Cameco three-month TSX trading

Cameco Corp. and Centerra Gold Inc. have signed a new agreement with Kyrgyzstan's government that they say resolves all outstanding issues with respect to the Kumtor gold mine in the central Asian country.

The Kyrgyz government intends to present the agreement and draft legislation to implement it for parliamentary approval next week, Cameco said in a news release Friday.

The new pact replaces an agreement announced on Aug. 30, 2007, that subsequently expired because it was not ratified by the Kyrgyz parliament within the time frame agreed to by the parties.

Cameco currently owns 53 per cent of Centerra, while the Kyrgyz government has a 16 per cent stake.

Under the terms of the deal, Cameco will transfer between 14.1 million and 25.3 million common shares of Centerra to the government upon satisfaction of several conditions.

Centerra Gold three-month TSX trading

When the transaction closes, Cameco's stake in Centerra will fall to 37.8 per cent, the Kyrgyz government will own as much as 33 per cent and the remaining shareholders will own 29.2 per cent.

The 2007 agreement called for Cameco to own 41 per cent, the government about 29 per cent and public shareholders 30 per cent.

Cameco did not say how much the share transfer will end up costing the company.

When it announced the 2007 deal, Cameco said it would result in a one-time, after-tax loss of about $120 million.

The current tax regime relating to the mine will also be replaced with a new tax of 14 per cent of gross revenue, plus a further four per cent annually against which Centerra's future capital and exploration expenditures in the country would be credited.

The current regime calls for tax of 10 per cent of taxable income, plus assorted levies amounting to 7.3 per cent of revenue and two to four per cent of taxable income, in addition to withholding taxes and duties.

Shares of Cameco closed up $1.16 to $25.22, while Centerra Gold shares gained $1.03, or more than 16 per cent, to $7.26 on the TSX.