Kyrgyz state-owned gold miner Kyrgyzaltyn said Wednesday it has yet to see an offer by Chaarat Gold Holdings to acquire Centerra Gold’s Kumtor mine, which is the Central Asian nation’s largest gold operation.
Speaking to Reuters, Kyrgyzaltyn chief executive Bektur Sagynov said the company would have to study Chaarat offer, which would make the London-listed miner Kumtor’s operator, while Kyrgyzaltyn would own the mine’s preferred equity and be entitled to 50% of the operation’s economic benefits.
The Canadian miner said Tuesday it had already informed Chaarat that it was not interested in its unsolicited bid for Kumtor, adding that senior Kyrgyz officials have confirmed to the company in recent meeting that the country’s government also wasn’t interested in pursuing the proposed deal.
Kumtor mine, 100% owned by Centerra through its subsidiary Kumtor Gold, is located in the southern Tien Shan Metallogenic belt, in which Charaat owns a namesake project.
Centerra says senior officials have confirmed Kyrgyzstan was not interested in pursuing the transaction proposed by Chaarat.
Under its current arrangement with the Toronto-based miner, Kyrgyzstan has a 26.6% interest in the company, which is the main foreign investor and taxpayer in the landlocked country, a former Soviet republic.
In the past two years, Centerra faced several disagreements with the Kyrgyz government and miner Kyrgyzaltyn over sharing profits from Kumtor. The long-dragged disputed ended in September, through a $60 million-settlement agreement to be fulfilled by the end of May, which ends mutual lawsuits, cancels environmental claims, halts court proceedings and allows the miner to transfer frozen funds from that country.
“While the agreement provides a pathway for the resolution of all outstanding matters affecting the Kumtor Project, there are no assurances that all of the conditions precedent to the completion of the settlement will be satisfied,” Centerra warned last week.
“The inability to successfully resolve all such matters, whether through the Strategic Agreement or otherwise could have a material adverse impact on the company’s future cash flows, earnings, results of operations and financial condition,” it said in the statement.
Centerra has been shopping for assets in safer jurisdictions as of late. In 2016, it bought out US-based Thompson Creek Metals (TSX:TCM) including the Mount Milligan copper-gold mine in British Columbia, Canada.
Comments
Andrew W.
Can you proofread your articles before posting….looks pretty unprofessional!