Centerra Gold Inc.
In a release Friday, Centerra said it had become aware of a law passed by the Central Asian nation’s parliament that could allow the country to install “external management” on companies operating in the Kyrgyz Republic under concession agreements, if the state deems the project could pose an immediate threat to human health or life.
Centerra’s local subsidiary, Kumtor Gold Company is the only operation in the country that would fall under the criteria outlined by the new law.
President Sadyr Japarov, who came to power in the wake of violent unrest last October, campaigned on a plan to nationalize the mine.
Centerra said its environmental practices have been audited by AMEC Foster Wheeler, a British-based engineering consultancy, and deemed to meet international best practices.
An additional US$170 million worth of tax claims have also been put forward by the government.
While Centerra has navigated political turmoil in the central Asian nation in the past, Scotiabank Analyst Trevor Turnbull cautioned investors that a quick resolution of the latest dispute appears unlikely.
“We note that previous political crises have been resolved with Centerra able to continue operating Kumtor profitably.
The Kumtor Mine is the largest of Centerra’s three operating sites, producing 556,000 ounces of gold in 2020.