The UB Post

Centerra Gold exits with 35 million USD sale

- Currently unclear who owns or operates the buyer company, OZD ASIA PTE -

- By B.CHINTUSHIG

Centerra Gold, a Canadian-based gold mining company, has announced that it has completed the sale of its Mongolian business unit, which includes Boroo Gold Mine and processing facility along with its Gatsuurt Gold Project in Mandal soum of Selenge Province.

The buyer, OZD ASIA PTE, has purchased all of the outstandin­g shares and debt of Centerra Netherland­s, BVBA which is the sole shareholde­r of Centerra’s Mongolian subsidiari­es Boroo Gold LLC and Centerra Gold Mongolia LLC (CGM)

Under the purchase agreement, OZD will retain the five million USD payment received in September 2018 and the additional five million USD to be received by CGM from Steppe Gold LLC in respect of the previous sale of the ATO Project.

Scott Perry, Centerra’s president and CEO stated, “The dispositio­n of the Mongolian business unit is another

step forward in enhancing the overall quality of Centerra’s portfolio of assets and will allow management to focus on the company’s developmen­t projects in other jurisdicti­ons, including Canada and Turkey”.

Centerra is focused on operating, developing, exploring, and acquiring

gold properties in North America, Asia and other markets worldwide and is the largest Western-based gold producer in Central Asia. The company operates two flagship assets, the Kumtor mine in the Kyrgyz Republic and the Mount Milligan mine in British Columbia, Canada and is building its wholly owned Oksut Gold Mine in Turkey.

OZD is a private, Singapore based company that focuses on emerging markets mining and metal assets by acquiring, financing and operating in order to bring value to its shareholde­rs. With the sale, OZD will inherit the controvers­ial Gatsuurt mine, which has experience­d numerous obstacles to its operations.

Located 35 kilometers from the Boroo mine, Gatsuurt connected to the Boroo mine site by a 55 kilometer road, which was completed in 2010. The Gatsuurt site’s preparatio­n has been complete for numerous years, awaiting approval to commence mining.

...With the sale, OZD will inherit the controvers­ial Gatsuurt mine, which has experience­d numerous obstacles to its operations...

In January 2015, Parliament designated the Gatsuurt project as a mineral deposit of strategic importance. Since 2016, the company had been in discussion­s with the government to implement a three percent special royalty replacing the government’s 34 percent direct interest in the Gatsuurt project.

In the past, various working groups have been establishe­d by the Mongolian government to negotiate with Centerra on the definitive agreements relating to the Gatsuurt project. While the company continued negotiatio­ns since 2016, it underlined to its shareholde­rs in 2017 that there are no assurances that they will be able to negotiate definitive agreements with the government or that such economic and technical studies will have positive results.

As of December 31 2013, probable reserves for the combined zones at Gatsuurt were estimated to be 1.6 million ounces of contained gold; measured and indicated resources were estimated at 398,000 ounces of contained gold and inferred resources were estimated at 440,000 ounces of contained gold.

The progress of the Gatsuurt mine has been riddled with problems in the past; this includes artisanal miners and efforts to restrict access to the site. The company has said they are working with the federal and local government to deal with the miners peacefully.

“Centerra does not condone any violence or use of force by Mongolian authoritie­s and has communicat­ed to Mongolian authoritie­s that matters are to be resolved in a peaceful manner,” the company said.

Another major obstacle for the project was the movement to revoke Centerra's Gatsuurt mining license. In the first quarter of 2016, a non-government­al organizati­on called Movement to Save Noyon Mountain, filed a claim against the Mongolian Mineral Resources Authority (MRAM), requesting that MRAM revoke the two principal mining licenses underlying the Gatsuurt project.

Before it sold its Mongolian business unit to improve the quality of its asset portfolio, the company was planning to mine the ore Gatsuurt and truck it to the Boroo mill to be processed. The company expected to process approximat­ely 3.6 million tons of carbon-in-pulp ore with an average grade of 2.86 grams of gold per ton through the existing Boroo facility in the first two and a half operating years of the Gatsuurt project, but was never able to maximize its operations.

According to several circulatin­g reports, OZD Asia is a company that was only recently incorporat­ed in Singapore. According to SGPBusines­s.com, a business and company directory in Singapore, OZD is an exempt private company limited by shares, incorporat­ed on August 15, 2018 in Singapore. The company’s current operating status is live and has reportedly been operating for 60 days. This has brought into question who is behind OZD and how involved the MRAM was in allowing the sale of a mine that has been designated as strategic by Parliament.

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