Kyrgyzstan No Longer Wants Centerra Gold Joint Venture

Reuters reported Thursday that the prime minister of Kyrgyzstan has said that forming a joint venture with Centerra Gold Inc. (TSX:CG) to develop the company’s Kumtor gold mine is no longer in its interests. The statement came after a lowering in the mine’s reserves.

As quoted in the market news:

In February Centerra published its 2014 year-end reserve and resource update, which put Kumtor’s proven and probable reserves at an estimated 6.1 million ounces of contained gold, compared to 8.5 million as of end-2013.

‘I now don’t believe that, given the current mining plan, this proposed joint venture is still in our national interests,’ Prime Minister Joomart Otorbayev told a news conference.

‘If we had stuck to that earlier mining plan which existed before, Kyrgyzstan would have received more than $2 billion,’ Otorbayev said, without specifying the period.

Centerra has since issued a statement on the prime minister’s comments:

Centerra will continue to engage constructively and in good faith with the Government of the Kyrgyz Republic to resolve all outstanding matters affecting the Kumtor Project. There are no assurances that continued discussions between the Kyrgyz Government and Centerra will result in a mutually acceptable solution regarding the Kumtor Project, that any agreed upon proposal for restructuring would receive the necessary legal and regulatory approvals under Kyrgyz law and/or Canadian law and that the Kyrgyz Republic Government and/or Parliament will not take actions that are inconsistent with the Government’s obligations under the Kumtor Project Agreements, including adopting a law ‘denouncing’ or purporting to cancel or invalidate the Kumtor Project Agreements or laws enacted in relation thereto.

Click here to read the full Centerra Gold Inc. (TSX:CG) press release.