LONDON (Alliance News) - Shares in Premier Gold Resources PLC dropped Friday after it said that it had encountered resistance from factions of local gangs seeking to hold up the work programme at its Cholokkaindy mine in the Kyrgyz Republic.
As a result, it will not be able to commence operations as originally intended.
Premier Gold said it will focus on resolving the situation to create a safe working environment so that work can resume. It said that it may still be able to undertake a limited work programme before winter sets in, but it cannot be certain it achieve the operational objectives it had set for 2013.
Local gangs have sought to threaten and intimidate employees of Premier Gold and its Kyrgyz contractors, the company said. Premier Gold said it has been informed that the Kyrgyz Deputy Prime Minister has been instructed by the Prime Minister to resolve the issue.
"The Company's primary objective is to resolve the local issues in order that activity on Cholokkaindy can commence safely, either before the first snow fall, or immediately at the outset of the next weather window beginning in Q2 next year," said Chief Executive Officer Richard Nolan in a statement.
"We are in regular contact with out representatives in the Kyrgyz Republic who are working with the government to resolve the issues. Premier Gold has repeatedly been impressed by the Kyrgyz governments encouragement of investment in the mining sector, and we are confident that they are affording the company all the necessary support required to resume activity as soon as possible."
Premier said it also believes it has support from the regional government.
Due to weather conditions in the Tien Shan mountain range, the company must conduct drilling assessment and preparation outside of peak winter months.
Premier Gold said that in preparation for drilling on the Cholokkaindy gold licence it had to begun a bulldozing process to provide access for its machinery.
Shares in Premier Gold are down 24% at 0.170 pence Friday morning, making it the biggest faller on AIM.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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