TORONTO — Centerra Gold Inc. reported a loss of US$851.7 million in its latest quarter as a result of a move by the Kyrgyz Republic to seize control of the company's Kumtor mine in the central Asian country in May.
The Toronto-based company, which keeps its books in U.S. dollars, said Tuesday it recorded a US$926.4-million loss on the change of control of the Kumtor operations.
The loss for the quarter ended June 30 amounted to US$2.87 per diluted share compared with a profit of US$80.7 million or 27 cents per share in the same quarter last year.
Centerra CEO Scott Perry said the Kyrgyz Republic government seized control of the Kumtor mine based on false and misleading allegations.
"While the company remains the rightful owner of Kumtor Gold Co., our 100 per cent owned subsidiary that holds the Kumtor mine, we cannot effectively exercise power over any relevant activities or affect the returns of the Kumtor Mine," Perry said in a statement.
However, Perry said the situation did not affect Centerra's other operations including the Mount Milligan mine in B.C. and the Öksüt mine in Turkey.
Centerra said its adjusted net profit from continuing operations, which excluded Kumtor, amounted to US$49.9 million or 17 cents per diluted share compared with a loss of US$22.3 million or eight cents per diluted share a year ago.
As a result of the seizure of the Kumtor mine, Centerra updated its production guidance.
The company says gold production this year is expected to between 270,000 and 310,000 ounces, while copper production is forecast to be between 70 million and 80 million pounds.
Gold production is expected to rise to between 380,000 and 430,000 ounces in 2022 and 2023, while copper production that year is expected to rise to between 90 million and 100 million pounds in 2022 before dropping back to between 70 million and 80 million pounds in 2023.
Gold production costs are expected to between US$625 and US$675 per ounce in 2021, before dropping to between US$550 and $600 per ounce in 2022 and edging back up to between US$575 and $625 per ounce 2023.
Centerra initiated binding arbitration in May against the Kyrgyz government in response to actions taken against its subsidiary Kumtor Gold Co. including fines, tax claims and legislation placing its operations under external management.
The Kyrgyz Republic has said it took control of the Kumtor mine because of what it said was the "abdication of its fundamental duties of care" by Centerra.
Centerra says its wholly owned subsidiaries that own and operate the Kumtor Mine have also filed for Chapter 11 bankruptcy protection in the U.S. in a move to protect its interests.
This report by The Canadian Press was first published Aug. 10, 2021.
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