Kyrgyzstan to Receive $360 Million in Funds to Boost Gold Production

Strategic Insights -

Kyrgyzstan has secured $360 million in international credit and equity funds to enhance its gold production capabilities, with the aim of reaching 500,000 ounces per year by 1997. The funds, which are comprised of debt financing and shareholder loans, will be utilized to develop the Kumtor gold mine, one of the largest gold mines in the world. The project is a joint effort between Cameco Corp., a Canadian uranium-mining company, and the Kyrgyzaltyn gold mining enterprise.

Key Takeaways:

  • The total funding for the project is $360 million, with $270 million allocated for debt financing and $90 million for equity and shareholder loans.
  • The International Finance Corp. and the Export Development Corp. of Canada will provide $270 million in debt financing, led by Chase Manhattan Bank.
  • The United States Overseas Private Investment Corp. will provide insurance cover for $15 million of a standby facility by commercial banks.
  • Cameco Corp. will operate the mine for the first 10 years of commercial production, which is scheduled to begin in 1997 with 500,000 ounces per year.
  • The Kumtor deposit is rated as one of the largest gold mines in the world, with reserves of 16.6 million ounces, including 9.3 million ounces recoverable by open pit method.
  • Agreements for two EBRD loans for a total of $40 million were signed last week in Bishkek, capital of Kyrgyzstan.
  • Cameco has been involved with gold mining in Kyrgyzstan for the past three years and already wholly owns the Kumtor Mountain Co. and the Kumtor Operating Co.
  • The project will also involve the modernization of electricity supplies to the Kumtor region, with a $38 million loan signed in May by the EBRD with the Kyrgyz Energy Co. to achieve this goal.

Statistics:

  • $360 million - total funding for the project
  • $270 million - debt financing from International Finance Corp. and Export Development Corp. of Canada
  • $90 million - equity and shareholder loans from Cameco Corp.
  • $40 million - two EBRD loans signed in Bishkek
  • $38 million - loan signed in May by EBRD with Kyrgyz Energy Co. for modernizing electricity supplies
  • 16.6 million ounces - reserves at the Kumtor deposit
  • 9.3 million ounces - recoverable gold at the Kumtor deposit
  • 500,000 ounces - annual gold production target by 1997
  • 1997 - planned start of commercial production
  • 10 years - period of commercial production by Cameco Corp.

Sources:

  • "Kyrgyzstan to Receive $360 Million in Funds to Boost Gold Production" - Officials
  • International Finance Corp.
  • European Bank for Reconstruction and Development (EBRD)
  • Export Development Corp. of Canada
  • United States Overseas Private Investment Corp. (OPIC)
  • Cameco Corp.
  • Kyrgyzaltyn gold mining enterprise
  • EBRD press release (no date provided)