"Centerra is no longer in control of the Kumtor mine and can no longer ensure the safety of the mine's employees or operations," Centerra said hours ago.
The parliament had yesterday instructed the government to install external management at the mine and Centerra's subsidiary Kumtor Gold Company, in line with a new law passed in a single day on May 6 allowing it to take over if there were threats to lives or the environment.
Senior government ministers in Canada said they were "very concerned" by the developments.
Centerra said the Kyrgyz government had effectively seized control on the weekend by sending authorities to the mine, KGC's office in Bishkek and the homes of several employees.
The move has been on the cards since pro-nationalisation Sadyr Japarov became president in January and follows a deterioration in relations, with the mine also recently issued with disputed tax claims and a US$3 billion environmental fine.
Centerra had initiated arbitration proceedings on Sunday to enforce its rights under longstanding investment agreements with the government.
It said the recent developments had "no justification whatsoever under those agreements or applicable law".
The company describes itself as the country's largest taxpayer and said the government's actions also put at risk the livelihoods of more than 2,700 employees, of whom 99% were Kyrgyz citizens.
Prior to the government taking over, Centerra said all the safety, monitoring and operational systems at the mine had been "functioning properly" and it had not disabled them, however it had suspended all local KGC employees' access to Centerra's global IT systems.
It has suspended 2021 and three-year guidance for the mine, which had been expected to produce 470,000-510,000 ounces of the company's forecast 740,000-820,000oz of gold this year.
Investigation
Centerra later separately said it had accepted the resignation of director Tengiz Bolturuk and was investigating statements regarding his involvement in and support for recent events.
Bolturuk had joined the board in December as a nominee of Centerra's 26% shareholder, state-owned Kyrgyzaltyn JSC.
Centerra said Kyrgyzaltyn JSC and its affiliates were now prohibited from transferring or encumbering any common shares, exercising any voting rights and receiving dividends, in line with restrictions provided for under the 2009 agreement.
Canada ‘very concerned'
The European Bank for Reconstruction and Development, the UK and Canadian embassies and senior Canadian MPs have criticised Kyrgyz's actions in recent days.
"As a significant investment partner of the Kyrgyz Republic, Canada is very concerned about continued developments in the mining sector," Canada's foreign affairs minister Marc Garneau and minister of small business, export promotion and international trade Mary Ng said yesterday in a joint statement.
"We are disappointed with the decision taken at the extraordinary session of the Parliament of the Kyrgyz Republic on May 17 to move forward with the imposition of external management on the Kumtor Gold Company, and statements made during the parliamentary session that Kyrgyz control will be sought over a publicly traded Canadian-based company with multiple international assets.
"This will potentially have far-reaching consequences on foreign direct investment in the Kyrgyz Republic."
Centerra shares (TSX: CG) remain near a one-year low but closed up slightly to C$8.66 yesterday, valuing it about $2.6 billion (US$2.1 billion).