Kyrgyz prime minister says 50/50 joint venture with Centerra Gold may not be in country’s interests

During an interview, the prime minister of the Kyrgyz Republic suggested that the restructuring of the Kumtor Project as a 50/50 joint venture between Centerra Gold (TSX:CG) and his country might not be in the interests of his country.

According to Centerra Gold, the prime minister also said that nationalization of the Kumtor mine is not a viable alternative and there should be changes to the composition of Centerra’s Board of Directors.

In a news release Centerra Gold said it “. . . will continue to engage constructively and in good faith with the Government of the Kyrgyz Republic to resolve all outstanding matters affecting the Kumtor Project.”

But the company warned that reaching a mutually acceptable solution between the two parties is not guaranteed.

In December 2013 Centerra Gold announced a potential restructuring transaction under which Kyrgyzaltyn would exchange its 32.7% equity interest in Centerra for a 50% interest in a joint venture company that would own the Kumtor Project.

Centerra Gold was down 2.90% to $6.37 a share. The 52 week range is $3.16 to $7.83.

Kumtor Mine is one of the largest gold mines in Central Asia. Expected gold production in 2015 is 470,000-520,000 oz at a all-in sustaining cost between $819-$908/oz.