Centerra down 5% on Kumtor environmental delays

Kumtor mine (Courtesy of Centerra Gold)

Kyrgyzstan’s state environment protection agency (SAEPF) on Wednesday extended for one month emissions permits for the country’s largest gold mine, Kumtor, owned by Centerra Gold (TSX:CG).

Centerra announced that the SAEPF continues to review Kumtor’s annual mine plan and has a further period of three months to complete its review. The agency has raised concerns about application of the Central Asian country’s Water Code at Kumtor.

Centerra said the Kyrgyz parliament may vote on amendments to the code this month to “alleviate concerns” and speed things up.

Centerra said it expects to continue discussions with SAEPF to obtain the approval of the annual mine plan and further extensions of the relevant permits:

“However, there can be no assurances that such approvals and extensions will be received within the required time frame or that a suspension of operations will not be required if they are not forthcoming.”

Centerra stock declined nearly 5% on the news and amid a weak gold price, marking the Toronto-based company’s market value down to C$1.8 billion on the Toronto big board.

Kumtor, which lies near the Chinese border at an altitude of 4,000 metres, accounts for 60% of the nation’s industrial output.

According to Centerra, it is expected to produce 470,000-520,000 ounces at a all-in sustaining cost between $819-$908 per ounce this year.