Centerra Tries to Calm Fears, but Shares Drop

Reuters

Shares of Centerra Gold fell nearly 7 percent on Thursday on concern about political risk in Mongolia even as the company said its Gatsuurt project was not on the Asian country's list of licenses to be revoked.

Toronto-based Centerra has four licenses on the list, but it said none of them are material to the company.

The company had previously received notice that Mongolia could revoke its Gatsuurt license under the legislation and was asked to provide the government with a compensation estimate. 

"I think there's a lot of risk there that (Gatsuurt) might get taken over," said Salman Partners analyst David West, adding that shares were falling on investor concern about such a possibility.

The Gatsuurt project is located some 35 km (21.7 miles) from Centerra's Boroo mine, its main Mongolian property, and has 1.2 million ounces of indicated gold resources.

Centerra said Boroo was exempt from the law, as it is a "mineral deposit of strategic importance."

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By author: admin - Nov 19, 2010 / Categories: News