Kyrgyzstan to auction huge gold field

By bne IntelliNews March 25, 2013

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Kyrgyzstan has announced plans to put five deposits, including its second largest gold deposit Jerooy, up for tender in May.

Kyrgyzstan's State Geology and Mineral Resources Agency says bidders will have until May - two months later than expected earlier - to submit their documents, 24.kg reports.

Jerooy is at the top of the list of deposits to be auctioned, and is expected to go on the block with a starting price of $100m, three times higher than previously announced. With reserves of 80-100 tonnes of gold, it is Kyrgyzstan's second largest gold deposit after Kumtor. In January 2013, Kyrgyzstan's Economy Minister Temir Sariev said that the total wealth of Jerooy is estimated at around $5bn, based on a world gold price of $1,700 per ounce.

The government hopes that by auctioning off Jerooy it will not only get much needed cash from the sale, but secure a steady stream of income once gold exports start. Kumtor, which is majority owned by Canada-listed Centerra Gold, accounts for around 12% of Kyrgyzstan's GDP. President Almazbek Atambaev announced in early March that the government hoped to use some of the revenues from Jerooy to finance urgently needed investments in the energy sector.

Other deposits due be auctioned off include the Togolok gold field, which has reserves of 17 tonnes. Bishkek hopes to raise $30,000 by selling the licence to develop the field. Kyrgyzstan also plans to sell of the Tegenek coal deposit, which should bring in at least $150,000, and the Akkart and Chaartash marble deposits.

However, a February 2013 study by Canadian research institute the Fraser Institute put Kyrgyzstan in 92nd place on a list of 96 countries ranked in terms of their attractiveness for mining investments. The index was based on interviews with representatives of 742 mining companies.

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