06/06/2016 04:56 EDT | Updated 06/07/2017 01:12 EDT

Centerra Gold faces fresh criminal probe by Kyrgyz Republic, demand for millions

TORONTO — Centerra Gold Inc. (TSX:CG) says its Kumtor subsidiary is the target of a fresh criminal investigation by the Kyrgyz Republic and that several senior managers have been advised they won't be allowed to leave the central Asian country.

The Toronto-based company didn't disclose the identities of the individuals or their positions.

In a statement released today, Centerra Gold and Kumtor Gold "strongly dispute" that any commercial transactions or any actions by their managers were "in any way improper."

In the same statement, Centerra says a Kyrgyz agency for environmental protection has alleged that Kumtor owes an additional US$220 million in fees.

Centerra says it understands that a court ruling on Friday is limiting Kumtor Gold's financial transactions, such as transferring assets or property or paying dividends while the fee dispute is ongoing.

The company did not immediately reply to a request for further information.

The Kumtor gold-mining operation has been the focus of a number of disputes between the company and Kyrgyz government, as well as allegations by Kyrgyz prosecutors. The allegations haven't been proven in court and Centerra denies them.

Last year, a former chief executive of the company was arrested by Bulgarian authorities while on a cruise in the Danube River with his family.

Len Homeniuk, then 68, spent 11 days in prison, then spent time under house arrest in Sofia, while fighting a Kyrgyz extradition request. The Bulgarian courts later rejected the request.



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