Response to Media Reports and Statements by the Leader of the Ar-Namys Party

published: 20 February 2014

The Company wishes to respond to certain public comments made by the leader of the Ar-Namys faction and statements in the media such as, “in 2009 processing object (plant) at the site (Kumtor) disappeared from the list of assets of both Kyrgyz and Canadian sides…”, and that “it is our asset, which is now not listed by documents. Neither as ours, not as Centerra’s…” – published at website www.vb.kg, the company considers it necessary to clarify that the gold-processing plant at the Kumtor mine, that MP is probably referring to, is an asset of the closed joint stock company Kumtor Gold Company (further KGC) and the value is booked on the KGC balance sheet.

Under international financial reporting standards, transports, equipment and mechanisms, compriseose the integrated property complex of the plant, and are considered as fixed assets according to rules of International financial reporting standards (issued by International Accounting Standards Board on IFRS, London, Great Britain), which are also accepted in the Kyrgyz Republic. KGC also observes national legislation, particularly laws of the Kyrgyz Republic “On Financial reporting” and “On joint stock companies” and reports according to the international standards of IFRS.

Closed Joint Stock Company Kumtor Gold Company is a wholly-owned subsidiary of Centerra Gold Inc., a public company established according to laws of Canada. Centerra Gold Inc. shares trade on the Toronto Stock exchange in Canada and the company is required to follow the proper level of reporting and, transparency, and files publicly its financial reporting as required by the stock exchange and other regulatory bodies. As well Centerra observes the rules of good corporate governance and management, and reports its financials according to the IFRS standards.

The financial reporting of KGC and Centerra Gold Inc., is audited annually by an internationally recognized audit firm which confirm the soundness of its assets annually. Accordingly, the abovementioned statements of Mr. Kulov F. are categorically not true.

Financial reports and other additional information on Centerra Gold Inc. assets are available at the corporate website http://www.centerragold.com/investor-center/financials and in the electronic information search system SEDAR www.sedar.com.

Also incorrect and false information on reserves and resources at the Kumtor mining site have been quoted and is very misleading. Data on the reserves and resources of the Kumtor mine was published by the company on the 10th of February 2014 and are available at the corporate web site www.kumtor.kg. The published data on reserves show that there is – 8,5 million ounces or approximately 264,8 tons of gold, and resources – 2,65 million ounces or 82,4 tons of gold in the resource..

The reserves and resources estimated by Centerra are determined in accordance with the National Instrument 43-101 which is the same standard used by many international mining companies. Such reserve and resource estimates are based on mining operations continuing until the end of the current life of mine plan in 2026 and do not consider potential mining activities after that time. These estimates also formed the basis of Centerra’s discussions with the Government of the Kyrgyz Republic when they entered into the non-binding Heads of Agreement on the Kumtor Restructuring. The Company will file updated reserve and resource estimates with the appropriate Kyrgyz authorities for their review and approval to facilitate the updating of the Kyrgyz state reserve registry.
The company also responded to public proposals made by members of the Ar-Namys faction to Repeal the Law on the Agreement on New Terms (further – “Law on Ratification of ANT”) on 31st of January 2014 and considers it necessary to remind them that based on the agreement of 2009 and the “Law on Ratification of ANT” the project was granted a special, profitable for the Kyrgyz Republic, tax regime. OJSC “Kyrgyzaltyn” received over 43 million shares of Centerra (valued at over USD$350 million), and in addition Centerra paid to the Kyrgyz Republic USD$22.4 million and invested a further USD$1 billion in the Kumtor project since 2009. In doing so, Centerra relied on the promises made by the Kyrgyz Republic in the 2009 agreements and the strength of the ANT Law which confirmed those agreements.

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