Canada's Centerra pursuing 'all measures' after Kyrgyzstan gold mine seizure, CEO says

·2-min read
FILE PHOTO: A general view of the Kumtor mine in Kyrgyzstan

By Jeff Lewis

TORONTO (Reuters) -Canada's Centerra Gold is taking all measures possible to protect shareholder rights and is seeing good support from the Canadian and UK governments, Chief Executive Scott Perry said on Tuesday, a day after Kyrgyzstan seized control of the company's Kumtor gold mine.

Kyrgyzstan's parliament voted Monday to seize control of the gold mine, the country's largest, after Centerra said it would take the government to an international court.

"Rest assured that we're taking all measures possible to ensure that we're protecting the rights of the organization and the rights of our shareholders," Perry said on a conference call with analysts.

A Kyrgyzstan court this month imposed a $3.1 billion fine on Centerra's Kumtor Gold Company after ruling that it had breached environmental laws by placing waste rock on glaciers. Centerra disputes the charges.

Canada expressed disappointment after Monday's vote and said the move could jeopardize foreign investment in the Central Asian country.

Late on Monday, Centerra also placed restrictions on the sale of shares held by state-owned Kyrgyzaltyn JSC, which owns a roughly 26% stake in Centerra. The Canadian mining company said it accepted the resignation of Kyrgyzaltyn nominee Tengiz Bolturuk from the board with immediate effect.

The company finished the latest quarter with $823 million in cash with as much as 99% held outside of Kyrgyzstan, Perry said, adding that Centerra is "no longer in control" of Kumtor.

Kyrgyzstan has a long history of disputes with Centerra Gold over how to share profits from the former Soviet republic's biggest industrial enterprise.

The latest stand-off began shortly after Sadyr Japarov came to power in Bishkek following violent riots last October.

Last year, the mine produced more than 556,000 ounces of gold.

(Reporting by Jeff LewisEditing by Chizu Nomiyama and Will Dunham)

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