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)
BISHKEK, JULY 26 2016 (The Conway Bulletin) — The board of Kyrgyz miner Kyrgyzaltyn will dispute Centerra Gold’s issue of new shares to buy US-based Thompson Creek because it reduces its own overall stake in the company, which owns its biggest gold mine – Kumtor.
This month, the Canadian miner, 32% owned by Kyrgyzaltyn, said that it would buy Thompson Creek for the equivalent of $1.1b, in cash and new shares.
Kyrgyzaltyn had already said it disagreed with the transaction and that it voted against it during the Centerra board meeting.
As part of the financing for the acquisition of Thompson Creek, Centerra Gold issued new shares which analysts said will reduce Kyrgyzaltyn’s 32% stake in Centerra to approximately 28.8%.
Now the local language service of US-funded Radio Free Europe/Radio Liberty has reported that senior Kyrgyz government officials are considering how to dispute the move, setting the scene for more disagreements between the Toronto-based company and Kyrgyzstan.
The two have been locked in a protracted row for years.
Kyrgyzsan wants to increase its direct ownership of the Kumtor mine, the country’s largest economic asset.
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(News report from Issue No. 291, published on Aug. 1 2016)
JULY 22-28 1 2016 (The Conway Bulletin) — Kazakhstan miner KAZ Minerals posted a 43% growth in output in H1 2016, compared to the same period last year, to 52,600 tonnes of copper cathode. KAZ Minerals also said it cut costs for the development of its Aktogay project by 4.4% to $2.2b. Together with Bozshakol in northern Kazakhstan, the Aktogay project, located in eastern Kazakhstan, is KAZ Mineral’s main copper asset.
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(News report from Issue No. 291, published on Aug. 1 2016)
JULY 22 2016 (The Conway Bulletin) — Chinese power engineering company TBEA received a licence to develop the Eastern Duoba and Upper Kumarg gold mines. The company, which won a tender to build a thermal power plant in Dushanbe in 2014, completed exploration works at the two mines in June. Chinese investment in Tajikistan has grown significantly in the past decade.
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(News report from Issue No. 291, published on Aug. 1 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 20 2016 (The Conway Bulletin) — Canadian miner Centerra Gold said it finalised a financing deal with three investment banks to partially fund its takeover of Thompson Creek, a US-based miner. Centerra will receive 185m Canadian dollars ($142) from BMO Capital Markets, Credit Suisse Securities Canada and Scotiabank. Centerra Gold’s main asset is the Kumtor gold mine in Kyrgyzstan.
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(News report from Issue No. 290, published on July 22 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)
BISHKEK, JULY 11 2016 (The Conway Bulletin) — A court in Canada dismissed a notion put forward by three companies and a businessman locked in legal disputes with the Kyrgyz government that would have threatened state-owned Kyrgyzaltyn’s ownership of shares in Toronto-listed Centerra Gold.
The decision is a major victory, after years of wrangling, for Kyrgyzstan which wanted to ringfence a 32.7% stake in Toronto-listed Centerra Gold owned by state gold company Kyrgyzaltyn. It’s also a relief for Centerra Gold, which owns the Kumtor gold mine — Kyrgyzstan’s single largest industrial asset.
The claimants — Canadian miner Stans Energy, Turkish construction companies Sistem and Entes and the Latvian citizen Valeri Belokon — had said that the Canadian court should freeze and seize the stake to enforce other arbitration rulings involving Kyrgyzstan. They said that the shares may be officially owned by Kyrgyzaltyn but that the Kyrgyz state was the beneficial owner.
The judge, Justice Conway, disagreed, though, and ruled that Kyrgyzaltyn and Kyrgyzstan could not be treated as the same entity.
The ruling means that the claimants will have to find other jurisdictions to pursue their legal claims against Kyrgyzstan.
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(News report from Issue No. 289, published on July 15 2016)
JULY 6 2016 (The Conway Bulletin) — Canadian miner Centerra Gold has struck a $1.1b deal with US-based Thompson Creek to buy a majority stake in the company. Centerra’s core asset is the Kumtor gold mine in eastern Kyrgyzstan. The move could be seen as an effort towards diversification as Thompson Creek owns mines in North America. The Kyrgyz government’s representatives on the Centerra board voted against the deal with Thompson Creek.
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(News report from Issue No. 288, published on July 8 2016)