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updated: 11/8/2012 6:16 AM

Mining company: Gold field 58% larger

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Associated Press

BISHKEK, Kyrgyzstan -- A Canadian-based mining company said Thursday that reserves at the major gold field it is developing in Kyrgyzstan are 58 percent larger than previously believed.

The announcement by Centerra Gold comes as a much-needed boost for the Central Asian nation, whose tiny economy has floundered in recent years.

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Kumtor goldmine accounts for about 12 percent of the economy.

Centerra says the end-date for open-pit mining will be extended five years, to 2023.

Kumtor's probable mineral reserves are now estimated at a total 9.7 million ounces of gold.

Kyrgyzstan, a country of 5 million people on China's mountainous western border, has come to prominence in recent years because it hosts a U.S. air base used to support military operations in nearby Afghanistan.

Kumtor has come under significant public pressure in Kyrgyzstan amid claims that it is major source of pollution and that Centerra Gold has used accounting tricks to reduce its tax liabilities.

A demonstration in the capital Bishkek in October to demand the nationalization of Kumtor spiraled into an unruly confrontation with police that ended with prominent opposition politicians scaling the gates of a government building.

Centerra denies all allegations of financial wrongdoing and says the new projections for the mine's future will prove beneficial to Kyrgyzstan.

"The increase in reserves and mine life will provide significant tax revenue to the Kyrgyz Republic of approximately $1.5 billion based on a gold price of $1,350, along with significant employment, community development and other benefits," Centerra Gold chief executive Ian Atkinson said in Thursday's statement.

The company warned, however, that its optimistic forecast could be undone by persisting political unrest in Kyrgyzstan or any major revisions to the concession agreement.

Kyrgyzstan has seen the overthrow of two governments in its short history since gaining independence amid the collapse of the Soviet Union in 1991.

President Askar Akayev was cast out of power in May 2005 after protests in the center of the capital against corruption and misrule.

Five years later, several dozen people were shot dead by government troops when angry mobs attacked the presidential administration building in unrest that led to President Kurmanbek Bakiyev's ouster.

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