Centerra gets some breathing room in dispute with Kyrgyz Republic
Canada's Centerra Gold (TSX:CG) has been granted some provisional relief in its ongoing arbitration against the Kyrgyz Republic and state-owned miner Kyrgyzaltyn, related to the firm’s vast Kumtor gold mine.
The miner sought international arbitration in May last year, following the country’s string of penalties, fees and accusations of damaging the environment and violating business deal, all of which the firm considers to be without merit.
Arbitrator sided with the company,saying Centerra had both made out a case for the arbitrator to take jurisdiction over the arbitration proceeding and been convincing regarding the merits of the case.
The Toronto-based company, the largest Western-based gold producer in Central Asia, said late Wednesday the arbitrator sided with the company, finding evidence that Centerra had both made out a case for the arbitrator to take jurisdiction over the arbitration proceeding and been convincing regarding the merits of the case, unless proved otherwise.
Centerra, which in January filed a request for a partial award or interim measures against the Kyrgyz Republic, is seeking an award ordering the Kyrgyz Republic withdraw or suspend its several claims and related decisions and court orders.
Such decision came on the heels of a court order forcing Centerra's local subsidiary, Kumtor Gold Company (KGC), to pay about $98 million in fees related to their mine waste. That was on top of an earlier court decision ordering Kumtor, the country's biggest gold mine, to pay a $10,000 fine.
The operation has been the focus of a number of disputes between the company and the Kyrgyz government.
Last year, Kyrgyz prosecutors went as far as to raid the company's offices to collect documents related to a suit alleging financial violations by Centerra.
Kumtor, which lies near the Chinese border at an altitude of 4,000 metres, has produced around 10 million ounces since inception and remaining reserves are 5.6 million ounces. In November Centerra said it was increasing its gold output guidance for the mine to 520,000 to 560,000 ounces and lowering all-in sustaining cost forecast to $666 – $718 per ounce.
Centerra has been shopping for assets in safer jurisdictions as of late. Last year, it bought out US-based Thompson Creek Metals (TSX:TCM) including the Mount Milligan copper-gold mine in British Columbia, Canada.