Project Description
A five-year revolving corporate debt facility to Centerra Gold Inc of up to US$ 150 million (€ 115 million) to finance the company's capital expenditures and working capital as well as acquisitions in the Bank's countries of operation.
The original revolving credit facility (DTM 47987) was approved by the EBRD's Board of Directors on 27 January 2016. The EBRD and Centerra now plan to formally include the Gatsuurt Gold Mine Project in Mongolia under the facility. As per the facility conditions, any category A projects to be included within the facility requires consideration and approval by the EBRD's Board of Directors.
In line with the Bank's Environmental and Social Policy (2014), the Gatsuurt project has been categorised A and has been subject to a full Environmental and Social Impact Assessment (ESIA), which is now disclosed (19 May 2016). The Project will be presented to the EBRD's Board of Directors on 20 July 2016 or later on a no-objection basis for inclusion in the existing Centerra Global Revolving Credit Facility as an authorised use of the facility.
Project Objectives
Support the development and ongoing operations of the Kumtor mine in Kyrgyzstan, the development of the Gatsuurt deposit in Mongolia and potential acquisitions in EBRD countries of operations.
Transition Impact
The Bank will be supporting responsible mining in countries such as the Kyrgyz Republic and Mongolia where mining is a strategic sector and a significant driver of economic growth. The Bank has been engaged in policy dialogue with the authorities on sector issues, and has provided technical assistance aimed at improving transparency in the sector in Mongolia, and helping to build capacity and adopt improved regulatory practices in the Kyrgyz Republic. The Bank is also engaged on an Equal Opportunities program with the client. In addition the Bank will support the introduction of modern technology for the mining sector in the region.
Client Information
CENTERRA GOLD INC
Centerra Gold Inc., the largest Western-based gold producer in Central Asia, listed on the Toronto Stock Exchange. Centerra Gold Inc key assets in EBRD countries of operation are the Kumtor mine (Kyrgyzstan), the Boroo mine and Gatsuurt deposit (Mongolia), and the Oksut deposit (Turkey).
EBRD Finance Summary
USD 150,000,000.00
Total Project Cost
USD 860,000,000.00
Environmental and Social Summary
Categorised B (2014 ESP). The Project comprises general corporate financing to a Company with multi-site operations with a use of proceeds focussed initially on an existing mining operation, Kumtor. Accordingly, the Project was categorised as B. The use of facility proceeds will now be extended to the development of the Gatsuurt Gold Mine project in Mongolia, a category A project. Mining projects, such as Gatsuurt, may be associated with various, potentially significant, environmental and social (E&S) impacts, which at the time of categorization, cannot readily be identified or assessed, and which, therefore, require a formalised and participatory environmental and social impact assessment (ESIA) process. The Company has developed an ESIA package for the Gatsuurt project, which was disclosed (19 May 2016) for a minimum of 60 days before the Project was presented to the EBRD's Board of Directors for inclusion in the facility. In addition, an Environmental and Social Action Plan (ESAP) has been agreed with the Company for the Gatsuurt project to ensure that it is developed and operated in line with the Bank's PRs. This PSD will be updated on an annual basis with respect to the Gatsuurt Project The Project was approved by EBRD’s Board of Directors.
Kumtor: The use of proceeds at Kumtor is consistent with B categorisation. The Bank has previously undertaken independent due diligence and monitoring of the Kumtor mine as part of the previous 2010 Facility. This was followed up by three separate monitoring visits by the Bank. For the purpose of this facility, EBRD visited Kumtor during November 2015 together with an independent consultant. The monitoring visit showed that the Company is managing its E&S risks in line with the Bank's PRs and international good practice. Current E&S performance and progress against the 2010 ESAP at Kumtor is satisfactory. To ensure that operations continue to meet the Bank's PRs, a revised ESAP has been developed drawing on the many of the Company's planned investments and initiatives to improve its E&S performance and manage its E&S risks. The ESAP has been agreed with the Company.
The Company will be required to continue to submit annual E&S reports to the Bank. Gatsuurt: The Project involves the development of the Gatsuurt gold deposit in a valley already disturbed by artisanal mining activities. The Project will employ open pit mining techniques with ore being transported via an already built road to the Boroo Gold Mine for processing. As required for category A projects, the Company has developed an ESIA disclosure package for the Project. The ESIA package includes local EIAs, additional studies to meet the Bank's requirements, an ESAP and a suite of management and monitoring plans. Key impacts and risks considered through the ESIA include impacts to biodiversity, impacts on surface and groundwater, emissions including dust, impacts to cultural heritage, livelihood issues, worker and community health and safety risks, labour and contractor issues and site closure. In order to meet the Bank's stakeholder engagement and disclosure requirements the Company has developed a Stakeholder Engagement Plan (SEP), a complaint procedure as well as a Non-Technical Summary of the ESIA. The ESIA Package was disclosed in line with the SEP and included a series of public meetings in the Project area. The Project will be required to report to the EBRD on a quarterly basis during construction and annually during operation on the E&S performance of the Project.
April 2017 update: Project design and feasibility works are ongoing. Construction has not started yet. Progress against the ESAP has been reported to the EBRD. Progress is satisfactory and the Bank’s Environmental and Social requirements are being implemented as required.
The EBRD will monitor the Project as necessary.
There is an Environmental and Social Impact Assessment available for this project.
February 2018 update: Since disclosure of the Gatsuurt ESIA in 2016 the Gatsuurt Project design has progressed and the ESIA documents are now being reviewed and updated. Updated ESIA documents will be disclosed when available.
Technical Cooperation
EUR 865,000 Technical cooperation funds have been granted by the Shareholder Special Fund from EBRD to support the broadening and deepening of implementation of EITI in Mongolia, involving capacity building and training, institutional and legal support, as well as helping to enhance communications and the outreach of EITI to local communities in Mongolia.
EUR 717,000 Technical cooperation funds have been granted by the Shareholder Special Fund from EBRD to support natural resources sector regulatory development and capacity building.
Technical cooperation funds will be sought to support the Ministry for Mining and MRAM of Mongolia in building a publicly available database of geological data.
Implementation Summary
The loan was prepaid in 2018. In terms of the Environmental and Social Action Plan (ESAP): in Mongolia, following disclosure of the ESIA, the Company complied with EBRD’s Performance Requirements and the ESAP actions relevant at the time. The Company has since divested from Mongolia. In the Kyrgyz Republic, the Company continued to implement the agreed ESAP throughout the Bank’s involvement with the Project.
Company Contact Information
Darren Millman
info@centerragold.com
+1 (416) 204-1953
+1 (416) 204-1954
www.centerragold.com
Darren Millman, Treasurer 1 University Avenue, Suite 1500 Toronto, ON M5J 2P1
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