Tag Archives: gold

Interview: Gold-plated resiliance in a tough year

>> Artem Volynets, the CEO of AIM-listed Chaarat Gold, had to deal wtih war and a coup in 2020, on top of the global pandemic.

JUNE 16 2021 (The Bulletin) — A global pandemic meant a tough 2020 for most people but for Artem Volynets, the CEO of AIM-listed gold miner Chaarat Gold, it was just one issue that he had to deal with. He also had to navigate a war and a coup.

“Yes, it was a complicated time,” he told The Bulletin over lunch in central London, flashing a pearl-white, relaxed, smile. 

“But in many ways it made us stronger as a company.”

Chaarat Gold is the owner of the Kapan gold mine in southeast Armenia and two gold concessions in Kyrgyzstan, Tulkubash and Kyzyltash. In 2020, Armenia lost a war to Azerbaijan for the disputed region of Nagorno-Karabakh and in Kyrgyzstan, a coup in October overthrew the government.

Volynets said that a third of his 1,000-person workforce at the Soviet-era Kapan gold mine was called up for active duty.

“Even so, if anything our reputation in the region was strengthened by the war,” he said. “We were the ones paying the taxes, keeping production going and jobs open.”

Chaarat Gold bought the Kapan mine from Russia’s Polymetal in 2019 for $55m, a deal that Volynets said had proved to be good value. 

He dodged discussing criticism of Armenian PM Nikol Pashinyan for allegedly dragging his feet over clearing protesters who have blocked access to another foreign-owned gold mine at Amulsar, but he was keen to discuss the expropriation in Kyrgyzstan of the Kumtor gold mine, the biggest in the country, from its Toronto-based owners, Centerra Gold.

Western investors in Bishkek have now described Kyrgyzstan as an “investment pariah” but Volynets was more circumspect.

“It’s very much an isolated incident that has to do with one particular foreign investor and one particular project,” he said. “We have been assured that we have no problems.”

Still, the noise around the expropriation of Kumtor has made life more difficult for Volynets and Chaarat Gold. Last month it said that raising finance for its Tulkubash project had slowed and that its first gold production was now delayed by a year to the second half of 2023.

In 2018, Chaarat Gold had offered to buy Kumtor, but Centerra Gold had turned down the offer.

“We’re not interested in it any more but we are still looking around at other FSU projects,” Volynets said.

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— This story was published in issue 48 of the Central Asia & South Caucasus Bulletin, on June 16 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Centerra Gold says it wants to negotiate with Kyrgyz government

JUNE 15 2021 (The Bulletin) — In an interview with the Bloomberg news agency, Scott Perry, the CEO of Centerra Gold, said that he wanted to negotiate a “divorce” settlement with the Kyrgyz government for the Kumtor gold mine which Kyrgyz officials expropriated in May. The Kyrgyz government also owns a 26% stake in Centerra Gold.

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— This story was published in issue 48 of the Central Asia & South Caucasus Bulletin, on June 16 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

IMF says that Kumtor row could damage Kyrgyz economy

BISHKEK/JUNE 9 2021 (The Bulletin) — The IMF said that without a quick resolution to the row between Toronto-listed Centerra Gold and the Kyrgyz government over ownership of the country’s largest gold mine, Kyrgyzstan will miss its GDP estimates.

Conspicuously avoiding naming Centerra Gold or Kumtor, the gold mine at the centre of the row, the IMF also said in a statement that the expropriation of the mine undermined foreign investor confidence.

“Directors also stressed the criticality of political stability, policy predictability, and a market-friendly business environment,” the IMF’s executive said in comments on both a consultation session with Kyrgyz officials and also its GDP growth estimates for Kyrgyzstan of 3.8% this year and 6.4% in 2022.

“A speedy and transparent resolution of the ongoing commercial dispute with the largest foreign investor would be critical to ensure uninterrupted gold production while protecting the environment.”

The Kumtor gold mine is the lynchpin of the Kyrgyz economy, contributing up to 15% of its GDP.

Western investors based in Bishkek have said that the expropriation last month of the mine by the Kyrgyz government had turned Kyrgyzstan into an “investment pariah”. The government has justified its expropriation because of alleged environmental damage at Kumtor, an accusation that Centerra Gold disputes. Centerra Gold has launched international arbitration.

Despite the growing pressure, neither Pres. Sadyr Japarov nor senior Kyrgyz officials appear to be too concerned. Mr Japarov has not commented on the expropriation and has instead promoted the official who steered it to be the Kyrgyz economy minister. Officials have taken journalists on a press trip to Kumtor to show them how efficiently it is now being run.

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— This story was published in issue 487 of the Central Asia & South Caucasus Bulletin, on June 9 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Anglo Asian Mining takes control of mines in Nagorno-Karabakh

JAN. 22 2021 (The Bulletin) — Anglo Asian Mining, the gold mining company part-owned by the Azerbaijani government, said that its ownership of three potential mines in Nagorno-Karabakh had been “restored” to it. Azerbaijan defeated Armenia in a six-week war for control of the disputed region last year. 

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— This story was first published in issue 469 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Chaarat says beats 2020 output expectations

JAN. 21 2021 (The Bulletin) — London-based Chaarat Gold said that it had exceeded production expectations at its Kapan mine in Armenia. In a media interview, Chaarat CEO Artem Volynets said that despite a war between Azerbaijan and Armenia over Nagorno-Karabakh and a coup in Kyrgyzstan that could have destabilised its Kyrgyz operations, Chaarat had had a decent year.

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— This story was first published in issue 469 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2021

Uzbekistan wants to sell stake in giant state-owned gold producer

TASHKENT/Feb. 28 2020 (The Bulletin) —  — Uzbekistan said that it wanted to push through the most ambitious sell-off of state assets in Central Asia within the next five years.

Included in its list of assets for sale are a 10% stake in gold producer Navoi Mining and Metallurgical Plant, a 49% stake in Uzbekistan Airways and a 24% in the Uzbekneftegaz. It will also sell stakes in 1,000 businesses that are fully or part-owned by the government, including all of Uzbekistan’s vegetable oil producers and its alcohol distillers.

Perhaps the most eye-catching of these potential privatisations is the prospect of investors taking a 10% stake in the Navoi Mining and Metallurgical Plant. The Soviet-era plant is the single biggest industrial project in Uzbekistan, accounting for around 10% of Uzbekistan’s GDP. It also sucks up 18% of the government’s revenues and employs 54,000 people, according to Uzbek President Shavkat Mirziyoyev.

“By the volume of raw materials, the Navoi Mining and Metallurgical Plant is the third gold producer in the world. However, the value of its assets is much less than similar companies abroad,” the Uzbek government said in a statement.

“At present, the book value of NMMP is estimated at $1.3b, while the market price of comparable foreign enterprises is $11b.” And it is this perceived undervaluation that the Uzbek government wants to address with a privatisation programme.

The government’s statement said that it wanted to increase output at the plant to 94 tonnes by 2026 by implementing 40 projects worth $4b and the development of a new gold field at a cost of $525m.

Since Mr Mirziyoyev took over from Islam Karimov in 2016, he has pushed to open business to investors.

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— This story was first published in issue 438 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Lydian says court backs it in dispute with government

FEB. 27 2020 (The Bulletin) — Toronto-based Lydian International said that a court in Armenia had dismissed eight of 10 criticisms of its operations at the Amulsar gold mine in the south of the country, including that it had mined illegally and that protected and near-extinct animal species had been found on its site. Lydian has been stopped since June 2018 from accessing the mine by protesters who have blocked the access road. They have complained that Lydian’s operations were ruining the environment, a standpoint that the Armenian mining inspection body agreed with in August 2018. Lydian said the rulings were politically motivated at the time.

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— This story was first published in issue 438 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Azerbaijan says it wants to boost gold production

FEB. 24 2020 (The Bulletin) — Azerbaijan’s state-owned gold mine AzerGold said that it was exploring two new gold mining areas that could be commissioned as mines by 2021. The areas, in the Western Dashkasan region, have already been scoped out and identified as potential sites. Azerbaijan is trying to diversify away from the oil and gas sectors. Last year, Azerbaijan’s gold production grew by 33.2% from 2018. 

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— This story was first published in issue 438 of the Central Asia & South Caucasus Bulletin

— Copyright the Central Asia & South Caucasus Bulletin 2020

Lydian extends protection from its creditors

JAN. 3 2020 (The Bulletin) — Lydian International, the mining company developing the Amulsar gold mine in Armenia, said that it had extended its protection from creditors scheme by three weeks to Jan. 23. Lydian said at the end of last year that its creditors had told them that they would not be extending their credit lines. Lydian has not accessed the Amulsar mine since June 2018 because of protests that it says the Armenian government has been unwilling to clear.

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— This story was first published in issue 433 of the weekly Bulletin on Jan. 13 2020

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Lydian calls in protection from creditors over Armenian mine dispute

YEREVAN/DEC. 23 2019 (The Bulletin) — Lydian International, the owner of the Amulsar gold mine in Armenia, said that it had called in protection from creditors while it held talks with them and restructured its loans.

For Armenia’s reputation as a place to do business, news that one of its most high-profile investors has had to call for protection from creditors will be damaging.

The company, which has registrations in Canada, Britain and the US, has been unable to access the Amulsar mine in the southeast of the country since June 2018 because local activists have blocked the single track road running up to the mine. They say that Lydian is causing environmental damage, accusations that Lydian denies.

Although the government of Nikol Pashynian has said it would disband the protests it has appeared less willing to do so in practice. Analysts have said that this is partly because the constituents that put Mr Pashinyan in power through a revolution in April and May 2018 are the same that are protesting against Lydian.

And in a statement, Lydian blamed the Armenian government for inaction which has turned creditors off the project.

“Despite its many public statements that there is no legal basis on which to prevent the Company’s development of the Amulsar Project, the Government of Armenia has failed to remove the illegal blockades,” Lydian said. “As a result, the Company’s lenders were not prepared to further extend a previously announced forbearance agreement, which expired on December 20, 2019.”

Lydian said that it had been granted 10 days of protection from creditors.
The Armenian government has not commented.
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— This story was first published in issue 432 of the weekly Bulletin on Dec. 27 2019

Copyright owned by the Central Asia & South Caucasus Bulletin