Currently viewing Global edition

Centerra seeks US$1M per day for Kumtor seizure

Centerra Gold subsidiaries are seeking penalties of US$1 million a day against the Kyrgyz government related to its “illegal seizure” of the circa 500,000 ounce per annum Kumtor gold mine.
Centerra seeks US$1M per day for Kumtor seizure Centerra seeks US$1M per day for Kumtor seizure Centerra seeks US$1M per day for Kumtor seizure Centerra seeks US$1M per day for Kumtor seizure Centerra seeks US$1M per day for Kumtor seizure

Kyrgyz plans to reuse Kumtor pit water in the mill and take the gold mine underground

Ngaire McDiarmid


Centerra's Kumtor Gold Company (KGC) and Kumtor Operating Company filed a motion in the US Bankruptcy Court on August 25, also seeking an order staying Kyrgyz's efforts to dismiss the case.

The same day, the KGC website reiterated its activities were "exclusively subject to and governed by the laws of the Kyrgyz Republic" and outlined developments including plans to take the openpit mine underground.

KGC said the company was implementing a set of environmental protection measures - including a shift to underground and reusing pit water in the mill - at the initiative of temporary external manager Tengiz Bolturuk.

"In order to fix what has been destroyed for decades, three months is not enough, however, what has already been done by the team of the external manager is impressive," KGC said.

It planned to cover 90% of the mill's water needs with pit water that needed to be constantly pumped out, calling Centerra's practice of pumping water for the mill from the high-altitude Petrov Lake as "another disastrous decision for the environment".

It also said it had worked to improve the efficiency of the effluent treatment plant, which was among the concerns raised by a State Commission formed in February to review Kumtor

More than three months have passed since Kyrgyz took what it said would be temporary control of Canada-based Centerra's flagship asset, citing environmental and health concerns and accusing Centerra of abdicating its fundamental duties of care.

Centerra has sought international arbitration, bankruptcy proceedings in the US and taken legal action in Canada against Bolturuk, who had been appointed director by 26% shareholder, state-owned Kyrgyzaltyn JSC, and has since become Kumtor's general manager.

Centerra said its latest motion would be heard in the US Bankruptcy Court for the Southern District of New York on September 15.

It claims the Kyrgyz government has "blatantly and continuously" violated the court's orders and had "continued and intensified" its efforts to deprive KGC and KOC of the protections afforded to them under Chapter 11 of the US Bankruptcy Code

The company also has the Mount Milligan mine in British Columbia and Oksut in Turkey.

Despite slashing guidance and recording a near-$1 billion non-cash loss on Kumtor earlier this month, president and CEO Scott Perry said Centerra continued to be "financially and operationally strong".

Centerra shares are trading towards near the bottom of a one-year range, closing on Friday at C$9.84 to value it at $2.9 billion (US$2.3 billion).