TORONTO (Reuters) – Canada’s Centerra Gold Inc on Monday mentioned Kyrgyzstan items Kumtor Gold Co and Kumtor Working Co have commenced chapter proceedings in a U.S. court docket following nationalization of the miner’s Kumtor gold mine by the previous Soviet republic.
Centerra mentioned the Chapter 11 submitting would haven’t any monetary or operational impression on it or every other areas of its enterprise, together with the Mount Milligan mine in Canada, the Oksut Mine in Turkey and its molybdenum enterprise in North America.
Kumtor, Kyrgyzstan’s largest overseas funding mission, was operated by Centerra. Nonetheless, the federal government of the Central Asian nation seized the mine, prompting the Canadian miner to hunt redress in a world court docket.
Kyrgyz lawmakers in early Could handed a regulation giving the state energy to briefly take management of the mine and appoint “exterior administration” to deal with alleged environmental and security issues.
Centerra mentioned chapter proceedings would forestall additional efforts by the Kyrgyz authorities to strip Kumtor Gold of its property or in any other case “improperly dispose” of the Kumtor mine in violation of its funding agreements with the corporate.
Representatives for the Kyrgyz authorities couldn’t instantly be reached by Reuters for remark.
Centerra mentioned the court-supervised restructuring gives for a worldwide computerized keep of all claims towards the Kyrgyz enterprise items, which it mentioned are at the moment solvent.
The Canadian miner mentioned that whereas it hopes the method will facilitate talks, it’ll proceed to pursue arbitration proceedings to implement agreements with the Kyrgyz authorities.
“These agreements are ruled by New York regulation, and we count on the U.S. court docket proceedings will serve to additional shield Centerra’s pursuits below their phrases pending a restructuring or different decision of the dispute,” Centerra Chief Government Scott Perry mentioned in a press release.
Centerra has suspended its 2021 manufacturing steering and three-year outlook for Kumtor, which final yr produced greater than 556,000 ounces (15,762 kg) of gold.
The miner mentioned it will additionally conduct a strategic evaluation of its possession of the subsidiaries “in mild of current occasions involving the Kumtor mine”.
(Reporting by Jeff Lewis and Mike Spector; Modifying by Christopher Cushing)
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