Centerra Gold won’t shut down Kumtor mine, plan approved
Canada's Centerra Gold (TSX:CG) confirmed Friday it has received all the necessary permits from the government of Kyrgyzstan to continue operating its massive Kumtor mine.
The Toronto-based company had set today as the deadline for Kyrgyz authorities to make up their mind on the Kumtor mine plan for 2014. If Centerra hadn’t heard from them by now, the company had said it would have likely shut down operations
Centerra has been negotiating for months the possibility to swap the government’s stake in the company for a direct interest. A non-binding pact last year was rejected by the Kyrgyz parliament following public opposition. A new agreement was signed in December and approved last February by parliament, creating a joint venture that evenly splits control of the Kumtor gold mine.
Despite apparently having made peace, the company and authorities continued talks until now trying to agree on the future of Kumtor mine. The operation, which lies near the Chinese border at an altitude of 4,000 metres, has been a source of political tension in the impoverished Central Asian country.
A shutdown would further aggravate the bitter dispute between Centerra and the government, which has been trying to increase revenues from the project.
The vast open pit gold mine accounts for 60% of the nation's industrial output and, according to the Centerra, it is the largest gold mine operated in Central Asia by a Western-based company.
Shares in the gold miner were up this morning. They were trading at Cdn$4.81 —a 5.25% jump— at 9:35 am ET.