Allegations that led to former Centerra Gold CEO's arrest without merit: company

TORONTO – Toronto-based miner Centerra Gold said Wednesday it has yet to see any evidence to support the arrest of a former CEO, more than a week after he was apprehended while on a family vacation in Bulgaria.

Centerra Gold spokesman John Pearson said the company believes Leonard Homeniuk was detained on July 27 by Bulgarian authorities at the request of Kyrgyzstan, where the company’s largest gold mine is located.

Homeniuk’s arrest appears to be related to allegations by the Kyrgyz Republic of improper transactions with Kyrgyz officials, Pearson said.

The improprieties are alleged to have occurred in 2003 and 2004, when Centerra Gold was spun off from Saskatchewan-based uranium miner Cameco Corp. to manage the Kumtor mine project in Kyrgyzstan, he said.

“Let’s be clear: There have been no illegal transactions, and the Kyrgyz authorities have not provided us any facts or evidence to support their allegations,” Pearson said.

The company isn’t in direct contact with him but is in regular contact with his family, he added.

Kyrgyzstan and Centerra Gold have sparred over the ownership and revenue of the Kumtor project for years as the mine has grown to become a key piece of the Kyrgyz economy.

Pearson said Centerra Gold is Kyrgyzstan’s biggest company in terms of revenue, number of employees and the amount of taxes it pays the country.

The Kumtor mine produced 567,693 ounces of gold in 2014, worth more than US$620 million at current prices.

A non-binding agreement signed by both sides in 2013 calls for state-owned Kyrgyzaltyn JSC to exchange its 32.7 per cent interest in Centerra Gold for 50 per cent of a joint venture that would own Kumtor.

The company remains in negotiations with Kyrgyzstan over the future of the Kumtor mine, Pearson said.

“We remain committed to concluding those discussions to restructure the Kumtor project in a way that is fair and equitable to all Centerra shareholders,” he said.

Foreign Affairs said it is aware of a Canadian detained in Bulgaria and will offer consular services, but it declined to identify the person, citing privacy concerns.

Homeniuk, 68, led Centerra Gold from 2004 until his retirement in 2008.

Kyrgyzstan had issued an Interpol red notice for Homeniuk’s arrest.