Centerra Gold in the home stretch of negotiations with Kyrgyzstan over Kumtor
Canadian miner Centerra Gold (TSX:CG) said Friday it is continuing negotiations with Kyrgyz authorities about a possible restructuring to resolve all outstanding concerns related to its flagship Kumtor mine.
According to local news agency 24.kg, the Toronto-based firm and the government of Kyrgyzstan are in the home stretch of negotiations that could see the formation of a joint venture company, which will own the debated mine.
It also says the government initially insisted on a 67% stake in Kumtor, which it dropped later to 52%. However, Centerra said in its statement that since no final deal has been reached, investors should be cautious about speculations over the terms of any eventual agreement.
Centerra and the Kyrgyzstan government have been in talks since last year, when they said they wanted to renegotiate the Kumtor contract with the gold miner, as the licence was granted under Kyrgyzstan deposed leader, Kurmanbek Bakiyev, who was accused of corruption.
Initially due in June, the result of the ongoing talks must be presented before the country's parliament by the new Sept. 10 deadline. Then, it will finally be known whether Kyrgyzstan has agreed to an improved deal with Centerra or decided to revoke its license altogether.
The Canadian miner is a significant employer and taxpayer in the country and a key contributor to the Kyrgyz economy. In fact, the Kumtor open pit gold mine accounts for 60% of the nation's industrial output and, according to the company, it is the largest gold mine operated in Central Asia by a Western-based company.
Image courtesy of Kumtor Mine