29 Jul 2022 15:40

Transfer of Kumtor gold mine to Kyrgyzstan's ownership completed

BISHKEK. July 29 (Interfax) - The Kumtor gold mine has been transferred to Kyrgyzstan's ownership, the presidential press service reported on Friday.

"A procedure to exchange documents confirming the process of transfer of the Kumtor gold mine to the republic's ownership took place in the Kyrgyz embassy in the United Kingdom today, on July 29," the report said.

A complete package of legal documents, including all necessary transfer documents, proxies and certificates for registration of full transfer of property rights to 100% of the shares in Kumtor Gold Company and Kumtor Operating Company to JSC Kyrgyzaltyn was transferred on the territory of the Kyrgyz embassy to Kyrgyz Ambassador to the UK Ulan Djusupov in the presence of the parties' international legal representatives and an escrow agent, the press service said.

"All financial payments envisaged by the agreement were also made to Kyrgyzstan," the press service said.

Under the agreement, the Kumtor mine is becoming the full property of the country. Kyrgyzstan received the right of ownership over gold extracted in the mine since May 15, 2021.

Besides, Centerra Gold Inc. pays some $11 million in dividends. A one-time payment by the Canadian company to the Kyrgyzstan side in an amount of $50 million was also approved. The reclamation fund for the Kumtor mine, amounting to some $53 million, which will be transferred to a special account in a Kyrgyz bank, has also been transferred to Kyrgyzstan's management.

Centerra Gold Inc. is also dropping all lawsuits initiated against the Kyrgyz side in the United States (terminated on July 27), Sweden and Canada (letters to withdraw claims were sent on July 28).

Kyrgyz President Sadyr Japarov said on April 4 Centerra Gold Inc. had signed an agreement with Kyrgyzaltyn and the government.

Kumtor, one of the largest foreign investment projects in Kyrgyzstan, accounted for almost 60% of Centerra Gold Inc.'s revenue in 2020. The company owned the mine and managed it through subsidiary Kumtor Gold Company in line with a 2009 agreement with the government.

The Kyrgyz authorities hit Kumtor Gold Company, the developer of the mine, which is one of the largest in Central Asia, with more than $3 billion in financial claims for violating environmental and tax laws in May 2021. External management was later installed at the mine.

Centerra Gold Inc. initiated international arbitration to challenge the actions of the Kyrgyz government, and KGC filed for bankruptcy on May 31. It said the losses from the loss of control over Kumtor were estimated at $926.4 million.