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Chaarat Gold Holdings Ltd. is offering US$800-million to buy Centerra Gold Inc.’s flagship asset, but the Toronto-based miner has no interest in selling.

Last week, Centerra said it had received an unsolicited proposal from the little known, London-listed gold company to buy its Kumtor mine in the Kyrgyz Republic.

Centerra rejected the offer, but didn’t explain why.

On Tuesday, after Chaarat made the price public, Centerra declined to comment further, both to analysts during a conference call, and to The Globe and Mail at the company’s annual general meeting.

RBC Dominion Securities Inc. analyst Stephen Walker estimates the net asset value of the Kumtor mine is US$966-million, implying that Chaarat is attempting to buy it at a 17-per-cent discount.

In an interview last week, Artem Volynets, director with Chaarat, denied the company was looking to pick up Kumtor at a bargain-basement price.

“We are not trying to steal anything on the cheap,” Mr. Volynets said.

Since Chaarat’s market capitalization of US$123.5-million is tiny compared with Centerra’s US$1.8-billion valuation, some have wondered how Chaarrat can pull off the transaction.

In a note to clients last week, Jack Gabb, an analyst with Global Mining Research, called Chaarat’s proposal “somewhat laughable.”

Chaarat says it intends to buy Kumtor with the assistance of Centerra’s biggest shareholder, state-owned Kyrgyzaltyn, but it still needs to raise US$400-million for its share of the transaction.

Chaarat says it has the backing of “two major international financial institutions,” including a Hong Kong-based investor with US$150-billion under management.

But complicating matters for both Centerra and Chaarat is the political scene in Kyrgyzstan. About 10 days ago, prime minister Sapar Isakov’s government was dismissed following a vote of no confidence in parliament. Any change in ownership of the Kumtor mine would have to be approved by the new administration, which has not yet publicly commented on the proposal.

After a rocky patch with prior Kyrgyzstan administrations, including lawsuits and allegations of environmental infractions, Centerra lately had improved its governmental relations. Last September, it reached an agreement with Kyrgyzstan to settle various legal spats for around US$60-million. But that agreement has not yet closed.

In the Tuesday conference call, Centerra’s chief executive Scott Perry said the company had exchanged letters with the new government, but had not yet met face to face.