Tag Archives: metals and mining

Kyrgyzstan’s Kumtor beats forecast

JAN. 12 2016 (The Conway Bulletin) — Canadian miner Centerra Gold said it had exceeded its 2015 production forecast and that output would be stable in 2016 at Kyrgyzstan’s largest gold mine, Kumtor. Kumtor produced 520,695 ounces of gold in 2015, or 97% of Centerra’s total production. The company said that in 2016 Kumtor will represent 100% of Centerra’s gold output. Kumtor is vital to the Kyrgyzstan economy, accounting for around 10% of its total GDP.

ENDS

(News report from Issue No. 263, published on Jan. 15 2016)

Tajik aluminium company receives gold licence

DEC. 21 2016 (The Conway Bulletin) — TALCO, the Tajik state-owned aluminium company, received the rights to develop a cluster of gold and precious metals deposits in the area near Ayni, north-west Tajikistan. The Tajik government granted TALCO the rights to the deposits of Konchoch and Skalnoye for 25 years. TALCO will also build a processing facility in the area.

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(News report from Issue No. 262, published on Jan. 8 2016)

Editorial: Horse-play in Kyrgyzstan

JAN. 8 2016 (The Conway Bulletin) – Scottish welder Michael Mcfeat was seeing in the New Year at the canteen in the Kumtor gold mine high up in the Tien Shan mountains when he sent a message back home to friends in Scotland jokingly referring to the chuchuk, a horse-meat sausage, as a horse’s penis.

It was a joke that was intended to raise smiles back home, and it may well have done, but Mcfeat’s error was to make it on an open Facebook account. Locals workers read his joke. They were furious.

Mcfeat is back home now, lucky to have escaped a beating from angry locals, while the Toronto-listed Centerra Gold that runs the mine is dealing with the latest PR setback in its relations with Kyrgyzstan.

The Kyrgyz may be overly sensitive to foreigners laughing at their national identity but, 25 years after the fall of the USSR, it is still a young country. Instead, the onus should be on international companies working in Kyrgyzstan and the rest of Central Asia to educate their foreign staff and also to impose some all important social media rules and guidelines.

After all what the chuchuk is to the Kyrgyz, the haggis is to the Scots.

ENDS

(Editorial from Issue No. 262, published on Jan. 8 2016)

Central Asia Metals’ plant in Kazakhstan boosts production

JAN. 6 2016 (The Conway Bulletin) — London-listed Central Asia Metals said it achieved record high production levels at its copper plant in Kazakhstan, boosting its plans for 2016. Over 12,000 tonnes of copper were recovered in 2015, an 8.4% jump compared to 2014.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Kyrgyzstan-Kumtor talks collapse

DEC. 22 2015 (The Conway Bulletin) – Kyrgyz government officials quit 2- year-long talks with Toronto-listed Centerra Gold, the company that owns the Kumtor gold mine, over a new ownership structure deal. Talks had focused on Kyrgyzstan swapping its 32.7% stake in Centerra Gold for a 50% stake in the subsidiary that directly owns the Kumtor mine. Relations between the two sides have been strained.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

China strikes Tajik gold

JAN. 6 2016 (The Conway Bulletin) — London-listed and Tajikistan-focused China Nonferrous Gold ltd said it produced its first gold from the Pakrut mine. Tajikistan had granted the company a licence to explore the Pakrut mine in 2004.

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(News report from Issue No. 262, published on Jan. 8 2016)

UN court dismisses British gold mining Uzbek expropriation case

DEC. 23 2016 (The Conway Bulletin) — A UN court dismissed a $400m claim by British mining company Oxus Gold against Uzbekistan after the Uzbek government took control of its stake in a gold mine in 2011, a blow to the company’s ambition of recovering cash from its former asset.

The UN Commission on International Trade Law (UNCITRAL) instead awarded $10.2m in damages to Oxus for what it said was a breach of a UK-Uzbekistan Bilateral Investment Treaty on tax issues.

Oxus chairman Richard Shead said that he was disappointed that the UN court had failed to uphold its claim of $400 for what he described as the expropriation of its assets at the Amantaytau Gold Fields (AGF) and the Khandiza deposits.

“I’m devastated by the decision of the arbitration award in relation to Oxus Gold and will continue to work with the company’s lawyers to extract as much value as possible for shareholders of the company,” Mr Shead said.

The UN court has not made clear why it turned down Oxus Gold’s application for damages. Uzbekistan has not commented.

Ozux had owned a 50% stake in the Amantaytau Goldfields JV in the Kyzylkum desert. It lost control of this stake in 2011 after the government ran an audit of the mine and accused Oxus of environmental damage, failing to pay enough tax and not meeting its investment obligations.

Eric McGlinchey, professor at George Mason University who focuses on litigation of Central Asian property, said that Oxus may turn to another court to look for another, more favourable, verdict.

“The $10m the tribunal awarded for Uzbekistan’s violation of fair treatment standards may allow Oxus to tread water a little longer in the hope of receiving a more favourable verdict from a different court,” Mr McGlinchey told The Bulletin.

Western firms have been disparaging of the investment climate in Uzbekistan and will be dismayed by the UN court’s decision against Oxus.

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(News report from Issue No. 262, published on Jan. 8 2016)

Stock market: Tethys, Nostrum, Tengri

DEC. 17 2015 (The Conway Bulletin) — Commodities prices keep declining and the industry continues to worry and use caution. This is reflected in the markets, which show the poor performance of Central Asia and South Caucasus focused firms.

Tethys Petroleum (-6% in the past week), Nostrum Oil & Gas (-5.8%) and Roxi Petroleum (-4%) were hit by oil prices plummeting to around $37/barrel.

Industrial and judicial news affected the performance of several miners in the region.

KAZ Minerals closed at 88.5p on Thursday a 7.7% fall in share prices compared to last week. Centerra Gold lost 11% on the Toronto Stock Exchange, closing at 7.07 Canadian dollars on Thursday.

Generally stable Tengri Resources also fell after it announced it was not going to mine the Taldybulak gold and copper project in Kyrgyzstan. It lost 17.4% in one day to close at 3p per share on Thursday.

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(News report from Issue No. 261, published on Dec. 20 2015)

Tengri drops Kyrgyz project

DEC. 16 2015 (The Conway Bulletin) — London-listed Tengri Resources said two mines it has been exploring in Kyrgyzstan “host large resources with significant upside exploration potential” but that it won’t exploit them because of low commodity prices. Tengri Resources’ shares fell 17.4% to 3p, a 9 month low, after the announcement. The company had been exploring the Taldybulak and the nearby Andash mines. Gold prices have fallen by 11% this year and copper prices by 25%.

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(News report from Issue No. 261, published on Dec. 20 2015)

Former head of Kyrgyzaltyn sent to jail for 3 years for corruption

DEC. 11 2015 (The Conway Bulletin) — A court in Kyrgyzstan sentenced Dilger Zhaparov, former head of state-owned gold miner Kyrgyzaltyn, to three years in prison for corruption, after he made an unauthorised payment to Toronto-listed Centerra Gold.

Zhaparov has been in jail since May 2014, when he was arrested.

According to the prosecution, in December 2013 Zhaparov illegally withdrew funds from Kumtor Gold Company (KGC), a holding company operating the Kumtor gold mine, to pay a $200m dividend to Centerra Gold. The court in Bishkek agreed and gave him the maximum three year jail sentence.

During the trial there was never any suggestion of wrongdoing by Centerra Gold and John Pearson, vice-president of Investors Relations at Centerra Gold, said he was disappointed by the jail sentence as he thought the transaction was legal.

“We are puzzled by the decision of the Kyrgyz authorities. The payment was perfectly legal as it was an inter- company dividend payment between KGC, which is a wholly owned subsidiary of Centerra, and Centerra itself,” Mr Pearson told The Bulletin.

Kyrgyzaltyn owns 32.7% of Centerra Gold. Centerra Gold, in turn, owns 100% of KGC.

When Zhaparov was arrested, the authorities said the payment needed government approval.

The Kyrgyz authorities have repeatedly rowed with Centerra over KGC’s ownership. The Kumtor gold mine is Kyrgyzstan’s most valuable asset, making up 10% of its GDP.

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(News report from Issue No. 261, published on Dec. 20 2015)