UPDATE 1-Kyrgyz president orders legal review of Centerra Gold deals

Tue Jun 14, 2016 2:42pm EDT
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(Adds Centerra response, background, share price)

June 14 (Reuters) - Kyrgyz President Almazbek Atambayev ordered state prosecutors on Tuesday to review the legality of agreements signed with Canada's Centerra Gold Inc in 2003-2004 and 2009, his office said in a statement.

Centerra operates Kyrgyzstan's biggest gold mine, Kumtor, and has been locked in a bitter dispute with the Central Asian nation's government over profit-sharing that has recently escalated.

Centerra has "complete confidence" in the 2009 agreements, company spokesman John Pearson said in an email.

"They were negotiated openly, fairly and transparently and were approved by the Kyrgyz government, parliament and the Kyrgyz supreme court," he said.

The 2009 agreements supersede all prior agreements including the 2003-2004 restructuring agreements and are part of Kyrgyz legislation, Pearson said.

Toronto-based Centerra turned to international arbitration last month to settle a number of disputes with the Kyrgyz government.

Centerra's chief executive officer earlier this month blamed the escalating tensions on a weaker economy in Kyrgyzstan and the impoverished nation's desire for a bigger slice of profits. Centerra is Kyrgyzstan`s biggest foreign investor and taxpayer.

Centerra's shares were down 2.8 percent on the Toronto Stock Exchange at C$6.70 on Tuesday, in line with other gold stocks. (Reporting by Olzhas Auyezov in Almaty and Nicole Mordant in Vancouver; Editing by Louise Heavens and Jeffrey Benkoe)