CENTERRA GOLD INC Annual and Special Meeting of Shareholders
May 08, 2014 AM EDT
CG.TO - Centerra Gold Inc
CENTERRA GOLD INC Annual and Special Meeting of Shareholders
May 08, 2014 / 02:00PM GMT
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Corporate Participants
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* Stephen Lang
Centerra Gold - Chairman
* Ian Atkinson
Centerra Gold - President, CEO
* Kylychbek Shakirov
Centerra Gold - Director
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Presentation
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Stephen Lang, Centerra Gold - Chairman [1]
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Good morning, ladies and gentlemen. I'm Stephen Lang, Chairman of Centerra's Board of Directors and on behalf of the Board I would like to welcome you to the Annual and General Meeting of shareholders of Centerra Gold.
I would like to introduce you to the other members of the Board who are here today and ask each of them to stand as their name is read. Ian Atkinson, Raphael Girard, Karybek Ibraev, Amandgeldy Muraliev, Sheryl Pressler, Terry Rogers, Kylychbek Shakirov and Bruce Walter. Unfortunately two of our other current Board members, Mr. Richard Connor and Mr. John Lill were not able to attend today.
Also, as you know, three of our Board members, Mr. Lill, Muraliev, and Ibraev will not stand for reelection as directors this year. Mr. Lill has been a member of the Board since 2009 and has brought great industry knowledge to the Board especially related to technical mining matters. Mr. Muraliev has been a Board member since 2010 and has assisted the company in his relationship with government of the Kyrgyz Republic. Mr. Ibraev has been a Board member also since 2010 and has brought technical expertise to the Board as well as knowledge of Kyrgyz regulatory mining matters. I thank each of them for their service to Centerra.
I'm also pleased that we have three new nominees to the Board this year who are subject - who subject to shareholder approval will be elected as Directors of Centerra. One of these new nominees Mr. Michael Parrett is here with us today. The other two nominees, Mr. Emil Orozbaev, Mr. Kalinur Sadyrov were not able to join us today because of difficulties in travel.
On the stage with me is Ian Atkinson, President, Chief Executive Officer and Frank Herbert, General Counsel and Corporate Secretary of Centerra. KPMG LLP, Centerra's auditors are also in attendance.
We will now proceed with the formal part of the meeting to conduct business set forth in the notice dated April 4 and sent to our shareholders. The meeting will please come to order.
On April 15 notice of the meeting, the management information circular, form of Proxy, and annual report contained in the financial statements and auditors' reports thereon were mailed to all of the shareholders entitled to receive notice.
The secretary has an affidavit from CST Trust Company, Centerra's registrar and transfer agent attesting to the mailing of the notice of this meeting. Unless there are any objections, I propose that we take the notice of meeting as having been read.
In accordance with the by-laws of the company, I will act as Chair of the meeting; Frank Herbert, General Counsel and Corporate Secretary of the Company will act as Secretary, and with the consent of the meeting, CST Trust Company by its representatives will act as scrutineer. I have been advised by the secretary that based on the scrutineer�s report of attendance that we have a quorum at the meeting.
The scrutineer�s report will be available at the close of the proceedings to anyone who wishes to inspect it. I now declare this annual meeting of the shareholders is duly constituted for the transaction of business; before proceeding with the business of meeting, I'd like to make a few comments regarding the procedures to be followed.
Only registered shareholders of the company's common stock who are here in person and holders of valid proxies may vote, other persons present here today or with the consent of the meeting to observe the proceedings only. There are three matters to deal with as part of the formal business of the meeting, the election of directors, the appointment of auditors, the approval of amendments to by-lay number two of the company. Any shareholder or proxy holders present may move or second the resolutions.
We will conduct all votes of this meeting by a show of hands unless a ballot is demanded for any particular motion. Following the formal part of this meeting, Mr. Ian Atkinson will provide an update on Centerra's activities, after that Mr. Shakirov will address the meeting on behalf of Kyrgyzaltyn JSC and then we will have an - be happy to respond to any general questions from shareholders and proxy holders.
I now request the Secretary to table the minutes of the last meeting of shareholders held on May 10, 2013. Unless there are any objections, I would like to propose that we dispense with the reading of the minute, we have a motion that the minutes of the annual meeting of shareholders held on May 10, 2013 be taken as read and verified and approved them. Thank you. Is there a second? Will those in favor please signify by raising their hand. Contrary if any? I declare the motion carried.
The annual report and consolidated financial statements of the company as at and for the year-ended December 31, 2013 and the auditors' report thereon have been mailed to all shareholders entitled to receive them and are available here today. Questions concerning the annual report, financial statements or management's discussion and analysis will be entertained in the general question period following the presentations.
We will now proceed with the Election of Officers. The Board has determined the number of Directors - the election of the Directors. The Board has determined that the number of Directors to be elected at this meeting shall be 11. All of the directors proposed for nomination in the management information circular mailed to shareholders in connection with this meeting have agreed to stand for election. The nominees are as follows, Ian Atkinson, Richard Connor, Raphael Girard, Stephen Lang, Emil Orozbaev, Michael Parrett, Sheryl Pressler, Terry Rogers, Kalinur Sadyrov, Kylychbek Shakirov, Bruce Walter.
If these nominees are elected as Directors, they will hold the office until the next annual meeting of shareholders or until their respective successors are duly elected or appointed pursuant to the provisions of Canadian Business Corporations Act and the by-laws of the Corporation.
As no additional nominees have been received by Centerra in accordance with the by-laws amended, adopted by the Board on February 19, 2014, we will proceed with the motions to elect the Directors proposed for nomination in the management information circular and mailed to shareholders in connection with this meeting.
May I have a motion to elect Ian Atkinson as a Director of the Company? Thank you. Is there a second? Thank you. Will those in favor of the motion please signify by raising their hands. Abstentions if any? I declare the motion carried.
May I have a motion to elect Richard Connor as a Director of the company? Thank you. Is there a second? Will those in favor of the motion please signify by raising their hands. Abstentions if any? I declare the motion carried.
May I have a motion to elect Raphael Girard as a Director of the company? Thank you. Is there a second? Will those in favor of the motion please signify by raising their hands. Thank you. Abstentions if any? I declare the motion carried.
May I have a motion to elect Stephen Lang as a Director of the company? Thank you. Is there a second? Thank you. Will those in favor of the motion please signify by raising their hands. Thank you. Abstentions if any? I declare the motion carried.
May I have a motion to elect Emil Orozbaev as a Director of the company? Thank you. Is there a second? Thank you. Will those in favor of the motion please signify by raising their hands. Thank you. Abstentions if any? I declare the motion carried.
May I have a motion to elect Michael Parrett as a Director of the company? Thank you. Is there a second? Thank you. Will those in favor of the motion please signify by raising their hands. Abstentions if any? I declare the motion carried.
May I have a motion to elect Sheryl Pressler as a Director of the company? Thank you. Is there a second? Thank you. Will those in favor of the motion please signify by raising their hands. Thank you. Abstentions if any? I declare the motion carried.
May I have a motion to elect Terry Rogers as a Director of the company? Thank you. Is there a second? Will those in favor of the motion please signify by raising their hands. Abstentions if any? I declare the motion carried.
May I have a motion to elect Kalinur Sadyrov as a Director of the company? Thank you. Is there a second? Will those in favor of the motion please signify by raising their hands. Abstentions if any? I declare the motion carried.
May I have a motion to elect Kylychbek Shakirov as a Director of the company? Thank you. Is there a second? Thank you. Will those in favor of the motion please signify by raising their hands. Abstentions if any? I declare the motion carried.
May I have a motion to elect Bruce Walter as a Director of the company? Is there a second? Will those in favor of the motion please signify by raising their hand. Abstentions if any? I declare the motion carried.
Accordingly, I declare that the nomination - the motions are carried and each of the nominees are newly directed - duly elected directors of the company. A little bit more time for that to do individual candidates rather than a [slight] but I think being technically correct is worth a time.
We will now proceed with the appointment of the auditors and authorization of the Directors to fix their remuneration. May I have a motion to approve the appointment of KPMG LLP as auditors of the company for the ensuing year and to authorize the directors of the company to fix their remuneration to be paid to the auditors. Thank you. Is there a second? Thank you. Will those in favor of the motion please signify by raising their hand. Abstentions if any? I declare the motion carried.
We will now proceed with the next item of business which is consideration of approving certain amendments to by-law number two of the company. The amendments that will be considered are in line with the emerging corporate government practices of Canadian Public companies, among other things, the by-law amendment will require advance notice of shareholders intending to propose nominees for election to the Board of Directors and to increase the quorum required for shareholders meeting to at least two persons present and in person or represented by proxy and holding or representing not less than 25% of the outstanding shares of the company. A detailed description of such amendments is on pages 18 and 19 of the company's management information circular.
May I have a motion to approve the amendments to by-law number two of the company as set forth in Appendix B of the company's management information circular? Thank you. Is there a second? Will those in favor of the motion please signify by raising their hand. Contrary if any? I declare the motion carried.
As there is no other formal business to come before this committee, I will entertain a motion to terminate. May I have a motion to terminate the meeting? Thank you. Is there a second? Thank you. Will those in favor of the motion please signify by raising their hand. Thank you. Contrary if any? I declare the motion carried and the meeting concluded.
That only concludes the formal business of the meeting I will now turn to our presentation by Ian Atkinson, Centerra's President and Chief Executive Officer to address our 2013 performance.
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Ian Atkinson, Centerra Gold - President, CEO [2]
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Good day. Thank you Steve and good morning everyone. Just bring your attention to the cautionary note here about forward-looking statements in the presentation, and I'd also like to point out that all figures are in U.S. dollars unless otherwise stated.
Because most of you know, Centerra has two operating platforms, the Boroo mine in Mongolia and our larger operation, the Kumtor mine in the Kyrgyz Republic and we got a number of exploring ventures throughout Asia.
So just looking at 2013, sometimes with the attention that's given to the political issues that we've been addressing, the company's achievements actually can get overlooked. Last year, we exceeded our guidance, with our gold production in low costs. We had no asset impairments and our reserves only change by accounting to production during the year.
We were also successful last year in extending the [Ohsut] resource and converting the majority of the inferred resource to indicated resources. The cash provided by our operations last year totaled $484 million and the company ended the year with a very strong balance sheet, our cash and short term investments were over $500 million or net of debt $425 million.
We also extended our revolving credit facility to $150 million with EBRD and that will provide us with additional liquidity throughout the year. We also maintained our quarterly dividend of $0.04 this year.
So we're just looking at 2013, as I've said we did exceed our gold production guidance producing 691,000 ounces of gold for the year. Kumtor certainly had an exceptional fourth quarter, it produced 348,000 ounces in the quarter exceeding its 600,000 ounce guidance.
Borro exceeded its volumes guidance by 5,000 ounces to produce over 90,000 ounces for the year. Their all-in cost for the year and for all operations and corporate matters is $920 per ounce sold pre-tax.
This year, we're estimating a consolidated gold production will be in the range of 595,000 to 645,000 for the year and again, the majority will come from Kumtor and like 2013, over 50% of the production will come in the fourth quarter, when mining reaches the high grade section of the SP zone.
This year, we will start recording our all-in cost according to the World Gold Council Guidelines; so on a consolidated basis, for the full year, we expect our all-in sustaining cost to be in the range of $857 to $929 per ounce.
Our all-in cost are expected to be in the range of $971 to $1053 per ounce sold; that all-in cost includes all of our sustaining capital, all of our growth capital, all of our exploration cost and corporate cost but excludes taxes.
So just looking at the financial results for 2013, we reported net earnings of $158 million or $0.67 per share and the cash provided by operations, like I already said is $484 million in the year. Centerra as I've said has a very strong balance sheet with $502 million in cash at the end of the year and the current gold price is - we do anticipate that that cash balance will grow again by the end of 2014.
For 2014, our outlook for capital expenditures and excluding capitalized stripping is $86 million, $43 million on sustaining capital and $43 million on growth capital and all of that will be sent to Kumtor. Our planned exploration spending for the year is $20 million.
So now just looking at the first quarter results for 2014, we produced 117,000 ounces of gold in the quarter. Our all-in sustaining cost for that was $1109 per ounce sold and then our all-in cost pretax was $1158 per ounce sold.
On the financial side, we reported net earnings of $2 million for the quarter, at $0.01 per share and the cash provided by operations during the quarter was $102 million. Our cash balance grew again to the end of the quarter to $512 million.
The gold grinds - go - certainly seems to be range bound at the present time, I think all of us here would like to see better gold prices but we must operate our business for this pricing environment. So, we're maintaining our focus on cost and we're continuing to look for further cost reductions.
Now as I said, the company has a strong balance sheet and we still continue to have good margins even in these low gold price environments.
On December 24, we announced that we signed a new non-binding heads of agreement with the government of Kyrgyz Republic in connection with the potential restructuring of the Kumtor project. The heads of agreement retained the material terms of the MOU that we signed in September 2013 and I think the most important is that this agreement represents the same value to all shareholders as the MOU did.
And of the agreement, Kyrgyzaltyn will exchange its 32.7% equity interest in Centerra for a 50% interest in the joint venture company that will be established to control the project. The joint venture will at least back the existing Kumtor mining, mobile mining fleet from Centerra for a period of 10 years.
Centerra will remain the operator of the project and Centerra will receive a management fee for acting as operator. All the environmental claims against Kumtor will be resolved prior to the restructuring and the 2009 agreements including the 14% gross revenue tax will remain in full force and effect.
The agreement also gets Kyrgyzaltyn the right to increase its interest in the Kumtor project at the end - in 2026 which is the end of the current lime life. They can then increase their interest to 67% from 50% by paying Centerra the fair market value of that additional interest at that time.
Kyrgyzaltyn would also receive 6 million warrants to acquire Centerra shares at an extra sides price of $10 per share with those warrants exercisable over a two-year period and then additional 4 million warrants of a side price of $12 exercisable for three years.
So the parliamentary actually met and reviewed the heads of agreement to early in the year and in February, adopted a resolution which supported the restructuring although the resolution does have the number of recommendations in it that are materially inconsistent with the heads of agreement. We are continuing our discussion with the government on the restructuring.
And since Parliament actually passed that resolution on the 6th of February, there have been a number of developments in the country. In the middle of March the Kyrgyz Parliamentary coalition that we've been working with now for the last 18 months collapsed and a new coalition was formed later in the month. The coalition then nominated a new prime minister and that was the � he was the former first vice-prime mister in the previous government, Mr. Otorbaev.
So now that the government and the working groups have been reappointed and reestablished, we will continue our discussions with the government regarding the restructuring transactions and look to resolve all of the outstanding concerns around Kumtor. But we do maintain that any agreement that we reach on the restructuring must be fair to all the shareholders.
Also on the 23rd of April, parliament passed a law prohibiting activities which affect glaciers in the Republic. We've not yet received the official version of the glacier law and several of its provisions and the draft law are very unclear. Glacier law itself must be signed by the president in the Kyrgyz Republic before it takes to force an effect.
So we move on now to Mongolia. Boroo, certainly have strong operating performance during the year and so it exceeds as regarding guidance producing over 90,000 ounces of gold for the year. Our 2014 production guidance for Boroo is 45,000 ounces. And so this doesn't include any production from Gatsuurt which is still tied up by the headwater and forest law.
We are encouraged actually about our Gatsuurt project as the property actually has been included in a list of mineral deposits of strategic importance which will be reviewed by the Mongolian parliament. If the parliament approves the list and declares Gatsuurt strategic, the government would then have to write to take up to a 34% ownership interest in the project but it would also exempt Gatsuurt from the headwater and forest law which is water is currently holding up further exploration and development on the property. We would need that to refresh the permits of Gatsuurt and we'd also have to complete an investment agreement with the government. Once that would be done, we could then move the project forward for them quickly.
Another encouraging sign we've seen in Mongolia recently is that this year they've actually revised their royalty rates and royalty regime. So now if you sell your gold that you produced in Mongolia to the Mongol bank the royalty rate has been reduced to 2.5%. So since January Boroo has been selling all of its gold production to the bank of Mongolia and paying the 2.5% royalty rate instead of the 9% that we would be paying at the current gold prices if we did not do that.
A key for the value growth of Centerra has been the growth of our reserves since we went public some 10 years ago. So over the last 10 years we've spent about $276 million on exploration. In that period we've mined about 8.5 million ounces of gold. We've increased our reserve based with 4.5 million ounces to over 10 million ounces. So that gives us the finding cost or addition cost to ounces of reserves - to our reserve profile at about $19 an ounce which is very competitive for the industry.
This chart actually only shows the gold reserves, it does not actually include any of the resources that we have such as the 1.1 million ounces of resources that we have at Oksut and I will talk a little more about that shortly. We've also got additional resources at Gatsuurt and the Russian have not been able to do any further exploration at Gatsuurt since 2009. We've got 800,000 ounces of gold at the ATO project in Mongolia. We've also got the 1.9 million ounces of high-grade inferred underground resources that come to work.
So as I said in 2004 we've plan on spending $20 million on our global exploration program. And certainly the exploration project that we are most excited about is our Oksut project in south-central Turkey. The Oksut project is an oxidized, high-sulphidation epithermal deposit which is very amenable to leaching. And the deposit itself for the principal one the Keltepe deposit is actually still open to the south. This year we're planning on spending a total $10 million on the Oksut project which includes $6.5 million for the technical and metallurgical studies, environmental and social impact assessments, and other projects support activities and another $3.5 million on exploration.
The start of 2013 we published our initial resource estimate for the property as I've said during 2013 we've completed quite a large amount of infield drilling that that allowed us to expand the Oksut resource and also convert the majority of the resource to the indicated category. So we now have an indicated resource of 1.1 million ounces in the Keltepe zone which is shown here on the slide. And we also have a further 134,000 ounces of inferred resources on the Keltepe zone which lies about 500 meters to the south of the Keltepe deposit.
All of this material is leachable oxide minimization and it doesn't have an average grade about 1.2 grams return gold. In February this year we announced that we completed a preliminary economic assessment for the Oksut project and that indicates that we have a potential open pit heat leach operation within an 11 year mine life which would start production in late 2016. The operation itself is expected to produce about 125,000 ounces per annum starting in year four through six and that would be about 2019 after ramping up over a three year period.
Actually the only costs of the project are the very good $849 per ounce and then if we include the taxes as well it's a very attractive $914 per ounce. As you can see on the slide the estimated capital will be about $166 million and the project does give a very good return and with an after tax NPV of $118 million with a use of 8% discount rate and $1,300 gold pricing that gives you a project rigor return of about 19%.
So we're now proceeding with the full feasibility study for the project and the ESIA, we're talking to have those completed by the middle of next year. The company also has some significant corporate responsibility program in the regions in which we operate with annual budgets to support local programs. This year we're planning on spending on the order of $8 million in that activity.
In addition to the annual local programs we do support some larger programs and examples of some of those that we have supported recently are shown on the slide. Certainly last year we had completed construction of 150 bed maternity hospital in Ulan Bator that was official opened in January 2013. And actually in 2012, we provided $21 million in funding for a national micro-credit financing facility in the Kyrgyz Republic that made low interest - small low interest loans available to some 20,000 people throughout the country.
So just to summarize, we had a good year in 2013. Exceeding our goal production guidance producing 691,000 ounces of gold with an all in cost for ounce sold pretax at $920 per ounce which was better than our cost guidance. The company has a solid financial position, we ended the year with $502 million in cash and we've maintained our quarterly dividend which when annualized gives you a yield of about 3%.
In 2014 we expect to produce between 595,000 and 645,000 ounces of gold and are all in cost for the year pretax is expected to be $970 to $1,050 per ounce sold. And that cost as I've said actually does include all of our capital including sustaining capital, exploration and corporate cost. So we're also continuing our dialogue with the government of the Kyrgyz Republic regarding the potential restructuring transaction and also to resolve all of the other outstanding concerns around Kumtor. But as I've said we must maintain that any agreement with the - we do reach with them, must be fair to all shareholders.
Lastly as I've said a number of promising exploration projects and certainly Oksut is the one that we're most excited about so we completed the PEA and we've now started moving forward as quickly as possible on the full feasibility study and we're projecting that we could get a potential production from that at the end of 2016. So with that, thank you for your attention and I'll pass the meeting back to Steve. Thank you.
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Stephen Lang, Centerra Gold - Chairman [3]
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Thank you, Ian. Before opening the floor for questions I would like to introduce again Mr. Kylychbek Shakirov who was asked to make a statement here. Mr. Shakirov will be speaking as a representative of Kyrgyzaltyn and not in his role as a director of Centerra.
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Kylychbek Shakirov, Centerra Gold - Director [4]
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Thank you very much. It is a year ago since I last spoke with you and affirm the commitment of Kyrgyzaltyn to see Kumtor succeed. Over the past year I have, Kyrgyzaltyn has and our professional advisor has spent hundreds of hours, negotiations with the Centerra management team and their advisors. We have then spent hundreds of hours assuring stakeholders why the proposal of the restructuring was the right approach to take in the interest of all concerned.
And undertook sense of media interviews and presentation and spoke at the meeting across the country for long decisions and Kyrgyz parliament and if its refusal initially to grant approval we then repeated this process. Kyrgyzaltyn and Kyrgyz Republic government have gone to great efforts to ensure that all the deputies in parliament have had a disposal of the information that has really want to enable them fully and effectively to continue this restructure. That is very important for all of us and Kyrgyzaltyn.
Such approach Kyrgyzaltyn have been supported by government which has been steadfast in its support for Kumtor. And both Kyrgyzaltyn and government remain committed to the restructure of Kumtor in order to reflect a true partnership to subdue the benefit that Kumtor can bring to Kyrgyzstan as well as ensuring that this are shared equitably.
There had been much focus over the past year on opportunities of certain groups in Kyrgyzstan who have decided the restructuring and make various allegation against Centerra. Allegations have also been made against us of and Kyrgyzaltyn who have supported this restructuring. Over the past year they have been indicate wherein deals have broken the law and blocked access to Kumtor. Where this has happened, the government has acted swiftly in enforcing the law.
Proposed restructure has certain undergone global scrutiny this is an important and entirely legitimate part of process of government. We have a democratic protest in Kyrgyzstan which doubtless different and perhaps more powerful, colorful than its Canadian equivalent. For folks that lives in Toronto that seems to be quite colorful too but we cherish it not less.
It is common for democracy to say that the people are sovereign in Kyrgyzstan that is quite literally true. An investor can come to our country and devote a very comfortable business relationship with powerful figures in government but if that relationship is not transparent and fair it may well do them more harm than good. And what Kyrgyzaltyn seeks it is really a critical fact. They want their government to be a watchdog for their interest and they want it to keep some distance from investor. They want relationships to be as transparent and fair as possible.
One of Centerra's big mistakes in operating in Kyrgyzstan has consistently been that it has focused on government and not on the people associated and what they think. It cannot be for Kyrgyzaltyn to abuse Centerra's case for it but our critics have certainly accused us of doing just that.
More recently there has been an exercise of communicating to the wider public by Centerra but that needs to be continuing series of communication to the right of public by Centerra but there proves to be continues series of communication not on of exercise. Overtime such communications help assist develop this trust and make it harder for those reaching to cause trouble our contract to gain traction.
This is a case that shows Centerra's ability to learn from past mistakes and to change its practices. It is good that this has done so. But it still has some work to do in communication, its interest effectively to Kyrgyz people.
One thing that is clear from the past year is that Centerra is trusted too little in Kyrgyzstan. The origins of this are not important for now but fixing this problem going forward is very important indeed. Which is why it is so important that in everything it does Centerra manages, focuses on transparency and the building and maintenance of trust.
This is why the payment of the [blue] of $200 million dividend to Centerra by controlling both company has caused us concern in Kyrgyzaltyn; both the timing in the middle of the negotiations process and the scale of the payment has prompted serious questions. The legality of this must now be properly assisted by all judicial bodies.
Hopefully we can soon all move on from this issue but both Centerra and Kumtor
Gold Company must recognize the important of the applicable Kyrgyz law, processes being followed and the fact that they are seem to be followed.
The relationship to trust that I am calling for does not mean that we shall be uncritical. In a true partnership this must be a scope for fair criticism for example, Kyrgyzaltyn continues to consider that Centerra management are successfully remunerated not only again Kyrgyz standards but also again international laws. And it should be noted that the age profile of the board of Centerra is mostly above 60 years. There has been little change over a number of years and there is strikingly little diversity. It is for this reason we have declined to support certain board members for reelection.
With regards to Mr. Walter, we made clear our concern last year that since his legal distractions mean he cannot properly fulfill his duties as a board member. There are issues that others shareholders might also want to think about.
Most recently I have heard the driven concern from Centerra as to the recent approval by Parliament of new law on glacier. On that topic please rest assure that those of us who understand the potential implication of limitation being applied to oxidation on glacier for Kumtor are taking steps to ensure all involvement in the legislative process do fully appreciate these situations that the law in question does not establish anything new in terms of prohibitions.
Centerra needs to appreciate that they accelerate this recession of all glacier is a matter of great alarm to the people of Kyrgyzstan. And that mining operations clearly are relevant issue for the parliament to consider.
Last year I explained that there were many concern in Kyrgyzstan about the circumstances of previous negotiation and they're very enraged this had been handled. Members of all Parliament have rightly questioned it the circumstance and sequence of negotiations that were conducted result transparency to Kyrgyz people in the past. It is because of this concern that we have been so careful and ensuring that the negotiation process this time has been undertaken with the outmost transparency within Kyrgyzstan.
Investigation into the second stages of previous negotiations are continuing and I would like to ask Centerra to continue to assist us to the fullest extent in that exercise. I know that they have already provided legal assistance to all lawyers in this regard.
I will ask that Centerra ensures that it sees to respect the process of investigations that is in hand in Kyrgyzstan. That have the ultimate it seems of success for Kyrgyzaltyn in current negotiations will be then we are [arrive] a position with our numerous business like Centerra investing Kyrgyzstan.
One step along the path to relieving that goal is for us to have a larger pool of highly styled and trained at mining supervisors and manager both in Kyrgyzaltyn and the country more generally. You can assist us in achieving this and demonstrate to your investment and the sectors of Kyrgyzstan by means and attribute to sought of the process of technical training development of Kyrgyz nationals and Kumtor and in Kyrgyzstan generally.
Certainly progress over the past year into the restructuring has been slower than we have hoped but the delay has been largely quoted by the [juries] process of scrutiny is that it has left Kyrgyz much better informed with Kumtor. More recently there has been a change of government but that has not lessened at all commitment to success of this project on its restructure.
We continue to leave and challenging things whether it is geological issues or political issues arising from other parts of the foremost of the (inaudible) far away from Kyrgyzstan. But please rest assure that this is not demands of commitment on the part of the government of Kyrgyzstan - of Kyrgyzaltyn to see this restructuring successfully delivered. I am confident that whatever our difference, the same can be said for Centerra and its management. Thank you.
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Stephen Lang, Centerra Gold - Chairman [5]
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Thank you, Mr. Shakirov. We only respond by noting that many of the items raised here are part of our ongoing negotiations with Kyrgyz government. These are negotiations in which Mr. Shakirov is a representative of the Kyrgyz party. Further the parties are aware that management has responded to the issues raised in writing to the relevant Kyrgyz authorities.
We would now be happy to respond to any questions from shareholders. We ask that you keep your questions brief and limit yourself to one question. Please be reminded that all questions from shareholders should be relevant, courteous and concise.
Only registered shareholders, or dully appointed proxies of registered shareholders, are entitled to address the meeting. Accordingly before asking your question, please state your name and advise if you are a shareholder or a proxy holder. Are there any questions?
Ladies and gentlemen, thank you for attending our annual meeting. Please join us now in enjoying some light refreshments.
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