Centerra Gold Looks To Settle Kumtor Mine Seizure Dispute

Centerra Gold’s (TSX: CG) saga with its Kumtor Mine, located in the Kyrgyz Republic, appears to still not be over. The firm this morning indicated it is working with the republic to achieve a final settlement on the matter.

However, the results don’t appear to be going in Centerra’s favor. The mining firm appears to be on the short end of the stick in terms of compensation for settlement, with the company outlining a number of items that are to be included in a settlement framework.

The settlement is expected to see the firm lose its Kumtor mine, and the two related Kyrgyz operating subsidiaries it currently owns. The firm is also expected to have to provide cash in the settlement, related to three dividend payments issued last year to shareholders that it did not provide to Kyrgyzaltyn JSC, an instrument of the republic that owns 26.1% of Centerra.

On the positive side, the firm is expected to receive the 26.1% stake of the company owned by the Republic, the shares of which are to be cancelled upon receipt. Two directors appointed by Kyrgyzaltyn JSC would also resign from the board, while a full and final release of all claims for both parties would also be entered into.

Discussions are said to still be ongoing, with no resolution guaranteed at this time. Financially, the firm has already recorded a US$926.4 million loss on the asset.

Centerra Gold last traded at $9.75 on the TSX.

Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply