Kyrgyzstan to offer Jerooy gold deposit at starting price of $300 mln
BISHKEK. March 4 (Interfax) - The government of Kyrgyzstan will offer the rights to one of the country's largest gold deposits, Jerooy in a tender at a starting price of $300 million.
This decision was made Friday by the interdepartmental commission for holding the tender for the license to develop the Jerooy deposit and explore the Jerooy field, an Interfax correspondent who attended the commission meeting reported. The starting price had earlier been tentatively set at $100 million.
The commission also determined the rules and conditions of the tender, which is to be held in April-May. The winner will have to pay for the license within 30 days.
The director of the country's State Geology and Mineral Resources Agency, Ishimbai Chunuyev told Interfax that the amount of $300 million includes historical exploration costs, as well as expenses on potential legal disputes over Jerooy with the company Jerooyaltyn, whose license to the project was revoked at the end of 2010.
Russia's Polyus Gold , Canada's Centerra Gold Inc and a number of Chinese companies have shown an interest in Jerooy. However, due to disputes over its Kumtor project in Kyrgyzstan, Centerra Gold is showing less interest in Jerooy and will probably not bid in the tender, Chunuyev said.
Following the annulment of its license to Jerooy in 2010, Jerooyaltyn filed two lawsuits - against the government and the Natural Resources Ministry (now the Geology and Mineral Resources Agency) to prohibit any action in regard to the license. The latter lawsuit was won by the agenda, clearing the way for the government to offer the deposit in a tender. In the lawsuit against the government, the Bishkek City Court ruled last fall that the annulment of the license was legal, but Jerooyaltyn has a year to appeal the ruling in the Supreme Court.
The head of natural resources policy at Kyrgyzstan's Economics Ministry, Almaz Alimbekov said in January that the government had resolved the issue with Jerooyaltyn and that this company will not stand in the way of a tender. The company plans to bid in the tender on an equal footing with other bidders.
He said the tender would be held in two stages. In the first round, bidders will have 30 days to submit a minimum package of documents about their company. After a review of all applications, the tender commission will begin the second round, in which the companies will have to provide complete information on their business.
In the second round, bidders will also have 20 days to submit a program for the development and exploration of the deposit, after which the commission will review the documents and decide on the winner with ten days. Alimbekov said the winner would be chosen by a point system.
The Geology and Mineral Resources Agency has said that Jerooy has explored gold reserves of about 100 tonnes. Jerooy is first among the country's hard rock gold deposits in terms of the size of its reserves and readiness for mining due to existing infrastructure.
