Centerra to work with Kyrgyz government on Kumtor issues

Fri Jul 6, 2012 10:43am EDT
 
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(Reuters) - Centerra Gold Inc (CG.TO: Quote) said on Friday it will work with the Kyrgyz government to address environmental issues at its Kumtor gold mine that were raised in a parliamentary report last month and which have led to calls for the company's mining contract to be renegotiated.

The Canadian company also said it has been assured by the prime minister of Kyrgyzstan that a decree issued on Thursday that canceled certain surface rights that had been granted to Centerra in the Central Asian country would not affect operations at the Kumtor mine.

Shares of Centerra fell 4 percent to C$7.78 on Friday morning on the Toronto Stock Exchange. The miner's stock is down 33 percent since late last month when the report, which said Centerra's operations were damaging the environment and the health of local villagers, was debated in the Kyrgyz parliament.

Centerra maintains that its Kumtor mine, which produced about 580,000 ounces of gold last year, is compliant with local and international environmental, health and safety standards.

Kumtor accounts for some 60 percent of Kyrgyzstan's industrial output and represents nearly 12 percent of the country's gross domestic product. Centerra, which is 33 percent owned by the Kyrgyz state, retains full ownership of the mine and its output.

(Reporting by Julie Gordon; Editing by Peter Galloway)