Centerra and the Government of Mongolia agreed that effective January 1, 2007, the Boroo Project will be subject to the generally-applicable 25% corporate income tax rate, which will apply until the termination of the Boroo Stability Agreement in July 2013.
Under the previous agreement the Company was subject to income tax at the rate of 20% for the three-year period commencing March 1, 2007 and 40% thereafter.
In addition, effective August 3, 2007, the mineral royalty payable will be 5% rather than the 2.5% previously applicable.
This agreement with the Mongolian government reaffirms the applicability of the Boroo Stability Agreement.
The Company also received a separate letter from the Minister of Finance confirming the Government`s willingness to conclude an Investment Agreement regarding the Gatsuurt Project and to advance the approval and registration of reserves with the applicable Mongolian authorities.
The Ministry of Finance acknowledges that the Company has submitted 2005 documentation related to the registration of reserves.
Centerra anticipates such registration may be completed this fall.
"We are very pleased that we have come to a mutually-acceptable amended Boroo Stability Agreement. We expect that this development will pave the way to an expedient final resolution on the Gatsuurt Investment Agreement. An agreement on Gatsuurt will solidify our current position in Mongolia, provide for a stable operational environment, and allow us to review our exploration and growth strategy there." said Len Homeniuk, Centerra Gold`s President and CEO.