UPDATE 1-Centerra 1st-qtr profit rises on strong gold output

Wed May 8, 2013 10:02pm EDT
 

May 8 (Reuters) - Canadian miner Centerra Gold Inc reported a jump in first-quarter profit on strong gold production at its Kumtor mine in Kyrgyzstan and Boroo mine in Mongolia.

Centerra, which is in talks with Kyrgyz authorities on an alternative waste dumping plan at Kumtor, said net profit for the March quarter rose to $51.4 million, or 22 cents per share, from $9.6 million, or 4 cents per share, a year earlier.

Revenue rose 44 percent to $192.3 million.

The Kumtor mine is the largest gold mine in Central Asia operated by a Western company and last year accounted for 5.5 percent of Kyrgyz GDP and 18.9 percent of industrial output.

However, Centerra is embroiled in a bitter row with the government, which has accused it of underpaying the state and wants it to pay $467 million in alleged environmental damages.

Centerra said last week a waste-rock dump at Kumtor had moved at a greater-than-expected rate, and warned that any delays to alternative plans would hurt its operations and results.

"We are continuing to have discussions with the Kyrgyz authorities to resolve the issues concerning Kumtor to the benefit of all Centerra shareholders," Chief Executive Ian Atkinson said in a statement accompanying the results.

Centerra said gold production rose 58 percent in the first quarter to about 115,220 ounces, while the company's average realized gold price fell about six percent to $1,619 per ounce.

Centerra shares closed at C$3.78 on Wednesday on the Toronto Stock Exchange.