Kyrgyzstan freezes talks with Centerra Gold over Kumtor
The Kyrgyzstan government halted Tuesday talks with Canadian miner Centerra Gold (TSX:CG) over plans to restructure their joint Kumtor project, saying the current deal "ran counter to the country's national interests," local News Agency 24 reports.
The announcement comes barely five months after the country’s authorities promised to make sure the gold project would move forward while fully protecting the country’s resources, environment and industrial safety standards.
Kumtor, which lies near the Chinese border at an altitude of 4,000 metres, has been a source of political tension in the impoverished country.
For over two years the Central Asian nation and the Toronto-listed miner have been in talks on a deal to swap the government’s 32.7% stake in Centerra for half of a joint venture that would control the Kumtor gold mine.
In April, former prime minister Joomart Otorbayev suggested a 50/50 joint venture with Centerra was not in the country's interests and rumours pointing to an imminent nationalization of the mine, later denied by Kyrgyzstan authorities, spread out.
Otorbayev resigned later that month after failing to clinch the restructuring deal. His successor, Temir Sariyev, said at the time that resolving the issue would be among his priorities.
According to Centerra, the vast open pit Kumtor gold mine is expected to produce 470,000-520,000 ounces at an all-in sustaining cost between $819-$908 per ounce this year.