Centerra Gold Inc. is trying to stop the Kyrgyzstan government from selling shares in the company, after the former Soviet Republic nationalized a giant mine operated by the Canadian firm.
After close to two decades of turbulence between Kyrgyzstan and Centerra, the landlocked central Asian state seized control of the Kumtor mine on the weekend, citing safety violations by the Toronto-based miner. As the largest of Centerra’s three gold mines, Kumtor accounts for more than half of its output.
Centerra on Sunday launched an arbitration suit against the Kyrgyz Republic, a legal maneuver that could take years to play out. Late Monday, the company took more immediate action, saying any attempt by the Kyrgyz government to sell its shares would violate an earlier investment agreement.
The Kyrgyzstan government is Centerra’s biggest shareholder with a 26-per-cent stake. Last week, it said it was looking to unload 14.8-million of its 77.4-million shares.
In a conference call on Tuesday, Scott Perry, the chief executive officer of Centerra, declined to answer an analyst’s question on how the company could prevent a sell order from Kyrgyzstan from being executed in the aftermarket.