Centerra and Kyrgyzstan Reach Agreement to Split

If implemented, the agreement would see the Canadian mining firm exit Kyrgyzstan after a tumultuous 20 years and Bishkek assume responsibility for the mine.

On April 4, Canadian mining firm Centerra Gold announced that it had reached an agreement with the Kyrgyz government, and Kyrgyzaltyn JCS, the state-owned mining company, which would see the Canadian firm exit the Central Asian state. The agreement was preceded by late March reports that the Kyrgyz government had approved such an agreement. At the time, however, the details were not known beyond the statement that they would fulfill the core terms outlined by the company earlier in the year when it confirmed it was in talks with Bishkek.

The agreement, to “effect a clean separation” includes the transfer of the Kumtor Mine and Centerra’s investments in Kyrgyzstan, the end of Kyrgyzaltyn’s involvement with Centerra, and the resolution of the standing disputes between Centerra and the Kyrgyz authorities.

In May 2021, Kyrgyz authorities moved to take control of the Kumtor Gold Mine, one of the country’s most lucrative assets. Long a flashpoint for nationalization calls, the seizure triggered a cascade of disputes that has led to this moment: Centerra looking to wash its hands of dealing with the Kyrgyz altogether.

Currently, Kyrgyzaltyn is Centerra’s largest single shareholder, with a 26.1 percent stake in the company. The announced agreement would see Kyrgyzaltyn transfer all of its 77.4 million shares to Centerra for cancellation for a purchase price of 972 million Canadian dollars (778.68 million U.S. dollars).

Kyrgyzstan would then receive from the Canadian firm 100 percent equity in its two Kyrgyz subsidiaries — the Kumtor Gold Company and Kumtor Operating Company — and assume responsibility for the Kumtor Gold Mine. This step includes a US$36 million cash payment, although $25 million would be withheld by Centerra for the Canadian tax authorities. The remaining $11 million would be paid out to Kyrgyzaltyn.

Upon closing of the agreement, Centerra would extinguish the inter-company balance between Centerra and the Kumtor Gold Company with a US$50 million payment. Kyrgyzaltyn’s two nominees to Centerra’s board would resign.

The agreement is contingent on the termination of all legal proceedings related to the Kumtor mine “with no admissions of liability.” These include all “ environmental, tax and other claims, fines, penalties or proceedings, including all criminal investigations and proceedings, in the Kyrgyz Republic” as well as the suspension of international arbitration proceedings. Centerra would agree to an order setting aside a February judgment in the Ontario Superior Court against Tengiz Bolturuk, a former member of the Centerra board of directors who, shortly after the Kyrgyz government seized control of the Kumtor Mine in May 2021, was put in charge of its operation. Centerra would then work to get its petition for Chapter 11 bankruptcy in the United States dismissed.

Not only is the agreement contingent on the cessation of all legal bickering, but it requires approval from Centerra’s shareholders (excluding Kyrgyzaltyn, for obvious reasons). The company’s press release states that it expects to hold a shareholder meeting in the second quarter of 2022 (so, between now and the end of June) to consider the matter, after sending shareholders “full details” of the agreement, the relevant transactions, the company’s rationale, and the risks.

Importantly, the company’s press release notes that “there can be no assurance” that Kyrgyzaltyn and the Kyrgyz government will fulfill the obligations laid out in the agreement, nor can it be assured that Centerra’s stakeholders and the Ontario court will approve the agreement.

If all the necessary conditions are met, the results would be a complete split of Centerra Gold from Kyrgyzstan, bringing to an end a tumultuous 20-year relationship, Diplomat writes.

Galantas Gold to kick off operations at Irish mine in June

Galantas Gold (TSX, LON: GAL) said on Wednesday it expects to re-start commercial operations at the past producing Omagh gold mine in Northern Ireland in June.

The Canada-headquartered junior said it had made significant progress in rehabilitating the underground workings, refurbishing, acquiring critical mining equipment, and installing electrical, water and ventilation systems.

GeoProMining Gold indirectly confirms its involvement in corrupt deal with Armenian government

The GeoProMining Gold LLC, which lost the vast majority of Armenia’s Sotk gold mine after the capitulation signed by Nikol Pashinyan, “has forgotten” about the losses incurred after its main shareholder Roman Trotsenko cut a “corrupt political deal” with the Armenian government, Pastinfo reports.

As a result of the trilateral statement of November 9, 2020, a part of the Sotk mine fell under the control of Azerbaijan. In particular, Anglo Asian Mining PLC, a UK-based holding company, has stated that more than 75% of the mine is under the control of the Azerbaijani military and GeoProMining Gold does not carry out any activity in Sotk.

Experts say that GeoProMining has all the legal grounds to apply to the International Court of Arbitration, as it has suffered significant material damage as a result of the actions of the Armenian government. Speaking to Sputnik Armenia, Sargis Grigoryan, head of the GPartners Law Firm, did not rule out the possibility that investors could file huge compensation claims against Armenia in international courts as part of international agreements. Moreover, the amount of possible compensation demanded, according to him, may range from $3 billion to $5 billion, which will be paid at the expense of Armenian taxpayers.

And suddenly a redistribution of business took place. Under highly suspicious circumstances, most of the shares of the Zangezur Copper-Molybdenum Combine (ZCMC) were sold to Roman Trotsenko without the knowledge and consent of the other GeoProMining Gold shareholders, which seemingly overshadowed the damage caused by the loss of the Sotk mine.

On March 16, Pastinfo submitted a written inquiry to GeoProMining Gold Director Roman Khudoli over violations of the company’s rights due to the capitulation deal, damages suffered, and Sotk mine operation, however the company has nothing to say as a result of suspicious transactions related to ZCMC.

In particular, Pastinfo asked the company whether the interests and rights of GeoProMining Gold have been violated as a result of the implementation of the provisions enshrined in the November 9 statement of the Armenian and Azerbaijani leaders, and the scale of the material losses it suffered. The news website also sought to reveal the official reason why the company did not make a claim to the relevant international financial institutions or the International Court of Arbitration against Armenia to get compensation, especially when, according to experts, the company had quite high chances to win the lawsuit. It also asked whether any issues related to the impossibility of operating the Sotk mine, compensation for damages, personnel maintenance and security provision while developing the mine had been discussed with the Armenian authorities in writing or verbally.

Pastinfo also tried to find out the reason for the “generosity” of the company that suffered great losses towards the Armenian government. The company was deprived of the opportunity to exploit 75% of the Sotk gold mine reserves, and, accordingly, the expected profits, but in parallel with the deal in September 2021, GeoProMining Gold announced that it would not cut jobs and after the ZCMC deal signed on September 30, it donated a large part of the newly acquired shares to the Armenian government.

“In addition, we reminded the company that the Azerbaijani leadership, who had been announcing plans to sue GeoProMining Gold over the Sotk mine development and waring about the environmental risks caused by the Zangezur Copper and Molybdenum Combine, stopped making such statements after the Industrial Company, a GeoProMining Armenia subsidiary, acquired a stake of ZCMC. We tried to find out what they attribute it to and whether any efforts have been made to normalize relations with Azerbaijan,” the news site said.

“Dragging its feet, the GeoProMining Gold LLC has avoided answering the mentioned questions, thus indirectly confirming our suspicions about the shady arrangements and a corrupt deal with the current Armenian authorities,” Pastinfo stressed.

It is worth noting that Russia’s former Minister of Health and Social Development Mikhail Zurabov, who owns 12.5% of the ZCMC shares, filed a lawsuit to a court in Syunik in August 2021, asking for a preference to acquire the ZCMC shares. The court not only agreed to hear the lawsuit but also applied a measure, seizing 75% of the shares of the Zangezur Copper Molybdenum Combine.

Later on September 30, the Syunik Court of General Jurisdiction ruled to lift the ban on shares, and the GeoProMining Armenia subsidiary acquired them immediately after it. After the deal, Trotsenko granted 15 percent of the shares of the Molybdenum Combine to the Armenian government, Panorama reports.

China makes fresh forays into gold mining sector in Tajikistan

Chinese investors often get generous tax breaks in the country.

Tajikistan’s president traveled to the northern Sughd region on April 14 to oversee the opening of a new gold processing plant built by a Chinese investor at a cost of around $136 million.

The enterprise, Talco Gold, will produce up to 2.2 tons of gold and 21,000 tons of antimony annually, according to government officials.

China is by far Tajikistan’s main source of foreign direct investment. In 2021, businesses from China invested more than $211 million in Tajikistan, an amount that account for nearly 62 percent of the global FDI figure. Those funds mainly went toward the extraction and processing of lead, zinc and tin ores, and the mining of precious and semi-precious gems and metals.

Talco Gold is a joint venture between the Talco Aluminum Company, a Tursunzoda-based company said to be owned Hasan Asadullozoda, the brother-in-law of President Emomali Rahmon, and China’s Tibet Huayu Mining.

The company has promised it will provide jobs for 1,500 people, most of them Tajik nationals. That prospect comes at a fortuitous time, just as Tajikistan faces the prospect of a fresh economic crisis precipitated by international sanctions on Russia, where hundreds of thousands of Tajiks travel annually for seasonal labor.

Work on building the processing facility in the Sughd region, which will work with material mined at the nearby Chulboi, Konchoch and Shakhkon deposits, had begun four years ago, but was delayed by the onset of the COVID-19 pandemic.

Talco is ostensibly an aluminum concern, but it began to branch out in 2015 as a result of a state-designed program to prop up the company. As part of that program, the government handed the company a 25-year concession to the Konchoch gold and silver deposits.

Chinese investments invariably arrive with many strings attached – not least because Tajikistan is deeply in debt to Beijing. According to the Finance Ministry, Tajik debt to China as of January 1 amounted to $1.1 billion, which is almost exactly one-third of the country’s overall external debt.

Some economic experts cast doubt on whether China’s debt strategy for Tajikistan brings sufficient rewards.

“China gives money as a loan to Tajikistan for specific projects, and often the parliament approves tax exemptions during the construction period,” one analyst told Eurasianet on condition of anonymity, as criticism of the government can incur reprisals. “Construction equipment is brought in from China, Chinese workers are engaged in the building. As a result, all the money goes back to China, and Tajikistan remains saddled with the debt”, Eurasianet writes.

A plan to extract gold in Northern Ireland’s eastern borderlands has moved closer to fruition

Mawson Gold has received key planning and regulatory decisions

Mawson Gold has received key planning and regulatory decisions related to its Rajapalot gold-cobalt project in the Lapland region of Finland.

The decisions were handed down by the Lapin Liitto, the regional council of Lapland. The council voted 42-6 in favour of developing the deposit. The body also approved the participation and evaluation plan, which sets out the regional stakeholder engagement process.

Environmental campaigners resist mining for base metals

Campaigners say the area is home to rich biodiversity and natural landscape, and is not appropriate for the type of mining that any prospecting may unveil

Environmental campaigners have said they will vigorously resist any attempts to begin mining in east Clare, after the Department of the Environment approved a licence for a company to explore the possibility.

The department said that Environment Minister Eamon Ryan intended to grant a prospecting licence to Navan, Co Meath-based Minco Ireland for base metals, barytes, as well as gold and silver ore around Tulla in Clare.

Dundee Precious Metals saw its third consecutive year of record annual gold production in 2021

TSX-listed Dundee Precious Metals saw its third consecutive year of record annual gold production in 2021. Its two gold mines in Bulgaria performed better-than-expected in Q4, while processing at the Namibian Tsumeb smelter fell behind guidance.

“Our mining operations continued to deliver impressive performance in the fourth quarter, driven by a new record for quarterly gold production at Ada Tepe, combined with strong results from Chelopech,” Dundee’s president and CEO David Rae said on January 10.

The Canada-based miner’s consolidated gold production was 310,000oz for 2021, which is at the higher end of the 271,000-317,000oz guidance. This came after production of 82,800oz in Q4.

Canaccord Genuity Capital Markets analyst Dalton Baretto said the consolidated Q4 production beat Canaccord’s forecast of 73,000oz by 13%.

Baretto said the result was due to higher throughput, grades and recoveries at the central-western Bulgarian Chelopech underground gold-copper mine.

Chelopech’s Q4 gold production was 49,000oz, which took the 2021 total for the operation to 177,000oz. This beat the 156,000-176,000oz guidance, but was down from the 179,000oz achieved in 2020.

Chelopech’s 2021 copper production was in line with guidance at 34,700 million pounds after production of 9.2Mlbs in Q4.

Dundee reported that the Southern Bulgarian Ada Tepe mine – which began commercial production in June 2019 – produced 133,000oz of gold in 2021, which compares with guidance of 115,000-141,000oz. Production was 119,000oz in 2020.

The 2021 total came after Ade Tepe produced 33,800oz in Q4, which was “slightly above plan due to higher grades”, Dundee said.

Ade Tepe’s Q4 gold production was in line with Baretto’s forecast.

“The Tsumeb smelter processed approximately 52,000 tonnes of complex concentrate during the fourth quarter, reflecting an 8-day maintenance shutdown to repair a water leak in the offgas system,” Dundee said.

The miner noted that this resulted in the smelter processing about 189,700 tonnes of complex concentrate in 2021, which was below revised guidance of 195,000-200,000t.

Meanwhile, Dundee announced in November that it would supplement its base US$0.03/share quarterly dividend with the repurchase of 152,000 shares at C$7.51/share.

In aggregate, Dundee repurchased 1,723,800 common shares in 2021 at an average price of C$7.64/share, for a total value of about C$13.2 million, the company said.

Baretto said the total value implies an incremental C$0.07/share, and together with the base dividend implies a total trailing 12-month yield of 2.9% at the current C$7.33 share price.

Mercury mining makes a comeback in Kyrgyzstan

Mercury, used in gold mining and electronics, poses serious health risks. Despite international pressure to ban its trade, Kyrgyzstan is ramping up production.

Just north of Aidarken, a town in Kyrgyzstan, smokestacks tower over hillsides streaked with red. Deep underground, men wearing headlamps toil away in the dusty dark, breaking rocks with sledgehammers. They are mining cinnabar ore, the mineral processed into mercury — a gleaming, silver-colored metal with dangerous properties.

The Aidarken mine is one of the  on Earth where new mercury is legally extracted for the international market. Since 2013, 135 nations have signed the Minamata Convention, a global agreement that bans new mercury production and aims to phase out most international trade in the metal.

But Kyrgyzstan, which sees mining as a cornerstone of its economy, isn’t one of them. The country is now ramping up mercury production, even as researchers warn the metal poses a health risk not just to people living near the mines, but around the world.

“I believe that mercury pollution of the environment is not only our problem,” said Makhmud Isirayilov, the head of a nearby laboratory run by the Health Ministry. “This is a global problem.”

A lucrative international market

Mercury mining in Aidarken, a town of roughly 10,000 people, began in 1941 when Kyrgyzstan was part of the Soviet Union and scrambling to find new sources of metal. After the Soviet Union’s collapse, the plant remained a state-owned venture, producing mercury for export to China, Russia, Kazakhstan, Ukraine, India, France and the United States.

Though the market has shrunk since the establishment of the Minamata Convention, mercury is still a $38-million (€32-million) industry worldwide and a significant driver of the regional economy in Kyrgyzstan’s impoverished Batken province, where per capita production is about 2.5 times lower than the national average.

The metal is used in manufacturing certain types of lamps, electrical equipment and batteries and is also a major component in artisanal and small-scale gold mining, mainly in South America and sub-Saharan Africa.

A 2015 global inventory found these activities emitted about 2,500 metric tons of mercury into the atmosphere annually. Illegal mercury mining is also a thriving black market, even in countries that have signed onto the Minamata Convention, and is particularly destructive in the Amazon.

Source: dw.com

Green activists attempt to block major gold mining project in Romania

Romanian NGO Declic, a member of the Mining Watch Romania network, reportedly managed to block the gold and copper mining in Rovina developed by the Canadian company Euro Sun Mining (formerly Carpathian Gold), the largest gold and copper mining project in the European Union.

Mining Watch Romania announced that Declic became the owner of three plots of land strategically located in the landfill area.

“It is not clear how Euro Sun can continue the project without the approval of landowners,” Mining Watch Romania said.

The Rovina gold deposit, the second largest in Europe, holds resources estimated at 204 tonnes of gold and over 635,000 tonnes of copper.

Earlier this year, Euro Sun received the approval of the Romanian authorities for the initiation of the Strategic Environmental Assessment (SEA) related to the project, an important step towards obtaining the building permit for the extraction facilities.

Later in the summer, based on this approval from the state, Euro Sun Mining decided to list its shares on the London Stock Exchange, based mainly on the Romanian project.

Source: romania-insider.com