Kyrgyz govenment gives Centerras green light for one deposit

While there is still no word on the finalization of an agreement for its Kumtor gold project with the government of Kyrgyzstan, Centerra Gold (CG-T) is taking the government’s latest move as a positive indicator.

On Nov. 29 the government issued a permit to Centerra for the Sarytor deposit a body of mineralization that lies 4.5 km from its Kumtor gold mine and is included in the overall projects reserves.

“Receiving the mining license for the Sarytor deposit ahead of finalizing our new agreement indicates the willingness and cooperative nature of the government and demonstrates the Government’s commitment to Centerra and the development of the Kumtor mine,” says Centerra’s president and chief executive Len Homeniuk in a release. “Having the ability to access and mine the Sarytor deposit will give us some flexibility and options for production sources next year at Kumtor.”

While Centerra and its majority owner Cameco (CCO-T, CCJ-N) Centerra was created as a spin-off of Cameco’s gold assets reached a summertime agreement with the government to avoid nationalization of Kumtor, the implementation of the deal was been put off by the dissolution of the parliament in October.

The deal is set to double Kyrgyz government’s stake to over 30%, while Cameco’s stake would drop to 38% from 53%. The deadline for the deal is Feb. 15 of next year.

Sarytor has roughly 300,000 contained ounces of gold in probable reserves which is included in Kumtor’s 4.7 million oz. of proven and probable reserves.

In Toronto on Nov. 29 Centerra shares were up 22 to $10.29 on roughly 165,000