyzaltyn’s two nominees; and

• Full and final releases of all claims of the parties and termination of all legal proceedings involving the parties in all jurisdictions with no admissions of liability.

Centerra said negotiations with representatives of the Kyrgyz Republic are ongoing and a resolution isn’t guaranteed.

Toronto-based Centerra Gold is a mining and exploration company. The Chapter 11 case number of Bishkek, Kyrgyzstan-based subsidiary Kumtor Gold is 21-11051. It filed bankruptcy on May 31, 2021.

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