GOLD MINING: Agreement reached for Kumtor mine

KYRGYZ REPUBLIC - The agreement governing the operation of the Kumtor gold mine has been finalized by Kyrgyz govern...

KYRGYZ REPUBLIC — The agreement governing the operation of the Kumtor gold mine has been finalized by Kyrgyz government, Toronto's Centerra Gold and its parent company, Cameco of Saskatoon.

 

The new agreement provides for government support of Centerra's current and future mining operations. Centerra' concession area has been expanded to include all of the area covered by its exploration and development licence. A flat 14% tax on gross revenue replaces a jumble of other taxes, and Centerra has settled the disputed tax amounts owing from last year. The company will also expand its board to include a director nominated by the republic.

 

As part of the agreement, the Kyrgyz government is increasing its interest in Centerra. The Canadian company has agreed to issue 18.2 new common shares and transfer between 14.1 million and 25.3 million shares to the government. When the transfer is completed, the Kyrgyz government will hold up to 33.0% of Centerra, Cameco 37.8%, and the balance by other investors.

 

With the stability provided in the new agreement, Centerra is expanding its underground diamond drilling program. Results of the drilling undertaken in April and May in the Stockwork zone continue to confirm the excellent potential for a high-grade underground deposit. A further three holes were completed and two holes are in progress to test the strike and down dip extensions of high-grade mineralization. Some of the better intercepts are 5.6 g/t Au over 16.1 metres, including 7.9 g/t Au over 10.1 metres in hole D1323A and 6.9 g/t Au over 14.3 metres, including 26.8 g/t Au over 2.8 metres in hole D1332.

 

Gold production from Kumtor during 2008 was more than 556,000 oz. Please visit www.Centerragold.com for additional information.

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