SEPT. 20 2016 (The Conway Bulletin) – Martin Andersson, Chaarat Gold’s largest shareholder, became non-executive chairman of the British Virgin Island-registered mining company developing gold projects in Kyrgyzstan. Mr Andersson is the owner of Labro Investments, which holds a 25.2% stake in Chaarat.
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(News report from Issue No. 297, published on Sept. 23 2016)
AUG 1 2016 (The Conway Bulletin) — This month, Canadian miner Centerra Gold received permission from the Kyrgyz government to continue its operations at the Kumtor gold mine in the east of the country, increased its production guidance and said it will pay out dividends for the second quarter of the year.
Kyrgyzaltyn, which owns 32% in Centerra, will receive $2.3m in dividends.
This will be the first time Kyrgyzaltyn has received a dividend from Centerra since 2014, when a Canadian court froze its assets due to a pending court case. Last week, the Canadian court dismissed the case and this week it released Kyrgyzaltyn’s assets.
By only reading official press releases, the month of July must have been excellent for Centerra and Kyrgyzaltyn.
But there’s more, and it looks ugly in the medium term.
Centerra raised cash through loans and new shares to buy a majority stake in Thompson Creek a US-based miner focused on Canadian gold. The whole operation will be worth $1.1b.
But issuing new shares will anger Kyrgyzaltyn, which will see its stake in the company shrink to around 28.8%. This means less direct revenues from the Kumtor gold mine, which is 100% owned by Centerra. Essentially, the Kyrgyz government wants to bring the gold mine back under its control.
If relations between the Candian miner and the Kyrgyz government do worsen, the fate of the Kumtor gold mine, Kyrgyzstan’s largest mining asset, could become more uncertain than ever.
For both Kyrgyzstan’s economic outlook and also for its reputation as a place to do business, this is not good.
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(News report from Issue No. 291, published on Aug. 1 2016)
JULY 14 2016 (The Conway Bulletin) — Azerbaijani miner Anglo Asian said production shrank by 5.9% to 33,837 ounces in the first half of 2016, compared to the same period last year. The company, listed in London, said it will keep its production target at 73,000/77,000 ounces for 2016 as it expects a boost in the second half.
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(News report from Issue No. 289, published on July 15 2016)
JULY 14 2016 (The Conway Bulletin) — Helped by the Brexit impact, shares in Azerbaijan’s Anglo Asian Mining soared at the end of June. A positive outlook has now sent them up again. Its shares closed at 19.5p on Thursday, up 5.4% in one week.
At the end of June, Anglo Asian said it would sell the remainder of its 2016 production as futures, which gave a bullish message to investors, as the company tried to raise cash to pay out some of its debt.
Despite posting a production cut in H1 2016, the company was upbeat because the second quarter outperformed the first.
“The second half of the year has historically been our best performing half due to the seasonally better weather and our production will also benefit from the second SAG mill which is due to start operating next month,” CEO Reza Vaziri said in a statement.
Overall it was a positive week for most Central Asia and South Caucasus-linked stocks, lifted by increased stability in oil and gold prices.
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(News report from Issue No. 289, published on July 15 2016)
MAY 27 2016 (The Conway Bulletin) — Azerbaijan’s President Ilham Aliyev said that the state was ready to buy the Aimroc mining company, which is alleged to be linked to his family. The company closed in 2014, as it ran into financial difficulties exploiting the Chovdar mine in western Azerbaijan. Aimroc’s name appeared in numerous investigations that linked its opaque offshore business to the presidential family. By presidential decree state-owned Azerigold will take over Aimroc.
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(News report from Issue No. 283, published on June 3 2016)
MAY 25 2016 (The Conway Bulletin) — Azerbaijan-based miner Anglo Asian posted a record production year in 2015, mining 72,000 ounces of gold, a 19% increase compared to 2014. The company’s revenues also grew by 15%, despite lower gold prices. Anglo Asian said it plans to produce even more gold in 2016 and plans to cut costs further thanks to the depreciation of the manat currency at the end of last year.
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(News report from Issue No. 282, published on May 27 2016)
MAY 13 2016 (The Conway Bulletin) – Residents of Ieli, a small village in the Svaneti region in the north of Georgia, demonstrated against a gold mining company that had started excavation work in the area. Dozens of protesters said that they didn’t believe that Optical System, a St Kitts and Nevis-based company, had a valid licence. The local government later showed that the company had been given an exploration licence in 2005.
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(News report from Issue No. 281, published on May 20 2016)
MAY 3 2016 (The Conway Bulletin) – Switzerland-based miner Glencore said it is considering selling its share in the Vasilkovskoye gold mine in Kazakhstan for around $2b. Glencore owns 70% of Kazzinc, the company that operates Vasilkovskoye which is located 300 km north-west of Astana. According to unnamed sources quoted in the Wall Street Journal, the buyers could be Chinese investors. China has been looking to buy Kazakh gold.
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(News report from Issue No. 279, published on May 6 2016)
BISHKEK, APRIL 28 2016, (The Conway Bulletin) — Toronto-listed miner Centerra Gold said that police in Bishkek have raided the offices of its wholly-owned Kumtor Gold Company, reigniting a vicious row between the Canadian company and the Kyrgyz government.
According to Kyrgyz officials, police were looking to collect documents related to allegations of financial misconduct by Kumtor.
Centerra said that the government had previously complained about a financial transaction it carried out in 2013. It once again refuted any allegations of criminal activities.
“The company reiterates that such inter-corporate dividend complied with the 2009 agreements governing the Kumtor Project and all applicable Kyrgyz Republic laws. Any claims to the contrary are without merit,” Centerra said in a statement.
On news of the raid, the Toronto stock market briefly suspended Centerra Gold’s shares.
Centerra said mine operations at Kumtor, which is located in the mountainous east of the country, were unaffected.
The Kyrgyz government owns a 32.7% stake in Centerra.
It has been trying to turn this stake in Centerra into a direct stake in Kumtor, the country’s single biggest asset, triggering a major row.
Kumtor represents around 7% of Kyrgyzstan’s GDP and is the country’s most valuable asset.
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(News report from Issue No. 278, published on April 29 2016)
APRIL 15 2016 (The Conway Bulletin) – Russian gold miner Polymetal said its output declined by 4% in the first quarter of the year to 260,000 ounces of gold equivalent, also due to a sharp decline in its Kazakh operations. At the Varvara gold project in north-western Kazakhstan, Polymetal produced 14,000 ounces of gold, 32% less than in Q1 2015, due to lower grade stockpiles. Polymetal said its Kyzyl gold project in north-eastern Kazakhstan is on track to start production this year.
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(News report from Issue No. 277, published on April 22 2016)