Centerra Gold Comments on Kyrgyz Republic Developments
1 University Avenue, Suite 1500
Toronto, ON
M5J 2P1
tel 416-204-1953
fax 416-204-1954
www.centerragold.com
NEWS RELEASE
Centerra Gold Comments on Kyrgyz Republic Developments
Toronto, Canada, May 7, 2021: Centerra Gold Inc. (“Centerra”) (TSX: CG) (NYSE: CGAU) announced
today that it has become aware of a number of legal and political developments in the Kyrgyz Republic which
may affect Centerra’s ownership of the Kumtor Mine and its rights under the 2009 restated project agreements
which govern the Kumtor Mine.
First, the Company understands that a law has been passed by the Kyrgyz Republic Parliament which would
enable the Kyrgyz Republic Government to impose “external management” on companies in the Kyrgyz
Republic operating under concession agreements. The law was proposed, passed three readings and was
adopted by Parliament in a single day and will now be referred to the President of the Kyrgyz Republic for
signature. The sponsor of the law, Mr. Akylbek Japarov, notes th at the only project operating under a
concession agreement in the Kyrgyz Republic is the Kumtor Mine.
Accordingly, the Company understands that this newly adopted law on external management would apply in
circumstances where Kumtor Gold Company (KGC) violates certain Kyrgyz laws relating to safety and thereby
creates an immediate threat to the life or health of people: (i) prohibit s KGC’s managers from managing the
mine (or else face criminal sanctions) ; and (ii) enables the Prime Minister of the Kyrgyz Republic to appoint
an external manager to take control of all management activities of KGC, including its bank accounts.
Centerra notes that Mr. A. Japarov is also the Chairman of the Kyrgyz Republic State Commission which was
formed in February 2021 to review the activities of the Kumtor Mine and is expected to report its findings
shortly.
Second, the Company is aware of other draft laws and decrees in the Kyrgyz Republic which seek to undermine
the 2009 restated Kumtor project agreements and the tax and fiscal regime under which the Kumtor Mine has
operated since 2009. It is unclear whether such drafts have progressed past the proposal stage.
Third, in March 2021, four Kyrgyz Republic private citizens commenced a civil claim against KGC requesting
that KGC’s past practice of placing waste rock on glaciers be determined to be illegal. This week the claimants
have recently amended their claim to demand over U.S. $3 billion in environmental damages in favour of the
Kyrgyz Republic. The Company notes that one of the claimants, Mr. Kutmanov, is the son of M s. Dinara
Kutmanova, the Director of the Kyrgyz Republic State Agency for Environment Protection and Forestry.
Fourth, further to the Company’s March 18, 2021 news r elease, the Company has now received the results of
the tax audits and re-audits conducted by the Kyrgyz Republic State Tax Service in respect of tax years 2015
through 2020. The results from the State Tax Service are preliminary and still being analyzed by K GC;
however, on their face they assert additional taxes owing by KGC in excess of U.S.$170 million. Such amounts
are allegedly owing on the same grounds as the previous tax claims received by the Company for withholding
taxes on dividends, certain payroll deductions and social insurance contributions, though it is unclear whether
the amounts noted in the latest audit results overlap the previously claimed amounts.
1 University Avenue, Suite 1500
Toronto, ON
M5J 2P1
tel 416-204-1953
fax 416-204-1954
www.centerragold.com
2
As the Company has noted many times, the 2009 restated Kumtor project agreements provide a solid foundation
for Kumtor’s operations and were approved by the Kyrgyz Republic Parliament and Constitutional Court in
2009. Those agreements were re-affirmed by the Government of the Kyrgyz Republic in 2017 when it entered
into the Strategic Agr eement on Environmental Protection and Investment Promotion which was completed
and became effective in 2019. KGC’s operations and activities have always carefully adhered to those
agreements and applicable laws. Furthermore, the Strategic Agreement included a release of the Company and
KGC by the Kyrgyz Republic Government of all outstanding claims at such time, including damages for harm
allegedly caused to the environment from storing production tails on glaciers. The Company therefore believes
strongly that the claims advanced by the State Tax Service and such individual Kyrgyz Republic claimants are
entirely meritless and the new and draft Kyrgyz Republic laws noted above , if implemented, would clearly
violate the 2009 restated project agreements and the 2009 Kyrgyz Republic laws which confirmed such
agreements. Furthermore, the Kumtor Mine’s environmental performance adheres to international standards,
including those of the European Bank for Reconstruction and Development, and have be en audited multiple
times by, among others, the Kyrgyz Government’s own environmental consultant , AMEC Foster Wheeler .
AMEC’s reports have confirmed that the Kumtor Mine is operated in accordance with international best practice
and its recommendations for improvements have been fully implemented by the Company. Furthermore, in
terms of Kumtor’s safety record, the mine recently achieved, one year of operations free of any lost time injuries.
The Company has benefited from a close and constructive dialogue with the Kyrgyz Republic authorities over
the almost 30 years of the Kumtor Mine’s operations. Centerra remains committed to continuing to work with
such authorities to resolve any outstanding issues in accordance with the 2009 restated project agreements
applicable to the Kumtor Mine , which provide for all disputes to be resolved by international arbitration, if
necessary. However, no assurances can be given that any of the current or future legal claims of the State Tax
Service or individual claimants, disputes as to the application of current or future Kyrgyz Republic laws relating
to the Kumtor Mine, the results of the State Commission review or any other future regulatory, civil or criminal
claims impacting KGC or Centerra can be resolved without a material impact on the Company.
About Centerra
Centerra Gold Inc. is a Canadian-based gold mining company focused on operating, developing, exploring and
acquiring gold properties in North Ameri ca, Asia and other markets worldwide and is one of the largest
Western-based gold producers in Central Asia. Centerra operates three mines, the Kumtor Mine in the Kyrgyz
Republic, the Mount Milligan Mine in British Columbia, Canada and the Öksüt Mine in Turkey. Centerra's
shares trade on the Toronto Stock Exchange (TSX) under the symbol CG and on the New York Stock Exchange
(NYSE) under the symbol CGAU. The Company is based in Toronto, Ontario, Canada.
For more information:
John W. Pearson
Vice President, Investor Relations
(416) 204-1953
Additional information on Centerra is available on the Company’s web site at www.centerragold.com on
SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar .
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