Tag Archives: gold

Kyrgyzstan-based Centerra increases profit but still can’t access Kumtor’s cashpile

BISHKEK, NOV. 7 2016 (The Conway Bulletin) — Canadian mining company Centerra Gold, owner of the Kumtor mine in Kyrgyzstan, reported a profitable Q3 for the first time in five years because it had cut costs and processed higher grade, and more valuable, gold but said it is still unable to access cash held in the company’s bank account.

Also, in the first nine months of 2016 the company turned a profit of $87.9m, compared to $44.5m in the same period last year. Centerra also revised upwards by 7% its yearly production guidance to 520,000 – 560,000 ounces. This is important because Kumtor is the single biggest economic asset in Kyrgyzstan, delivering around 10% of its total GDP.

But Centerra, which is 32% owned by the Kyrgyz government, also said that Bishkek’s Supreme Court rejected its appeal in October against a freeze of Kumtor’s bank account. Importantly, the Supreme Court’s decision came just one day after Centerra finalised the buyout of Canada’s Thompson Creek, which Kyrgyz lawmakers had fiercely opposed.

A Bishkek Court has frozen Kumtor’s bank accounts since June because of an unpaid environmental fine. Centerra has said the fine is politically motivated. The two sides have been locked in a row over ownership of the Kumtor gold mine.

CEO Scott Perry said the ongoing spat meant Centerra could not pay a dividend this quarter and hinted it may have to raise external finance.

“Absent access to cash held by KGC (Kumtor), the Company expects that it will be required to raise financing in order to fund construction and development expenditures on its development properties or to defer such expenditures,” he said in Centerra’s statement. The Kyrgyz government has not commented.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

Anglo-Asian improves efficiency in Azerbaijan

NOV. 3 2016 (The Conway Bulletin) — Azerbaijan-focused Anglo Asian Mining said it had improved cost- efficiency at its gold mining operations in Gedabek, a gold, copper and silver mine in the west of the country. The company has cut per-ounce expenditure to $703 in H1 2016 from $925 in H1 2015.

ENDS

(News report from Issue No. 303, published on Nov. 4 2016)

Azerbaijani miner jumps

OCT. 25 2016 (The Conway Bulletin) — Rallying on last week’s new discovery, Anglo Asian’s stock price nearly doubled, closing at 29p, a three-year high. On Oct. 17, the Azerbaijani miner said it discovered a new gold deposit 3km north of its main deposit at Gadabek. The company will further evaluate the deposit next year, when it plans to bring it to commercial production.

ENDS

(News report from Issue No. 302, published on Oct. 28 2016)

Kyrgyzstan-based Centerra completes deal

OCT. 21 2016 (The Conway Bulletin) — Kyrgyzstan-focused miner Centerra Gold said it completed the acquisition of Thompson Creek, a Canadian miner, in exchange for 8% of its shares. Centerra said that the deal is consistent with its diversification efforts. Under the Centerra brand, Thompson Creek will continue its operations in British Columbia. The Kyrgyz government owns a minority stake in Centerra and had opposed the transaction because it said it would have diluted its shareholding in Centerra.

ENDS

(News report from Issue No. 302, published on Oct. 28 2016)

Stock market: Centerra Gold, Thompson Creek

OCT. 7 2016 (The Conway Bulletin) – Centerra Gold’s stock price has been on a rollercoaster this summer, closely following the ups and downs of the price of gold.

This week, both fell. Centerra contracted by 9% to 6.49 Canadian dollars and gold registered an unusual 5% fall to $1,254.38/troy ounce on Thursday. After a tense spring, when the Kyrgyz government and Centerra were at loggerheads over permits and court cases, calm now appears to reign. Importantly, though, this year Centerra has actively tried to diversify its portfolio away from Kyrgyzstan, investing in Turkey and in the US.

As part of the financing for the acquisition of Colorado-based Thompson Creek, Centerra issued new shares which analysts said will dilute the share that Kyrgyzaltyn, the government-owned gold miner, owns in Centerra from 32% to approximately 28.8%.

The deal, inked in July, put relations between the company and the government under strain once again.

ENDS

(News report from Issue No. 299, published on Oct. 7 2016)

Pakrut to increase gold production in Tajikistan

SEPT. 30 2016 (The Conway Bulletin) – London-listed China Nonferrous Gold said it is close to reaching its goal of increasing production capacity at its Pakrut gold project in Tajikistan to 2,000 tonnes/day. The company produced its first gold in Tajikistan in January. It has held an exploration licence since 2004. The Pakrut gold mine lies 120km north-east of Dushanbe.

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(News report from Issue No. 299, published on Oct. 7 2016)

Kyrgyzstan-gold miner raises cash

SEPT. 28 2016 (The Conway Bulletin) – Kyrgyzstan-focused miner Chaarat Gold said it raised £4.1m ($5.3m) by issuing 78.8m new shares in London. Labro Investments, which previously held a 25.6% stake in the company, will raise its ownership to 31.7%. Last week, Martin Andersson, owner of Labro Investments, was named non-executive chairman of the British Virgin Islands-registered company.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

Kyrgyz miner names new non-executive chairman

SEPT. 20 2016 (The Conway Bulletin) – Martin Andersson, Chaarat Gold’s largest shareholder, became non-executive chairman of the British Virgin Island-registered mining company developing gold projects in Kyrgyzstan. Mr Andersson is the owner of Labro Investments, which holds a 25.2% stake in Chaarat.

ENDS

(News report from Issue No. 297, published on Sept. 23 2016)

Business comment: Centerra’s Good, Bad, and Ugly

AUG 1 2016 (The Conway Bulletin) — This month, Canadian miner Centerra Gold received permission from the Kyrgyz government to continue its operations at the Kumtor gold mine in the east of the country, increased its production guidance and said it will pay out dividends for the second quarter of the year.

Kyrgyzaltyn, which owns 32% in Centerra, will receive $2.3m in dividends.

This will be the first time Kyrgyzaltyn has received a dividend from Centerra since 2014, when a Canadian court froze its assets due to a pending court case. Last week, the Canadian court dismissed the case and this week it released Kyrgyzaltyn’s assets.

By only reading official press releases, the month of July must have been excellent for Centerra and Kyrgyzaltyn.

But there’s more, and it looks ugly in the medium term.

Centerra raised cash through loans and new shares to buy a majority stake in Thompson Creek a US-based miner focused on Canadian gold. The whole operation will be worth $1.1b.

But issuing new shares will anger Kyrgyzaltyn, which will see its stake in the company shrink to around 28.8%. This means less direct revenues from the Kumtor gold mine, which is 100% owned by Centerra. Essentially, the Kyrgyz government wants to bring the gold mine back under its control.

If relations between the Candian miner and the Kyrgyz government do worsen, the fate of the Kumtor gold mine, Kyrgyzstan’s largest mining asset, could become more uncertain than ever.

For both Kyrgyzstan’s economic outlook and also for its reputation as a place to do business, this is not good.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Azerbaijani miner’s production shrinks by 5.9%

JULY 14 2016 (The Conway Bulletin) — Azerbaijani miner Anglo Asian said production shrank by 5.9% to 33,837 ounces in the first half of 2016, compared to the same period last year. The company, listed in London, said it will keep its production target at 73,000/77,000 ounces for 2016 as it expects a boost in the second half.

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(News report from Issue No. 289, published on July 15 2016)