Miner in £20m battle for gold
15th June 2014
by Matthew Goodman
A GOLD mining company chaired by the Conservative MP Bob Stewart is threatening to sue Kyrgyzstan’s government for $35m (£20m) over security lapses that are preventing it from developing a mine in the region.
Lawyers for the AIM-listed Premier Gold Resources have demanded that the Kyrgyz government resolve the situation in three months or face legal action. They claim the authorities are in breach of a treaty signed in 1994 under which Kyrgyzstan was to provide full protection to British companies operating there.
In the letter to the Kyrgyz prime minister, Djoomart Otorbaev, a copy of which has been seen by The Sunday Times, Premier Gold’s adviser, DWFM Beckman, claims the company has not been able to work on the mine since June 2012, when a campsite was invaded by 70 protesters. They say the locals threatened to harm workers and destroy equipment unless the site was relinquished.
The lawyers state that the government has failed to provide proper security and the police have not acted “effectively”. Stewart, who commanded British forces in Bosnia, has visited the country three times to try to resolve the situation.
The $35m in compensation would cover outgoings including investment on geological surveys and losses from being unable to drill.
The company declined to comment but a source said: “I think the Kyrgyz government genuinely wants to resolve the problem but it seems unable to deal with locals.” The Kyrgyz embassy in London declined to comment.
At its annual results this month, Premier Gold said it was working towards a resolution. Its shares have slumped by 65% in a year. They closed on Friday at 0.1p, valuing the business at £1.3m.
Read the article in The Sunday Times here.