First, the Company understands that a law has been passed by the Kyrgyz Republic Parliament which would enable the Kyrgyz Republic Government to impose “external management” on companies in the Kyrgyz Republic operating under concession agreements.
Second, the Company is aware of other draft laws and decrees in the Kyrgyz Republic which seek to undermine the 2009 restated Kumtor project agreements and the tax and fiscal regime under which the Kumtor Mine has operated since 2009.
Third, in March 2021, four Kyrgyz Republic private citizens commenced a civil claim against KGC requesting that KGC’s past practice of placing waste rock on glaciers be determined to be illegal.
Such amounts are allegedly owing on the same grounds as the previous tax claims received by the Company for withholding taxes on dividends, certain payroll deductions and social insurance contributions, though it is unclear whether the amounts noted in the latest audit results overlap the previously claimed amounts.
The Company therefore believes strongly that the claims advanced by the State Tax Service and such individual Kyrgyz Republic claimants are entirely meritless and the new and draft Kyrgyz Republic laws noted above, if implemented, would clearly violate the 2009 restated project agreements and the 2009 Kyrgyz Republic laws which confirmed such agreements.
However, no assurances can be given that any of the current or future legal claims of the State Tax Service or individual claimants, disputes as to the application of current or future Kyrgyz Republic laws relating to the Kumtor Mine, the results of the State Commission review or any other future regulatory, civil or criminal claims impacting KGC or Centerra can be resolved without a material impact on the Company.
is a Canadian-based gold mining company focused on operating, developing, exploring and acquiring gold properties in North America, Asia and other markets worldwide and is one of the largest Western-based gold producers in Central Asia.