Centerra Gold Inc. has lowered its 2009 gold production estimate for the Kumtor mine in Kyrgyzstan by 60,000 to 100,000 ounces, a decline of up to 17 per cent from guidance issued during the summer.
The company said Thursday it has been prevented from getting access to high-grade ore as a result of the large amount of ice and waste that must be removed from the open-pit mine in the central Asian country.
The mine is now expected to produce 500,000 ounces this year, down from the previous range of 560,000 to 600,000.
Centerra spokesman John Pearson said Kumtor's size contributed to the delay in accessing the higher-grade ore deeper in the pit.
"Kumtor is a very large open pit," Mr. Pearson said. "It's got a high strip ratio and, with the accelerated waste and ice movement and focusing on removing, that has delayed it. It's a risk that we always run there."
Centerra is currently implementing a plan to accelerate the waste and ice movement, the company said.
For the third quarter ending Sept. 30, Kumtor's output is expected to be in a range of 125,000 to 130,000 ounces, down from the previous range of 165,000 to 185,000 ounces.
Centerra now expects its total production this year will be between 620,000 and 630,000 ounces, down from the previous range of 680,000 to 730,000 ounces.
At the Boroo mine in Mongolia, Centerra said it is working with the government to finalize an operating permit for a heap leach facility that would add approximately 3,000 ounces per month to the company's gold production guidance.
In late April, Centerra announced that it had reached an agreement with the government of Kyrgyzstan, resolving years of uncertainty over ownership of the Kumtor mine.
Under the agreement, which has not yet been finalized, Kyrgyzstan will get one-third ownership in Centerra - with 18.2 million new shares issued by Centerra and up to 25.3 million shares transferred from uranium miner and partial Centerra owner Cameco Corp. - in return for a new tax regime and additional land rights.
This would leave the Kyrgyz government owning up to 33 per cent of Centerra, Cameco holding 37.8 per cent and other shareholders with 29.2 per cent.
Shortly after Centerra reached its tentative agreement with the Kyrgyz government, it was faced with more political uncertainty in Mongolia, where it operates the Boroo mine.
The Mongolian government suspended the mine's operating licence in mid-June because of operating issues. The licence was reinstated in late July.
Besides Kumtor and Boroo, Centerra also owns the Gatsuurt exploration property in Mongolia and 62 per cent of the REN gold exploration property in Nevada. The company reported a loss of $79.6-million, or 36 cents per share, in the second quarter, reversing a year-earlier profit. Revenue declined 27 per cent to $104.3-million.