POLYUS and ALROSA are interested in developing Dzheruy deposit site in Kirgizia
23 october 2009
Eight companies interested in developing Dzheruy lode gold deposit in Kirgizia applied to the government of the country and the State Agency for Geology and Mineral Resources of the republic, informed the liaison office of the Agency.
Among these companies are Russian Polyus Zoloto OJSC (RTS: PLZL) and ALROSA, Canadian Centerra Gold Inc (developing Kumtor lode gold deposit in Kirgizia), and Gold Fields gold mining company.
Within the structure of ALROSA there is an investment group under the same name, which is implementing projects unrelated to diamond extraction. In the past, ALROSA Investment Group had owned several licenses for gold mining, but later the group sold them.
As was reported earlier, the Fund of development of Kirgizia planning to concentrate under its management 100% shares of Dzheruyaltin CJSC (and owning the license for development of Dzheruy deposit site) intends to transfer the package of shares to a strategic investor. It was also reported that the Fund considers Centerra Gold as one of the potential strategic investors of Dzheruyaltin company.
Presently 40% of shares of Dzheruyaltin are owned by Kirgizaltin OJSC. The rest of the shares belong to a private investor, which in the early October 2009 applied to the Development Fund with a request to accept for trust management 60% package of shares of Dzheruyaltin CJSC to find new investors into development of the site.
State Geology Agency informs, that on October 1 2009, the license of Dzheruyaltin CJSC should have been terminated for failure to complete construction of the enrichment facility. However, the Kirgizia Development Fund applied to the Agency and informed about its preparedness to take 60% share of Dzheruyaltin into trust management based on written application of the owner of this package of shares - Austrian Global Gold Holding Gmbh to the fund. Presently the Fund is also conducting consultations about acquiring the remaining 40% of the shares of Dzheruyaltin CJSC owned by Kirgizaltin OJSC.
According to the liaison office of the Agency, the Development Fund in its message to the agency asks not to terminate the license of the company. Presently the possibilities of terminating or extending the license are being considered. The final solution will be made by the Government of Kirgizia after reviewing the proposals of the Development Fund and completing the negotiations with the companies interested in developing the deposit site.
Dzheruyaltin CJSC obtained the license in July 2006. The licensing agreement anticipated completion of construction of the enrichment facility by November 1 2008 and initiation of gold extraction. However, in October 2008 the company applied to State Geology Agency and asked to postpone the completion deadline due to the need to revise the design taking into account mining and environmental requirements.
Consequently, the Company received a new licensing agreement, according to which design of all the facilities of the mining and enrichment complex was supposed to be finalized by October 1 2009, and all the design documents were to be properly approved by that date. The construction of the mining and enrichment complex was supposed to be completed by November 1 2010, the capital construction cost having been estimated in the feasibility study at $200 million.
“Fund of development of Kirgiz Republic” CJSC is the largest corporation in the country, dealing with funding and co-funding of the priority projects for the national economy, and with attracting investments into strategic industries of Kirgizia.
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