Centerra Gets License to Mine Satellite Deposit at Kumtor

Centerra Gold’s Kumtor mine, located in the Kyrgyz Republic, has received a mining license for its nearby Sarytor deposit, according to a recent announcement by the Toronto, Canada-based company. The Sarytor deposit is approximately 4.5 km southwest of the Kumtor mill and has about 300,000 contained oz of gold in probable reserves which are included in Kumtor's total 4.7 million contained oz of proven and probable reserves. Centerra said total proven and probable reserves comprise 1.9 million contained oz of proven reserves and 2.8 million contained oz of probable reserves.

Len Homeniuk, president and CEO of Centerra, said, “Receiving the mining license for the Sarytor deposit ahead of finalizing our new agreement indicates the willingness and cooperative nature of the government and demonstrates the government's commitment to Centerra and the development of the Kumtor mine. Having the ability to access and mine the Sarytor deposit will give us some flexibility and options for production sources next year at Kumtor.”

In late August, Centerra announced that it had reached binding agreements with the government of the Kyrgyz Republic that would extend the government's commitment and support for continuing long-term development of the Kumtor project. The agreements, according to Centerra, also enlarge the company’s existing concession area by more than 25,000 hectares to include all territory covered by the current exploration license. Centerra and the Kyrgyz government also agreed to replace Kumtor’s existing tax regime with a new tax plan applied to Kumtor’s gross revenue at the rate of 11% in 2008, 12% in 2009 and 13% thereafter. According to Centerra, at current gold prices the revised tax regime is “slightly beneficial” to the project.

The final agreement called for Cameco Corp., which holds a significant interest in Centerra, to transfer 32.3 million shares of Centerra to the Kyrgyz government; 17.3 million of such shares will be held in escrow to be released within four years subject to certain conditions. After completion of the transactions, the Kyrgyz government will own 29.3% of Centerra, Cameco will own 40.5% and 30.2% will be held by the remaining shareholders.

As featured in Womp 07 Vol 9 -