By Olga Dzyubenko
BISHKEK, Oct 20 (Reuters) - Kyrgyzstan President Almazbek Atambayev said on Monday he could seek to delist the shares of Canada’s Centerra Gold Inc on the Toronto Stock Exchange after a Canadian court effectively suspended shares in the company held by the Kyrgyz government.
The former Soviet republic owns a third of Centerra, which operates the vast Kumtor gold mine near Kyrgyzstan’s border with China. The mine is a major contributor to the Central Asian country’s economy.
Toronto-based Centerra said it was business as usual at the Kumtor mine and that it was continuing to negotiate a restructuring of Kyrgyzstan’s stake in Centerra with the government.
The company and the government have been in discussions for more than a year on a deal that would involve the state swapping its 32.7 percent stake in Centerra for half of a joint venture that would control the Kumtor mine, the company’s main asset.
Centerra spokesman John Pearson said that if such a deal was reached, Kyrgyzstan’s shares in Centerra would be canceled and delisted.
The latest comments from Kyrgyzstan’s Atambayev come after another Canadian miner, Stans Energy, obtained an order from an Ontario court on Oct. 14 that prohibits the Kyrgyz Republic and its state gold company, Kyrgyzaltyn, from selling, pledging or exchanging its 47 million shares in Centerra.
Stans Energy has sought payment from the government of $118 million in damages and losses after losing its license for the Kutessay II rare-earth mine in Kyrgyzstan. At current prices, Kyrgyzstan’s stake in Centerra is worth around $374 million.
Atambayev said the action taken by the court against Kyrgyzstan was discriminatory.
“In particular, a question could be raised about possible delisting of Centerra Gold shares on the Toronto Stock Exchange,” he said in a written statement published by his press service.
“Or we could take more decisive steps to protect Kyrgyzstan’s national interests, which would exclude deciding Kumtor’s fate in the courts of Canada, whose companies have already withdrawn by different means the bigger part of profits from one of the world’s largest gold deposits.”
He did not elaborate.
The court injunction could delay a final restructuring agreement between Centerra and Kyrgyzstan. A draft agreement was reached last December.
“The issues raised by the Ontario injunction ... would have to be fully resolved by the Kyrgyz government before any restructuring transaction could be completed,” Centerra’s Pearson said.
Centerra, which employs more than 3,000 workers in Kyrgyzstan, accounted for 7.7 percent of the country’s gross domestic product and 24 percent of its industrial output in 2013, while its gold made up 36.5 percent of all Kyrgyz exports, official data show.
Centerra’s shares were down 5 Canadian cents, or nearly 1 percent, at C$5.40 on the Toronto Stock Exchange. That was against the trend of generally stronger gold-mining stocks, which rose on a firmer gold price.
$1=$1.13 Canadian Additional reporting by Nicole Mordant in Vancouver; Writing by Dmitry Solovyov; Editing by Ruth Pitchford; and Peter Galloway