(Adds comment from Centerra, stock price movement)
By Olga Dzyubenko
BISHKEK, June 11 The government of Kyrgyzstan
said on Wednesday it had approved Centerra Gold's mine
plan for 2014, rushing to meet a deadline set by the Canadian
investor, which had threatened to shut operations at the
country's largest gold deposit.
"We have signed a relevant order. The company receives the
right to continue its work," Valery Dil, Kyrgyzstan's deputy
prime minister in charge of economy and investment, told
"We chose the most rational option ... to avoid the
mothballing of the company's facilities and to avert
unpredictable consequences for the economy and ecology."
But in a statement released shortly after midday on
Wednesday, Toronto-based Centerra Gold said it did not yet have
official approval for the mine plan in hand.
"The company reiterates ... that absent the receipt of such
approvals by the close of business on (Friday) June 13, 2014, it
intends to begin an orderly shutdown of operations at the Kumtor
project," Centerra said.
Centerra's stock jumped 6.4 percent to trade at C$4.33 on
the Toronto Stock Exchange, ahead of its peers but off an
earlier high of C$4.59.
Centerra has until Aug. 1 to coordinate its planned work at
the Davydov Glacier at the site of its operations in the Tien
Shan mountains, and register all the explored mineral reserves
of its licence area, the Kyrgyz geology and mineral resources
The Kumtor mine, which lies near the Chinese border at an
altitude of 4,000 metres (13,123 feet), has been a source of
political tension in the impoverished Central Asian country,
which has been trying to increase revenues from the project.
Kyrgyzstan's state environment agency said last week that
after looking into Centerra's 2014 work plan for the mine, there
were serious concerns that the plans could damage the glacier.
Centerra said last week that Kumtor had "significant
geotechnical and other challenges," including instability in the
wall of the open pit, water flows and ice movement from the
Davydov Glacier. The company has said it has been trying to get
its mine plan and related operating permits approved since late
The Kumtor mine, which was discovered by Soviet geologists,
is a key source of foreign exchange for the country of 5.5
million people. It is also the main taxpayer and biggest
employer in Kyrgyzstan.
A shutdown would further aggravate the bitter dispute
between Centerra and the government, which wants more revenue
from the mine.
Under a draft agreement in December, Kyrgyzstan would swap
its 32.7 percent stake in Centerra for half of the Kumtor mine,
the company's main asset. But the deal has not been finalised.
Kumtor's gold production is expected to be about 550,000 to
600,000 ounces in full-year 2014.
Stressing Kumtor's role in the country's economy and
signaling its willingness to reach a compromise with the
strategic investor, an official at the state geology and mineral
resources agency said last week that the authorities could amend
the water code, "taking into account Kumtor's strategic
(Writing by Dmitry Solovyov, additional reporting by Nicole
Mordant in Vancouver; editing by G Crosse, Dale Hudson and David