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Toronto, May 16, 2021 (Global News)-Centerra Gold Inc. (hereinafter referred to as “Centerra”) (Toronto Stock Exchange:CG)(New York Stock Exchange:CG) Announced today that it has initiated a binding arbitration against the government of the Kyrgyz Republic to exercise its rights under a long-term investment agreement with the government of that country. Centerra seeks to prohibit the government from taking further steps to implement the recently passed law or to pursue fines and taxes on recent purchases by Kumtor Gold Company (“KGC”), all of which violate the government’s investment agreement with the Kumtor mine. Centerra also intends to hold the government responsible for any and all losses and damages caused by its recent actions against the KGC and Kumtor mines, if a solution cannot be reached.
Centerra President and CEO Scott Perry said: “Since the beginning of this year, the leadership of the Kyrgyz Republic has acted at an alarming rate, destroying the operating foundation of the Kumto Mine and refusing to cooperate with The actions taken by us in contact with the government have left Centerra no choice but to exercise our legal rights by pursuing arbitration to protect the interests of KGC, Centerra and our shareholders. The government hopes to have a constructive dialogue, and we are still willing and willing to do so. do.”
Illegal and illegal acts in the Kyrgyz Republic include:
- The Parliament of the Kyrgyz Republic passed a new law on May 6. The new law enables the government to impose “external managers” to control the Kumtor mine if the government believes that KGC’s activities pose a threat to personal safety. surroundings;
- The Kyrgyz Republic court made a decision supported by the government and issued hastily on May 7, imposing a fine of 3 billion U.S. dollars on KGC in accordance with the requirements of the private civil environment;
- The National Committee of the Kyrgyz Republic and other Kyrgyz national and law enforcement authorities intimidated KGC personnel, including the police, who visited the residences of several KGC senior executives on May 15 and raided the KGC office in Bishkek; and
- Many tax claims filed by the government in Kyrgyzstan courts have been completely resolved in the previous project agreement and Kyrgyzstan court rulings, and were ultimately excluded by the government’s agreement with KGC and Centerra.
This and other recent actions by the government undermined the basic investment protection provided to Centerra and its Kyrgyz Republic subsidiary under the 2009 reorganization project agreement to manage the Kumtor mine. According to the investment agreement restated in 2009 and the 2017 Strategic Agreement on Environmental Protection and Investment Promotion (hereinafter referred to as the “strategic agreement”), Centerra’s claims will be determined by an arbitrator in the arbitration proceedings in Stockholm, Sweden, and based on the following Rules to proceed: United Nations Commission on International Trade Law (“UNCITRAL”). The two parties have 28 days to reach an agreement on an arbitrator, otherwise Centerra will request the Permanent Court of Arbitration in The Hague to appoint an arbitrator. According to the agreement, the applicable law is New York State law.
The Kumtor mine is the largest private sector employer and taxpayer in the Kyrgyz Republic and the largest foreign investment in the country. In 2020, Kumtor’s mining business contributed 12.5% of Kyrgyzstan’s GDP, and approximately 99% of KGC’s 2,750 employees are Kyrgyz citizens. Earlier this year, Centerra announced a new mining plan that will extend the life of the Kumtor mine by five years to 2031 and increase its gold reserves by three million ounces (85 tons), estimated The capital investment is 2 billion U.S. dollars.
Perry said: “Since the 1990s, Centerra and its predecessors have been operating the Kumtor mine for the common interests of the company and the Kyrgyz Republic.” “During that time, we have invested billions of dollars in the project. Operate with the highest environmental and social standards and create huge economic value, including thousands of high-paying and high-paying jobs for citizens of Kyrgyzstan, procurement opportunities for local suppliers, and deep relationships with locals through social and other projects Community cooperation.”
There is no guarantee that any current or future legal claims and other disputes related to KGC or Kumtor Mine can be resolved without significant impact on the company or loss of Centerra’s entire investment in Kumtor Mine.
About Centerra
Centerra Gold Inc. is a Canadian gold mining company dedicated to operating, developing, exploring and acquiring gold assets in North America, Asia and other markets around the world, and is one of the largest Western gold mining producers in Central Asia. Centerra operates three mines, namely the Kumtor mine in the Kyrgyz Republic, the Milligan Mountain mine in British Columbia, Canada, and the Öksüt mine in Turkey. Centerra’s stock is traded on the Toronto Stock Exchange (TSX) under the ticker symbol CG and on the New York Stock Exchange (NYSE) under the ticker symbol CGAU. The company is located in Toronto, Ontario, Canada.
Warning about forward-looking information
As far as Canadian securities laws are concerned, the information contained in this document that is not historical facts may be “forward-looking information” and fall within the meaning of the “United States Private Securities Litigation Reform Act of 1995.” Such forward-looking information involves risks, which may cause uncertainties and other factors that may cause actual results, performance, prospects and opportunities to be materially different from those expressed or implied by such forward-looking information. “Believe”, “expect”, “anticipate”, “consider”, “plan”, “plan”, “continue”, “budget”, “estimate”, “may”, “will”, “plan” and other words, “Understanding” and similar expressions indicate forward-looking information. These forward-looking statements relate to the following aspects: the company’s arbitration proceedings against the Kyrgyz Republic, the claims based thereon and its possible success, and future discussions with the government of the Kyrgyz Republic on disputes with the Kyrgyz Republic. The project agreement restated in 2009 and/or the 2017 Strategic Agreement on Environmental Protection and Investment Promotion, and the potential for successful negotiated solutions resulting from any such discussions.
Forward-looking information is necessarily based on many estimates and assumptions. Although Centerra believes these estimates and assumptions are reasonable, they are inherently subject to major technical, political, commercial, economic and competitive uncertainties and emergencies. Known and unknown factors may cause actual results to differ materially from those predicted in forward-looking information. Factors and assumptions that may cause actual results or events to differ materially from current expectations include: political risks related to the company’s operations in the Kyrgyz Republic; the Kyrgyz Republic government’s failure to implement its 2017 Environmental Protection and Investment Promotion Strategic Agreement and 2009 Continuing obligations stipulated in the agreement on the reorganization of the Kumtor mine in 2016 to allow KGC and KOC to continue to operate the Kumtor mine and to take any expropriation actions against the Kumtor mine, including through an external manager appointed by the government of the Kyrgyz Republic; the government of the Kyrgyz Republic or any country Actions taken by agencies or the Office of the Attorney General to restrict or otherwise interfere with KGC and KOC’s payment of funds to Centerra; Resource nationalism, including managing the expectations of external stakeholders; Changes or changes in laws, regulations, and government practices The impact of implementation in a positive manner, including improper civil or criminal proceedings against the company, its affiliates or its current or former employees, including the interaction of claims for environmental damage, the impact of the new Kyrgyz Republic’s law on human health, thereby making Kyrgyzstan The Government of the Republic of Stanley has implemented external management of the Kumto Mine; the potential impact of the Kyrgyz Republic’s tools on the Kumtore Mine; the company and its subsidiaries in some cases are unable to enforce their legal rights or are unable to take any advantage against the Kyrgyz Republic The arbitration award of the Kyrgyz Republic will be recovered; the important shareholders of the state-owned company of the Kyrgyz Republic are present For other risk factors, please refer to the section titled “Risk Factors” in the company’s recently submitted annual information sheet on SEDAR at: www.sedar.com Edgar www.sec.gov/edgar.
There is no guarantee that forward-looking information and statements will prove to be accurate, because many known and unknown factors and future events may cause actual results, performance or achievements to be significantly changed or different from the following results, performance or achievements: This article Such forward-looking statements contained or incorporated by reference are or may be expressed or implied. Therefore, all these factors should be carefully considered when making decisions about Centerra, and prospective investors should not rely excessively on forward-looking information. Forward-looking information is as of May 16, 2021. Centerra assumes no obligation to update or revise forward-looking information to reflect changes in assumptions, changes in circumstances, or any other events that affect such forward-looking information, unless applicable laws provide otherwise.
Want more information:
John W. Pearson
Vice President of Investor Relations
(416) 204-1953
john.pearson@centerragold.com
For additional information about Centerra, please visit the company’s website: www.centerragold.com On SEDAR www.sedar.com And on EDGAR www.sec.gov/edgar.
The PDF accompanying the announcement is available at: http://ml.globenewswire.com/Resource/Download/dcf15371-22d4-4611-b9aa-a64a17b88a0b
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