Bishkek (AKIpress) - Centerra Gold Inc. CEO Len Homeniuk told shareholders Wednesday the company expects to increase 2007 gold production by 19 to 23 per cent – about 700,000 to 720,000 ounces – after a tough 2006 when it was forced to cut output at its operations in Central Asia, reported The Star.

The forecast is an improvement on the company's 2006 production of 586,000 ounces, but is still lower than 2005 production of 787,275, Homeniuk told the annual meeting Wednesday.

On the upside, the average realized gold price in 2006 was $597 (U.S.), up from $433 in 2005.

Centerra anticipates cash costs per ounce in 2007 may decrease slightly, as low as $375 per ounce, down from an average of $385 last year.

The company is also expected to boost its capital spending from $87 million to $104 million, and to increase exploration spending by $2 million, up to $25 million this year.

Centerra had reduced its 2007 production estimates for its Kumtor mine in Kyrgyzstan by more than 58,000 ounces of gold in September after a pit wall movement in July at Kumtor that resulted in lower gold production and higher costs.

That was the second such reduction, with Centerra having lowered its 2006 Kumtor production estimate by about 20 per cent.

Centerra was also faced with a government-mandated program that increased salaries and a $1.2-million land tax settlement payment at Kumtor – negatives that were partially offset by higher realized gold prices and a tax recovery of $8.1 million.

Homeniuk, meanwhile, got philosophical with shareholders about his company's fortunes, said The Star.

The company has survived many trials and tribulations in the past year with political and technical problems in Central Asia, where it operates the Kumtor, as well as the Boroo mine in Mongolia.

"Yet through it all, we have persevered without losing any material production time and generally maintaining normal operations while growing the company through our exploration programs," Homeniuk said.

"In this context it is hard not to recall the well known quote from the German philosopher Nietzsche: `That which does not kill us makes us stronger," and indeed ... we see the light at the end of the tunnel and Centerra is not only very much alive, it is maturing and gaining strength with every quarter," Homeniuk said.

Centerra, which was launched with an initial public offering on the TSX in 2004, took over the assets of Cameco Gold Inc., a wholly owned subsidiary of Canadian uranium giant Cameco Corp. (TSX: CCO). Cameco, which still holds a 53 per cent stake in Centerra, has said it wishes to divest its interest in the company.

The two central Asian countries have presented a host of problems to Centerra, including significant political unrest, particularly in Kyrgyzstan, reported The Star.

The company said earlier this week that a small group of about 50 to 70 villagers is blocking the road to the Kumtor mine demanding the government and the company make further compensation payments in relation to a May 1998 cyanide spill.

Centerra said the government is responsible for administering the compensation, and while Centerra has provided advance payments to the government, which has a stake in the mine, the government has not made any further payment requests.

Centerra said despite the problems Kumtor, it is proceeding with its planned investment program, which includes investing $15 million in exploration and $59 million in growth capital.

Last month, Centerra reported first quarter net earnings of $5.9 million or three cents per share, down from $18 million, or eight cents per share, in the first quarter of 2006.

Shares in Centerra fell one cent to close at $10.95 on the Toronto stock market Wednesday, said The Star.

No Kumtor nationalization, only revision of general agreement

Bishkek (AKIpress) - The question now is not about the Kumtor nationalization, but about appropriateness of revision of the General Agreement, said Foreign Affairs Minister Ednan Karabaev during the meeting with Canadian Ambassador Margaret Skok in Bishkek on Tuesday.

The two sides exchanged opinions on selected issues of bilateral cooperation and said all conditions are in place necessary for its further development, reported press office of the Foreign Affairs Ministry.

The Canadian Ambassador asked about position of the Kyrgyz Government concerning the Kumtor gold mine and expressed her concerns over reports on its possible nationalization.

The Foreign Minister stressed that the Kumtor nationalization is not raised anymore. "However, we should admit some problems in the General Agreement signed between the Kyrgyz Government and Cameco Corporation and it is reasonable to revise it. Kyrgyzstan is able to resolve the problems on its own. We will not sign any agreement since now on in case the national interests of Kyrgyzstan are not taken into account," said Minister Karabaev.

According to local expert’s estimate, Kyrgyzstan would have to pay US $300M to investors in case of nationalization of Canadian Kumtor Gold mine. Kyrgyzstan doesn’t have such resources at the moment.

Australian Monitor Energy gets uranium exploration project

Australian based resources company Monitor Energy (ASX: MHL) has acquired 100 per cent interest in a new uranium exploration license in the north-eastern region of the Kyrgyz Republic. The license is issued to its wholly owned, locally registered subsidiary Issyk-Kul Energy, “Mineweb.net” site reported.

The Kalmaksu license is valid for two years between 4 May, 2007 and 4 May, 2009. The license covers 27,200 hectares (272 square kilometers) of land and is located north of Lake Issyk-Kul. It is also in close proximity to two of Monitor's four existing petroleum exploration licenses, which total an area of 9,900 square kilometers.

Monitor believes that the company's new license is located in a highly prospective area for uranium as historic exploration data of the Kalmaksu license area, including mapping, geophysics surveys and sparse drilling, has identified zones of mineralization for uranium as well as molybdenum, lead and sliver.

The company intends to expedite its uranium exploration program in the region, which will include detailed geological mapping, surface and underground sampling and radiometric surveys to determine drill targets. (www.24.kg)

“KazakhGold” buys “Oxus Gold” assets in “Talas Gold Mining Company”

Bishkek (AKIpress) - British company “Oxus Gold” announced its decision to sell 66.67% of “Talas Gold Mining Company” share to Kazakh company “Kazakhgold” on March 12, said “Kyrgyzaltyn” General Director Almazbek Jakypov.

“Oxus Gold” will receive 7% share (costing $72m) in “Kazakhgold” in return.

The company said it would get $80m in case “Kazakhgold” received license for Jerooy development. The company plans to focus its activity on gold mining in Uzbekistan at Amantaitau deposit.

“We believe the deal with “Kazakhgold” will resolve Jerooy problems,” said “Oxus Gold”.

“Kazakhgold” is a founder member of Kazakhaltyn gold mining company, which is one of the three largest gold mining companies in Kazakhstan.

Kyrgyz Government bans Andash mine development

Bishkek (AKIpress) - The Kyrgyz Government issued a decree to ban Andash mine development unless the feasibility study is re-worked based on recommendations of the state and independent environmental examination, reported the press office of the Kyrgyz Government.

Andash Mining Company is Kyrgyz-English joint venture which obtained a license for development of the mine in 2005. It was expected that the gold would be extracted since January 2007. Prior to Andash, the mine was developed by Alatoo Gold Company. Beside gold, the mine has some 70 tons of copper.

Australian Monitor Energy receives uranium exploration license

Bishkek (AKIpress) - Australian based resources company Monitor Energy announced that the Company has acquired 100% interest in a new uranium exploration license in the north-eastern region of the Kyrgyz Republic. The license is issued to its wholly owned, locally registered subsidiary Issyk-Kul Energy, reported MineWeb.com.

Exploration work in the area with detailed geological mapping, surface and underground sampling and radiometric surveys should commence shortly.

The Kalmaksu license is valid for two years between 4 May, 2007 and 4 May, 2009. The license covers 27hectares of land and is located north of Lake Issyk-Kul. It is also in close proximity to two of Monitor's four existing petroleum exploration licenses, which total an area of 9,900 square kilometers.

The Kyrgyz Republic has a history of uranium mining, with production of approximately 3,000 tons mined up until the 1970s. Advanced exploration has been previously conducted by Soviet geologists but limited drilling was carried out.

Monitor has a strong focus on energy opportunities in the Kyrgyz Republic and beyond. Current oil and gas technical work in the area includes new age interpretation of existing seismic data in the southern license areas, which has indicated several large untested, four way dip anticlines with geology similar to both the adjacent Fergana and Tarim basins. The company is currently in negotiations with geo-science field data acquisition contractors to obtain modern geophysical data to assist with prospect development.

Government gives UMC Plus a lot in Minkush for coal mining

Bishkek (AKIpress) - Kyrgyz Government gave a lot in Minkush (Naryn region) to Kyrgyz-English UMC Plus LLC for a stripping to extract coal. The decree was signed by Kyrgyz PM Almazbek Atambaev.

The decision was made to attract direct investments in the industry, reported Governmental press office on Friday.

The lot is given for 2 years. The gross area is 45 ha.

BUSINESS DEVELOPMENT & INVESTMENTS

EBRD’s credit program gives Kyrgyzstan over $200M

Bishkek (AKIpress) - EBRD Micro& Small Financing Program in Kyrgyzstan operates in Kyrgyzstan for 5 years already.

Credit Consultant of the Program Holger Wiefel announced the results of the work. “Working with micro and small financing is more profitable. In the beginning it was difficult to teach credit experts. Later people understood everything and submitted to the terms,” he said and added that now the Program gives credits to the agricultural sector as well.

One of the main problems in the beginning was that many businessmen did not believe it was possible to get a credit, said Deputy Head of the Program Jyldyz Galieva. “People thought there were supposed to be bribes. Now we do not have such problems,” she said.

According to her it was not easy to find credit experts to analyze borrowers’ activity. “Now we have these experts, and have no non-payers,” she noted.

“The total sum of credits for 5 years exceeded $200m, and the joint credit portfolio made $85m. Some 30.000 businessmen are active borrowers of the credits,” said the Program representatives.

The given credits provided more than 100,000 people with work.

Islamic principles of financing introduced in Kyrgyzstan

Bishkek (AKIpress) - Kyrgyz State Secretary Adakhan Madumarov met with Head of Office of the Regional Representative of Islamic Development Bank (IDB) Nik Zainal Abidin in the White House

Issues relevant to perspectives and priorities of economic cooperation between Kyrgyzstan and IDB, development of Islamic banking, particularly the pilot project of Islamic principles of financing (interest –free credits), were discussed at the meeting.

The National Bank developed the draft law on banking transactions based on Islamic funding principles, which regulates alternative banking and financing principles. This draft law was forwarded to the Kyrgyz Government that should be submitted to the Parliament afterwards.

Kyrgyz local commercial bank “EcoBank” carried out transactions based on Islamic funding principles worth some US$30 thousand already.

EBRD grants $1m loan to Kyrgyz credit company “Frontiers”

Bishkek (AKIpress) - European Bank for Reconstruction and Development (EBRD) granted $ 1m credit to Kyrgyz credit company “Frontiers”, reported EBRD press service.

The loan is given for financing micro enterprises in Kyrgyzstan, Tajikistan, and Kazakhstan. $100,000 will be granted additionally for institutional development of the company.

“Frontiers” credit company was established in 2003 by the American private non-commercial ACDI/VOCA organization that contributes to economic development and social progress in more than 40 countries around the world.

“Frontiers” is located in Bishkek and finances non-bank financial institutions granting credits to micro and small enterprises in Central Asia.

The company has been financed by USAID. It attracts commercial credits since 2006.

ENERGY SECTOR

Kazakh companies finance Kambarata HPPs preliminary feasibility study

Bishkek (AKIpress) - Kazakh holding Samruk and KazKuat JSC have started financing the preliminary feasibility study for hydroelectric stations Kambarata 1, 2, said Executive Director of KEGOC JSC Valeri Li in Ministry of Energy and Mineral Resource, reported Kazakhstan Today.

“We participate in the project, as electric energy deficit will grow in the South of Kazakhstan, any production will benefit for the region. Besides, Naryn electric energy production cost is cheap. Samruk holding and KazKuat JSC appropriate money on Kambarata 1, 2 preliminary feasibility study,” said Mr. Li.

“There is a tendency this year to increase the production of Kyrgyz and Tajik electricity exported to south Kazakhstan,” he said and added that the cost had always been cheaper.

Mr. Li also said that Tajik electric energy had a limited access to Kazakhstan through Kyrgyzstan because of lack of proper debt regulations.

The sum of money Kazakh investors will spend will be known after the feasibility study is ready.

According to the preliminary estimations, Kazakhstan is ready to invest $8m, said Kazakh Minister of Energy and Mineral Resource Bakhtykozha Izmukhambetov on April 25.

Specialists from Kazakhstan, Kyrgyzstan, Russia will take part in the feasibility study preparation. United Energy Systems of Russia has already invested $6m into the feasibility study.

According to the preliminary estimations, the construction of hydroelectric stations Kambarata 1, 2 will cost some $2.5 billion.

2^nd tender for export of electricity to be held this summer

Bishkek (AKIpress) - Power engineers plan to announce a call for bids for purchase of the Kyrgyz electric power. Minister of Industry, Energy and Natural Resources Igor Chudinov said the last tender which was held in March was won by the Kazakh company which offered 1.52 US cents for kW of electric power at the starting price of 1.5 US cents.

By this tender, the Kyrgyz specialists wish to determine the prices for electric power at the foreign market. Minister Chudinov mentioned that during summer and fall the water level in Toktogul reservoir will increase, which will allow to produce more electricity in this period of time. The minister said there is a trend of price growth for electricity which is being exported, last year the price for electricity reached 1.1 cents for kW.

In future, Minister Chudinov said, energy sector will grow due to putting Kambarata hydro power plants into operation, which is a top priority for the country right now.

The Minister said Kyrgyzstan produces 14 billion kW of electricity every year, while Toktogul cascade of hydro power plants produces 80% of electricity. Kyrgyzstan exports 3 billion kW of electric power. The rest is consumed domestically, and the demand grows by 5% on average every year.

Kyrgyzstan & Gazprom sign oil & gas agreement

Bishkek (AKIpress) - Gazprom President Aleksey Miller, Kyrgyz Minister of Industry, Energy Sector and Fuel Resources Igor Chudinov discussed further cooperation between Kyrgyzstan and Russian Company Gazprom at the meeting in Moscow.

Issues relevant to exploitation and recovery of gas, reconstruction and shared use of gas transmission infrastructure of Kyrgyzstan were also discussed. The sides discussed joint supply of oil-products and liquefied hydrocarbon gases.

Agreement on general principles of oil & gas promising areas exploration in Kyrgyzstan was signed at the meeting.

Gazprom and Kyrgyz Government signed an agreement on long-term cooperation for 25 years in 2003.

Kyrgyz gas reserves are estimated for 6 billion cubic meters. Share of gas resources in Kyrgyzstan’s fuel and energy balance reaches 30%.

MACROECONOMICS

Ukraine to pay Kyrgyzstan $ 27M within few years

Ukraine intends to pay Kyrgyzstan $ 27M within few years, Ukraine Minister of Economy Anatoliy Kinah said.

The debt rose after the two countries went out of the ruble zone, Kinah said. Ukraine is working out the mechanism of the debt payment.

Kyrgyzstan agreed not to consider the Ukraine’s debt as an external at the second session of Kyrgyz-Ukrainian intergovernmental commission. “We have agreed that Ukraine will pay out the debt by means of technical and humanitarian aid. The debt will not have the external status,” Kinah added.

Kyrgyzstan remains the only member-country of working group on WTO joining by Ukraine, which did not sign the bilateral agreement with Kiev. Kyrgyz minister of finance Akylbek Japarov earlier said that there are two “hot buttons” in Kyrgyz-Ukraine relationships: the external debt and question of joining WTO. These issues will be possibly settled at the third session of the intergovernmental committee in Kiev in July-August 2007. (www.24.kg)

National Bank to open public account for external debt payback

Bishkek (AKIpress) - A special public account of the Central Treasury of the Finance Ministry will be opened in the National Bank intended for country's public external debt redemption. With a view of the public concerns over the country's public external debt and in order to consolidate efforts of the Kyrgyz Government and the nation in debt recovery, the Kyrgyz Government decided to open a special public account for country's external debt payback, where voluntary contributions and donations will be accumulated. The respective decree was signed by Prime Minister Atambaev.

The Finance Ministry is instructed to prepare the draft provision on administration procedures of the public account for country's foreign debt payback and to register it with the Justice Ministry within a month.

Though Kyrgyzstan attempted to resolve foreign debt problem and asked Paris Club of Creditors to provide a debt relief in 2002 and 2005, the country's debt problem is still not resolved. As of February 28, 2007, the public external debt amounted to US$1.98 billion. The debt service is growing every year. According to estimations, the debt servicing maximum rate will be in 2020-2025 and will amount to over US$80m.

January-April GDP growth makes 9.1%

Bishkek (AKIpress) - Kyrgyz National Statistics Committee official website announced results of January-April 2007 economic growth.

GDP growth made record 9.1%. The growth made 11.1% (not taking Kumtor into account). Industrial rate of growth is 102.5% including the Kumtor deposit, +10.8%, if not to include Kumtor.

Construction (143.4%), telecommunication services (149.9.3%), trade (115%), and hotel and restaurant services (115%) have the largest inputs in GDP.

January-April GDP growth in 2006 made only 1.6%. Economic growth rate in 2006 made 5.1% (without Kumtor) and 2.76 % (including Kumtor).

Kyrgyzstan to introduce coins in circulation since 2008

Bishkek (AKIpress) - The National Bank of Kyrgyzstan plans to introduce coins of 10 tyins, 50 tyins, 1 som, 5 som and 10 som in virtue into circulation since 2008, said Chair of the National Bank Marat Alapaev.

The Chair of the National Bank congratulated the population of Kyrgyzstan with 14th anniversary of introduction of the national currency. "The national currency is an important element of sovereignty. We hope we will celebrate 50th anniversary of our currency too," he said.

The official meeting was held in the National Bank today on occasion of the Banker's Day and 14th anniversary of introduction of national currency with President Administration, government officials, bankers present.

The Chairman of the National Bank reported on 4 months of 2007. Inflation made 2.4%, while GDP growth reached 7.3%, according to the report of the National Bank.

For more information on Kyrgyz Republic, visit BISNIS online at: http://bisnis.doc.gov/bisnis/country/kyrgyzstan.cfm

BISNIS (www.bisnis.doc.gov) is part of the U.S. Commercial Service (www.export.gov).

BISNIS Representative in Kyrgyzstan: Artyom Zozulinsky (ZozulinskyA@state.gov)