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  • Centerra Gold (CG) has commented on recent developments in the Kyrgyz Republic that may affect the company’s ownership of the Kumtor Mine
  • A law has been passed that allows the government to impose an external manager on companies operating under concession agreements
  • Centerra’s Kumtor Mine is the only project operating under such an agreement
  • Four Kyrgyz Republic private citizens are seeking US$3 billion in environmental damages for the company placing waste rock on glaciers
  • The Kyrgyz Republic State Tax Service is also asserting that the company owes back taxes in excess of US$170 million
  • The company strongly believes that the claims are entirely meritless
  • Centerra Gold operates gold mines in the Kyrgyz Republic, Turkey and Canada
  • Centerra Gold (CG) is down by 30.88 per cent and is currently trading at $8.28 per share

Centerra Gold (CG) has commented on developments in the Kyrgyz Republic that may affect the company’s ownership of the Kumtor Mine.

A law has been passed that would enable the Kyrgyz Government to impose external management on companies operating under concession agreements. 

The Kumtor Mine is the only project operating under a concession agreement in the Kyrgyz Republic.

The new law would apply in circumstances where Kumtor Gold Company violates certain Kyrgyz laws and creates an immediate threat to people’s lives.

In such cases, the law would prohibit KGC’s managers from managing the mine and enable the Prime Minister to appoint an external manager to take control of all KGC management activities including its bank accounts.

Additional drafts of laws and decrees seek to undermine the 2009 restated Kumtor Project agreements and the tax and fiscal regime under which the Kumtor Mine has operated since 2009. 

Furthermore, four Kyrgyz Republic private citizens are seeking US$3 billion in environmental damages for the company placing waste rock on glaciers.

The company has also received tax audits and re-audits conducted by the Kyrgyz Republic State Tax Service for 2015 through 2020. They assert that KGC owes taxes in excess of US$170 million.

Centerra notes that the 2009 restated Kumtor Project agreements were approved by the Kyrgyz Republic Parliament and Constitutional Court in 2009.

Those agreements were re-affirmed in 2017 when the government entered into the Strategic Agreement on Environmental Protection and Investment Promotion.

The Strategic Agreement included a release of Centerra and KGC of all outstanding claims, including damages for harm allegedly caused to the environment from storing production tails on glaciers.

The Kumtor Mine’s environmental performance adheres to international standards according to multiple audits by the Kyrgyz Government’s own environmental consultant, AMEC Foster Wheeler. 

The company strongly believes that the claims advanced by the State Tax Service and individual claimants are entirely meritless.

Centerra Gold operates gold mines in the Kyrgyz Republic, Turkey and Canada.

Centerra Gold (CG) is down by 30.88 per cent and is currently trading at $8.28 per share as of 11:27 am ET.

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