Kumtor Gold Company warns mine can be frozen from June 30

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BISHKEK. KAZINFORM - The Kumtor Gold Company will have to stop mine development in case the relevant environmental permit is not provided, KGC President Daniel Desjardins told reporters in Bishkek, AKI Press reported citing Tazabek.

The actions to freeze the mine may start from June 30, since this process requires certain time, he explained.

Stop of the mine even for an insignificant period of time may lead to loss of access to the ore body and loss of the value of the mine, Mr. Desjardins emphasized.

In case the mine is stopped from July 1, 2016, loss in gold production will make 15,400 ounces for every week of the Kumtor mine's idle period, he added.

Bishkek interdistrict court has ruled for the State Environmental and Technical Safety Inspectorate of Kyrgyzstan on May 25 and awarded damages in the amount of 6,698,878,290 soms (approximately US$ 98.4 million) to be paid by the Kumtor Operating Company for bringing harm to environment.

This is one of 4 claims brought by the Inspectorate against Kumtor Operating Company. The total amount of claim is more than 7 billion soms.
The court's ruling followed a ruling of May 24 against KOC in a claim brought by the Inspectorate in relation to unrecorded wastes from Kumtor's effluent and sewage treatment plants which awarded 663,839 Kyrgyz soms (approximately U.S.$10,000).

The Centerra Gold Inc. said it strongly disputes the allegations and claims and considers the claims to be without merit.

"The Kumtor Project has always been operated in accordance with the provisions of the 2009 project agreements governing the Kumtor Project, including the 2009 Restated Investment Agreement which provides a complete code of all taxes, fees and other charges applicable to the Kumtor Project. In addition, the Kumtor Project has been the subject of systemic audits and investigations over the years by Kyrgyz and international experts, including by an independent, internationally recognized expert who carried out a due diligence review of Kumtor's performance on safety, health and environmental matters at the request of Centerra's Safety, Health and Environmental Committee of the Board of Directors," the company said in the statement issued following the verdict.

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