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UPDATE 1-Kyrgyz authorities search Centerra unit Kumtor's office

Published 2016-04-28, 01:10 p/m
© Reuters. UPDATE 1-Kyrgyz authorities search Centerra unit Kumtor's office
CG
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(Adds stock decline, dividend, background on dispute with
government, mine size)
TORONTO, April 28 (Reuters) - Canadian miner Centerra Gold
Inc CG.TO said prosecutors and state law enforcement agencies
had conducted a search at the Bishkek offices of its subsidiary
Kumtor Gold Co on Thursday and its shares fell nearly 9 percent.
Centerra, which operates Kyrgyzstan's biggest gold mine,
Kumtor, said the search was to collect documents related to a
criminal case alleging financial violations by its subsidiary.

The government has said it is concerned about a dividend
paid by Kumtor to Centerra in 2013, Centerra said, adding that
the dividend complied with Kyrgyz laws and 2009 agreements
governing the Kumtor project.
Toronto-based Centerra and the government have been in
drawn-out, on-and-off talks on restructuring the ownership of
the mine. The ex-Soviet republic currently holds a 32.7 percent
stake in Centerra.
In late December, the government said it had stopped talks
with Centerra because the current agreement "ran counter to the
country's national interests."
The Kumtor mine is the biggest foreign investment in
Kyrgyzstan and accounted for 7.4 percent of the Central Asian
nation's GDP in 2014.
In February, Centerra cut its proven and probable gold
reserves at Kumtor by 495,000 contained ounces to an estimated
5.6 million ounces of gold as of Dec. 31, 2015. The company
processed 658,000 contained ounces in 2015.

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