Centerra dispute with Kyrgyz flares up as takeover campaign simmers – by Gabriel Freidman (Financial Post – June 14, 2018)

http://business.financialpost.com/

Centerra Gold Inc.’s conflicts with political leaders in the Kyrgyz Republic continue to rear their head

Centerra Gold Inc.’s conflicts with political leaders in the Kyrgyz Republic, a mountainous former Soviet state where its flagship goldmine is located, continue to rear their head.

Last September, the Toronto-based gold company said it had reached a settlement to resolve environmental, legal and other disputes with Kyrgyz authorities, but it has twice extended its deadline to finalize the deal, with a target date now set for June 22.

On Tuesday, a Kyrgyz news station reported that the country’s prime minister, who took over in April, is studying the settlement anew and also wants a parliamentary review.

The predicament comes at a time when Centerra is battling a U.K.-listed exploration company’s efforts to purchase the flagship mine, known as Kumtor, through a campaign that plays to populist sentiment by promising to re-invest cash from the mine back into the Kyrgyz Republic.

By contrast, Centerra chief executive Scott Perry has stressed that his company is using its cash flows — Kumtor produced 563,000 ounces of gold in 2017, about 70 per cent of the company’s total — to build mines outside of the Kyrgyz Republic in British Columbia and Turkey.

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