TORONTO (CP) - Centerra Gold Inc. [TSX:CG] said Tuesday it will focus over half its 2006 exploration budget at its Kumtor project in Kyrgyzstan after adding 2.3 million ounces to the mine's gold reserve estimate.
''We will continue our aggressive exploration program in 2006 with and have budgeted C$21 million for exploration expenses,'' Ian Atkinson, Centerra's vice president of exploration said in a conference call with analysts.
Exploration at Kumptor in 2006 will be focused on extending the mine's SB zone down dip and along strike, where the high grade nature of the mineralization offers the potential for further exploitation, he added.
Len Homeniuk, president and CEO of the gold junior spun off from uranium giant Cameco Corp. [TSX:CCO; NYSE:CCJ] in 2004, said C$11.4 million of the exploration budget will be spent at Kumtor.
''We view the capital expenditures as a real opportunity here in that our mine fleet is... early 90s vintage, and to replace it with larger and more fuel-efficient trucks, I think, will pay huge benefits.''
The Toronto-based company reported the reserve addition Monday, following drilling at the south end of the currently operating pit. The average grade of the reserve has been raised to 3.8 grams of gold per tonne from 3.3 grams per tonne.
As of Dec. 31, Centerra's proven and probable reserves were 6.1 million ounces, which includes an increase of 2.7 million ounces offset by 917,000 ounces mined during 2005. Measured and indicated resources were 5.8 million ounces, up by 2.5 million during 2005.
The results, Centerra said, will suggest an increase in the mine's life by three years.
Atkinson also said the company will continue to look for possible growth in the Kyrgyz Republic, Mongolia, China and other emerging markets.
Its Boroo mine in Mongolia added 349,000 ounces, which replaces reserves mined in 2005. Its life has been extended by one year.
''We anticipated Centerra would be a successful, growing gold producer when the company was formed,'' Cameco CEO Jerry Grandey said in a statement.
''The remarkable reserve and resource results announced today are another indication that our confidence was well-founded.''
The Sakatchewan-based uranium producer owns 53% of Centerra.
Homeniuk also hinted at the possibility of a more constant production number at Kumtor going forward.
''With the high-grade ounces that we're going to be adding for the SB zone - (which) we're trying to bring forward as quickly as possible by investing further mining capital - I think that you'll be pleasantly surprised in what you see.''
Further details, he added, will be released along with quarterly results on Jan. 31.
Centerra is a gold company focused on acquiring, exploring, developing and operating gold properties primarily in Central Asia, the former Soviet Union and other emerging markets.
Its other projects are the Gatsuurt deposit, 35 kilometres east of the Boroo Mine, and the REN project in Nevada.
On the Toronto Stock Exchange Tuesday morning, Centerra shares were up 50 cents, or 1.47%, to trade at C$34.55. Cameco shares added C$2.37 to C$87.38.
(c) The Canadian Press 2006
