Centerra Gold Reaches Comprehensive Settlement with the Government of the Kyrgyz Republic
1 University Avenue, Suite 1500
Toronto, ON
M5J 2P1
tel 416-204-1953
fax 416-204-1954
www.centerragold.com
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NEWS RELEASE
Centerra Gold Reaches Comprehensive Settlement
with the Government of the Kyrgyz Republic
Toronto, Canada, September 11 , 2017: Centerra Gold Inc. (TSX: CG) announces today that the Company
and its Kyrgyz subsidiaries (Kumtor Gold Compan y (“KGC”) and Kumtor Operating Company (“KOC”))
have entered into a comprehensive settlement agreement (the “Strategic Agreement”) with the Government of
the Kyrgyz Republic (the “Government”) on behalf of the Kyrgyz Republic.
Highlights of the Strategic Agreement
Full and final reciprocal releases and resolution of all existing arbitral and environmental claims,
disputes, proceedings and court orders, and releases of the Company and its Kyrgyz subsidiaries from
future claims covering the same subject matter as the existing environmental claims arising from
approved mine activities;
The termination of the Kyrgyz Republic court orde r which, among other things, restricted KGC’s
ability to transfer cash to Centerra. KGC is in the process of transfe rring the cash balance that is over
and above its ordinary working capital requirements to Centerra and the Company expects that to
occur by September 15, 2017;
An acknowledgement that there will be no restrictions on the ability of KGC to distribute funds to
Centerra in the future;
All restrictions are lifted on the free movement of KGC’s employees;
No admission on the part of Centerra or its Kyrgyz subsidiaries of: (i) any environmental
wrongdoing, (ii) any non-compliance with Kyrgyz law or the Kumtor Project Agreements or (iii) any
pre-existing obligation to make additional enviro nmental or Reclamation Trust Fund payments or
environmental remediation efforts;
The existing 2009 agreements governing the Kumtor Project (the “Kumtor Project Agreements”)
remain in full force and effect, including the tax and fiscal regime thereunder;
No changes to current or planned operations at the Kumtor Project are required;
KGC has agreed to make a one-time lump sum payment totaling US$57 million to a new,
government-administered Nature De velopment Fund (US$50 million) and to a new, government-
administered Cancer Care Support Fund (US$7 mill ion) and within 12 months of closing make a
further one-time payment of US$3 million to the Cancer Care Support Fund. These amounts are
expected to be recorded as an expense and liability in the Company’s third quarter results;
Annual payments of US$2.7 million to the new Nature Development Fund, conditional on the
Government continuing to comply with its obligations under the Strategic Agreement;
KGC has agreed to accelerate its annual payments to Kumtor’s Reclamation Trust Fund in the amount
of US$6 million a year until the total amount contributed by KGC reaches the total estimated
reclamation cost for the Kumtor Project (representing the independent assessment of Kumtor’s
current reclamation costs) subject to a minimum total reclamation cost of US$69 million (which is
broadly in line with KGC’s current estimated reclamation cost for the Kumtor Project);
KGC would consider, together with the Government , other potential investment opportunities in the
Kyrgyz Republic and at the Kumtor Project; and
1 University Avenue, Suite 1500
Toronto, ON
M5J 2P1
tel 416-204-1953
fax 416-204-1954
www.centerragold.com
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The releases of liability and all payments are su bject to a range of initial conditions precedent,
discussed in further detail below and are expected to be completed in the fourth quarter of 2017.
Scott Perry, Centerra Gold’s Chief Executive Officer co mmented, “First and foremost, this agreement is a
comprehensive resolution to all of the outstanding matte rs affecting the Kumtor Project. Our arrangement
provides for the lifting of all restrictions on the free dom of movement of KGC employees as well as the
restrictions on the ability of Kumtor to distribute funds to Centerra. The agreement also provides business
certainty for future mining operations at the Kumtor Project, as it preserves all rights of the Company, KGC
and KOC under the Kumtor Project Agreements and, in order to receive full payment, requires continued
compliance by the Government with a number of conditio ns precedent that are designed to protect Centerra,
KGC and KOC. Lastly, this agreement represents a symbol of commitment from Centerra and the Kyrgyz
Republic Government, a commitment not only to stability for foreign investment in the Kyrgyz Republic but
a commitment to the environment, health and wellbeing of the citizens of Kyrgyzstan.”
Sapar Isakov, Prime Minister of the Kyrgyz Republic commented, "We are pleased to have worked together
with Kumtor and the Company to reach a solution regard ing the Kumtor Project. It is encouraging to see the
Company's commitment to the environment with the establishment and funding of a new Nature Development
Fund. This new fund will help finance environmen tal conservation and natu re preservation projects
throughout Kyrgyzstan going forward. Additionally, th e Company has strengthened its social responsibility
by committing to fund a new Cancer Care Support F und with contributions up to US$10 million and to
provide stronger annual contributions to the environmen t and to Kumtor's existing reclamation trust fund.
With the resolution of all the outstanding matters rega rding the Kumtor Project we have established a new
beneficial relationship with our country's largest en terprise and can look forward to a climate of economic
stability which will encourage further foreign investment to grow our economy."
Consideration by Centerra’s Board of Directors
A Special Committee comprised of independent directors of Centerra has overseen the negotiation of, and
entry into, the Strategic Agreement, and has recommende d that Centerra’s Board of Directors approve the
Strategic Agreement and the transactions contem plated thereby. Upon taking into account the
recommendation of the Special Committee and such othe r factors as it considered relevant, the Board of
Directors of the Company unanimously approved the St rategic Agreement and the transactions contemplated
thereby.
Further Details of the Strategic Agreement
Under the Strategic Agreement, KGC has committed to making contributions to (i) a new, government-
administered Nature Development Fund established for the purpose of financing environmental conservation
projects and nature preservation in the Kyrgyz Repub lic, consisting of a one-time lump sum payment of
US$50 million and ongoing annual payments of US$2.7 million, which annual payments are conditional on
the Government continuing to comply with all conditions precedent under the Strategic Agreement, (ii) a new,
government-administered Cancer Care Support Fund to be established for the purpose of funding cancer
treatment, research, support and outreach in the Kyrgyz Re public, including a one-time lump sum payment of
US$7 million and within 12 months of closing a furt her one-time payment of US$3 million, and (iii) the
acceleration of payments to Kumtor’s Reclamation Trust Fund in the amount of US$6 million a year until the
total amount contributed by KGC to the Reclamati on Trust Fund (which currently holds approximately
US$26.3 million) reaches the total reclamation cost for th e Kumtor Project determined in accordance with the
existing Reclamation Trust Deed (subject to a mini mum total reclamation cost of US$69 million), which
annual payments are conditional on continued operati on of the Kumtor Mine by KGC and KOC with all
necessary permits and no expropriation-related action being taken on the part of the Government.
1 University Avenue, Suite 1500
Toronto, ON
M5J 2P1
tel 416-204-1953
fax 416-204-1954
www.centerragold.com
3
The Parties will also negotiate in good faith to amend and restate the existing Reclamation Trust Deed to: (i)
provide for the accelerated Reclamation Trust Fund paymen ts described above, (ii) re quire that such funds be
held in highly liquid, safe US dollar-denominated s hort-term securities (such as obligations of the United
States government), provided that, subject to the agreemen t of the Parties, no less than 20% of the funds shall
be invested in highly liquid securities backed by the full faith and credit of the Kyrg yz Republic; and (iii) to
establish a supervisory board to oversee such investments.
KGC has also agreed to take certain specified actions in respect of the recommendations previously made by
the Government’s environmental consultant, Amec Foster Wheeler, most of which have already been fully
implemented.
The releases of liability and all payments are subject to a range of initial conditions precedent designed to
protect Centerra, KGC and KOC, including (i) the appr oval by the Government of various outstanding items,
including the Kumtor life-of-mine (LOM) plan, official reserves report and the taili ngs dam expansion, (ii)
compliance by the Government with its obligations unde r the Kumtor Project Agreements, (iii) continued
operation of the Kumtor Mine by KGC and KOC with all necessary permits, (iv) no expropriatory action
having been taken by the Government , and (v) termination of the envir onmental disputes and the civil and
criminal proceedings instigated by the Kyrgyz General Prosecutor’s Office on terms satisfactory to Centerra.
Centerra is continuing to work closely with the Gove rnment to expeditiously satisfy the conditions precedent
to the Strategic Agreement, which are expected to be completed in the fourth quarter of 2017.
Caution Regarding Forward-Looking Information
Information contained in this news release which are not statements of historical facts, and the documents
incorporated by reference herein, may be “forwa rd-looking information” for the purposes of Canadian
securities laws. Such forward-looking information invol ves risks, uncertainties and other factors that could
cause actual results, performance, prospects and opportuni ties to differ materially from those expressed or
implied by such forward-looking information. The words “believe”, “expect”, “anticipate”, “contemplate”,
“target”, “plan”, “intends”, “continue”, “budget” , “estimate”, “may”, “will”, “schedule” and similar
expressions identify forward-looking information. These forward-looking statements relate to, among other
things the satisfaction of the conditions precedent to the implementation of the provisions of the Strategic
Agreement and the anticipated benefits and conseque nces of implementing the provisions of the Strategic
Agreement. Forward-looking information is necessar ily based upon a number of estimates and assumptions
that, while considered reasonable by Centerra, are inherently subject to significant political, business,
economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual
results to differ materially from those projected in the forward-looking information. Factors that could cause
actual results or events to differ mate rially from current exp ectations include, among other things: risks that
any of the conditions precedent to the Strategic Agreement will not be satisfi ed in a timely manner or at all,
particularly as the Government may not bind the Genera l Prosecutor’s Office or the Parliament of the Kyrgyz
Republic; a decision by the General Prosecutor’s Office, or its successor the Anti-Corruption Service of the
State Committee for National Security, to re-open at a ny time civil or criminal proceedings against Centerra,
its subsidiaries or other stakeholders; the failure of the Government to comply with its continuing obligations
under the Strategic Agreement, including the requirement th at it comply at all times with its obligations under
the Kumtor Project Agreements, allow for the conti nued operation of the Kumtor Mine by KGC and KOC
and not take any expropriatory acti on; actions by the Government or any state agency or the General
Prosecutor's Office that serve to restrict or otherwise interfere with the payment of funds by KGC and KOC to
Centerra; a new claim by the Government, a state agen cy or the General Prosecutor’s Office for alleged
unknown environmental damage; and other political risks associated with the Company’s operations in the
1 University Avenue, Suite 1500
Toronto, ON
M5J 2P1
tel 416-204-1953
fax 416-204-1954
www.centerragold.com
4
Kyrgyz Republic. See “Risk Factors” in the Company’s 2016 Annual Information Form available on SEDAR
at www.sedar.com.
There can be no assurances that forward-looking informa tion and statements will prove to be accurate, as
many factors and future events, both known and unknown could cause actual results, performance or
achievements to vary or differ materially, from the resu lts, performance or achievements that are or may be
expressed or implied by such forward-looking statements contained herein or incorporated by reference.
Accordingly, all such factors should be considered care fully when making decisions with respect to Centerra,
and prospective investors should not place undue relian ce on forward-looking information. Forward-looking
information is as of September 11, 2017. Centerra a ssumes no obligation to update or revise forward-looking
information to reflect changes in assumptions, changes in circumstances or any other events affecting such
forward-looking information, except as required by applicable law.
About Centerra
Centerra Gold Inc. is a Canadian-based gold mining company focused on operating, developing, exploring
and acquiring gold properties in North America, Asia and other markets worldwide. Centerra operates two
flagship assets, the Kumtor Mine in the Kyrgyz Repu blic and the Mount Milligan Mine in British Columbia,
Canada and is the largest Western-based gold producer in Central Asia. Centerra’s shares trade on the
Toronto Stock Exchange (TSX) under the symbol CG. The Company is based in Toronto, Ontario, Canada.
For more information:
John W. Pearson
Vice President, Investor Relations
Centerra Gold Inc.
(416) 204-1953
Additional information on Centerra is available on the Company’s web site at www.centerragold.com
and at SEDAR at www.sedar.com.
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