Centerra Gold to Hand Over Expropriated Gold Mine to Kyrgyzstan

Canterra Gold Inc has agreed to hand control of its expropriated gold mine to Kyrgyzstan’s government in a deal that was approved earlier this week.

Under the terms of the agreement, Centerra relinquishes control of its wholly-owned subsidiary, Kumtor Gold Co., and one of the state-owned Kyrgyzaltyn OJSC refiners. In exchange for control, Kyrgyzaltyn will return a 26% stake in Centara to a Canadian company, which is planning to cancel its shares.

The minority stake is valued at approximately $972 million ($776 million). Centerra will pay approximately $36 million for Kyrgyzaltyn shares and Canadian tax authorities, as well as other potential payments.

The deal comes nearly a year after Kyrgyzstan's secret police forced local managers to transfer control of Centerra's Kumtor mine. Centerra has invested more than $3 billion over nearly 30 years to transform remote real estate into one of the largest gold mines in Central Asia. Kumtor accounts for about one-tenth of Kyrgyzstan's economic output, and the country's president Sadyr Japarov has long advocated the nationalization of mines.