Meanwhile Kyrgyz, which seized temporary control of the significant gold mine last week citing Centerra's abdication of its fundamental duties of care, has reportedly said it would demand 51% of Centerra.
Tengiz Bolturuk, who was on Centerra's board as the nominee of 26% shareholder state-owned Kyrgyzaltyn JSC, had resigned on May 17 then was appointed to the GM job two days later.
Centerra has initiated proceedings in the Ontario Superior Court of Justice seeking to prevent Bolturuk "from direct or indirect involvement in the management of the Kumtor mine as well as engaging in further breaches of fiduciary and confidentiality duties owed to the company".
Centerra also said it had learned Kyrgyzaltyn, prior to the seizure, had attempted to divert about US$29 million to an unauthorised bank account using a forged payment instruction sent to a third party.
President and CEO Scott Perry said last week the company was "pursuing all avenues" and said claims regarding environmental and safety conditions at Kumtor were "entirely meritless" and had no justification under longstanding investment agreements or applicable law.
Canaccord Genuity analysts said earlier this month they had anticipated developments since Sadyr Japarov, who was renowned for his earlier fight to nationalise Kumtor, became president in January.
"We believe this opens the door to what is likely going to be a multi-year degradation of the relationship with the Kyrgyz state, and while CG will leverage all available avenues of international trade disputes, we believe these are unlikely to be effective in the long term," they said.
Kumtor has what's been described as a putrid legacy in Kyrgyz.
Akylbek Japarov, who chaired a state commission set up to look into Kumtor, said the government had been forced to act when Centerra declined to respond to a request to return the mine to normal and safe operations.
He told local media the government would demand an increase in its stake to 51% of Centerra.
"[Some] 54% of the company's gold comes from Kumtor, so we will demand 51% of the shares in Centerra, and Kumtor - in full," he said in the translated report.
The mine was expected to produce about 500,000 ounces of gold this year and is of strategic importance to Kyrgyz, representing about 10% of GDP in 2019.
Centerra shares (TSX: CG) shares plunged to a one-year low of C$8.21 earlier this month as Kumtor's nationalisation was foreshadowed, less than half the value of an August peak of $19.59.
They rose 4.7% on Friday to close at $9.84, valuing it at $2.9 billion (US$2.4 billion).
