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2018 Kumtor Environment and Sustainability Report

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2018 Kumtor Environment and Sustainability Report ENVIRONMENT AND SUSTAINABILITY REPORT 2018 ABOUT KUMTOR MINE Kumtor mine is the largest western-operated gold mine in Central Asia. It has been operating since May 1997 and has produced approximately 12 million ounces of gold to December 31, 2018. Kumtor Gold Company CJSC (KGC) is the concession holder for the Kumtor deposit responsible for the entire production cycle. The Kumtor open pit mine is located approximately building its next gold mine, the Öksüt Gold Project in 350 kilometers southeast of the capital Bishkek and 60 Turkey. Centerra also owns late-stage development kilometers north of the border with the People’s Republic properties; the Kemess Project in British Columbia, of China. It is at an altitude of 4,000 meters above sea Canada, which includes the Kemess Underground level in a partially glaciated permafrost zone in the and the Kemess East gold-copper projects, and a 50% Central Tien Shan Mountains. The current life of the interest in the Greenstone Gold Property which includes Kumtor mine is until 2026. the Hardrock Gold Project in northwestern Ontario, Canada. Centerra through its acquisition of Thompson About Centerra Creek Metals Company in 2016, also owns a well- established, fully integrated Molybdenum Business Centerra Gold Inc. (Centerra) is the parent company, consisting of an operating metallurgical processing which owns 100% of Kumtor Gold Company. Centerra is facility and two primary molybdenum mines, which are a publicly listed, Canadian-based gold mining company currently on care and maintenance. engaged in operating, developing, acquiring, and exploring gold properties in North America, Asia and The Company also has active exploration joint ventures other emerging markets worldwide. The Company is one and exploration properties in Canada, Finland, Mexico, of the largest Western-based gold producer in Central Sweden, Turkey and the United States. Kyrgyzaltyn Asia and its shares trade on the Toronto Stock Exchange OJSC, a state-owned entity, is Centerra’s largest (TSX) under the symbol CG. shareholder, owning 77,401,766 common, approximately 27% of the issued and oustanding shares. Additional Centerra operates two flagship assets, the Kumtor gold information on Centerra is available at SEDAR mine in the Kyrgyz Republic and the Mount Milligan (www.sedar.com) and on the Company’s website gold-copper mine in British Columbia, Canada and is (www.centerragold.com). About this Report This document is the Kumtor Annual Environment considered an importance evaluation process described and Sustainability Report for the 2018 financial year in the Governance Section of this report. Please note our (ending December 31, 2018) except where otherwise Cautionary Note regarding the forecast information on noted. This report is focused on the Kumtor mine in the inside back cover. This report will also be available the Kyrgyz Republic. Performance data include only in the Russian and Kyrgyz languages. As we continue Kumtor’s own operations, unless noted otherwise, to further improve our systems and approaches, we although the policies of Centerra and Kumtor apply to welcome your comments and suggestions on how we both employees and contractors. Financial metrics are can further improve our annual environmental and social reported in US dollars (USD) unless otherwise stated. reporting and practices. You can find contact details on This report has been prepared in accordance with GRI the back cover of this report. Standards: Core option. In addition the Report addresses the key reporting requirements centered in Kumtor’s Environment Managemeent Action Plan (EMAP). For each specific sector various indicators set in GRI’s Mining and Metals Sector Supplement (see www.globalreporting.org) are disclosed. In determining the scope, content, and boundaries of this report, we 102-1/ 102-2/ 102-4/ 102-5/ 102-6/ 102-45/ 102-46 102-49/ 102-50/ 102-51/ 102-52/ 102-54 2 ENVIRONMENT AND SUSTAINABILITY REPORT 2018 CONTENTS About Kumtor mine ............................................................................2 About this report .................................................................................2 Message from the President ..............................................................4 Operations Overview...........................................................................8 Environmental and Sustainability Snapshot ..................................10 1 Governance 1.1 Governance Model ......................................................................14 1.2 Sustainability Management ..................................................... 18 1.3 Risk Management and Continuous Improvement ...............19 1.4 Materiality Assessment .............................................................20 1.5 Business Ethics ...........................................................................23 2 Economic value 2.1 Economic Performance .............................................................26 2.2 Local Procurement .....................................................................28 3 People 3.1 Workplace Practices ..................................................................32 3.2 Occupational Health and Safety ..............................................40 4 Environment 4.1 Environmental Responsibility ...................................................46 4.2 Environmental Monitoring ........................................................50 4.3 Biodiversity ...................................................................................54 4.4 Energy Use and Carbon Emissions .........................................60 4.5 Air Emissions ...............................................................................62 4.6 Waste Management ...................................................................66 4.7 Unprocessed Waste Rock .........................................................69 4.8 Tailings Management.................................................................70 4.9 Mine Closure ................................................................................73 5 Glaciers and water management 5.1 Water Use and Treatment .........................................................76 5.2 Water Quality and Compliance .................................................80 5.3 Glacier Management ..................................................................84 5.4 Petrov Lake Water Balance .......................................................88 6 Social responsibility 6.1 Stakeholder Engagement ..........................................................90 6.2 Community Investment Projects .............................................94 Glossary and Abbreviations ............................................................98 Performance Data ..........................................................................101 GRI Content Index ..........................................................................104 Appendix Environmental Monitoring Data ....................................................108 Cautionary Note Regarding Forward-Looking Statement ..................123 ENVIRONMENT AND SUSTAINABILITY REPORT 2018 3 MESSAGE FROM THE PRESIDENT The progress we have achieved, as well as the challenges we faced in 2018, are described in this report. We have exceeded our operating performance and introduced a technologically advanced dispatching system at the mine site. Safety remains our top priority, and in 2018 the Work Safe | Home Safe leadership program training continued. Contribution to the Country Economy KGC remains an enterprise that makes a total of payments since 1994 $3.7 billion. KGC is significant contribution to the economy of the the largest taxpayer and largest employer in the Kyrgyz Republic. In 2018, our production activity private sector of the Kyrgyz Republic. By the end accounted for 18.4% of industrial output and of 2018, the company employed 2,641 Kyrgyz 8.6% of GDP. Payments in the Kyrgyz Republic citizens, or 98% of the total number of the full-time in 2018 amounted to $301 million, making the workforce. 102-14 4 ENVIRONMENT AND SUSTAINABILITY REPORT 2018 KGC remains an enterprise that makes a significant contribution to the economy of the Kyrgyz Republic Increasing Local Procurement Geotechnical Safety We believe that a strategic approach to procurement The Kumtor mine ore body and related infrastructure in the local market will not only benefit our company, are located under the moving glaciers or subjected to but also contribute to the development of local their impact. Since the approval of the Kumtor project communities by creating jobs and developing the in 1994, plans for the management of ice (necessary economy of the Issyk-Kul region. We continue to for the safe operation of the mine) have become promote and support local business and in 2018 an integral part of the annual mining plans that are our company spent about $81 million on local subject to approval by the relevant authorities of the procurement. Kyrgyz Republic. As further described in the report, we involve leading local and international experts and use advanced technologies for monitoring and Interaction with Stakeholders assessing geotechnical safety and implementing The Kumtor Ambassadors program, launched the activities necessary to ensure the proper level of in 2015, continues to involve employees and safety of Kumtor mine. contractors in social projects implemented in the Issyk-Kul region and in other regions of the country. Our employees have volunteered more than 5,000
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