Cameco completes spinoff of gold mining assets in C$253 million IPO of Centerra Gold

Cameco Corporation, the world's largest uranium producer, completed the spinoff of its gold mining assets with the C$253.2 million initial public and secondary offering of Centerra Gold Inc. on June 30, 2004. Centerra is now North America's fifth-largest gold producer and the largest western-based gold producer in the former Soviet Union and Central Asia. The offering was the largest mining IPO on the TSX in seven years.

The IPO followed a significant restructuring and consolidation of Cameco's gold assets. Prior to the restructuring, Cameco's wholly owned subsidiary, Cameco Gold, held a 33 percent interest in the Kumtor mine in the Kyrgyz Republic, with the remaining 67 percent held by Kyrgyzaltyn JSC, whose shares are 100 percent owned by the Government of the Kyrgyz Republic. The Kumtor mine, which began operations in 1997, is the largest private-sector employer and the largest foreign investment in the country; in 2002, its production represented 5.2 percent of the country's GDP. In addition, Cameco Gold held a 56 percent ownership interest in Australia-based AGR Limited, which in turn holds a 95 percent indirect equity interest in the Boroo mine in Mongolia. The Boroo mine, which began operations in March 2004, is the first significant foreign investment in Mongolia for industrial development since 1979.

On June 22, 2004, the Kumtor restructuring was completed, in which Centerra acquired each of Kyrgyzaltyn's and Cameco Gold's interest in the Kumtor mine in exchange for shares in Centerra, with Kyrgyzaltyn initially receiving a 33 percent common share interest. Centerra also entered into a new investment agreement with the Government of the Kyrgyz Republic relating to the operation of the mine and various investment protection rights, including tax and legal regime stabilization periods. On June 25, 2004, the remaining indebtedness of the Kumtor mine held by the International Finance Corporation (IFC) and the European Bank for Reconstruction and Development (EBRD) was also exchanged for a combination of cash and a 4 percent common share interest in Centerra. In addition, concurrently with the closing of the IPO, Centerra acquired the remaining 44 percent of AGR in exchange for an 8 percent common share interest in Centerra.

On July 22, 2004, the underwriters exercised their full over-allotment option to purchase an additional 1,875,000 shares from treasury.

Following completion of the restructuring, the IPO and the closing of the over allotment option, Cameco Gold will hold 52.7% percent of Centerra, Kyrgyzaltyn will hold 15.7% percent, EBRD and IFC each will hold approximately 2.1%, with the remaining 27.3% percent being held by the public. Based on the offering price of $15.50, Centerra's market value is over $1 billion. The offering was underwritten by a syndicate of underwriters jointly led by CIBC World Markets Inc. and BMO Nesbitt Burns Inc. and includes RBC Dominion Securities Inc., Canaccord Capital Corporation, GMP Securities Ltd., HSBC Securities (Canada) Inc., Scotia Capital Inc. and Salman Partners Inc.