The report of the Temporary Parliamentary Commission on the compliance of JSC Kumtor Operating Company to the standards and requirements for the rational use of natural resources, environmental protection, safety of production processes, and social protection of the population in the area of impact of the gold mine, formed on February 15, 2012, received a high profile in the Parliament, media and public.
The report contains a long list of unfounded accusations against the Kumtor Operating Company, all of which are based on incorrect facts and assumptions. The Kumtor Operating Company has worked and continues to work in strict compliance with the legislation of the Kyrgyz Republic, and does meet international environmental and industrial safety standards, which has been proven repeatedly, in the course of systematic inspections undertaken by the Regulatory Authorities of Kyrgyzstan, as well as by international experts.
The unfounded conclusions announced by the Temporary Parliamentary Commission during the Parliamentary hearings have damaged the image of the Kumtor Operating Company and of Centerra Gold Inc. Since June 19th the market valuation of Centerra Gold Inc dropped sharply due to the sharp drop of the value of the securities of Centerra Gold Inc. on the Toronto Stock Exchange. This sharp drop in the value of common stock of Centerra Gold Inc reduced the value of the Kyrgyz Republic shareholding by more than US $300 million.
In 2009 Kumtor, Centerra and the Kyrgyz Republic entered into the Agreement on New Terms (ANT). The ANT and related agreements were freely entered into by the appropriate Kyrgyz authorities. They were approved by parliament and the Constitutional Court and are valid and enforceable obligations of the Kyrgyz Republic. These agreements contain guarantees by the Kyrgyz Republic to protect the Kumtor project, prohibit the actions being discussed by parliament, and state that the Kyrgyz Republic shall be liable for substantial damages in international arbitration in the event of unjustified claims and attacks such as those being made by the Temporary Parliamentary Commission.
The ANT enabled Kumtor to continue to make significant contributions to the economic development of the Kyrgyz Republic and form a good basis for the continuing success of the project. Kumtor and Centerra are always ready to engage in a constructive dialogue with appropriate Kyrgyz Republic authorities but such discussions must take into account the binding commitments made by the Kyrgyz Republic in the ANT.
For further information please contact Media Relations, KOC