TO ALL:I took this off the CGZ thread.It doesn't look good.News from FP today.
Wednesday August 27, 1997
Kazakhstan ends venture with Canadian gold mining
company
MOSCOW (AP-CP) - Kazakhstan has dissolved a Kazak-Canadian gold mining
venture, accusing
the company of failing to boost production at some mines formerly run by the
government.
The venture, Gold Pool, took control of the mines - Aksu, Bestube and Jolimbet - last
year from
the government's mining company. It said it planned to invest up to $70 million in the
Central Asian
mines as part of its agreement with the government to boost production and buy
control of the
operations.
On Wednesday, the government said Gold Pool had not fulfilled those pledges, and
that gold
production had fallen during 1996 and the first half of this year, the Interfax news
agency reported.
It said back taxes and wages also remained a problem at the mines. The government
said Gold
Pool offered to settle the debts if it were allowed a controlling interest in the three
mines.
Gold Pool is a joint venture between Toronto-based Central Asia Goldfields Corp.
and the Kazak
BSB Corp.
The mines have been operating for 150 years. Ore production has fallen steadily from
a peak of
5.3 million tonnes in 1989.
In Toronto, Central Asia Goldfields said the three mines were temporarily shut down
because ''their
present economic viability has been strained by high local smelting and refining costs,
frequent
power shortages and the inability of a local smelter to process more than 25 per cent
of the
company's concentrate."
The company also said Gold Pool has complied with its obligations under its contract
with
Kazakhstan and remains willing to settle its dispute with the government.
"The company has previously stated, both directly and through its counsel in
Kazakhstan, that it
fails to see any provision of the management contract that has been breached," Central
Asia said in
a release.
The Toronto miner said Gold Pool has already invested $20 million in the Kazak mines
and
planned a further $70 million investment over the next 18 months under a plan to buy
the operations.
However, "the government has stated that it requires Gold Pool to restart the presently
uneconomic
mines and complete its proposed capital investment prior to advancing to direct
ownership under
the privatization process."
Central Asia said it plans to seek a third-party arbitrator to resolve the dispute under
provisions of
its contract with the government.
"The company also intends to pursue any other remedies available to it, particularly to
preserve the
considerable financial investment it has made in these properties," it said |
