Cameco finances Kyrgyzstani mine

Toronto-listed Cameco can now proceed with development of the US$360-million Kumtor gold deposit in Kyrgyzstan.

Certain lenders will commit US$270 million to the project, and the balance will be provided by a subordinated loan and equity financing.

Cameco will guarantee repayment of the loan in the event of default. Such a guarantee, however, will not apply in the event of political force majeure, which would either be covered by political risk insurance or assumed by the lenders.

Cameco owns a third of the project and will act as operater. The remaining two-thirds is owned by the government of Kyrgyzstan. Geological reserves are estimated at 16.6 million oz., of which 9.3 million oz. are believed to be extractable by open-pit methods at a grade of 3.6 grams per tonne.

Cameco forecasts annual production of 500,000 oz. at a cash operating cost of US$160 per oz. Production is expected to start in early 1997.