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Centerra Gold Inc No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This prospectus constitutes a public offering only in those jurisdictions where they may be lawfully offered for sale and only by persons permitted to sell these securities. The securities offered by this prospectus have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and, subject to certain exceptions, may not be offered or sold within the United States. See ‘‘Plan of Distribution’’. Prospectus Initial Public Offering and Secondary Offering June 22, 2004 CENTERRA GOLD INC. C$253,175,869 16,333,927 Common Shares This offering is an initial public offering and secondary offering of 16,333,927 common shares of Centerra Gold Inc., of which 5,000,000 common shares are being offered by us and 11,333,927 common shares are being offered by Kyrgyzaltyn JSC and Central Asia Gold Limited, the selling shareholders. See ‘‘Principal and Selling Shareholders’’. This prospectus also qualifies for distribution the common shares that we have offered to the minority shareholders of AGR Limited, other than Central Asia Gold Limited, in exchange for their shares in AGR Limited as well as the common shares that we intend to issue to each of International Finance Corporation, a subsidiary of the World Bank, and the European Bank for Reconstruction and Development, in connection with the exchange of their subordinated loans. See ‘‘Reorganization — Offer to Acquire AGR Minority’’ and ‘‘Reorganization — Exchange by IFC and EBRD’’. We are a growth-oriented, Canadian-based gold company focused on acquiring, exploring, developing and operating gold properties primarily in Central Asia, the former Soviet Union and other emerging markets. We are the largest Western-based gold producer in Central Asia and the former Soviet Union and the sixth largest North American-based gold producer. We currently operate two low-cost producing mines: the Kumtor mine in the Kyrgyz Republic, in which we have a 100% interest, and the Boroo mine in Mongolia, in which we have a 79% economic interest. See ‘‘Economic Interest’’. We also have interests in exploration properties, including a 62% interest in the REN property in Nevada and a 73% interest in the Gatsuurt property in Mongolia. See ‘‘Our Properties’’. Our economic interest in the Boroo mine will increase to 98% and our interest in the Gatsuurt property will increase to 100% following our acquisition of the minority interest in AGR Limited. See ‘‘Reorganization — Offer to Acquire AGR Minority’’. The offering price of our common shares was determined by negotiation between us, the selling shareholders and the underwriters, being CIBC World Markets Inc., BMO Nesbitt Burns Inc., RBC Dominion Securities Inc., Canaccord Capital Corporation, GMP Securities Ltd., HSBC Securities (Canada) Inc., Scotia Capital Inc. and Salman Partners Inc. Investing in our common shares involves risks. See ‘‘Risk Factors’’. Price: C$15.50 per common share Price to Underwriters’ Net Proceeds to Net Proceeds to the Public Fee(1)(2) Centerra Gold Inc.(3)(4) Selling Shareholders Per common share ***************************** C$15.50 C$0.775 C$14.725 C$14.725 Total **************************************** C$253,175,869 C$12,658,794 C$73,625,000 C$166,892,075 (1) The obligation to pay the underwriters’ fee will be shared by us and the selling shareholders in proportion to the number of common shares sold by us and them. (2) No underwriters’ fees will be payable in respect of the common shares we intend to issue to the minority shareholders of AGR Limited, International Finance Corporation and the European Bank for Reconstruction and Development. See ‘‘Reorganization — Offer to Acquire AGR Minority’’ and ‘‘Reorganization — Exchange by IFC and EBRD’’. (3) Before deducting expenses of this offering, estimated to be $2 million, which our subsidiary Kumtor Gold Company will pay in accordance with the terms of the Kumtor restructuring agreement. (4) We have granted the underwriters an over-allotment option, exercisable for a period of 30 days from the date of the closing of this offering, to purchase up to a total of 1,875,000 additional common shares on the same terms as set out above solely to cover over-allotments, if any, and for market stabilization purposes. If the over-allotment option is exercised in full, the total number of common shares to be sold in this offering will be 18,208,927 and the total price to the public, underwriters’ fee and net proceeds to us will be C$282,238,369, C$14,111,918 and C$101,234,375, respectively. This prospectus qualifies the distribution of the common shares issuable upon exercise of the over-allotment option. See ‘‘Plan of Distribution’’. There is currently no market through which the common shares may be sold and purchasers may not be able to resell common shares purchased under this prospectus. The Toronto Stock Exchange has conditionally approved the listing of the common shares under the symbol CG, subject to our fulfilling all of the requirements of the Toronto Stock Exchange on or before September 15, 2004. In connection with this offering, the underwriters may over-allot or effect transactions which stabilize or maintain the market price of the common shares at levels other than those that otherwise might prevail on the open market. See ‘‘Plan of Distribution’’. CIBC World Markets Inc., RBC Dominion Securities Inc., HSBC Securities (Canada) Inc. and Scotia Capital Inc. are subsidiaries of Canadian banks which are lenders to Cameco Corporation, our ultimate parent. Accordingly, in connection with this offering, we may be considered a ‘‘connected issuer’’ of CIBC World Markets Inc., RBC Dominion Securities Inc., HSBC Securities (Canada) Inc. and Scotia Capital Inc. See ‘‘Relationship Between Centerra and the Underwriters’’. The underwriters, as principals, conditionally offer the common shares, subject to prior sale, if, as and when issued by us and accepted by the underwriters in accordance with the conditions contained in the underwriting agreement referred to under ‘‘Plan of Distribution’’ and subject to the approval of certain legal matters on our behalf by Torys LLP, on behalf of the selling shareholder, Kyrgyzaltyn JSC, by Blake, Cassels & Graydon LLP and on behalf of the underwriters by Borden Ladner Gervais LLP. Subscriptions for the common shares will be received subject to rejection or allotment in whole or in part and the underwriters reserve the right to close the subscription books at any time without notice. It is expected that the closing of this offering will take place on June 30, 2004 or on another date as we, the selling shareholders and the underwriters may agree, but not later than August 2, 2004. Kyrgyzaltyn JSC and Central Asia Gold Limited, the selling shareholders, are organized under the laws of foreign jurisdictions and have no assets in Canada. Although Kyrgyzaltyn JSC and Central Asia Gold Limited have appointed Blake, Cassels & Graydon LLP as their agent for service of process in Canada it may not be possible for investors to collect from either Kyrgyzaltyn JSC or Central Asia Gold Limited judgments obtained in courts in Canada predicated on the civil liability provisions of Canadian securities legislation. Centerra Gold Inc. · Sixth largest North American-based gold producer · Largest western-based gold producer in Central Asia and the former Soviet Union · Two low-cost operating mines producing solid cash flows and earnings · Significant potential to increase reserves · Debt-free balance sheet · Unhedged strategy provides leverage to higher gold prices · Proven acquisition, development, operating and exploration experience · Aggressive growth strategy Centerra’s Gold Mines and Exploration P Kazakhstan lt Kyrgyz Republic Tien Shan Gold Belt Tien Shan Gold Belt Kazakhstan Northern Tien Shan Uzbekistan Muruntau Kumtor Tien Shan Amantaitau Jerooy Suture Kyrgyz Kalmakyr Republic Daugyztau Zarmitan Turkmenistan Southern Jilau Tien Shan Tajikistan Kumtor Mine – Kyrgyz Republic Car Russia Properties Boroo Mine & Gatsuurt Property Mongolia Mongolia North China Gold Belt China Head Office Toronto, Canada Canada REN Property rlin Trend, Nevada USA TABLE OF CONTENTS Page Page PROSPECTUS SUMMARY ***************** 1 SELECTED PRO FORMA AND OPERATING GENERAL MATTERS ********************* 13 AND FINANCIAL INFORMATION ******** 103 EXCHANGE RATE INFORMATION********* 13 MANAGEMENT’S DISCUSSION AND **************************** HISTORIC GOLD PRICES ***************** 14 ANALYSIS 106 TECHNICAL INFORMATION ************** 14 PRINCIPAL AND SELLING SHAREHOLDERS*********************** 123 CASH FLOW AND OTHER PROJECTIONS ** 14 PLAN OF DISTRIBUTION ***************** 125 FORWARD-LOOKING STATEMENTS ******* 15 RISK FACTORS ************************** 126 NON-GAAP MEASURES ****************** 15 PROMOTER ***************************** 133 ECONOMIC INTEREST ******************* 16 LEGAL PROCEEDINGS ******************* 133 ELIGIBILITY FOR INVESTMENT ********** 17 INTEREST OF MANAGEMENT AND CORPORATE STRUCTURE AND HISTORY** 18 OTHERS IN MATERIAL TRANSACTIONS 134 OUR BUSINESS ************************** 21 RELATIONSHIP BETWEEN CENTERRA ************************ OUR PROPERTIES 28 AND THE UNDERWRITERS ************* 134 *************************** Kumtor Mine 28 AUDITORS, TRANSFER AGENTS AND Boroo Mine and Gatsuurt Exploration REGISTRARS ************************** 135 ***************************** Property 54 MATERIAL CONTRACTS ***************** 135 *****************
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