Kumtor Gold Mines project in shamble as Kyrgyz PM said joint venture not in the interest of his country
Bishkek, Kyrgyzstan: Kyrgyz authorities have rejected any joint venture in Kumtor gold mines project and the Prime minister of Kyrgyzstan Djoomart Otorbaev has said that joint venture of Kumtor gold mines are not in the interest of his country.
Addressing a press conference here on Thursday, Otorbaev indicated the change in entire management of Kumtor gold mine project and said that God saved Kyrgyzstan from signing the contract last year on unfavorable conditions because there were tricks involved in the project by the administration of the project.
“We expected to get 2 billion 245 million dollars and it turns out to 742 million dollars less. Now I do not believe that the creation of a joint venture” Kumtor “would meet the interests of the country,” said Prime Minister Otorbaev.
“Yes, a year ago I was a supporter of the joint venture, but now I do not believe that it is in the interests of Kyrgyzstan. We change our opinion, based on the actual situation. And that is why now I do not agree on a joint venture, “said the Prime Minister.
( Click here to read Financial statement issued by Canadian based company Centerra on March 20, 2015 that resulted shaking trust on the compnay by the Kyrgyzstan government. Document is 273 pages).
Canadian based company Centerra owns 100% of the Kumtor gold mine through its wholly owned subsidiary Kumtor Gold Company. Kumtor is located in the Kyrgyz Republic, about 350 kilometres southeast of the capital Bishkek and about 60 kilometres north of the border with the Peoples Republic of China. It is the largest gold mine operated in Central Asia by a Western-based company, having produced more than 9.9 million ounces of gold between 1997 and the end of 2014.
Centerra Gold Inc. has been under criticism since last year for not sharing information with partners including loans it was taking for its projects and kept changing data and figures it was providing to Kyrgyz government. Kyrgyz authorities claim that Centerra Gold presented a different mine plan on March 30, 2015 than it discussed with government earlier.
Centerra is a young company came out on the surface in year 2014 when it was publicly-listed company on the Toronto Stock Exchange in June 2004 following the transfer to Centerra of certain gold assets, including the Kumtor Mine, previously held by Kyrgyzaltyn OSJC (Kyrgyzaltyn), a state owned entity of the Government of the Kyrgyz Republic (the Government) and Cameco Gold Inc. (Cameco Gold), a wholly-owned subsidiary of Cameco.
During his press conference, Prime Minister indicated that he had instructed the State Agency on Geology and Mineral Resources of the Kyrgyz Republic to check the plan thoroughly and carry out the audit the data presented by Centerra Gold.
He said that the agreement especially in view of mining operations is not in the interests of the Kyrgyz Republic, therefore options as a joint venture, and nationalization are rejected, and decided to change of management through a change of members of the Board of Directors.
“The company has lost 70% of market capitalization. Also, about $ 500 million invested in projects outside of Kyrgyzstan. This is money that came from Kumtor, we cannot let it go out, we need to change the management of the company to serve the shareholders, ” said the Prime Minister.
The Kumtor gold deposit is located in the southern Tien Shan Metallogenic Belt, a major suture that traverses Central Asia, from Uzbekistan in the west through Tajikistan and the Kyrgyz Republic into northwestern China, a distance of more than 1,500 kilometres. A number of important meso-thermal-type gold deposits occur along this belt including Muruntau, Zarmitan, Jilau and Kumtor.
It may be mentioned that Centerra is operating in the region at Kyrgyzstan (Kumtor mine) as well as in Mongolia (Boroo/Gatsuurt operation) and Bankwatch and Kyrgyz groups have asked Centerra to share details of loans taking from EBRD but EBRD did not share details and “commercial confidentiality” was the excuse for not even disclosing the usual Project Summary Document.