Cameco sells stake in Centerra Gold for $820 million

Canada's Cameco Corporation, one of the world's largest uranium producers agreed yesterday to sell its complete stake in Centerra Gold Inc for approximately C$872 million ($820 million) on a bought-deal basis.

Both the companies entered into an agreement with a syndicate of underwriters led by CIBC World Markets Inc and RBC Capital Markets, who have agreed to purchase approximately 88.6 million common shares of Centerra now held by Cameco, at a price of C$10.25 per share for sale to the public.

Cameco's entire holdings in Centerra consist of about 113.9 million common shares or 48.5 per cent of the outstanding shares. Along with the above mentioned offering of the 88.6 million shares, Cameco will also transfer the remaining 25.3 million shares to Kyrgyzaltyn JSC, the state-owned gold mining company of the Kyrgyz Republic, conforming to the agreement on new terms which Cameco entered into with the country's government earlier in April.

The transaction is expected to provide approximately C$872 million in net proceeds, which the company intends to utilise for expanding its core uranium business, targeting doubling of its production from the current level of 11-13 million kilograms of uranium.

Barely a month ago Cameco's chief executive officer and president, Jerry Grandey had said that the company is planning to sell its stake in the gold miner to focus on investments in the uranium and nuclear energy sector. (See: Cameco likely to sell stake in Centerra Gold)

Saskatoon, Saskatchewan-based Cameco is a world leader in low-cost uranium production and accounts for about 15 per cent of world mine output. Its products are used to generate electricity from nuclear power plants around the world.