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Under the proposed transaction, Chaarat would provide US$400 million in cash (a mixture of debt and equity �backed by two major international financial institutions�). Subject to approval from the Kyrgyz government, US$400 million of Centerra�s shares currently held by state-owned Kyrgyzaltyn (which processes Kumtor�s gold at its own refinery) would be transferred to Centerra and cancelled, in exchange for a 50% direct preferred economic interest in the mine. If the deal gets done, Chaarat would own all of the common equity of Kumtor and have control over management and operations of the mine, and Kyrgyzaltyn would own all of the preferred equity of Kumtor and be entitled to 50% of the economic benefits from the mine. Kyrgyzaltyn is the biggest company in Kyrgyzstan, and, with its joint-venture partners, produces more than 97% of the Republic�s gold. �Under our proposal, 100% of the cash flow from Kumtor stays in the country,� Volynets explains. �The government will get 50% of dividends from Kumtor directly, and another 50% that Chaarat gets will be reinvested in the Kyrgyz Republic for the development of our two properties there, which require about US$600 million in capex over the next five to seven years.� �We are 100% confident that the transaction will proceed as planned because it makes money for everyone, it creates value for all stakeholders,� Volynets says. �I�ve been in this business for quite some time and completed some US$30 billion worth of deals, and those deals that make money typically do get completed.� What�s more, he says, Chaarat�s proposal was supported by its advisors, BMO, and accompanied by two support letters on funding: �one from one of the largest banks in Europe, and the second one from a cornerstone investor with US$150 billion of investment in listed companies.� �We were able to provide those confirmations of interest and funding because it�s part of the strategy we�ve been working on for a number of years.� Volynets argues that the proposal will be beneficial to the Kyrgyz Republic, �and, as such, will have full and popular support from all constituents in the country.� �Obviously they have to go through the proper debate and we welcome that debate �. Most likely it will go to debate in parliament, where we will present our case, and independent experts will present their views based on whether it will be good for the country or not.� Volynets also reasons that Centerra should appreciate the offer, given its history of troubles operating in the republic (including lawsuits and allegations of environmental infractions), and its repeatedly stated goal over the last few years of diversifying out of politically risky jurisdictions. �Not only will they get a full and fair price for this asset bu

�The sector is very fragmented,� Volynets explains in an interview from London. �The single-asset companies have anywhere from 30,000 oz. of gold up to 600,000 oz. of gold, and yet the sector is very profitable. It is profitable because the local currencies in places like Russia and Kyrgyzstan and Kazakhstan have all depreciated and revenues are in U.S. dollars. EBITDA margins are something like 50% or more.� Now Volynets wants to build �one of the leading emerging market gold companies� and describes Chaarat�s pursuit of Centerra�s Kumtor mine as �only the tip of the iceberg.� �We want to be over 1 million oz. of gold in two or three years,� he says. �The assets we�re currently considering are in two other countries � Russia and one more. The company we want to build will have multiple assets across the countries of the former Soviet Union.� But first, Chaarat must convince Centerra and its shareholders that they should part ways with Kumtor, a mine that represents 33% of Centerra�s net asset value. Centerra stated in a press release on April 24 that it had �no interest� in the offer, and that �in recent meetings with the Kyrgyz Republic Government, senior Kyrgyz Republic officials have confirmed to Centerra that the Government is also not interested in pursuing the transaction proposed by Chaarat.� Centerra declined a request for comment from The Northern Miner. Kumtor � the largest gold mine operated in Central Asia by a Western mining company � has produced more than 11.5 million ounces of gold since 1997. Last year, the mine, 350 km southeast of the capital, Bishkek, and 60 km north of Kyrgyzstan�s border with China, produced 562,749 ounces of gold at all-in sustaining costs on a by-product basis of US$698 per oz. gold sold. It also generated US$188 million of free cash flow. Kumtor has more than 4 million ounces of gold remaining in its open-pit reserves that can be extracted at a low cost, according to Chaarat�s calculations, and an additional 3.4 million ounces of gold grading 7.3 grams gold per tonne in the inferred resource category. Chaarat believes it is offering fair value for the mine. �Centerra�s market capitalization is currently C$2.2 billion, implying that the market values Kumtor at approximately C$740 million,� Volynets says. �Our proposal of US$800 million, or about C$1.025 billion, represents a premium of more than 30% of the value the market currently places on Kumtor.� �It�s actually more than you would typically see as a takeover of an entire company, let alone an asset in a politically difficult jurisdiction.�

Before Chaarat Gold (LON: CGH) launched a US$800 million cash and share proposal to acquire Centerra Gold�s (TSX: CG) Kumtor mine in the Kyrgyz Republic, very few North Americans had even heard of the junior mining company. But what Chaarat lacks in visibility on this side of the Atlantic, it makes up for with deep management roots in the mining business, with a board of directors headed by Artem Volynets, a Russian businessman who cut his teeth consolidating aluminum assets in Russia and parts of the former Soviet Union. Volynets, who joined Chaarat in late March as non-executive director, made a name for himself as the CEO of Russia�s En+ Group from December 2010 until June 2013, where he was responsible for implementing strategies designed to make the group a global leader in the mining, metallurgy and energy industries. Prior to the En+ Group, Volynets was senior vice-president of strategy at the Siberian-Urals Aluminium Company (SUAL), and played a key role in the US$20 billion, three-way merger of SUAL, Rusal and Glencore�s (LON: GLEN) aluminum assets to create UC Rusal, where he worked as deputy CEO and director for corporate strategy. Volynets also stick-handled UC Rusal�s US$2 billion IPO on the Hong Kong Stock Exchange. (En+ Group and Rusal are among a number of Russian companies caught up in the net of U.S. sanctions against Russia announced on April 6.) Volynets left the En+ Group five years ago and started looking for opportunities in the gold sector, specifically consolidating small, typically privately held gold companies in Russia and other countries in Central Asia that were once part of the Soviet Union and where �there are no big gold companies similar to that in North America.�

This article has quite a lot of details and Volynets speaking his mind : http://www.northernminer.com/news/chaarat-gold-wants-to-buy-centerra-golds-kumtor-mine/1003795858/

You know that confirmation I got from Bob B. on the $600m, it had a strange extra bit in the email which I further clarified with him. He stated it was possible, though not probable, that a further project might turn up in the 'five to seven years timescale' that pushed development of the Chaarat property further down the project pipeline and the $600m could be used there first if it meant a better return for shareholders ! Seems a silly thing to say but he did say our own projects were still the number 1 priority. I thought it conveyed poor sentiment on our projects but maybe it was just his way of being too honest in that anything could happen in 5 - 7 years.

Thanks for your replies and clearing up the football non-connection ! I think the simple thing here is The Krygyz are fed up with Centerra and the whole country would probably welcome their departure and the environmental problems they've created. Secondly, investment in the country and more profits for the country. Centerra want's to invest as little as it can get away with because it is fed up with the Krygyz and does not see it's future there(imagine them considering a new project there !). Current profits for the country 26.6% - proposed deal offering 50%. Got to be a few positives in there for the Krygyz unlike your analysis "rubbish for Kyrgyzstan"

Their stake in Centerra is worth US $467m (26.6% and converting to US$ a CAN$2,260m m/cap) so they've got a bit to spare on paying $400m for their part of our bid.

Yes, you were right Daisan, that is the $600m earmarked for our own projects

Well I suppose you're probably right on that $600m - just thought the way it was written 'other projects' seemed to preclude our very own projects. I'll ask Bob. Noted also "Chaarat will fund the cash component of the offer through a mixture of debt and equity, backed by two major international financial institutions, which have made private indications of support for the transaction to the parties concerned. The names of these institutions have been confidentially disclosed to Centerra." "confidentially disclosed" - so they're definitely setting up some dialog between the companies. To me it all depends on the Krygyz president/government, they can put so much pressure on Centerra if they want the deal, otherwise it's a non-starter.

than you can shake a stick at ! Alfredo is back - yuck. Still holding

I think Shakhtar Donetsk's position looks quite perilous for winning the Ukanian League and Cup double as Dynamo Kyiv seem the team in form. Perhaps shakhtar would care to give us his opinion on his home turf.

Seems a bit daft everyone getting into discussion with Shakhtar. Obviously the first offer put on a table is not necessarily the final offer. I think The Krygyz were required to put "US$400 million of Centerra shares currently held by Kyrgyzaltyn will be transferred to Centerra and cancelled" Don't think that's all their Centerra holding. All 3 parties will make their own minds up considering their own circumstances but the biggest driver outside Chaarat is the huge ongoing problems Centerra have had with the Krygyz for decades (as I've been reporting on here for about 7 years !). Daisan $600m - the company stated "Therefore the Company intends to invest up to US$600 million into other projects in the country's mining sector over the next five to seven years." Don't think that refers to Chaarat's own current projects imo.

More general info : "Centerra�s mine is located in the southern Tien Shan Metallogenic belt, in which Charaat owns a namesake project, comprising the Tulkubash and Kyzyltash deposits, which are set to yield 300,000 to 400,000 ounces of gold a year when in full production. Under its current arrangement with the Canadian miner, Kyrgyzstan has a 26.6% interest in the Toronto-based gold producer, which is the biggest foreign investor and taxpayer in the landlocked country, a former Soviet republic. Centerra Gold, which in recent months faced several disagreements with the Kyrgyz government and state-owned miner Kyrgyzaltyn over sharing profits from Kumtor, openly rejected last week Chaarat's proposed deal, adding that senior officials had confirmed they were not interested in pursuing the transaction proposed by the bidder. Kyrgyzaltyn chief executive Bektur Sagynov, however, said later the company had not seen the offer, refusing to comment on whether or not the deal seemed attractive. Looking at the home market Centerra, the largest Western-based gold producer in Central Asia, reached in September a $60 million-settlement with Kyrgyzaltyn, which ended mutual lawsuits, cancelled environmental claims, halted court proceedings and allowed the miner to transfer frozen funds from that country. Kumtor, which lies near the Chinese border at an altitude of 4,000 metres, has produced around 10 million ounces since inception and remaining reserves are 5.6 million ounces. Last year alone, it produced 562,749 ounces of gold, exceeding the upper end of its revised guidance. Centerra has been shopping for assets in safer jurisdictions as of late. In 2016, it bought out US-based Thompson Creek Metals (TSX:TCM) including the Mount Milligan copper-gold mine in British Columbia, Canada. And last year signed a deal to buy smaller rival AuRico Metals (TSX:AMI), in a friendly transaction valued at Cdn$310 million." Rejected but admitted hadn't seen the offer - lol

Centerra on Tuesday refused to comment on the offer on an Analysts call nor to reporters from The Globe and Mail at the company's AGM - reported in Canada's 'The Globe and Mail. Well at least they're not talking now - lol - step up from dismissing

States hasn't seen the bid and not interested and the Krygyz govt not interested - how stupid is that. Plus this article also says how they are still trying to conclude their huge ongoing problems with the Govt http://www.mining.com/faith-centerra-mine-not-sealed-kyrgyz-owned-company-yet-see-takeover-bid/?utm_source=digest-en-au-180430&utm_medium=email&utm_campaign=digest

That's the one - great confident viewing. I think we might find ourselves very lucky being in this share before suspension, could return much higher.

Another interview of Artem and Dusty - very confident the deal on Kumtor is going to go through on a Win - Win - Win basis. To my mind it only needs the Government and people to get behind us and Centerra will not be able to resist. http://www.proactiveinvestors.co.uk/companies/news/196018/chaarat-gold-believes-in-tulkubashs-potential-to-deliver-strong-operational-cash-flow-196018.html Dusty predicting a minimum of 12 years Tulkubash mine-life through continued exploration. First Assay results should be with us in a few weeks from the new drilling.

These read a lot better - making an early start before winter totally abated out there on the drilling that they are sooo confident about. Some Big numbers on the proposed Kumtor deal - I personally reckon this could go through. Centerra's shareholders must be fed up with all the problems and environmental challenges they've suffered out there and if the Krygyz president and government(when they reform) are behind it, it will be odds on. Could take a while but would be a massive leap for this company and more benefit for the Krygyz. ------------- Shaktar - thanks for your industry insights and you are right taking the FS simply as a one-off, but it can't be looked at that way. The company has done several interviews on ProactiveInvestors lately that foresaw your point of view and outlined how they are very confident of changing the economics of the project.

Good summary, thanks. It is difficult to find things to send one Tweeting about our fantastic project at the moment.

Great find with that article - that shows the ideas behind the support we hope for beyond the bland rebuffal from Centerra.