Kyrgyzstan and Centerra Gold confirmed the recent negotiations to resolve the disputes on Kumtor Gold Mine.
Kyrgyzstan President Sadyr Japarov visited Kumtor Gold Mine to learn about activities of the mine. While his visit, he was briefed on the current operations of the company and visited the workshop of heavy-duty mining equipment, Petrov Lake and the tailings dump. During the visit, noting that good progress has been made in the negotiation process with the Canadian company Centerra Gold, Japarov shared these information: “Currently, the parties are finalizing the discussion on settlement agreement, which includes a condition for the full transfer of Kumtor Gold Mine to Kyrgyz Republic among other things.”
Expressing his hope on resolving the long-lasting disputes between the parties, Japarov stated that “Kumtor will become a new page in the history of the country and will be an example of development for the young generation. The past year has shown that our own professionals are able to effectively manage such a large and sophisticated enterprise and achieve high production indicators.”
Centerra Gold also shared an update and confirmed that it is engaged in negotiations with representatives of the Kyrgyz Republic to resolve their disputes related to Centerra’s Kumtor Mine and the seizure of control of the mine by the Kyrgyz government in May 2021.
Further to statements in the Kyrgyz media regarding the potential negotiated transfer of the Kumtor Mine to the Kyrgyz Republic, Centerra noted that they expects that the framework for any resolution would involve the series of principal terms.
The company listed the following terms;
Centerra receiving the approximately 26.1% in Centerra common shares held by Kyrgyzaltyn JSC (an instrumentality of the Kyrgyz Republic). Upon receipt, Centerra would cancel the shares surrendered by Kyrgyzaltyn JSC.
The Kyrgyz Republic receiving, and assuming all responsibility for, the Company’s two Kyrgyz subsidiaries and the Kumtor Mine.
Payment by Centerra of a cash amount equal to the net amount of the three dividends paid by Centerra in 2021 that Kyrgyzaltyn JSC did not receive as a result of the seizure of the mine and certain other financial consideration associated with the settlement of inter-company balances between Centerra and its two Kyrgyz subsidiaries.
The resignation from Centerra’s Board of Directors of Kyrgyzaltyn JSC’s two nominees.
Full and final releases of all claims of the parties and termination of all legal proceedings involving the parties in all jurisdictions with no admissions of liability.
The company also commented on negotiations between the sides: “Negotiations with representatives of the Kyrgyz Republic are ongoing, and there can be no assurance that any proposed resolution will be consummated or as to the final economic and other terms and conditions of any such resolution, if agreed. Any such resolution would need to be formalized in a definitive agreement and would be subject to compliance with all applicable legal and regulatory requirements and approvals, including any applicable independent valuation or shareholder or government approval requirements.”
