September 25 (Cover Mongolia) Cabinet meeting held today determined the government stake to take in Centerra Gold’s (TSX:CG) Gatsuurt gold deposit in making it a “strategic” deposit, and has decided to submit the bill to parliament.
The government will take a 20% stake in “Erdenes-Gatsuurt,” a joint venture company to be created to hold Gatsuurt deposit’s special permit. Erdenes MGL will contribute the government’s portion of $100,000 needed to establish such a foreign invested company or $20,000.
Erdenes-Gatsuurt LLC, becoming a “state-involved” company, will be mandated to resolve project financing issues on its own, without “overburdening the shareholders,” during the exploitation of the deposit, most likely meaning that the government will not be providing financing for the project, perhaps in a similar fashion as OT.
Gatsuurt deposit has a registered resource of 27.6Mts of ore, 75.9 thousands kilograms of gold.