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Kyrgyzaltyn comments on reduction of country's share in Kumtor project

Chairman of the Board of Kyrgyzaltyn Almaz Alimbekov commented to 24.kg news agency on reduction in the share of Kyrgyzstan in Centerra Gold Inc.

Earlier it was reported that share of Kyrgyzstan decreased by six percent because of the additional issue of shares. According to Almaz Alimbekov, the additional share issue of Centerra Gold Inc. will allow Kyrgyzaltyn to receive dividends for other 20 years.

He confirmed that in 2016 Centerra Gold Inc. acquired the North American mining company Thompson Creek Metals Inc.

Financing of the transaction was also carried out through additional emission. The size of this transaction was about $ 1.1 billion. Within the transaction, about 26.6 million shares were additionally issued and placed on the market. As a result, $ 141.4 million was raised. In addition, the additional issue of 22.3 million shares was exchanged for shares of Thompson Creek Metals.

«The number of shares owned by Kyrgyzaltyn OJSC did not change as a result, but the additional issue led to a decrease in the share of Kyrgyzaltyn OJSC from 32.1 percent to about 26.6 percent. But it is not a decrease of six percent. At the same time, the interests of all other shareholders decreased proportionally. The transaction was conducted in accordance with international law and approved by the majority of the members of the Board of Directors of Centerra Gold Inc.," Almaz Alimbekov commented.

«The deal enables Kyrgyzaltyn, firstly, to increase the amount of dividends 1.5 times, and, secondly, the company will be able to receive dividends for at least other twenty years," the head of Kyrgyzaltyn assured.

He explained that Thompson Creek Metals Inc. is an operating enterprise. The company has gold, copper and molybdenum deposits in its assets. The main asset of TCM is the copper-gold Mount Milligan mine located in the Canadian province British Columbia, which can be considered as one of the most attractive and profitable mining projects in Canada. Its gold reserves amount to about 177 tons, copper — 991,000 tons. The operating life of the mine, starting from 2017, is 20 years.

After the acquisition of TCM, the volumes of gold production of Centerra Gold Inc. will significantly increase. Taking into account the low cost of gold production at Mount Milligan mine, this will double the total profit.

Almaz Alimbekov

«In its turn, the profit of Kyrgyzaltyn OJSC, increased thanks to dividends, will increase the amount of deductions to the republican budget proportionally," Almaz Alimbekov said.

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