KGL: Court Decision on the Minority Ownership in Andash Mining Company

Yesterday Kentor Gold advised that the Chui Regional Court had handed down their decision in relation to the minority ownership in Andash Mining Company.

This minority ownership refers to the 20% of the project not owned by Kentor Gold and the previous transfer of this stake between the minority owners.

The court found in favour of the General Prosecutor “who asserted that the transfer of a 20% holding in AMC between the minority owners was invalid.” Furthermore the court now requires KGL to re-register Andash as a company owned 100% by Kaldora (100% Kentor) and then make an offer to the Kyrgyz Government to purchase this 20% stake.

This does not affect the project dynamics in any way as Kentor Gold, previously had 80% and will still have 80% if the government takes up their 20%. Furthermore Kentor has previously advised the market that if they were awarded 100% of the project that they would sell the 20% stake to the government for nil consideration.

In my opinion this is an important step forward in proceeding with the Andash project. Firstly it removes the legal clouds surrounding the project and provides Kentor with a valuable bargaining chip (the 20%) to get the government onside.

Should the government take up their 20% stake Kentor will pay for the entire development of the mine and oversee its operations, while the government gets the opportunity to rake in a considerable amount of profit. Given the importance of mining to the local economy and the nations GDP this has the potential to create a “win-win” scenario for all involved.

Finally it is important to note that the case can be appealed further, however “Kentor believes that the General Prosecutor’s legal case is now very well tested”. Hopefully more positive news on the Andash project follows in the near future.

Link to the announcement.