KYRGYZ REPUBLIC – Toronto-based CENTERRA GOLD has informed its shareholders of a ground movement of the Kumtor mine wall that will have a significant impact on production. Preliminary engineering analysis of the event indicates that 2006 production at Kumtor will be about 300,000 oz at a cash cost of about US$530/oz. Previously Centerra projected this year’s output to be between 410,000 and 420,000 oz at a cash cost of US$370-380/oz.
The incident occurred late on Thursday, July 13, and involved a significant portion of the northeast wall. Kumtor’s extensive slope monitoring system was effective, enabling safe advanced evacuation of the mining area. The movement occurred above the higher-grade stockwork area, which was planned to be mined beginning late this year and continuing into 2007. While the stockwork area was not covered, safety concerns identified in the company’s engineering analysis undertaken after the event will require a new mining sequence, which will defer production from this planned area.
Centerra says that normal operations continue in the south end of the pit, and milling of low grade stockpiles continues. Gold reserves are not expected to be affected as a result of the rock slide, as the wall movement lies entirely within the ultimate pit design.
Further information is available from Centerra’s executive VP and CFO David Petroff at 416-204-1961.