Tag Archives: metals and mining

Glencore to sell Kazakh mine

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)

Kazakhstan plans mining auction

MAY 3 2016 (The Conway Bulletin) – A Kazakh mining government agency said it will auction 101 gold, copper, manganese and other precious metals mines on June 16. The auction, Kazakhstan’s second, will be conducted within the framework of the International Mining and Metallurgical Congress. Last year’s auction earned the state budget around 1.5b tenge ($4.5m).

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(News report from Issue No. 279, published on May 6 2016)

Centerra looks to diffuse row with Kyrgyzstan over Kumtor

BISHKEK, MAY 4 2016, (The Conway Bulletin) – Scott Perry, CEO of Canadian miner Centerra Gold, invited the Kyrgyz government to meet with him to discuss their differences, less than a week after police in Bishkek raided the company’s offices looking for evidence of financial crimes.

In an interview with Bloomberg, Mr Perry said the government has not responded to Centerra’s offer to hold talks.

He also reiterated the company line that Kumtor’s dividend payment to Centerra in 2013 was perfectly legal.

“The rattling of the cage is without merit,” Mr Perry said of the police raid in Bishkek.

Last week, police raided the offices of Kumtor Gold Company (KGC), wholly-owned by Centerra. They were looking for documents linked to a dividend payment of $200m that KGC paid to Centerra in December 2013.

At the end of last year, the authorities sentenced Dilger Zhaparov, former board member of Kyrgyzaltyn, a state-owned mining company which has stakes in Centerra, to three years in prison for authorising the dividend payment.

During the police raid last week, Centerra’s shares were briefly suspended on the Toronto stock exchange. Many analysts interpreted the raid and the Kyrgyz allegation of financial crime against Centerra as more positioning. Kyrgyzstan has been trying to increase its control over the gold mine, the country’s single biggest industrial asset, for years.

This week, Centerra also posted quarterly results which showed a fall in gold production because of a drop in quality of mined ore. Sales also lagged because of a delay in gold shipments to Kyrgyzaltyn, which trades Kumtor’s gold, in March.

Low gold prices hit revenues, which dropped by 66% to $73.2m, compared to last year.

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(News report from Issue No. 279, published on May 6 2016)

Kyrgyzstan and Centerra row

MAY 4 2016 (The Conway Bulletin) – Canadian miner Centerra Gold, owner of the Kumtor gold mine in Kyrgyzstan, once again said that it had not broken any rules in 2013 when it made a dividend payment . It was responding to a raid by police on the Kumtor office in Bishkek. Police were apparently sent to the Kumtor office specifically to search for any evidence of financial crime. Kyrgyzstan wants to increase its stake in Kumtor.

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(News report from Issue No. 279, published on May 6 2016)

Armenia gold reserve go up

APRIL 29 2016 (The Conway Bulletin) – Russian gold miner Polymetal said that its Lichkvaz project in Armenia holds 18.1 tonnes of gold, up 17% from a previous assessment. Last November, Polymetal bought the 75% stake it didn’t own in Lichkvaz for $9.7m, gaining full ownership in the project. Outside Russia, Polymetal operates in Armenia and Kazakhstan.

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(News report from Issue No. 279, published on May 6 2016)

Stock market: Centerra gold

MAY 6 2016 (The Conway Bulletin) – Centerra Gold shares rebounded 5% to 6.93 Canadian dollars last Friday after the regulator of the Toronto Stock Exchange briefly halted trading the day before, when news came through of a police raid at the office of a Centerra- owned company in Kyrgyzstan.

The stock continued to float around 7 Canadian dollars, settling on 7.18 yesterday, despite what could be regarded as poor quarterly results.

Centerra, though, still handed out its quarterly dividend of 0.04 Canadian dollars, in line with previous payments, which is something that other companies in the region have been dodging over the past few months if results have been lower-then-expected.

Low gold prices and slower-than-expected gold production have hit the company’s performance.

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(News report from Issue No. 279, published on May 6 2016)

Kyrgyz police raids Centerra

APRIL 28 2016 (The Conway Bulletin) – Toronto-listed miner Centerra Gold said that Kyrgyz police have raided the Bishkek offices of its wholly owned Kumtor Gold Company, reigniting a vicious row that has involved the miner and the government. For years, Centerra and the government have rowed about ownership of the Kumtor gold mine. Kumtor accounts for around 7% of Kyrgyzstan’s GDP and is the country’s largest industrial asset.

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(News report from Issue No. 278, published on April 29 2016)

Kazakhstan’s KAZ Minerals improves

APRIL 28 2016 (The Conway Bulletin) – London-listed Kazakh miner KAZ Minerals said it increased production of copper cathode by 12.6% in the first quarter of 2016, to 21,500 tonnes. Copper cathode sales also increased by 4% to $106.5m. Net debt grew by 7.6% to $2.4b on a quarterly basis because of the company’s investments in its two new mines at Bozshakol and Aktogay.

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(News report from Issue No. 278, published on April 29 2016)

Editorial: Kumtor and Kyrgyzstan

APRIL 29 2016 (The Conway Bulletin) – The Kyrgyz government and Centerra Gold appear hell-bent on another major row over ownership of the Kumtor gold mine.

Last year, Djoomart Otorbayev resigned as PM after barely a year in office having failed to reach an agreement with Centerra on swapping Kyrgyzstan’s share in the Canadian company for a 50% share in Kumtor.

In December, the authorities sentenced Dilger Zhaparov, former head of state-owned gold miner Kyrgyzaltyn, to three years in prison for authorising an allegedly illegal dividend payment to Centerra.

Now, the Kyrgyz authorities have stormed the offices of Centerra-owned Kumtor Gold Company, in what could be the beginning of a legal dispute.

Centerra replied with a detailed letter, written in unusual legalese lingo. The company argues that the dividend payment was legitimate.

Kumtor is vital for Kyrgyzstan. It is its largest industrial asset and seizing ownership would boost government revenues. All this, though, at the expense of its once-welcoming-now-worsening business environment.

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(Editorial from Issue No. 278, published on April 29 2016)

Kyrgyz police raid Kumtor’s Bishkek office

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)