Project summary document

Project description
and objectives:

The facility will finance the ongoing operations and development of the Company’s mining operations in the Kyrgyz Republic and Mongolia and potential acquisitions of new exploration, development and mining assets.

Transition impact:

Through the proposed financing, the Bank will contribute to transition impact in three areas:

(a) it will have a demonstration effect in the Kyrgyz Republic, being this the first international syndicated facility since 2005’;

(b) in parallel with the proposed transaction, the Bank is conducting a capacity building for the Mongolian Minerals and Petroleum Authority aimed at improving regulatory framework. The Technical Cooperation (‘TC’) project consists of advanced financial, technical and environmental training for key policy advisors and regulators in the Authority;

(c) in parallel with the proposed transaction, the Bank will provide technical assistance to the Kyrgyz Republic in deepening the process of implementation of the Extractive Industries Transparency Initiative in the country.

(d) the transaction will also have a demonstration effect through the introduction of a new technological process for gold extraction (gold heap leach process) in Mongolia.

The client:

Centerra Gold Inc. (“CGI”, “Centerra” or the “Company”), a company listed on the Toronto Stock Exchange, the largest Western-based gold producer in Central Asia and the FSU.

EBRD finance:

Corporate loan of up to USD 100-150 million, of which EBRD will provide approximately USD 50 million.

Total project cost:

Up to 150 million.

Environmental impact:

The project was screened C/1. Regular independent environmental audits, annual Sustainability Reports and extensive environmental, health and safety information on the practices and procedures of Centerra as a whole have confirmed that mines in both countries are ‘best-in-class’ and a site visit and OPER in 2007 from the Bank’s Evaluation Department (EvD) also rated the Company’s environmental performance highly. Centerra Gold supports sustainable development programmes directly and through various national and local NGO’s especially the support of biodiversity, protection of snow leopard and effective forestry management. The Company is in full compliance with the Equator principles at its corporate level and these have been implemented throughout its operating facilities. Kumtor’s response to a serious cyanide accident in 1998 has led, with EBRD’s assistance, to a programme which has confirmed that, while mining operations can have significant negative impacts, they can deliver sustainability in terms of environment, biodiversity and local employment.

Going forward, environmental and social due diligence, including a risk assessment relating to the future use of proceeds, is presently being finalised by independent consultants. The implementation of an Environmental and Social Action Plan (ESAP), together with relevant legal agreements, will seek to ensure that appropriate due diligence is undertaken and mitigation measures established to reduce potential risk and liability associated with any future operations.

Technical
cooperation:

Two technical cooperation projects are being carried out in parallel with this operation:

(a) a capacity building TC of EUR 100K for the Mining and Petroleum Authority of Mongolia (“MRPAM”, part of the Ministry of Industry and Trade), aimed at improving frameworks for markets. This TC is being co-ordinated with the other IFIs -in particular World BankB- and is quite timely given the increasing level of mining activity in the country. The TC comprises a series of advanced technical, financial and mining engineering training modules for a number of officials of MRPAM. The programme aims at raising the quality standards of government policy formation and commitment in the mining sector, promoting predictability and transparency in the approach towards FDIs and foreign investors.

(b) a capacity building TC of up to EUR 100k for technical assistance to the Kyrgyz Republic in deepening the process of implementation of the Extractive Industries Transparency Initiative in the country.

For consultant opportunities for projects financed by technical cooperation funds, visit procurement of consultants.

Company contact:

Manuela Battello, Treasurer
1 University Avenue, Suite 1500
Toronto, ON
M5J 2P1

Tel 416-204-1953
Fax 416-204-1954

EBRD contact:

Enrico Grassi, Operation Leader: grassie@ebrd.com

Business opportunities:

For business opportunities or procurement, contact the client company.

General enquiries:

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com