Centerra's Kyrgyz gold mine caught in green tangle; shares plunge

Reuters News
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Posted: Jun 22, 2012 11:05 AM

(Reuters) - Canadian miner Centerra Gold Inc on Friday said allegations of environmental violations at its Kumtor mine made by a panel of the Kyrgyzstan parliament are without merit.

The Kyrgyz Parliament is discussing the report by the commission, set up to review Kumtor's compliance with environmental, health and safety standards, the company said.

Shares of Centerra Gold, in which the Kyrgyz state owns a 33 percent stake, fell as much as 31 percent to a more than two-and-half-year low of C$8.10 on Friday on the Toronto Stock Exchange.

Centerra, which also produces gold in Mongolia, said it is not able to comment on the likely outcome of the discussions in parliament at this time.

The economy in Kyrgyzstan, a mountainous former Soviet republic, relies heavily on gold production from the mine.

The project is in compliance with Kyrgyz laws, and meets Kyrgyz and international environmental, safety and health standards, the company said in a statement.

The mine has been hit by a series of disruptions, with villagers of the Central Asian state blocking the only road to the mine, demanding land and jobs.

The Centerra stock has lost more a third of its value so far this year.

(Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Sriraj Kalluvila)