During a working trip to the Issyk-Kul region, Prime Minister and Head of the Presidential Administration of the Kyrgyz Republic, Akylbek Japarov, familiarized himself with the activities of the closed joint-stock company “Kumtor Gold Company.” A meeting was held with the management of the Kumtor enterprise, where Prime Minister Japarov emphasized the crucial importance for the state to ensure uninterrupted and efficient operation of the mine, as well as the fulfillment of all planned objectives. He then visited the machinery workshop of the enterprise to inspect the assembly of new excavators and refueling stations. The project for the automation of oil storage facilities and refueling stations at Kumtor allows for meticulous control over fuel consumption. Currently, over 800 different vehicles, machinery, and equipment are utilized to ensure uninterrupted mining at the site. Prime Minister Japarov also visited the main quarry of Kumtor, where mining operations are in full swing, including the implementation of an underground gold mining project. It’s worth noting that in February of this year, the underground gold mining project at the Kumtor deposit was launched, aiming to extract around 115 tons of gold. During the inspection of the gold mining plant, it was noted that new equipment has been installed, similar to an X-ray machine, enabling proper control of entries and exits from the plant premises. Additionally, it was announced that gold extraction from ore waste located in the mine’s tailings facility is planned to commence in 2026. Preliminary estimates suggest this could yield an additional 120 tons of gold. Furthermore, the 2023 results revealed that 13,567 tons of gold were extracted from the Kumtor deposit, with the company’s total revenue amounting to $848 million USD, and a net profit of $302.5 million USD. Prime Minister Akylbek Japarov, having familiarized himself with the Kumtor mine operations on-site, highlighted significant changes occurring for the state following Kumtor’s transition. Notably, last year, the country’s budget received 17.2 billion soms in taxes, social payments, and other fees, with over 99.9% of the workforce comprising local specialists.
Tag: Kyrgyzstan
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Prime Minister of Kyrgyzstan Visits Kumtor Gold Mine
During a recent working trip to the Issyk-Kul region, Akylbek Japarov, the Prime Minister and Head of the Administration of the President of the Kyrgyz Republic, visited the operations of the closed joint-stock company “Kumtor Gold Company.” The Prime Minister toured the plant’s machinery workshop, where he inspected the assembly of new excavators and refueling stations. Currently, the mine utilizes over 800 various types of transportation vehicles, machinery, and equipment. Japarov also visited Kumtor’s main quarry, where a project for underground gold mining has been underway since February of this year. According to estimates, the project aims to extract approximately 115 tons of gold. As reported by the cabinet, gold extraction from the mine’s ore waste, located in the tailings facility, is planned to commence from 2026. Preliminary calculations suggest an additional yield of 120 tons of gold through this initiative. In 2023, Kumtor mine yielded 13,567 tons of gold, generating a total revenue of $848 million with a net profit of $302.5 million.
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Kumtor Gold Company to Pay Kyrgyzaltyn $151.3 Million in Dividends
Kumtor Gold Company (KGC) has announced its plans to pay Kyrgyzaltyn $151.3 million in dividends. This amount exceeds the 2022 figure by $11.3 million when Kyrgyzaltyn received $140 million. According to KGC’s financial report, the company’s net profit amounted to $371.721 million last year, marking a 59.4% increase from 2021.
It’s worth noting that with the dividend payout by Kumtor, Kyrgyzstan’s total income from the gold mining company for 2022 and 2023 will reach $291.3 million. This nearly triples the dividends received by Kyrgyzstan from Canadian company Centerra Gold Inc. between 2010 and 2021, which amounted to $101.7 million.
Recall that Kumtor fully transitioned into Kyrgyzstan’s ownership on July 29, 2022, following the exchange of relevant documents at the Kyrgyzstan Embassy in the United Kingdom.
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Kyrgyzstan Allocates 1 Billion Som for Geological Industry Development
For the first time in Kyrgyzstan’s history, 1 billion som has been allocated for the development of the geological sector, stated in the president’s congratulatory message on Geologist Day. According to Sadyr Japarov, these funds will be used for the discovery of new deposits, conducting geological research, purchasing specialized equipment, exploration, assessment of mineral resources, and specialist training.
Today, large deposits of state significance are allocated to enterprises with a hundred percent state share. Licenses have been issued to Kyrgyzaltyn JSC, state enterprises Kyrgyzkomur and Kyrgyzgeology, the president noted.
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Kyrgyz Ministry of Ecology Stresses Compliance with Mining Legislation
The Ministry of Ecology in Kyrgyzstan has issued a reminder regarding the imperative need to adhere to the country’s mining laws concerning subsoil use.
In order to prevent the unauthorized transfer of licenses for subsoil exploitation, the Ministry underscores that, as per the Subsoil Law, such transfers are prohibited until a period of two years has elapsed since the conclusion of the license agreement for conducting mining activities.
Furthermore, it is clarified that the transfer of a license to another party, resulting from the transfer of rights under the license, is treated akin to obtaining a new license. This action necessitates the payment of a bonus as mandated by Kyrgyz tax laws. However, any such transfer can only occur if the current subsoil user is devoid of outstanding payments related to bonuses, royalties, and fees for subsoil use.
According to Article 351 of the Tax Code, except in specific instances like inheritance or the reorganization of a legal entity without altering its ownership structure, the transfer of subsoil usage rights to another entity is subject to taxation.
Failure to meet the stipulated deadlines for bonus or license fee payments can lead to the suspension and eventual termination of subsoil usage rights.
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Revised Agreement for Gold and Silver Sale Approved by Kyrgyz Government
The Kyrgyz government, under the leadership of Prime Minister Akylbek Japarov, has signed a resolution (No. 117, dated March 15, 2024) approving a revised contract for the sale of gold and silver between Kumtor Gold Company, Kyrgyzaltyn, and the government. The decision aims to ensure the uninterrupted and efficient operation of the Kumtor mine following Centerra Gold Inc.’s exit from the Kumtor project. The approved resolution includes provisions for the revised contract, rendering previous agreements obsolete. Additionally, the resolution advises relevant entities such as Kumtor Gold Company, Kumtor Operating Company, Kyrgyzaltyn, and the National Bank of the Kyrgyz Republic to take necessary actions as per the resolution. Ministries and administrative bodies are instructed to organize and execute tasks in line with the resolution. The administration of the Kyrgyz President will oversee the implementation of the resolution, which comes into effect immediately upon signing and will be officially published.
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Kyrgyzaltyn Announces First Gold Delivery to International Market in April
In a closed briefing attended by journalists, a high-ranking official from the Kyrgyz presidential administration revealed that the first delivery of gold to the international market by Kyrgyzaltyn is slated for April. The official emphasized transparency, stating that the precious metal would be sold at the price prevailing on the London Stock Exchange at the time of delivery. Despite receiving several purchase offers, many of which requested discounts, the authorities are committed to transparency in the process. Additionally, the official expressed a desire to retain as much gold as possible within the country to encourage domestic investment. To facilitate this, Kyrgyzaltyn is finalizing the construction of a plant for the production of weighted ingots, which will be available for purchase by the public. However, approximately 10-12 tons of gold will be allocated for sale to the foreign market. Furthermore, the authorities are actively working towards the development of a thriving jewelry industry within the country.
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Centerra Gold Ensures Measures to Protect Shareholder Rights Amid Kumtor Mine Seizure
Centerra Gold, based in Canada, is actively implementing measures to safeguard shareholder rights following the seizure of its Kumtor gold mine by Kyrgyzstan’s parliament. The company’s Chief Executive, Scott Perry, emphasized strong support from the Canadian and UK governments in this matter, reassuring stakeholders during a conference call with analysts.
The move by Kyrgyzstan’s parliament to seize control of the Kumtor gold mine, the country’s largest, came after Centerra announced its intention to challenge the government in an international court. This decision has sparked significant concern over foreign investment in the Central Asian country, prompting expressions of disappointment from the Canadian government.
Furthermore, Centerra Gold imposed restrictions on the sale of shares held by Kyrgyzaltyn JSC, a state-owned entity with a sizable stake in the company. The resignation of Kyrgyzaltyn nominee Tengiz Bolturuk from Centerra’s board was also accepted by the company.
Despite these developments, Centerra Gold disclosed holding $823 million in cash reserves, with the majority held outside of Kyrgyzstan. Perry emphasized that Centerra no longer retains control over the Kumtor mine.
This escalation is part of a longstanding dispute between Kyrgyzstan and Centerra Gold over profit-sharing arrangements. The tension intensified following political upheaval in Kyrgyzstan last October, with the country’s new leadership taking a firm stance against the mining company.
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Centerra Gold Confirms Kumtor Gold Mine Ball Mill Repair Completion by Mid-April
Centerra Gold Inc affirmed on Monday that the ball mill at its Kumtor gold mine in Kyrgyzstan will recommence operations by mid-April after undergoing repairs to its ring gear. Despite the shell replacement of the ball mill, Centerra assured that gold production and cash costs would remain unaffected by the maintenance activity. Owned 53 percent by uranium producer Cameco Corp, Centerra addressed concerns over delays stemming from the Kyrgyz government’s pending decision on ratifying the mine. Last month, both Canadian firms indicated that the Kyrgyz government required until April 30 to finalize its decision, a factor that has weighed on Centerra’s stock performance. Shares of Centerra experienced a dip to a three-month low on Monday morning, declining by 51 Canadian cents or 4.1 percent, trading at C$11.83 on the Toronto Stock Exchange.
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Kumtor Gold Company Exceeds Gold Production Targets in 2023, Boosting Revenue and Profit
Kumtor Gold Company, based in Kyrgyzstan, achieved remarkable milestones in 2023, surpassing its gold production targets and recording significant revenue and profit growth. The company’s production output totaled 15.567 tons of gold, slightly higher than the amount sold, which stood at 15.577 tons, reflecting robust operational efficiency and market demand. With revenue from production activities soaring to $849 million, Kumtor Gold exceeded its planned revenue of $734.2 million, driving a net profit of $302.4 million, well beyond the projected $194 million. Tax contributions to the republican budget further underscored the company’s substantial economic impact, amounting to 17.241 billion soms ($192.787 million).
In a strategic move to optimize workflow and modernize equipment, Kumtor Gold implemented measures resulting in savings exceeding $30 million, demonstrating its commitment to operational excellence. Despite a reduction in capital investment volume to $111.5 million compared to the previous year, the company’s focus on efficiency enhancements yielded impressive financial outcomes.
Moreover, Kumtor Gold reaffirmed its commitment to regional development by allocating significant funds to various initiatives. Notably, $8.389 million was directed towards the development of the Issyk-Kul region, while $5.033 million was allocated to the Naryn region development fund. Additionally, contributions to the Regional Development Partnership Fund and the Nature Development Fund further underscored the company’s dedication to environmental sustainability and community welfare.
Kumtor Gold Company remains a cornerstone of the mining industry in Kyrgyzstan, spearheading the operation of the Kumtor project, the country’s largest gold mining enterprise. With a commitment to excellence, responsible production practices, and community engagement, Kumtor Gold continues to drive economic growth and social development in the region.