Kyrgyzstan reaches deal on Kumtor Gold Company

President of Kyrgyzstan Sadyr Zhaparov announced the signing of an agreement between the Cabinet of Ministers and Centerra Gold Inc, resolving disagreements over the management of Kumtor Gold Company (KGC).

According to the agreement, the Cabinet of Ministers received the right of full management and ownership of the Kumtor mine.

In a live televised address to the people, Zhaparov called the agreement a "historic breakthrough" and noted that the concluded conditions are the best possible at the moment. He declared Kyrgyzstan's openness to foreign investment.

The agreement provides for a clear separation and resolution of all disputes between the Cabinet of Ministers, Centerra and Kyrgyzaltyn OJSC, which is the main shareholder of Centerra.

The Kyrgyz Republic and Kyrgyzaltyn OJSC have assumed full responsibility for the Kumtor mine and will retain the income received from the mine after May 15, 2021, as per the agreement. Centerra will make an additional cash payment of $11.1 million in favor of Kyrgyzaltyn.

In addition, control over the reclamation fund in $53 million will be returned to the Kyrgyz Republic.

Kyrgyzaltyn and Centerra will exchange shares, while Kyrgyzaltyn will return its shares in Centerra and receive 100 percent of KGC shares.

The agreement also provides for the complete and final withdrawal of mutual claims by the parties, the termination of all court proceedings involving the parties in all jurisdictions without recognition of liability.

The agreement was previously approved by the Cabinet of Ministers of the Kyrgyz Republic and the Jogorku Kenesh of the Kyrgyz Republic. The Cabinet of Ministers, Centerra and Kyrgyzaltyn expect that the agreement will be closed no later than 90 days after its signing.