POLITICS

Centerra Gold shares down more than 20 per cent after director resigns

06/28/2012 01:33 EDT | Updated 08/28/2012 05:12 EDT
TORONTO - Shares of Centerra Gold Inc. (TSX:CG) were down more than 30 per cent on Thursday after the company said Niyazbek Aldashev had resigned from the company's board of directors.

A managing partner of international law firm Lorenz LLC in its Bishkek, Kyrgyzstan, office, Aldashev was co-chair of Centerra's corporate social responsibility committee and a member of the audit committee and the human resources and compensation committee.

On the Toronto Stock Exchange, Centerra shares closed down $3.16, or 32 per cent, at 6.72

The gold miner's shares have been under pressure as questions have been raised about its Kumtor mine in Kyrgysztan.

The central Asian country's parliament backed a motion Wednesday to review the operating licence of a Canadian mining company developing a major gold mine that accounts for 12 per cent of the country's economy.

"Niyaz Aldashev made important contributions to the board during his tenure and we regret his departure from the board," Centerra chairman Steve Lang said in a statement.

The motion by Kyrgysztan's parliament calls for an increase in the government's current 33 per cent stake in Centerra.

A state commission is to be set up to assess the environmental damage that deputies say served as a leading motivation for reviewing the licensing agreement.

Centerra has said the Kumtor project, which has been operating since 1997, is in full compliance with Kyrgyz laws and meets or exceeds Kyrgyz and international environmental, safety and health standards.

The company has also said the project has generated $1.9 billion in benefits for Kyrgyzstan, including $620 million in taxes.

The open-pit gold mine run by Centerra's Kumtor Operating Company subsidiary, or KOC, has been the source of a string of toxic spills in past years, including a cyanide spill into a river.

Deputies have voted to compel KOC to increase the contributions it makes toward protecting the environment and reclaiming agricultural land near the mine.

The government has until Nov. 1 to report back to parliament on how the decree has been implemented.