Kumtor gold mine arbitration suspended by Centerra
Centerra Gold says it has suspended arbitration proceedings regarding its Kumtor gold mine agreement as a result of ongoing discussions with the Kyrgyz government which may lead to a satisfactory resolution.
TORONTO (Reuters) -
Centerra Gold (CG.TO) has agreed to suspend international arbitration proceedings in its contract dispute with the Kyrgyz government regarding its Kumtor gold mine, the company said on Thursday.
Centerra, which is 53 percent-owned by Canadian uranium producer Cameco Corp (CCO.TO), had been slated to resume arbitration on Sept 29, after earlier postponing the proceedings in July.
The company is trying to revive an investment agreement it reached with the government last year, but which expired in June without having been passed by the government.
The deal would introduce a new tax structure and would see Kyrgyzstan double its stake in Centerra to about 30 percent, while Cameco would reduce its stake.
The deal is expected to calm persistent worries about nationalization of the mine.
Centerra said it suspended the arbitration "as a result of ongoing discussions with the Kyrgyz government."
"Our hope is that we will resolve the issues and not have to go (back) to arbitration," Centerra spokesman John Pearson said.
Kumtor is expected to produce between 580,000 and 620,000 ounces of gold this year.
Uncertainty about Centerra's agreements and licenses in Kyrgyzstan have helped pull the company's shares down by 72 percent this year.
The stock closed at C$3.47 on the Toronto Stock Exchange.
($1=$1.03 Canadian) (Reporting by Cameron French; Editing by Frank McGurty)
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