Centerra Gold’s Kumtor Gold Project has received a one-month extension to July 4, 2015 of its permits for emissions into the atmosphere and waste disposal into the tailings management facility.

The Kyrgyz Republic State Agency of Environmental Protection and Forestry (SAEPF) continues to review Kumtor’s annual mine plan and has a further period of three months, from June 3, to complete its review. SAEPF has advised Kumtor that it is not necessary to suspend operations while it continues its review of the annual mine plan.

The process of obtaining approval of Kumtor’s annual mine plan and other permits required for operation of the Kumtor project has been impacted by concerns from SAEPF regarding the potential application of the Kyrgyz Water Code to the Kumtor operations.

The Kyrgyz Republic government has proposed draft amendments to the Water Code to the Kyrgyz Republic parliament that, if adopted, would alleviate this concern. Centerra understands that parliament will be considering the proposed amendments during this month.

Centerra and Kumtor dispute SAEPF’s interpretation of the Water Code, including on the basis that the stabilization and non-discrimination provisions contained in the project agreements governing the Kumtor project and the laws of the Kyrgyz Republic which implemented these project agreements support the view that the Water Code does not apply to the Kumtor operations.

Furthermore, the project agreements provide that Kumtor is entitled to receive all licences, permits and approvals as are necessary or convenient for the operation of the Kumtor project. The annual mine plan submitted by Kumtor is consistent with its past operations and previously approved mine plans. As such, Centerra and Kumtor believe that the annual mine plan should be approved and all permits provided in the usual course.

Centerra and Kumtor expect to continue discussions with SAEPF to obtain the approval of the annual mine plan and further extensions of the relevant permits. However, there can be no assurances that such approvals and extensions will be received within the required time frame or that a suspension of operations will not be required if they are not forthcoming.

Furthermore, there are no assurances that the Kyrgyz parliament will approve the proposed amendments to the Water Code. The absence of relevant approvals and permits could require a suspension of project operations, which would have a material adverse impact on Centerra’s future cash flow, earnings, results of operation and financial condition.

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