A meeting is planned for June 27 to discuss the license to mine a major gold field in Kyrgyzstan after a parliamentary meeting on Friday delivered no resolution.
Stripping the company of its license would be a huge blow to Toronto, Canada-based miner Centerra Gold Inc. (TSX:T.CG, Stock Forum), which wholly controls KOC (the Kumtor operating company).
According to published reports, the company has been accused of causing toxic spills and damaging the environment by opponents in the Kyrgyzstan parliament.
“And it’s just all completely without merit,” said Jeff Parr, Chief Financial Officer, about the accusations. “The mine operates to the highest international standards.”
“I mean any open-pit mine has an impact, but there are no toxic spills or anything like that,” Parr said. “There was an accident and there was a spill into one of the local rivers, which we cleaned up completely, and that was the only incident that ever happened with this operation.”
The cyanide spill into the river occurred on May 20 in 1998, and had no long-lasting environmental effects. The incident was caused by human error.
“We’re a really, really important part of Kyrgyzstan’s economy, [accounting for] anywhere between 13% and 20% of the GDP depending on the year and how you measure it,” Parr said. “We don’t think the mine is going to be nationalized.”
Two senior officials from Centerra will be attending the meeting on June 27 in Kyrgyzstan.
“As to the outcome of that meeting,” Parr said. “We have no way of knowing.”
The company has been in Kyrgyzstan for 15 years, and it has never had a political incident that led to a work stoppage.
On Friday, Centerra was trading for $8.12 a share. The company’s market cap is $1.9 billion, based on $236.4 million shares outstanding. The 52-week high and low was $23.69 and $8.95 respectively.