The Kyrgyz Republic may seek to delist Centerra Gold from the Toronto Stock Exchange after a Canadian court effectively suspended its Kyrgyz-held shares. Kyrgyz President Almazbek Atambayev threatened to make the move last week, saying legal actions taken by Canadian courts against the country were discriminatory.
The former Soviet republic owns 32.7% of Centerra which is operating the massive Kumtor Gold Project in the Tien Shan mountains near China’s border. The government and the company are engaged in tricky and delicate talks on restructuring the project, which the government hopes will boost budget revenues.
On October 14, another Canadian miner Stans Energy obtained an order from an Ontario court which prohibits the Kyrgyz Republic and state-owned gold company Kyrgyzaltyn from making any move to sell, pledge or exchange 47 million shares in Centerra.
Stans has sought payment from the government of $118 million in damages and losses after losing its licence for the Kutessay II rare-earth mine.
In a written statement Atambayev said, “In particular, a question could be raised about possible delisting of Centerra Gold shares on the Toronto Stock Exchange. Or we could take more decisive steps to protect Kyrgyzstan’s national interests which would exclude deciding Kumtor’s fate in the courts of Canada, whose companies have already withdrawn by different means the bigger part of profits from one of the world’s largest gold deposits.”
Official data shows that Centerra accounted for 7.7% of Kyrgyzstan’s gross domestic product and 24% of industrial output in 2013, while its gold made up 36.5% of all Kyrgyz exports.
Under a non-binding draft agreement with Centerra, Kyrgyzstan would swap its 32.7% Centerra stake for half of a joint venture controlling the Kumtor mine, but this deal has not been finalized.