MINING REPORTER
Centerra Gold shares fell nearly 12 per cent yesterday after protesters claimed to have toppled the Kyrgyzstan government, which is a one-third owner of the Toronto-based gold producer.
Company spokesman John Pearson said nervousness about the violence and political instability in Kyrgyzstan likely led to the selloff in Centerra's stock, even though its flagship Kumtor mine in the central Asian country has so far been unaffected.
"We haven't seen any impact on our ability to move people or supplies back and forth from the mine. The mine is still operating," Mr. Pearson said.
The Kumtor mine is located about 350 kilometres southeast of the capital Bishkek, where most of the protests have been taking place.
Centerra shares dropped the most yesterday afternoon, around the same time reports surfaced that President Kurmanbek Bakiyev fled the country after protesters stormed government buildings.
Reports also say clashes between police and protesters have left dozens dead, and that several top government aides were captured and beaten.
The Kyrgyz government owns a 33-per-cent stake in Centerra held through its state-owned entity, Kyrgyzaltyn JSC.
It doubled its stake last year after Saskatchewan-based uranium company Cameco Corp. divested its interest in Centerra.
The agreement was signed to solidify Centerra's ownership of the mine, which some had worried could face nationalization.
Centerra owns 100 per cent of Kumtor, which is considered the largest gold mine operated in central Asia by a Western-based company.
The Kumtor mine is forecast to produce between 520,000 and 560,000 ounces of gold this year, and accounts for nearly 10 per cent of Kyrgyzstan's gross domestic product.
It went into commercial production in 1997 and has been operating continuously since then, despite political unrest in the past.
Mr. Bakiyev came to power in the country during a similar popular uprising five years ago.