Workers stand beside machinery in a tunnel in the Kumtor mine in Kyrgyzstan |
Visor Holdings of Kazakhstan claims that its licence was revoked improperly in 2010 for what the Kyrgyz government said was 'failure to begin gold production'.
Visor previously held a 60% stake in a joint venture with Kyrgyzstan at Jeeroy. Sources at Visor say that tens of millions had already been invested before the licence was revoked.
The issue is being arbitrated at a US court.
According to Kyrgyzaltyn, the state gold company, the Jeeroy mine holds at least 84 tonnes of gold in addition to 13 tonnes of silver. The gold deposit is the country's second-largest and lies about 3000 metres above sea-level. The largest deposit, Kumtor, is also at the center of a dispute between the government and Canadian developer Centerra Gold.
The winner of the auction will be awarded a mining licence only and the state geological agency does anticipate obstacles for the winner in the form of property rights disputes.
(Source: Olga Dzyubenko, Reuters)
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