By Clara Denina and Zandi Shabalala
LONDON (Reuters) – The Kyrgyzstan government on Monday said it has reached an out-of-court settlement with Centerra Gold over ownership of the Kumtor gold mine (KGC), ending a series of legal challenges launched by both parties over the past year.
Kyrgyzstan, which holds a 26% stake in Centerra, had seized the former Soviet republic’s biggest industrial enterprise from the Canadian miner, prompting the initial arbitration.
Kyrgyz President Sadyr Japarov is scheduled to say in a televised announcement at 1230 GMT that state-owned gold miner Kyrgyzaltyn will own Kumtor and retain income it earned from the mine since it was seized in May, according to an advanced release of the agreement seen by Reuters.
In exchange, Kyrgyzaltyn will return the 26% stake it holds in Centerra, which will make a cash payment of $50 million to repay an outstanding loan to KGC and preserve and protect the country’s natural resources.
Centerra and Kyrgyzstan, which have a long history of disputes over how to share profit from the 550,000-ounce gold mine, have also agreed to end all legal proceedings against each other with no admissions of liability.
Shares in Centerra, which lost 34% of their value in 2021, have rebounded by 29% so far this year on expectations that the dispute would be resolved outside international courts.
(Reporting by Clara Denina and Zandi Shabalala; Editing by David Goodman)
