CORRECTED-Canada's Centerra given go-ahead to mine Mongolian gold deposit

(Corrects size of deposit reserve to 1.6 million ounces, not
1,603 ounces, in third paragraph)
ULAN BATOR, Feb 4 (Reuters) - Canada's Centerra Gold Inc
CG.TO has been given the go-ahead from Mongolia's lawmakers to
mine the Gatsuurt Gold deposit after a five-year delay, as the
resource-rich country looks to bolster its economic activity and
gold reserves.
Mongolia's once-booming economy has taken a steep slide,
with the Asian Development Bank estimating growth in 2015 at
less than 3 percent compared with 17.5 percent in 2011. Mongolia
hopes to rake in greater revenue this year and stimulate growth
by green lighting projects such as Gatsuurt, despite a backlash
from some citizens.
The parliament passed a bill granting the country 34 percent
ownership of the mine with 1.6 million ounces of probable gold
reserves, a government website says. Centerra, which also owns
the Boroo mine in Mongolia, will hold the remaining 66 percent
of equity.
With the parliament's approval, the government can now
negotiate the final conditions for mining with Centerra.
Approval comes a year after legislators rejected the first
deal proposed with a smaller stake holding for the government in
return for larger royalty fees. It also follows an agreement
signed last May to relaunch an expansion project at Mongolia's
Oyu Tolgoi copper mine, owned by Rio Tinto RIO.AX RIO.L with
a price tag of $4-6 billion.
Centerra has been waiting since 2010 for a decision from the
government on whether it could go ahead after a law banned
mining at certain areas near forests and water sources,
including the Gatsuurt deposit.
In December 2014, Gatsuurt was included in a list of
strategic deposits that is exempt from the restrictions but
requires government ownership.
The deposit has attracted opposition from environmentalists
and conservationists concerned about sites where historical
artefacts have been discovered at the Noyon Uul mountain,
located seven km away from where Centerra plans to mine.
The government led by Prime Minister Chimed Saikhanbileg
ramped up efforts to reach a deal when artisanal miners began
mining the area for themselves illegally.
The legislation establishes special protected areas that
includes Noyon Uul where mining will not be permitted. A
spokesperson from the mining ministry could not confirm that the
specially protected areas did not include Gatsuurt, but said
that would be the likely result.