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Posts tagged ‘Centerra Gold Inc (CG)’

Kyrgyzstan gains B.C. foothold as Centerra hedges jurisdictions

July 5th, 2016

by Greg Klein | July 5, 2016

A “balanced geopolitical risk profile” would counter Centerra Gold’s (TSX:CG) Kyrgyzstan woes with a solid foundation in more favourable countries. But with Kyrgyzstan currently holding nearly a third of Centerra shares, that country retains a sizeable piece of the action. Late July 5 Centerra announced a definitive agreement to pick up Thompson Creek Metals TSX:TCM and its Mount Milligan copper-gold mine in British Columbia. Also included are Thompson Creek’s Endako molybdenum mine in B.C. and its Thompson Creek moly mine in Idaho, both on care and maintenance, as well as two development projects in B.C.

Kyrgyzstan gains B.C. foothold as Centerra hedges jurisdictions

Gold miner Centerra takes on Thompson
Creek’s debt to move into a safer jurisdiction.

Subject to approvals, the share swap values Thompson Creek at C$0.79, a 33% premium to the company’s 20-day volume-weighted average to July 4. The deal would leave Thompson Creek shareholders with about 8% of Centerra. The company also pays off Thompson Creek’s outstanding notes. The companies value the transaction at approximately US$1.1 billion.

Royal Gold’s Mount Milligan gold stream would drop from 52.25% to 35% in exchange for an 18.75% copper stream.

The deal gives Centerra “an operating base in Canada—one of the lowest-risk mining jurisdictions in the world—which will complement our [50%-held] Canadian-based Greenstone project and provide for further flexibility to expand into the Americas,” commented CEO Scott Perry.

In addition to its flagship Kumtor gold mine in Kyrgyzstan, Centerra holds Mongolia’s Boroo gold mine, currently on care and maintenance, and two advanced-stage gold projects in Mongolia and Turkey.

At the company’s May AGM the CEO reportedly acknowledged that Kyrgyzstan is “not viewed as a top-tier jurisdiction”—a considerable understatement. Out of 109 countries ranked by the Fraser Institute’s annual mining survey, Kyrgyzstan ranks 19th from last on the Investment Attractiveness Index and eighth from last on the Policy Perception Index. B.C., although no paradise itself for miners, ranks 18th from top on the IAI and 41st on the PPI.

Centerra’s Kyrgyzstan adversities have included a police raid on the company’s office, a US$220-million pollution fine, a US$9-billion claim by the country’s Green Party, criminal investigations against the company’s executives, a ban on executives leaving the country, the arrest of a former CEO in Bulgaria reportedly at Kyrgyzstan’s behest, illegal roadblocks, violent mobs, and the arrest and deportation of a Centerra welder after he posted a Facebook remark comparing a local sausage to “horse penis.”

Centerra holds a 100% interest in Kumtor but Kyrgyzstan holds 32.7% of Centerra. In December the company offered to trade a 50% stake in the mine for the country’s shares. But now Kyrgyzstan faces dilution through the C$170-million bought deal Centerra also announced on July 5.

The company expects to close the offer around July 20 and the acquisition in autumn.

Athabasca Basin and beyond

May 17th, 2014

Uranium news from Saskatchewan and elsewhere for May 10 to 16, 2014

by Greg Klein

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Cameco suspends Millennium mine proposal

Declining uranium prices have forced Cameco Corp TSX:CCO to postpone its Millennium mine proposal. On May 16 the Canadian Nuclear Safety Commission stated a public hearing for a licence application scheduled for June had been adjourned at Cameco’s request. A brief message on the company’s website blamed “poor economic conditions in world uranium markets.”

Figures from 2009 credited the project with an indicated resource of 46.8 million pounds uranium oxide (U3O8) averaging 4.53% uranium. A 2013 environmental impact statement forecast an initial 10-year lifespan, but anticipated extensions if further resources were found. Ore would have been shipped 36 kilometres south to the Key Lake mill, held 83% by Cameco and 17% by AREVA Resources Canada.

Uranium news from Saskatchewan and elsewhere for May 10 to 16, 2014

Although just last month Cameco expressed optimism in uranium’s
long-term outlook, the company blamed market conditions as it
withdrew its Millennium licence application.

Uranium prices have continued their slide to new record lows. Although there’s no spot price for the metal, UX Consulting’s most recent indicator, published May 12, came to $29 a pound.

In last month’s Q1 report, Cameco expressed optimism about the long-term outlook, expecting “an increase in annual uranium consumption from today’s 170 million pounds to about 240 million pounds” over the next decade.

In March Cameco finally put its Cigar Lake mine into production, nine years after construction began and 33 years after its discovery.

The CNSC left the door open for Cameco to make a future request that its licence application be considered by the commission, which would then call a public hearing.

Fission Uranium hits 30 metres of 2.58% U3O8 at Patterson Lake South

Fission Uranium TSXV:FCU unloaded assays for eight more holes from Patterson Lake South on May 13, all of them from the R780E zone. This week’s star, PLS14-158, marks the eastern-most R780E hole for which assays have been released, boosting the company’s optimism in the deposit’s eastward potential. Some of the best results show:

Hole PLS14-141

  • 0.72% U3O8 over 11 metres, starting at 163 metres in downhole depth
  • (including 2.04% over 3 metres)

  • 0.77% over 6 metres, starting at 187.5 metres
  • (including 2.31% over 1.5 metres)

PLS14-143

  • 0.26% over 14 metres, starting at 145 metres

  • 0.41% over 5 metres, starting at 248 metres
  • (including 1.06% over 1.5 metres)

PLS14-144

  • 0.79% over 19 metres, starting at 127.5 metres
  • (including 3.21% over 3.5 metres)

  • 0.46% over 7.5 metres, starting at 151.5 metres

  • 0.3% over 8.5 metres, starting at 196 metres
  • (including 1.43% over 1 metre)

  • 2.07% over 3 metres, starting at 208 metres
  • (including 3.21% over 1.5 metres)

PLS14-148

  • 1.83% over 3.5 metres, starting at 154.5 metres
  • (including 2.9% over 2 metres)

  • 0.63% over 5 metres, starting at 192.5 metres

PLS14-149

  • 0.2% over 17.5 metres, starting at 117.5 metres

PLS14-150

  • 2.94% over 7 metres, starting at 219 metres
  • (including 5.58% over 3.5 metres)

  • 0.22% over 19.5 metres, starting at 285.5 metres

PLS14-157

  • 0.35% over 6.5 metres, starting at 125 metres

  • 0.29% over 14.5 metres, starting at 168.5 metres

PLS14-158

  • 0.72% over 8 metres, starting at 141 metres

  • 2.58% over 30 metres, starting at 152 metres
  • (including 22.02% over 1 metre)
  • (and including 8.57% over 5 metres)

  • 6.85% over 10 metres, starting at 232.5 metres
  • (including 12.23% over 5.5 metres)

  • 3.53% over 4.5 metres, starting at 253.5 metres
  • (including 11.95% over 1 metre)

True widths weren’t provided. R780E is the middle of five zones, and the largest of all five, along a 2.24-kilometre potential strike that’s open both to the east and west. With assays released for 30 winter holes so far, lab results are pending for approximately 62 more.

Although winter exploration drilling fell short of exciting, the season’s focus was on infill drilling to define a maiden resource that will—on some unspecified date—debut to an intensely curious audience.

Powertech files Kyrgyzstan resource held 80% by proposed merger partner, updates South Dakota licence challenge

Powertech Uranium TSX:PWE has filed an inferred resource for the Kyzyl Ompul licence in Kyrgyzstan, the company announced on May 13. The 42,379-hectare project is held 80% by Azarga Resources Ltd, which plans to merge with Powertech. The resource uses a 0.01% cutoff to show 15.13 tonnes averaging 0.022% for 7.51 million pounds U3O8 inferred.

Powertech described the Kok Moinok main zone as about 700 metres along an east-west strike, 600 metres north-south and 10 to 30 metres in depth. The report also included two conceptual exploration target area estimates.

Although Powertech acknowledged that access to the project was blocked by political unrest in 2005 and 2010, the company maintained that “the main risk factors at this stage are commodity prices….”

Last year Kyrgyzstan managed to fall a few spots to the very bottom of the Fraser Institute’s policy perception index and achieved near-bottom rankings for several other categories in the annual poll of mining professionals. But a May 7 Financial Post article by Peter Koven pointed out that despite public opposition, social unrest and ongoing government policy threats, Centerra Gold’s (TSX:CG) Kyrgyzstan mine “continues to run and churn out cash.”

The Kyzyl Ompul licence expires at the end of 2015. Read more about the Powertech/Azarga merger here and here.

On May 14 Powertech updated events following a challenge to its operating licence for the company’s Dewey-Burdock project in South Dakota. In oral hearings the previous day, opponents questioned procedures followed by the U.S. Nuclear Regulatory Commission to determine the importance of possible native religious sites in the area.

As the hearings continue, the NRC’s Atomic Safety and Licensing Board will decide whether Dewey-Burdock’s licence becomes effective or remains on hold until a formal hearing in August. Read more about the licence challenge.

MPVC begins drilling Maguire Lake target at NW Manitoba

Drilling has begun at MPVC Inc’s (TSXV:UNO) Northwest Manitoba project, the company announced May 14. While winter conditions persist, a diamond drill will focus on Maguire Lake. Preliminary radon measurements from the lake reported the previous week were, to the company’s knowledge, second only to PLS for a water-based survey. MPVC will also bring in a rotary air blast drill, which is intended to test shallow targets quickly.

With ground gravity survey results now in hand, the company has filled in gaps between three earlier sets of data, extending previously identified gravity lows and discovering new gravity lows.

To earn 80% of the 143,603-hectare project from CanAlaska Uranium TSXV:CVV, MPVC must spend $3.2 million on exploration by 2015.

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Year in review: Part II

December 29th, 2012

A mining and exploration retrospect for 2012

by Greg Klein

Read Part I of Year in Review.

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Graphite boom, bust and echo

One of the commodities that excited the 2012 market, graphite began stirring interest in 2011 and really gained momentum early this year. But the precipitous fall, right around April Fool’s Day, let cynics bask in schadenfreude. It was a bubble all along, they insisted.

Well, not quite. Despite reduced share values, work continued as the front-runners advanced their projects and earlier-stage companies competed for position in graphite’s second wave of potential producers. By autumn some of the advanced-stage outfits, far from humbled by last spring’s events, boldly indulged themselves in a blatant bragging contest.

Old king coal to regain its throne

If clean carbon doesn’t excite investors like it used to, plain old dirty carbon might. By 2017 coal’s share of the global energy market will rival that of oil. So says the International Energy Agency, which issued its Medium-Term Coal Market Report in December.

A mining and exploration retrospect for 2012

The forecast sees China consuming over half the world’s production by 2017. “Even if Chinese GDP growth were to slow to a 4.6% average over the period, coal demand would still increase both globally and in China,” the report stated. India, with the world’s “largest pocket of energy poverty,” will take second place for consumption.

Coal’s growth in demand is slowing, however. But its share of the energy mix continues to increase even though Europe’s “coal renaissance” (sic) appears to be temporary.

Bringing coal miners to new hassle

Chinese provide much of the market and often the investment. So why shouldn’t they provide the workers too? That seems to be the rationale of Chinese interests behind four British Columbia coal projects.

The proponents plan to use Chinese underground workers exclusively at the most advanced project, HD Mining International’s Murray River, for 30 months of construction and two additional years of mining. Only then would Canadians be initiated into the mysteries of Chinese longwall mining. But with only 10% of the workforce to be replaced by Canadians each year, Chinese “temporary” workers would staff the mine until about 2026. The B.C. government has known about these intentions since at least 2007.

The HD Mining saga has seen new developments almost every week since the United Steelworkers broke the story on October 9.

As Greenland’s example suggests, the scheme might represent another facet of China’s growing power.

Geopolitical geology

Resource imperialism aside, resource nationalism and other aspects of country risk continued throughout 2012. South American Silver TSX:SAC continues to seek compensation after spending over $16 million on a silver-polymetallic project that the Bolivian government then snatched as a freebie. Centerra Gold TSX:CG escaped nationalization in Kyrgyzstan but works its way through somewhat Byzantine political and regulatory intrigue, as does Stans Energy TSXV:HRE. In November the latter claimed a court victory over a hostile parliamentary committee.

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Week in review

October 5th, 2012

A mining and exploration retrospect for September 29 to October 5, 2012

by Greg Klein

So much for the environmental review

Monday’s news from British Columbia indicates another level of uncertainty has hit the province’s mining sector. Two B.C. cabinet ministers refused an environmental assessment certificate for Pacific Booker Minerals TSXV:BKM, even though the company passed a provincial environmental review. As a result, the half-billion-dollar Morrison copper-gold-molybdenum proposal has been put on hold.

A new development at the provincial level, it does have similarities to a federal decision to reject Taseko Mines’ TSX:TKO Prosperity gold-copper mine proposal for B.C. A November 2010 report from the Canadian Environmental Assessment Authority convinced the federal government to reject the $800-million proposal. The three-member CEAA panel found few significant adverse environmental effects but emphasized significant adverse effects on established native rights, potential rights, potential title, tradition and culture.

Mining and exploration week in review

Now B.C. has taken a comparable approach, although the supposedly “environmental” arguments come from politicians, not the people who conducted the environmental review. In fact the provincial review repeatedly stated that, with successful implementation of mitigation measures and conditions, the Morrison mine is “not likely to have significant adverse effects.”

Nevertheless Derek Sturko, who’s both executive director of B.C.’s Environmental Assessment Office and an associate deputy minister of the environment, seemed to reject his own department’s 270-page report. He suggested instead that the government take a “risk/benefit approach.” Sturko also emphasized strong native opposition and a “moderate to strong prima facie case for aboriginal title.” On that basis, two cabinet ministers representing mining and the environment nixed the proposal.

The decision might be related to the pre-election BC Liberal government’s prevaricating but currently negative stance towards the proposed Northern Gateway pipeline. But the province’s decision, like the federal decision regarding Taseko, also raises the question of whether native rights are handled according to the principle of law or appeasement.

Taseko submitted a revised $1.1-billion New Prosperity proposal to the feds on September 20. On Tuesday Business in Vancouver cited analysts, for some reason speaking anonymously, who said Taseko’s $300-million revision remains viable despite a drop in copper prices. But “with a large question mark as to whether the federal government will approve the project on a second go-round, they’re currently ascribing no value to the project in their target stock prices for the company,” BIV reported.

On Tuesday Pacific Booker Director Erik Tornquist told ResourceClips his company is reviewing its options.

Confiscation without compensation

If miners haven’t given up on B.C., it might be a case of the devil they know. Wednesday’s announcement that the Bolivian government would not provide compensation for nationalizing the Malku Khota Project followed months of uncertainty for South American Silver TSX:SAC. Since 2007, the company had spent over $16 million building a resource of 158 million ounces silver and 1,184 tonnes indium with lead, zinc and copper credits.

The company claimed the support of 43 out of 46 land-owning indigenous groups. SAC blamed illegal artisanal miners and activists from outside the region for intense opposition from the three dissident communities.

But last May, the company said, Mining Minister Mario Virreira signed an agreement with the 43 supportive groups stating that the government will not reverse the mining concession and that the company should continue exploration.

Protests turned violent in June, with one death and several injuries. Later that month seven people were taken hostage, including three drill contractors, two SAC employees, a government prosecutor and a police officer. The final three hostages were released unharmed after 11 days, when the government decreed that it would nationalize Malku Khota.

Reuters quoted a confident-sounding Vice-President Alvaro Garcia saying, “If we have to invest $500 million or $700 million or even $1 billion for a large-scale project at Malku Khota, which benefits Bolivia, the state is prepared and has the capacity to do that.”

At the time he added that government might pay compensation of $2 million or $3 million. Then came Wednesday’s decree. In an Agence France-Presse dispatch printed in the Globe and Mail, Virreira stated, “The nation has no financial obligation to South American Silver.”

By press time South American hadn’t responded. In an August 2 statement Greg Johnson, then the company’s president/CEO, said the company is prepared to go to international arbitration.

But, as Financial Times correspondent Andres Schipani pointed out, “Getting fair compensation, or any for that matter, from Bolivia has proved tricky since 2007. A year after [President Evo] Morales took office, the Andean country pulled out of the World Bank body that conducts arbitration between businesses and governments …”

Schipani noted other troubled nationalizations in Bolivia, including the Colquiri tin mine taken from Glencore in June. The government rationalized the move by saying it could then end disputes between independent and unionized miners. But the conflict flared up again with more violent clashes which shut down operations. On September 14 Reuters quoted Hector Cordova, president of the state-owned mining company, who said, “We’re losing more than $250,000 per day through lost production and this has been going on for two weeks. That means an accumulated loss of almost $4 million.”

Last Sunday the government said it solved the dispute by dividing the mine’s richest vein between the rival groups.

Friends and foes in the Kyrgyz Republic

On Friday three Kyrgyzstan MPs faced criminal charges while political unrest focused on Centerra Gold’s TSX:CG Kumtor Gold Mine. Prosecutors say the three attempted to overthrow the government by leading a mob that stormed the parliament building on Wednesday, Reuters reported. The incident grew out of a protest demanding that Kumtor be nationalized.

Violence has turfed previous Kyrgyzstan governments in 2005 and 2010. Last June a motion to nationalize Kumtor failed to pass parliament but MPs did pass a motion to consider increasing the country’s 33% stake in the Centerra subsidiary that owns the mine, as well as redefining the concession and boosting taxes.

But reassuring news came on Monday when Kyrgyzstan’s new president Zhantoro Satybaldiyev declared, “Kumtor will not be nationalized.” He told Reuters, “Problems will be resolved. I asked [the Kumtor venture] to keep up its output.” He added, “The way they extract gold, it’s really a state-of-the-art job. To be honest, I am jealous of their skills.”

The news agency pointed out, however, that the government had cancelled a televised auction of mining licences on August 28 after protesters stormed the TV studio.

Kumtor produced 583,156 gold ounces in 2011 at $482 an ounce. But in August the company blamed its $54.6-million Q2 loss largely on Kumtor’s “abnormal mining costs.”

Last September Kyrgyzstan ordered Stans Energy Corp TSXV:HRE to suspend drilling at its Kutessay II REE Deposit. According to the company, the government wanted “a firm proposal for the gratuitous transfer of a percentage of ownership” of a company subsidiary to the state. The stop-work order ended as the company met with Satybaldiyev and Economic Minister Temir Sariev.

In a statement issued Monday, Stans quoted Sariev saying, “Our state does not have the necessary financial and technical resources for the development of deposits and we have, so far, no such specialists. Development of the mining industry of our country at this stage is only possible by attracting investment. And the investors will come to our country when they will be confident in the safety of their financial investments.”

South Africa: A tragic outcome from a positive move?

Another striking miner was killed in South Africa Thursday night. On Friday Anglo-American Platinum fired 12,000 strikers. A Reuters dispatch in the Globe and Mail stated, “When rival Impala Platinum fired 17,000 workers in January to squash a union turf war, it led to a six-week stoppage in which three people were killed, the company lost 80,000 ounces in output and platinum prices jumped 21%.”

One disturbing aspect of the crisis is that a generous pay hike in a poor country can cause so much controversy. In last month’s “Lonmin settlement,” the platinum producer raised miners’ wages between 11% and 22%. Nic Borain, described as “an independent political analyst,” told Reuters, “Amplats had been giving signals that it was going to hold the line after Lonmin had folded—but it’s a huge gamble. Someone had to take it on the chin or this would have kept on unravelling and spread through the economy. It’s difficult to know whether this causes the unrest to spread or whether it takes some of the sting out of it. It could go either way.”

Not without risk

September 21st, 2012

Mongolia offers huge resources but with political challenges

By Greg Klein

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Reputedly this company is used to weathering Asian storms. So a long wait that has just ended for Centerra Gold TSX:CG in Mongolia must have been borne with patience. On September 19 the company received approval to resume heap leap operations at its Boroo Mine. The facility operated from June 2008 to April 2009, when a temporary permit expired. Beginning in December, recommissioning should add around 2,000 gold ounces a month to the mill, which has been processing stockpiled ore since the mine closed in November 2010.

The news shot Centerra’s stock from a September 19 open of $10.40 to a high of $12.08 before closing at $11.95.

The $2.75-billion-cap company shows dogged determination in a country where giants tread carefully due to government interference. The Boroo mill was also intended to handle ore from Gatsuurt, just 55 kilometres away. Centerra was ready to develop an open-pit gold mine there after the Mongolian government approved a feasibility study in March 2008. The following year, however, the government brought in new environmental legislation that blocked the mine.

Mongolia offers huge resources but with political challenges

Tremendous mineral resources could bring big changes to Mongolian society.

Last November Centerra VP of Investor Relations John Pearson told ResourceClips, “The site is completely prepared. We have the admin buildings on site, the trucks fleet has been purchased, the road connecting the Gatsuurt mine site to the Boroo mill is complete. Everything is ready to go. Until the government and parliament resolve the issues with that particular piece of legislation, Gatsuurt is currently on hold waiting the final approval.”

According to an estimate completed in December 2010, Gatsuurt has probable reserves of 1.5 million gold ounces, measured and indicated resources of 426,000 ounces and inferred resources of 491,000 ounces.

But the company faces greater obstacles at its flagship Kumtor Mine in the Kyrgyz Republic, on China’s western border. Last month Centerra blamed a Q2 loss of $54.6 million largely on Kumtor’s “abnormal mining costs.” Over the last several months the operation has been hit by an illegal roadblock, a strike and technical problems, as well as government threats to revise its operating licence, change its tax regimen and increase the government’s own interest. The Kyrgyz Republic already holds 33% of the project. Centerra is the country’s largest investor.

Yet the company’s ability to overcome challenges hasn’t gone unnoticed.

Last June the Financial Post quoted Scotia Capital analyst Trevor Turnbull calling Centerra an “unusual buying opportunity.” He added, “Centerra is used to weathering political storms, including the 2010 coup d’e'tat, without impact to its Kumtor Mine, which has been in continuous operation since 1997 and a major component of the economy.”

Getting back to Mongolia, on September 19 Centerra also announced receipt of a mining licence for its Altan Tsagaan Ovoo Project, 800 kilometres from Boroo. ATO’s December 2011 resource shows 824,000 gold ounces measured and indicated, and 26,000 inferred. Exploration drilling continues.

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Eurasian, Centerra report Turkey Assays up to 4.47 g/t Gold, 16.39 g/t Silver over 26.1m

July 19th, 2012

Resource Clips - essential news on junior gold mining and junior silver miningEurasian Minerals Inc TSXV:EMX in joint venture with Centerra Gold Inc TSX:CG announced results from their Akarca Project in northwest Turkey. Highlights include

4.57 g/t gold, 16.39 g/t silver over 26.1 metres
(including 13.59 g/t gold, 49.65 g/t silver over 5.8 metres)
1.35 g/t gold, 3.07 g/t silver over 8.1 metres
(including 6.41 g/t gold, 11.3 g/t silver over 1.6 metres)
3.98 g/t gold, 80.25 g/t silver over 6.2 metres
(including 12.45 g/t gold, 25.6 g/t silver over 1.5 metres)

The joint venture covers both the Akarca and Elmali properties. Centerra recently completed US$5 million in exploration expenditures to fulfill its 50% earn-in requirements. As a follow-up to the earn-in, Centerra must pay $1,000,000 to Eurasian. Centerra may earn an additional 20% in the project, bringing the total to 70%, by spending a further US$5 million over two years.

View Company Profile

Eurasian Minerals Inc
David M Cole
President/CEO
303.979.6666

or Valerie Barlow
Corporate Secretary
604.688.6390

Centerra Gold Inc
John W Pearson
VP Investor Relations
416.204.1241

Read a feature story about Eurasian

Read a feature story about Centerra

by Kevin Michael Grace

Eastern Promise

November 21st, 2011

Centerra Seeks Gold From Turkey to Mongolia

By Greg Klein

Gold has long lured adventurers to uncharted territories. But while the trades are full of stories about Africa, Centerra Gold Inc TSX:CG demonstrates the potential of Asia. In the Kyrgyz Republic on China’s western border, the company’s Kumtor Mine prepares to add an underground operation to its open-pit gold producer. Its Mongolian operations include a mill working its way through years of stockpiled ore and a new gold mine waiting for final approval. Then there are the JVs spread as far afield as Turkey, China and eastern Russia and even Nevada.

“There are a couple of other, small-scale operations in the Kyrgyz Republic, but we’re probably 95% of the gold production in that country and about 45% to 50% of the country’s industrial output,” says Centerra President/CEO Steve Lang. “There, like Mongolia, we’re 100% owners. When we step out into Russia, Turkey and China, we move into joint ventures. Overall, there’s a lot of gold in Asia but not much competition.”

Centerra Seeks Gold From Turkey to Mongolia

To support his point, Kumtor shows proven and probable reserves of 6.28 million gold ounces, measured and indicated resources of 4.13 million ounces and an inferred resource of 2.75 million ounces. The mine produced 567,802 ounces last year, with about 600,000 projected for 2011. Cash costs per ounce are now $474.

“Over the last 12 months our drilling added about four years of operation, raised the average life-of-mine grade and lowered the strip ratio,” Lang says. “We’ve got quite a bit of unexplored ground still on our licence, and we’re picking up additional packages immediately adjacent to the Kumtor package.”

The underground operation, scheduled to start in 2013, is expected to result in a 35% to 40% production increase.

Mongolia has also proved bountiful, if challenging. Centerra’s Boroo Mine produced around 1.5 million gold ounces from 2004 to November 2010, when it closed. The plan was to immediately start a new open-pit gold mine at Gatsuurt, 55 kilometres away. At that point, however, the company hit an obstacle—the 2009 Water and Forest Law, which now blocks the project. The government had approved Gatsuurt’s feasibility study in March 2008.

As VP Investor Relations John Pearson says, “The site is completely prepared. We have the admin buildings on site; the trucks fleet has been purchased; the road connecting the Gatsuurt mine site to the Boroo mill is complete. Everything is ready to go.” He adds, however, “Until the government and parliament resolve the issues with that particular piece of legislation, Gatsuurt is currently on hold waiting the final approval.”

Other mining companies have also run afoul of the Mongolian government. The most recent was Ivanhoe Mines TSX:IVN, 49% owned by Rio Tinto, which is building Ivanhoe’s Oyu Tolgoi Mine in Mongolia. Last September, the government demanded an increase in its 34% interest, despite an agreement preventing it from doing so until 2039. The miners stood their ground. In early October, the government appeared to relent in a public statement reaffirming support for the project.

Meanwhile, Centerra’s Boroo mill keeps busy processing a stockpile built up before its adjacent mine closed. Even without Gatsuurt, the mill will process an estimated 50,000 to 60,000 ounces in 2011, with an incremental gain next year. “At the current gold price, our stockpiles will probably last two or three more years,” says Pearson.

In northeastern Mongolia, some 800 kilometres from Boroo, Centerra drills its Altan Tsagaan Ovoo Prospect. Assays announced July 11 include

  • 3.91 grams per tonne gold, 10.81 g/t silver, 0.87% lead and 1.08% zinc over 113.5 metres
  • 2.89 g/t gold, 6.52 g/t silver, 1.04% lead and 1.1% zinc over 147 metres
  • 2.09 g/t gold, 8.32 g/t silver, 0.81% lead and 1.58% zinc over 196 metres
  • 2.15 g/t gold, 12.95 g/t silver, 0.32% lead and 0.52% zinc over 183.4 metres

“We’ll have a resource estimate on that at year-end,” Lang says. “It’s still fairly early stage but an exciting project.”

We’re trying to spend something close to $60 million a year. If we can do that consistently over a period of time, that should lead to a million and a half ounces of annual production —Steve Lang

The company’s other Mongolia project is the Sumber Joint Venture with Altairgold LLC, in which Centerra may earn up to a 75% interest in the former gold mine.

In the Russian republic of Tyva, bordering northwestern Mongolia, Centerra holds a 50% interest, with an option to earn a further 20%, in the Kara Beldyr Gold Project, where drilling is underway.

In Turkey, Centerra’s JV with Eurasian Minerals TSXV:EMX allows up to a 70% interest in the Akarca, Samli and Emali projects.

Another Turkey JV, with Stratex International, offers Centerra up to 70% of the Oksut Project, which has an Australian JORC (non-43-101) resource estimate of 163,849 gold ounces indicated and 153,407 inferred.

In Nevada, the company acts as project operator for the Tonopah Divide Gold Project, in which it holds a 60% interest under an option with Tonogold Resources. Centerra may also earn a 75% interest in another Nevada JV, the Oasis Gold Project, with Redstar Gold TSXV:RGC.

Finally, Centerra has signed a letter of intent for another JV, the Laogouxi Gold Project in northeastern China.

“We want to keep expanding our exploration,” Lang says. “This year we’re at about $40 million. We’re trying to spend something close to $60 million a year. If we can do that consistently over a period of time, that should lead to a million and a half ounces of annual production. To do that, we need to continue adding projects in the early exploration level.”

Earlier this month, Centerra posted revenue of $772.4 million for the first three quarters of 2011, up 46% over the same period last year. Net earnings for that period were $291.5 million, $1.23 per share, while 3Q net earnings were $83.5 million, $0.35 per share. Third quarter gold production was 154,936 ounces at $556 per ounce. The company’s cash and equivalents were $271.7 million.

At press time, Centerra had 236.3 million shares trading at $20.59 for a market cap of $4.87 billion.

Eurasian, Centerra report Turkey Assays of 1.35 g/t Gold over 67.9m

September 2nd, 2011

Resource Clips - essential news on junior gold mining and junior silver miningEurasian Minerals Inc TSXV:EMX in joint venture with Centerra Gold Inc TSX:CG announced results from their Akarca Project in northwestern Turkey. Highlights include 1.35 g/t gold and 16.08 g/t silver over 67.9 metres (including 2.86 g/t gold and 32.97 g/t silver over 18 metres), 1.35 g/t gold and 13.93 g/t silver over 58.3 metres (including 4.9 g/t gold and 45.75 g/t silver over 11.4 metres), 4.61 g/t gold and 2.22 g/t silver over 14.2 metres (including 10 g/t gold and 4.16 g/t silver over 5.8 metres) and 0.63 g/t gold and 8.77 g/t silver over 57.9 metres (including 1.02 g/t gold and 21.03 g/t silver over 12.9 metres).

The joint venture covers both the Akarca and Elmali properties. Centerra may earn a 50% interest in both properties by spending US$5 million over four years and paying Eurasian US$1 million. Centerra may earn an additional 20% by spending a further US$5 million over two years. The JV agreement is currently in its third year.

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Contact:
Eurasian Minerals Inc
David M. Cole
President/CEO
303.979.6666
or Valerie Barlow
Corporate Secretary
604.688.6390

Centerra Gold Inc
416.204.1953

by Greg Klein