Centerra Gold reaches agreement on Kumtor Project

Centerra Gold (TSX: T.CG, Stock Forum) announced Friday that it has reached an agreement with the Government of the Kyrgyz Republic and Cameco Corp. (TSX: T.CCO, Stock Forum), that resolves all of the existing disputes between Centerra and the Government with respect to the Kumtor Project.

The Canadian Press reported earlier this week that Centerra, 53% owned by Cameco, has been trying to negotiate a three-way agreement that would increase its concession in the Central Asian country by more than 250 square kilometres.

Last June, the company reported that a previously announced agreement between the company, Cameco and the government on August 30, 2007 expired as it had not been ratified by the Parliament of the Kyrgyz Republic within the agreed time frame.

“Subsequently, the parties resumed their discussions and negotiations and the current Agreement reflects the outcome of those negotiations,” says the company.

The company says highlights of the new agreement include business certainty for future mining operations at the Kumtor Project and the government's full commitment to and support for Centerra's growth plans, the expansion of the company’s existing concession area to include the area of its exploration and development license and the replacement of the current tax regime applicable to the Kumtor project with a new tax rate effective January 1, 2008.

After closing of the transactions, the Kyrgyz Government could own up to 33% of Centerra, Cameco 37.8% and the balance, 29.2%, would be held by the remaining shareholders, says the company.

The government has advised Centerra that it intends to present the agreement and draft legislation for Parliamentary approval next week.

Shares of the company were halted Friday morning, but resumed trading at 10:45 ET, rising 10.4% to $6.88.

On Thursday, after one Stockhouse member posted a link to a Kyrgyz news article discussing the deal, travelnutter said: “Seems to be a good deal for both parties as I see it[sic]”…