Cameco Corporation announced that the company and Centerra Gold Inc. have signed an agreement with the Kyrgyz government that resolves all outstanding issues with respect to the Kumtor gold mine. The agreement is expected to further align the parties’ business interests and provide additional certainty for continuing operations and future development of the Kumtor project.
The Kyrgyz government intends to present the agreement and draft legislation authorizing its implementation for parliamentary approval next week.
Cameco owns 53% of Centerra and the Kyrgyz government owns 16%. On June 2, 2008, Cameco reported that the previously announced agreements entered into between Cameco, Centerra and the government on August 30, 2007 had not been ratified by the Parliament of the Kyrgyz Republic within the time frame agreed by the parties and had therefore expired. Subsequently, the parties resumed negotiations. The current agreement reflects the outcome of those negotiations.
The number of common shares to be transferred to the government will depend upon the value received by Cameco on any sale of common shares. The agreement also provides for Kyrgyz government support in connection with any sale of 5% or more of its shareholding in Centerra.
Closing of the transactions under the agreement is dependent upon the satisfaction of certain conditions including Kyrgyz parliamentary approval of the agreement and the required legislation to implement its terms, withdrawal of all claims and proceedings before the Kyrgyz courts, and any necessary regulatory and other approvals, including TSX approval. The parties have agreed to apply reasonable efforts to close the transaction within 30 days of signing the agreement.
After closing of the transactions and upon the satisfaction of all conditions to the transfer of shares by Cameco, the Kyrgyz government could own up to 33% of Centerra, Cameco 37.8% and the balance, 29.2%, will be held by the remaining shareholders.