Which US presidential candidate does gold prefer?
Gold loves chaos and should be hitting new highs, especially with inflation coming down and with it, two rate cuts likely before year’s end.
The long-dragged negotiations between Canadian miner Centerra Gold (TSX:CG) and Kyrgyz authorities about the future of the company’s flagship Kumtor mine, may finally be headed for the home stretch, as the parties reached Monday a memorandum of understanding.
In the non-binding pact, the Toronto-based firm agrees to review a proposal that would give the Central Asian country a 50% stake in Centerra’s gold mine, tucked high in the Tien Shan mountains.
The agreement would allow the state-controlled Kyrgyzaltyn JSC to exchange its 33% stake in Centerra for a 50% interest in a joint venture that would own Kumtor. The Canadian miner would remain the operator and manager of the mine, and would also receive $100 million, the firm said in a press release.
The gold company has been under pressure to rework a 2009 contract to operate the Kumtor for over a year, during which has faced massive protests from locals demanding the mine’s nationalization and more social benefits.
The Canadian miner is a significant employer and taxpayer in the country and a key contributor to the Kyrgyz economy. In fact, the Kumtor open pit gold mine accounts for 60% of the nation’s industrial output and, according to the company, it is the largest gold mine operated in Central Asia by a Western-based company.
The Kumtor mine output is expected to almost double this year to as much as 600,000 ounces, according to Centerra.
Image from Wikimedia Commons
