Centerra Gold Inc. (“Centerra” or the “Company”) (TSX: CG and NYSE:
CGAU) today reported its first quarter 2024 operating and financial
results.
President and CEO, Paul Tomory, commented,
“Centerra had a strong quarter of operating performance with
production and costs outperforming our expectations. At Mount
Milligan, we continued to advance a site-wide optimization program,
implementing tangible initiatives in several areas, including
concentrate management, mine operations and mine-to-mill
optimization. We are also focused on a preliminary economic
assessment to evaluate the substantial mineral resources at the
Mount Milligan mine to unlock value beyond its current 2035 mine
life. At Öksüt, we remain on track with elevated production in the
first half of the year, in line with our guidance.
“In the first quarter of 2024, our cash and cash
equivalents increased to $647.6 million, despite making the $24.5
million payment related to the additional agreement with Royal
Gold. We have been active on share buybacks in late February and
March, delivering on our disciplined capital allocation strategy.
Looking ahead, in the second quarter we expect to make tax and
annual royalty payments in Türkiye, totalling approximately $105
million, which will impact our cash balance. We continue to believe
that Centerra is well positioned to achieve its 2024 guidance, as
we are delivering on our value maximizing strategy for the
Company’s portfolio of assets,” concluded Mr. Tomory.
First Quarter 2024
Highlights
Operations
- Production:
Consolidated gold production of 111,341 ounces, including 48,317
ounces of gold from the Mount Milligan Mine (“Mount Milligan”) and
63,024 ounces of gold from the Öksüt Mine (“Öksüt”). Copper
production in the quarter was 14.3 million pounds.
- Sales: First
quarter 2024 gold sales of 104,313 ounces at an average realized
gold priceNG of $1,841 per ounce and copper sales of 15.6 million
pounds at an average realized copper priceNG of $3.12 per pound.
The average realized gold and copper prices include the impact from
the Mount Milligan streaming agreement.
- Costs:
Consolidated gold production costs were $746 per ounce and all-in
sustaining costs (“AISC”) on a by-product basisNG were $859 per
ounce for the quarter.
- Capital
expendituresNG: Additions to property,
plant, and equipment (“PP&E”) and sustaining capital
expendituresNG were $15.3 million and $16.2 million, respectively.
Sustaining capital expendituresNG in the first quarter 2024
included water pumping system construction, equipment overhauls,
and purchases of mobile equipment at Mount Milligan, as well as the
heap leach pad expansion and capitalized stripping and water
treatment plant construction at Öksüt.
Financial
- Net earnings:
First quarter 2024 net earnings were $66.4 million, or $0.31 per
share, and adjusted net earningsNG were $31.3 million or $0.15 per
share. Adjustments to net earnings include $25.0 million of
reclamation provision revaluation recovery, $8.9 million of
unrealized foreign currency exchange gains, and $6.8 million in
income tax adjustments mainly resulting from a withholding tax
expense on the repatriation of Öksüt’s earnings. For additional
adjustments refer to the “Non-GAAP and Other Financial Measures”
disclosure at the end of this news release.
- Cash provided by operating
activities and free cash flowNG: Cash
provided by operating activities was $99.4 million and free cash
flowNG was $81.2 million. This includes $101.4 million of cash
provided by mine operations and $90.1 million of free cash flowNG
at Öksüt; and $30.0 million of cash provided by mine operations and
$24.1 million of free cash flowNG at Mount Milligan. This is offset
by cash used in operating activities and a free cash flowNG deficit
from corporate expenses, Thompson Creek expenditures, and other
exploration activities.
- Cash and cash
equivalents: Total liquidity of $1,046.9 million as at
March 31, 2024, comprising a cash balance of $647.6 million and
$399.3 million available under a corporate credit facility.
- Dividend:
Quarterly dividend declared of C$0.07 per common share.
Other
- Share buybacks:
Under Centerra’s normal course issuer bid (“NCIB”) program, the
Company repurchased 1,783,800 common shares in the first quarter
2024, for the total consideration of $10.0 million.
- Mount Milligan mine life
extension and additional agreement with Royal Gold: In the
first quarter of 2024, Centerra announced an additional agreement
with Royal Gold related to Mount Milligan, which resulted in a life
of mine extension to 2035 and established favourable parameters for
potential future mine life extensions. This is a key first step in
the Company’s strategy to realize the full potential of this
cornerstone asset in a top-tier mining jurisdiction. For additional
details, please refer to the announcement entitled “Centerra Gold
Announces Mount Milligan Mine Life Extension and Additional
Agreement with Royal Gold”, issued on February 14, 2024.
- Thompson Creek Feasibility
Study: Work is progressing on the feasibility study to
evaluate the restart of mining at the Thompson Creek mine. The
Company expects to complete the study in late summer of 2024.
Table 1 - Overview of Consolidated Financial and
Operating Highlights
| ($millions, except as
noted) |
Three months ended March 31, |
|
|
2024 |
2023 |
|
% Change |
|
| Financial
Highlights |
|
|
|
|
| Revenue |
305.8 |
226.5 |
|
35 |
% |
| Production costs |
173.8 |
204.3 |
|
(15 |
)% |
|
Depreciation, depletion, and amortization ("DDA") |
33.3 |
18.5 |
|
80 |
% |
|
Earnings from mine operations |
98.7 |
3.7 |
|
2568 |
% |
| Net earnings (loss) |
66.4 |
(73.5 |
) |
190 |
% |
| Adjusted net earnings
(loss)(1) |
31.3 |
(52.9 |
) |
159 |
% |
| Cash provided by (used in)
operating activities |
99.4 |
(99.8 |
) |
200 |
% |
| Free cash flow
(deficit)(1) |
81.2 |
(105.9 |
) |
177 |
% |
| Additions to property, plant
and equipment (“PP&E”) |
15.3 |
8.0 |
|
91 |
% |
| Capital expenditures -
total(1) |
16.8 |
4.9 |
|
243 |
% |
|
Sustaining capital expenditures(1) |
16.2 |
4.9 |
|
231 |
% |
|
Non-sustaining capital expenditures(1) |
0.6 |
— |
|
0 |
% |
| Net earnings (loss) per common
share - $/share basic(2) |
0.31 |
(0.34 |
) |
191 |
% |
|
Adjusted net earnings (loss) per common share - $/share
basic(1)(2) |
0.15 |
(0.24 |
) |
163 |
% |
|
Operating highlights |
|
|
|
|
|
| Gold produced (oz) |
111,341 |
33,215 |
|
235 |
% |
| Gold sold (oz) |
104,313 |
38,990 |
|
168 |
% |
| Average market gold price
($/oz) |
2,074 |
1,890 |
|
10 |
% |
| Average realized gold price
($/oz )(3) |
1,841 |
1,446 |
|
27 |
% |
| Copper produced (000s
lbs) |
14,331 |
13,355 |
|
7 |
% |
| Copper sold (000s lbs) |
15,622 |
15,332 |
|
2 |
% |
| Average market copper price
($/lb) |
3.86 |
4.05 |
|
(5 |
)% |
| Average realized copper price
($/lb)(3) |
3.12 |
3.42 |
|
(9 |
)% |
| Molybdenum sold (000s
lbs) |
2,948 |
3,347 |
|
(12 |
)% |
| Average market molybdenum
price ($/lb) |
19.93 |
32.95 |
|
(40 |
)% |
| Average
realized molybdenum price ($/lb) |
20.47 |
29.91 |
|
(32 |
)% |
|
Unit costs |
|
|
|
|
|
| Gold production costs
($/oz)(4) |
746 |
1,124 |
|
(34 |
)% |
| All-in sustaining costs on a
by-product basis ($/oz)(1)(4) |
859 |
1,383 |
|
(38 |
)% |
| All-in costs on a by-product
basis ($/oz)(1)(4) |
991 |
2,107 |
|
(53 |
)% |
| Gold - All-in sustaining costs
on a co-product basis ($/oz)(1)(4) |
1,013 |
1,603 |
|
(37 |
)% |
| Copper production costs
($/lb)(4) |
1.92 |
2.66 |
|
(28 |
)% |
| Copper - All-in sustaining
costs on a co-product basis – ($/lb)(1)(4) |
2.09 |
2.67 |
|
(22 |
)% |
| (1) |
|
Non-GAAP financial measure. See discussion under “Non-GAAP and
Other Financial Measures”. |
| (2) |
|
As at March 31, 2024, the Company had 214,361,403 common
shares issued and outstanding. |
| (3) |
|
This supplementary financial measure within the meaning of National
Instrument 52-112 - Non-GAAP and Other Financial Measures
Disclosure (“NI 51-112”). is calculated as a ratio of revenue from
the consolidated financial statements and units of metal sold and
includes the impact from the Mount Milligan Streaming Agreement,
copper hedges and mark-to-market adjustments on metal sold not yet
finally settled. |
| (4) |
|
All per unit costs metrics are expressed on a metal sold
basis. |
| |
|
|
2024 Outlook
The Company’s 2024 outlook previously disclosed
in the MD&A for the year ended December 31, 2023, filed on
SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov/edgar, is
unchanged except for the following revisions: the Kemess Project’s
reclamation costs have been revised down from the range of $24 to
$30 million to the range of $19 to $25 million and the expected
Öksüt Mine taxes have been increased from the range of $46 to
$52 million to the range of $54 to $60 million due to higher gold
prices. The Company notes that except for the changes highlighted
above the rest of the outlook remains unchanged. The Company’s full
year 2024 outlook, as adjusted, and comparative actual results for
the three months ended March 31, 2024 are set out in the
following table:
|
|
Units |
2024Guidance |
Three months ended March 31, 2024 |
|
Production |
|
|
|
|
Total gold production(1) |
(Koz) |
370 - 410 |
111 |
|
Mount Milligan Mine(2)(3)(4) |
(Koz) |
180 - 200 |
48 |
|
Öksüt Mine |
(Koz) |
190 - 210 |
63 |
|
Total copper production(2)(3)(4) |
(Mlb) |
55 - 65 |
14 |
|
Unit Costs(5) |
|
|
|
|
Gold production costs(1) |
($/oz) |
800 - 900 |
746 |
|
Mount Milligan Mine(2) |
($/oz) |
950 - 1,050 |
954 |
|
Öksüt Mine |
($/oz) |
650 - 750 |
587 |
|
All-in sustaining costs on a by-product basisNG(1)(3)(4) |
($/oz) |
1,075 - 1,175 |
860 |
|
Mount Milligan Mine(4) |
($/oz) |
1,075 - 1,175 |
688 |
|
Öksüt Mine |
($/oz) |
900 - 1,000 |
823 |
|
Capital Expenditures |
|
|
|
|
Additions to PP&E(1) |
($M) |
108 - 140 |
15.3 |
|
Mount Milligan Mine |
($M) |
55 - 65 |
0.8 |
|
Öksüt Mine |
($M) |
40 - 50 |
12.6 |
|
Total Capital ExpendituresNG(1) |
($M) |
108 - 140 |
16.8 |
|
Mount Milligan Mine |
($M) |
55 - 65 |
4.1 |
|
Öksüt Mine |
($M) |
40 - 50 |
11.3 |
|
Sustaining Capital ExpendituresNG(1) |
($M) |
100 - 125 |
16.2 |
|
Mount Milligan Mine |
($M) |
55 - 65 |
4.1 |
|
Öksüt Mine |
($M) |
40 - 50 |
11.3 |
|
Non-sustaining Capital ExpendituresNG(1) |
($M) |
8 - 15 |
0.6 |
|
Depreciation, depletion and amortization(1) |
($M) |
140 - 165 |
33.3 |
|
Mount Milligan Mine |
($M) |
90 - 100 |
18.3 |
|
Öksüt Mine |
($M) |
45 - 55 |
14.2 |
|
Income tax and BC mineral tax expense(1) |
($M) |
55 - 65 |
37.4 |
|
Mount Milligan Mine |
($M) |
1 - 5 |
0.9 |
|
Öksüt Mine |
($M) |
54 - 60 |
36.5 |
- Consolidated
Centerra figures.
- The Mount Milligan Mine is subject
to the Mount Milligan Streaming Agreement. Using an assumed market
gold price of $2,000 per ounce and a blended copper price of $3.75
per pound for 2024, Mount Milligan Mine’s average realized gold and
copper price for the remaining three quarters of 2024 would be
$1,419 per ounce and $2.96 per pound, respectively, compared to
average realized prices of $1,552 per ounce and $3.12 per pound in
the three-month period ended March 31, 2024, when factoring in
the Mount Milligan Streaming Agreement and concentrate refining and
treatment costs. The blended copper price of $3.75 per pound
factors in copper hedges in place as of March 31, 2024.
- In 2024, gold and copper production
at the Mount Milligan Mine is projected with recoveries estimated
at 64% and 78%, respectively.
- Unit costs include a credit for
forecasted copper sales treated as by-product for all-in sustaining
costsNG and all-in costsNG. Production for copper and gold reflects
estimated metallurgical losses resulting from handling of the
concentrate and metal deductions levied by smelters.
- Units noted as ($/oz) relate to
gold ounces and ($/lb) relate to copper pounds.
Molybdenum Business Unit
|
(Expressed in millions of United States dollars) |
2024 Guidance |
Three months ended March 31, 2024 |
|
Langeloth Facility |
|
|
|
Loss from operationsNG(1) |
(5) - (15) |
(3.8) |
|
Cash (used in) provided by operations before changes in working
capital |
(5) - 0 |
(2.0) |
|
Changes in Working Capital |
(20) - 20 |
3.8 |
|
Cash (Used in) Provided by Operations |
(25) - 20 |
1.8 |
|
Sustaining Capital ExpendituresNG |
(5) - (10) |
(0.5) |
|
Free Cash Flow (Deficit) from OperationsNG(2) |
(30) - 10 |
1.3 |
|
Thompson Creek Mine(2) |
|
|
|
Project Evaluation Expenses(3) |
(17) - (20) |
(6.9) |
|
Care and Maintenance Expenses - Cash |
(1) - (3) |
(0.9) |
|
Changes in Working Capital |
— |
0.6 |
|
Cash Used in Operations |
(18) - (23) |
(7.2) |
|
Non-sustaining Capital ExpendituresNG |
(7) - (12) |
(0.4) |
|
Free Cash Flow (Deficit) from OperationsNG |
(25) - (35) |
(7.6) |
|
Endako Mine |
|
|
|
Care and Maintenance Expenses |
(5) - (7) |
(1.1) |
|
Reclamation Costs |
(15) - (18) |
— |
|
Cash Used in Operations |
(20) - (25) |
(1.1) |
- Includes DDA of
$0.9 million in the Q1 2024 actuals and $5 to $10 million in the
full year of 2024 guidance.
- Outlook range for the Thompson
Creek Mine relates to the first half of 2024 only.
- Project evaluation expenses are
recognized as expense in the consolidated statements of earnings
(loss).
Project Evaluation, Exploration, and
Other Costs
The Company’s 2024 outlook for the Goldfield
Project, Kemess Project, corporate administration, and other
exploration projects and comparative actual results for the three
months ended March 31, 2024 are set out in the following table:
|
(Expressed in millions of United States dollars) |
2024 Guidance |
Three months ended March 31, 2024 |
|
Project Exploration and Evaluation Costs |
|
|
|
Goldfield Project |
9 - 13 |
2.6 |
|
Thompson Creek Mine(1) |
17 - 20 |
6.9 |
|
Total Project Evaluation Costs |
26 - 33 |
9.5 |
|
Brownfield Exploration |
17 - 22 |
2.9 |
|
Greenfield and Generative Exploration |
18 - 23 |
2.6 |
|
Total Exploration Costs |
35 - 45 |
5.5 |
|
Total Exploration and Project Evaluation Costs |
61 - 78 |
15.0 |
|
Other Costs |
|
|
|
Kemess Project(2) |
19 - 25 |
2.9 |
|
Corporate Administration Costs |
37 - 42 |
10.0 |
|
Stock-based Compensation |
8 - 10 |
1.0 |
|
Other Corporate Administration Costs |
29 - 32 |
9.0 |
- Outlook range for
the Thompson Creek Mine relates to the first half of 2024
only.
- Includes care and maintenance costs
as well as reclamation costs included in the reclamation provision
as at March 31, 2024.
Mount MilliganMount Milligan
produced 48,317 ounces of gold and 14.3 million pounds of copper in
the first quarter of 2024. Mining activities were carried out in
phases 6, 7, and 9 of the open pit. A total of 12.3 million tonnes
were mined in the first quarter of 2024. Process plant throughput
for the first quarter of 2024 was 5.2 million tonnes, averaging
56,728 tonnes per day. Mount Milligan is on track for its 2024 gold
production guidance of 180,000 to 200,000 ounces and copper
production guidance of 55 to 65 million pounds. Both gold and
copper production are expected to be evenly weighted throughout the
year, however, gold and copper sales in the second half of 2024 are
expected to contribute approximately 55% of the annual sales.
Gold production costs in the first quarter 2024
were $954 per ounce, in line with $946 per ounce last quarter. AISC
on a by-product basisNG was $688 per ounce, 27% lower than last
quarter, due to lower sustaining capital expenditures and higher
by-product credits. The Company expects gold production costs and
AISC on a by-product basisNG to be higher in the second quarter of
2024 as a result of a lower percentage of annual sales in the first
half of 2024 (as noted above), along with higher expected
sustaining capital expenditures. Mount Milligan is on track for its
full year 2024 gold production costs guidance and AISC on a
by-product basisNG guidance.
In the first quarter 2024, sustaining capital
expenditures at Mount Milligan were $4.1 million, focused on the
tailings storage facility, projects related to water sourcing and
access, equipment overhauls, and equipment purchases. The Company
maintains the 2024 sustaining capital guidance at Mount Milligan
and expects the sustaining capital spending to increase throughout
the year.
In the first quarter of 2024, Centerra made
progress on its site-wide optimization program at Mount Milligan,
initially launched in the fourth quarter 2023 and focused on a
holistic assessment of occupational health and safety, as well as
improvements in mine and plant operations. This program covers all
aspects of the operation to maximize the potential of the orebody,
setting up Mount Milligan for long-term success to 2035 and beyond.
Notable achievements in the first quarter of 2024 were observed in
key areas, including:
- Occupational health and
safety: An improved safety record, including an increase
in proactive safety interactions, fewer incidents and a much lower
severity index compared to the same period last year. There has
been a significant increase of focus and measurement of the leading
indicators such as our visible felt leadership program, root cause
incident investigation and mitigation of fatal risks (MFR). These
initiatives collectively have contributed to cultivating a safer
and more informed workplace, fostering the well-being and
productivity of all personnel.
- Mine: Increase in
the mining fleet mechanical availability, utilization and overall
productivity of the load-haul cycle. These strategies have
contributed to higher tonnes mined compared to the same period last
year, while simultaneously lowering the unit operating costs.
- Plant: Increased
mill throughput per operating day due to factors such as consistent
ore supply, renewed operating strategy of the flotation circuit and
equipment modifications. Additionally, as part of the optimization
efforts, the site has started to test a number of initiatives that
aim to increase the overall copper and gold recoveries. This
includes real-time adjustments to the flotation circuit for
improved stabilization with optimal grind sizing and throughput,
producing a higher volume of gold-copper concentrate with lower
copper grades and ore blending initiatives to improve the
processing of elevated pyrite bearing high-grade gold, low-grade
copper ore.
On February 14, 2024, Centerra announced that
the Company has entered into an additional agreement with Royal
Gold relating to Mount Milligan, which has resulted in a life of
mine extension to 2035 and established favourable parameters for
potential future mine life extensions. Centerra has initiated a
preliminary economic assessment (“PEA”) to evaluate the substantial
mineral resources at the Mount Milligan mine with a goal to unlock
additional value beyond its current 2035 mine life. The PEA is
expected to be completed in first half of 2025.
Öksüt
Öksüt produced 63,024 ounces of gold in the
first quarter of 2024. Mining activities were focused on phase 5
and phase 6 of the Keltepe pit and in phase 2 of the Güneytepe pit.
In the first quarter 2024, a total of 3.7 million tonnes were mined
and 1.0 million tonnes were stacked at an average grade of 1.44
g/t. The Company is on track to achieve its production 2024
guidance with approximately 60% of the annual production weighted
to the first half of the year.
Gold production costs and AISC on a by-product
basisNG for the first quarter 2024 at Öksüt were $587 per ounce and
$823 per ounce, respectively. These costs per ounce were higher
compared to last quarter primarily due to increased mining and
hauling costs and higher weighted average costs per ounce in the
remaining inventory, as well as decreased gold production and
sales. Öksüt is on track to achieve its gold production costs
guidance and AISC on a by-product basisNG guidance for 2024.
In the first quarter 2024, sustaining capital
expenditures at Öksüt were $11.3 million, focused on capitalized
stripping and water treatment plant construction.
In 2024, Öksüt’s current income tax paid is
expected to be approximately $95 to $105 million, with
approximately $75 million to be paid in the second quarter of 2024,
assuming no change in the exchange rate between the Turkish lira
and US dollar. Additionally, the annual Turkish government royalty
payment will be made in the second quarter 2024. This is expected
to be approximately $30 million. Together, these cash payments will
require a cash outflow in the second quarter 2024 of approximately
$105 million.
Molybdenum Business Unit
In the first quarter 2024, the Molybdenum
Business Unit sold 2.9 million pounds of molybdenum, generating
revenue of $63.4 million with an average realized price of $20.47
per pound. As part of Centerra’s previously disclosed 2024
guidance, the Langeloth Metallurgical Facility (“Langeloth”) is
expected to complete an acid plant maintenance shutdown in the
second quarter 2024. A portion of Langeloth’s full year sustaining
capital expenditure guidance is related to this planned outage.
Molybdenum sales are not expected to be impacted by the acid plant
maintenance shutdown as Langeloth has sufficient inventory levels
to maintain a steady level of sales. As part of Centerra’s strategy
to maximize the value for each asset in its portfolio, the Company
has recently completed a commercial optimization plan at Langeloth,
geared at increasing profitability and evaluating its future
potential. Details of the commercial optimization plan and the
value potential at Langeloth will be announced in conjunction with
the Thompson Creek Mine feasibility study in late summer of
2024.
In the first quarter of 2024, the Thompson Creek
Mine progressed with early works in the main open pit area that are
expected to continue through 2024. The costs of these activities
are expected to be expensed until a limited notice to proceed is
authorized by the Board of Directors, a matter to be considered
following completion of the feasibility study.
First Quarter 2024 Operating and
Financial Results Webcast and Conference Call
Centerra invites you to join its 2024 first
quarter conference call on Tuesday, May 14, 2024, at 9:00 a.m.
Eastern Time. Details for the webcast and conference call are
included below.
Webcast
- Participants can access the webcast
at the following
link:https://services.choruscall.ca/links/centerragold2024q1.html
- An archive of the webcast will be
available until the end of day on August 14, 2024.
Conference Call
- Participants can register for the
conference call at the following registration link. Upon
registering, you will receive the dial-in details and a unique PIN
to access the call. This process will bypass the live operator and
avoid the queue. Registration will remain open until the end of the
live conference call.
- Participants who prefer to dial in
and speak with a live operator can access the call by dialing
1-844-763-8274 or 647-484-8814. It is recommended that you call 10
minutes before the scheduled start time.
- After the call, an audio recording
will be available via telephone for one month, until the end of day
on June 14, 2024. The recording can be accessed by dialing
1-855-669-9658 or 604-674-0852 and using the passcode 0803. In
addition, the webcast will be archived on Centerra’s website at:
www.centerragold.com/investors/webcasts.
- Presentation slides will be
available on Centerra’s website at www.centerragold.com.
For detailed information on the results
contained within this release, please refer to the Company’s
Management’s Discussion and Analysis ("MD&A") and financial
statements for the quarter ended March 31, 2024, that are available
on the Company’s website www.centerragold.com or SEDAR+ at
www.sedarplus.ca.
About Centerra Centerra Gold
Inc. is a Canadian-based mining company focused on operating,
developing, exploring and acquiring gold and copper properties in
North America, Türkiye, and other markets worldwide. Centerra
operates two mines: the Mount Milligan Mine in British Columbia,
Canada, and the Öksüt Mine in Türkiye. The Company also owns the
Goldfield Project in Nevada, United States, the Kemess Project in
British Columbia, Canada, and owns and operates the Molybdenum
Business Unit in the United States and Canada. Centerra's shares
trade on the Toronto Stock Exchange (“TSX”) under the symbol CG and
on the New York Stock Exchange (“NYSE”) under the symbol CGAU. The
Company is based in Toronto, Ontario, Canada.
For more information:
Lisa WilkinsonVice President, Investor Relations
& Corporate Communications(416)
204-3780lisa.wilkinson@centerragold.com
Lana PisarenkoSenior Manager, Investor Relations (416)
204-1957lana.pisarenko@centerragold.com
Additional information on Centerra is
available on the Company’s website at
www.centerragold.com, on SEDAR+ at www.sedarplus.ca and EDGAR
at www.sec.gov/edgar.
Caution Regarding Forward-Looking
Information:
This document contains or incorporates by
reference “forward-looking statements” and “forward-looking
information” as defined under applicable Canadian and U.S.
securities legislation. All statements, other than statements of
historical fact, which address events, results, outcomes or
developments that the Company expects to occur are, or may be
deemed to be, forward-looking statements. Such forward-looking
information involves risks, uncertainties and other factors that
could cause actual results, performance, prospects and
opportunities to differ materially from those expressed or implied
by such forward-looking information. Forward-looking statements are
generally, but not always, identified by the use of forward-looking
terminology such as “believe”, “continue”, “expect”, “evaluate”,
“finalizing”, “forecast”, “goal”, “ongoing”, “plan”, “potential”,
“preliminary”, “project”, “restart”, “target” or “update”, or
variations of such words and phrases and similar expressions or
statements that certain actions, events or results “may”, “could”,
“would” or “will” be taken, occur or be achieved or the negative
connotation of such terms.
Such statements include, but may not be limited
to: statements regarding 2024 guidance, outlook and expectations,
including production, cash flow, costs including care and
maintenance and reclamation costs, capital expenditures,
depreciation, depletion and amortization, taxes and cash flows;
exploration potential, budgets, focuses, programs, targets and
projected exploration results; gold and copper prices; the timing
and amount of future benefits and obligations in connection with
the Additional Royal Gold Agreement; a Preliminary Economic
Assessment at Mount Milligan Mine and any related evaluation of
resources or a life of mine beyond 2035; a feasibility study
regarding a potential restart of the Thompson Creek Mine; an
initial resource estimate at the Goldfield Project including the
success of exploration programs or metallurgical testwork; the
Company’s strategic plan; increased gold production at Mount
Milligan and the success of any metallurgical reviews including the
blending of elevated pyrite bearing high-grade gold, low-grade
copper ore and any recoveries thereof; the optimization program at
Mount Milligan including any improvements to occupational health
and safety, the mine and the plant and any potential costs savings
resulting from the same; the expected gold production at Öksüt Mine
in 2024; the new multi-year contract with the existing mining and
hauling services provider at Öksüt Mine; royalty rates and taxes,
including withholding taxes related to repatriation of earnings
from Türkiye; project development costs at Thompson Creek Mine and
the Goldfield Project; the decommissioning of the Kemess South TSF
sedimentation pond and associated works; financial hedges; and
other statements that express management’s expectations or
estimates of future plans and performance, operational, geological
or financial results, estimates or amounts not yet determinable and
assumptions of management.
The Company cautions that forward-looking
statements are necessarily based upon a number of factors and
assumptions that, while considered reasonable by the Company at the
time of making such statements, are inherently subject to
significant business, economic, technical, legal, political and
competitive uncertainties and contingencies. Known and unknown
factors could cause actual results to differ materially from those
projected in the forward-looking statements and undue reliance
should not be placed on such statements and information.
Risk factors that may affect the Company’s
ability to achieve the expectations set forth in the
forward-looking statements in this document include, but are not
limited to: (A) strategic, legal, planning and other risks,
including: political risks associated with the Company’s operations
in Türkiye, the USA and Canada; resource nationalism including the
management of external stakeholder expectations; the impact of
changes in, or to the more aggressive enforcement of, laws,
regulations and government practices, including unjustified civil
or criminal action against the Company, its affiliates, or its
current or former employees; risks that community activism may
result in increased contributory demands or business interruptions;
the risks related to outstanding litigation affecting the Company;
the impact of any sanctions imposed by Canada, the United States or
other jurisdictions against various Russian and Turkish individuals
and entities; potential defects of title in the Company’s
properties that are not known as of the date hereof; the inability
of the Company and its subsidiaries to enforce their legal rights
in certain circumstances; risks related to anti-corruption
legislation; Centerra not being able to replace mineral reserves;
Indigenous claims and consultative issues relating to the Company’s
properties which are in proximity to Indigenous communities; and
potential risks related to kidnapping or acts of terrorism; (B)
risks relating to financial matters, including: sensitivity of the
Company’s business to the volatility of gold, copper, molybdenum
and other mineral prices; the use of provisionally-priced sales
contracts for production at the Mount Milligan Mine; reliance on a
few key customers for the gold-copper concentrate at the Mount
Milligan Mine; use of commodity derivatives; the imprecision of the
Company’s mineral reserves and resources estimates and the
assumptions they rely on; the accuracy of the Company’s production
and cost estimates; persistent inflationary pressures on key input
prices; the impact of restrictive covenants in the Company’s credit
facilities which may, among other things, restrict the Company from
pursuing certain business activities or making distributions from
its subsidiaries; changes to tax regimes; the Company’s ability to
obtain future financing; sensitivity to fuel price volatility; the
impact of global financial conditions; the impact of currency
fluctuations; the effect of market conditions on the Company’s
short-term investments; the Company’s ability to make payments,
including any payments of principal and interest on the Company’s
debt facilities, which depends on the cash flow of its
subsidiaries; the ability to obtain adequate insurance coverage;
changes to taxation laws in the jurisdictions where the Company
operates and (C) unanticipated ground and water conditions; risks
related to operational matters and geotechnical issues and the
Company’s continued ability to successfully manage such matters,
including: the stability of the pit walls at the Company’s
operations leading to structural cave-ins, wall failures or
rock-slides; the integrity of tailings storage facilities and the
management thereof, including as to stability, compliance with
laws, regulations, licenses and permits, controlling seepages and
storage of water, where applicable; periodic interruptions due to
inclement or hazardous weather conditions or operating conditions
and other force majeure events; the risk of having sufficient water
to continue operations at the Mount Milligan Mine and achieve
expected mill throughput; changes to, or delays in the Company’s
supply chain and transportation routes, including cessation or
disruption in rail and shipping networks, whether caused by
decisions of third-party providers or force majeure events
(including, but not limited to: labour action, flooding,
landslides, seismic activity, wildfires, earthquakes, COVID-19, or
other global events such as wars); lower than expected ore grades
or recovery rates; the success of the Company’s future exploration
and development activities, including the financial and political
risks inherent in carrying out exploration activities; inherent
risks associated with the use of sodium cyanide in the mining
operations; the adequacy of the Company’s insurance to mitigate
operational and corporate risks; mechanical breakdowns; the
occurrence of any labour unrest or disturbance and the ability of
the Company to successfully renegotiate collective agreements when
required; the risk that Centerra’s workforce and operations may be
exposed to widespread epidemic or pandemic; seismic activity,
including earthquakes; wildfires; long lead-times required for
equipment and supplies given the remote location of some of the
Company’s operating properties and disruptions caused by global
events; reliance on a limited number of suppliers for certain
consumables, equipment and components; the ability of the Company
to address physical and transition risks from climate change and
sufficiently manage stakeholder expectations on climate-related
issues; regulations regarding greenhouse gas emissions and climate
change; significant volatility of molybdenum prices resulting in
material working capital changes and unfavourable pressure on
viability of the molybdenum business; the Company’s ability to
accurately predict decommissioning and reclamation costs and the
assumptions they rely upon; the Company’s ability to attract and
retain qualified personnel; competition for mineral acquisition
opportunities; risks associated with the conduct of joint
ventures/partnerships; risk of cyber incidents such as cybercrime,
malware or ransomware, data breaches, fines and penalties; and, the
Company’s ability to manage its projects effectively and to
mitigate the potential lack of availability of contractors, budget
and timing overruns, and project resources.
Additional risk factors and details with respect
to risk factors that may affect the Company’s ability to achieve
the expectations set forth in the forward-looking statements
contained in this document are set out in the Company’s latest
40-F/Annual Information Form and Management’s Discussion and
Analysis, each under the heading “Risk Factors”, which are
available on SEDAR+ (www.sedarplus.ca) or on EDGAR
(www.sec.gov/edgar). The foregoing should be reviewed in
conjunction with the information, risk factors and assumptions
found in this document.
The Company disclaims any intention or
obligation to update or revise any forward-looking statements,
whether written or oral, or whether as a result of new information,
future events or otherwise, except as required by applicable
law.
Non-GAAP and Other Financial Measures
This document contains “specified financial
measures” within the meaning of NI 52-112, specifically the
non-GAAP financial measures, non-GAAP ratios and supplementary
financial measures described below. Management believes that the
use of these measures assists analysts, investors and other
stakeholders of the Company in understanding the costs associated
with producing gold and copper, understanding the economics of gold
and copper mining, assessing operating performance, the Company’s
ability to generate free cash flow from current operations and on
an overall Company basis, and for planning and forecasting of
future periods. However, the measures have limitations as
analytical tools as they may be influenced by the point in the life
cycle of a specific mine and the level of additional exploration or
other expenditures a company has to make to fully develop its
properties. The specified financial measures used in this document
do not have any standardized meaning prescribed by IFRS and may not
be comparable to similar measures presented by other issuers, even
as compared to other issuers who may be applying the World Gold
Council (“WGC”) guidelines. Accordingly, these specified financial
measures should not be considered in isolation, or as a substitute
for, analysis of the Company’s recognized measures presented in
accordance with IFRS.
Definitions
The following is a description of the non-GAAP
financial measures, non-GAAP ratios and supplementary financial
measures used in this document:
- All-in sustaining costs on a
by-product basis per ounce is a non-GAAP ratio calculated as all-in
sustaining costs on a by-product basis divided by ounces of gold
sold. All-in sustaining costs on a by-product basis is a non-GAAP
financial measure calculated as the aggregate of production costs
as recorded in the condensed consolidated statements of (loss)
earnings, refining and transport costs, the cash component of
capitalized stripping and sustaining capital expenditures, lease
payments related to sustaining assets, corporate general and
administrative expenses, accretion expenses, asset retirement
depletion expenses, copper and silver revenue and the associated
impact of hedges of by-product sales revenue. When calculating
all-in sustaining costs on a by-product basis, all revenue received
from the sale of copper from the Mount Milligan Mine, as reduced by
the effect of the copper stream, is treated as a reduction of costs
incurred. A reconciliation of all-in sustaining costs on a
by-product basis to the nearest IFRS measure is set out below.
Management uses these measures to monitor the cost management
effectiveness of each of its operating mines.
- All-in sustaining costs on a
co-product basis per ounce of gold or per pound of copper, is a
non-GAAP ratio calculated as all-in sustaining costs on a
co-product basis divided by ounces of gold or pounds of copper
sold, as applicable. All-in sustaining costs on a co-product basis
is a non-GAAP financial measure based on an allocation of
production costs between copper and gold based on the conversion of
copper production to equivalent ounces of gold. The Company uses a
conversion ratio for calculating gold equivalent ounces for its
copper sales calculated by multiplying the copper pounds sold by
estimated average realized copper price and dividing the resulting
figure by estimated average realized gold price. For the first
quarter ended March 31, 2024, 423 pounds of copper were
equivalent to one ounce of gold. A reconciliation of all-in
sustaining costs on a co-product basis to the nearest IFRS measure
is set out below. Management uses these measures to monitor the
cost management effectiveness of each of its operating mines.
- Sustaining capital expenditures and
Non-sustaining capital expenditures are non-GAAP financial
measures. Sustaining capital expenditures are defined as those
expenditures required to sustain current operations and exclude all
expenditures incurred at new operations or major projects at
existing operations where these projects will materially benefit
the operation. Non-sustaining capital expenditures are primarily
costs incurred at ‘new operations’ and costs related to ‘major
projects at existing operations’ where these projects will
materially benefit the operation. A material benefit to an existing
operation is considered to be at least a 10% increase in annual or
life of mine production, net present value, or reserves compared to
the remaining life of mine of the operation. A reconciliation of
sustaining capital expenditures and non-sustaining capital
expenditures to the nearest IFRS measures is set out below.
Management uses the distinction of the sustaining and
non-sustaining capital expenditures as an input into the
calculation of all-in sustaining costs per ounce and all-in costs
per ounce.
- All-in costs on a by-product basis
per ounce is a non-GAAP ratio calculated as all-in costs on a
by-product basis divided by ounces sold. All-in costs on a
by-product basis is a non-GAAP financial measure which includes
all-in sustaining costs on a by-product basis, exploration and
study costs, non-sustaining capital expenditures, care and
maintenance and other costs. A reconciliation of all-in costs on a
by-product basis to the nearest IFRS measures is set out below.
Management uses these measures to monitor the cost management
effectiveness of each of its operating mines.
- Adjusted net earnings (loss) is a
non-GAAP financial measure calculated by adjusting net (loss)
earnings as recorded in the condensed consolidated statements of
(loss) earnings for items not associated with ongoing operations.
The Company believes that this generally accepted industry measure
allows the evaluation of the results of income-generating
capabilities and is useful in making comparisons between periods.
This measure adjusts for the impact of items not associated with
ongoing operations. A reconciliation of adjusted net (loss)
earnings to the nearest IFRS measures is set out below. Management
uses this measure to monitor and plan for the operating performance
of the Company in conjunction with other data prepared in
accordance with IFRS.
- Free cash flow (deficit) is a
non-GAAP financial measure calculated as cash provided by operating
activities from continuing operations less property, plant and
equipment additions. A reconciliation of free cash flow to the
nearest IFRS measures is set out below. Management uses this
measure to monitor the amount of cash available to reinvest in the
Company and allocate for shareholder returns.
- Free cash flow (deficit) from mine
operations is a non-GAAP financial measure calculated as cash
provided by mine operations less property, plant and equipment
additions. A reconciliation of free cash flow from mine operations
to the nearest IFRS measures is set out below. Management uses this
measure to monitor the degree of self-funding of each of its
operating mines and facilities.
Certain unit costs, including all-in
sustaining costs on a by-product basis (including and excluding
revenue-based taxes) per ounce, are non-GAAP ratios which include
as a component certain non-GAAP financial measures including all-in
sustaining costs on a by-product basis which can be reconciled as
follows:
|
|
Three months ended March 31, |
|
|
Consolidated |
Mount Milligan |
Öksüt |
|
(Unaudited - $millions, unless otherwise
specified) |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
2023 |
|
Production costs attributable to gold |
77.9 |
|
43.8 |
|
43.1 |
|
43.8 |
|
34.8 |
— |
|
Production costs attributable to copper |
29.9 |
|
40.8 |
|
29.9 |
|
40.8 |
|
— |
— |
| Total
production costs excluding Molybdenum BU segment, as reported |
107.8 |
|
84.6 |
|
73.0 |
|
84.6 |
|
34.8 |
— |
| Adjust
for: |
|
|
|
|
|
|
| Third
party smelting, refining and transport costs |
2.7 |
|
1.9 |
|
2.4 |
|
1.9 |
|
0.3 |
— |
|
By-product and co-product credits |
(50.4 |
) |
(54.6 |
) |
(50.4 |
) |
(54.6 |
) |
— |
— |
| Adjusted
production costs |
60.1 |
|
31.9 |
|
25.0 |
|
31.9 |
|
35.1 |
— |
| Corporate
general administrative and other costs |
9.6 |
|
14.7 |
|
— |
|
0.1 |
|
0.1 |
— |
|
Reclamation and remediation - accretion (operating sites) |
2.5 |
|
0.9 |
|
0.5 |
|
0.5 |
|
1.9 |
0.4 |
|
Sustaining capital expenditures |
15.7 |
|
4.9 |
|
4.1 |
|
1.8 |
|
11.3 |
3.1 |
|
Sustaining leases |
1.7 |
|
1.5 |
|
1.4 |
|
1.3 |
|
0.3 |
0.2 |
| All-in
sustaining costs on a by-product basis |
89.6 |
|
53.9 |
|
31.0 |
|
35.6 |
|
48.8 |
3.7 |
|
Exploration and evaluation costs |
7.8 |
|
15.3 |
|
0.5 |
|
0.4 |
|
0.2 |
0.4 |
| Care and
maintenance and other costs |
5.9 |
|
12.9 |
|
1.3 |
|
— |
|
— |
9.5 |
| All-in
costs on a by-product basis |
103.3 |
|
82.1 |
|
32.8 |
|
36.0 |
|
49.0 |
13.6 |
| Ounces
sold (000s) |
104.3 |
|
39.0 |
|
45.1 |
|
39.0 |
|
59.2 |
— |
| Pounds
sold (millions) |
15.6 |
|
15.3 |
|
15.6 |
|
15.3 |
|
— |
— |
| Gold
production costs ($/oz) |
746 |
|
1,124 |
|
954 |
|
1,124 |
|
587 |
n/a |
| All-in
sustaining costs on a by-product basis ($/oz) |
859 |
|
1,383 |
|
688 |
|
914 |
|
823 |
n/a |
| All-in
costs on a by-product basis ($/oz) |
991 |
|
2,107 |
|
727 |
|
924 |
|
826 |
n/a |
| Gold -
All-in sustaining costs on a co-product basis ($/oz) |
1,013 |
|
1,603 |
|
1,044 |
|
1,134 |
|
823 |
n/a |
| Copper
production costs ($/pound) |
1.92 |
|
2.66 |
|
1.92 |
|
2.66 |
|
n/a |
n/a |
|
Copper - All-in sustaining costs on a co-product basis
($/pound) |
2.09 |
|
2.67 |
|
2.09 |
|
2.67 |
|
n/a |
n/a |
Adjusted net earnings (loss) is a
non-GAAP financial measure and can be reconciled as
follows:
|
|
Three months ended March 31, |
|
($millions, except as noted) |
|
2024 |
|
|
2023 |
|
|
Net earnings (loss) |
$ |
66.4 |
|
$ |
(73.5 |
) |
| Adjust
for items not associated with ongoing operations: |
|
|
|
Reclamation (recovery) expense at the Molybdenum BU sites and the
Kemess Project |
|
(25.0 |
) |
|
15.6 |
|
|
Unrealized foreign exchange gain(1) |
|
(8.9 |
) |
|
— |
|
|
Income and mining tax adjustments(2) |
|
(6.8 |
) |
|
5.0 |
|
|
Transaction costs related to the Additional Royal Gold
Agreement |
|
2.5 |
|
|
— |
|
|
Unrealized loss on financial assets relating to the Additional
Royal Gold Agreement |
|
1.5 |
|
|
— |
|
|
Unrealized loss on marketable securities |
|
1.6 |
|
|
— |
|
|
Adjusted net earnings (loss) |
$ |
31.3 |
|
$ |
(52.9 |
) |
|
|
|
|
|
Net earnings (loss) per share - basic |
$ |
0.31 |
|
$ |
(0.34 |
) |
|
Net earnings (loss) per share - diluted |
$ |
0.30 |
|
$ |
(0.34 |
) |
|
Adjusted net earnings (loss) per share -
basic |
$ |
0.15 |
|
$ |
(0.24 |
) |
|
Adjusted net earnings (loss) per share -
diluted |
$ |
0.14 |
|
$ |
(0.24 |
) |
| (1) |
|
Effect of the foreign exchange movement on the reclamation
provision at the Endako Mine and Kemess Project and on the income
tax payable and royalty payable related to the Öksüt Mine. |
| (2) |
|
Income tax adjustments mainly resulted from a withholding tax
expense on the repatriation of the Öksüt Mine’s earnings. |
| |
|
|
Free cash flow (deficit) is a non-GAAP
financial measure and can be reconciled as follows:
|
|
Three months ended March 31, |
|
|
Consolidated |
Mount Milligan |
Öksüt |
Molybdenum |
Other |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
Cash provided by (used in) operating
activities(1) |
$ |
99.4 |
|
$ |
(99.8 |
) |
$ |
30.0 |
|
$ |
27.6 |
|
$ |
101.4 |
|
$ |
(20.8 |
) |
$ |
(6.5 |
) |
$ |
(76.6 |
) |
$ |
(25.5 |
) |
$ |
(30.0 |
) |
|
Deduct: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant & equipment additions |
|
(18.2 |
) |
|
(6.1 |
) |
|
(5.9 |
) |
|
(3.0 |
) |
|
(11.3 |
) |
|
(3.1 |
) |
|
(0.9 |
) |
|
— |
|
|
(0.1 |
) |
|
— |
|
|
Free cash flow (deficit) |
$ |
81.2 |
|
$ |
(105.9 |
) |
$ |
24.1 |
|
$ |
24.6 |
|
$ |
90.1 |
|
$ |
(23.9 |
) |
$ |
(7.4 |
) |
$ |
(76.6 |
) |
$ |
(25.6 |
) |
$ |
(30.0 |
) |
| (1) |
|
As presented in the Company’s condensed consolidated statements of
cash flows. |
| |
|
|
Sustaining capital expenditures and
non-sustaining capital expenditures are non-GAAP measures and can
be reconciled as follows:
|
|
Three months ended March 31, |
|
|
Consolidated |
Mount Milligan |
Öksüt |
Molybdenum |
Other |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
Additions to PP&E(1) |
$ |
15.3 |
|
$ |
8.0 |
|
$ |
0.8 |
|
$ |
4.3 |
|
$ |
12.6 |
|
$ |
3.7 |
|
$ |
0.9 |
|
$ |
— |
|
$ |
1.0 |
|
$ |
— |
|
| Adjust
for: |
|
|
|
|
|
|
|
|
|
|
|
Costs capitalized to the ARO assets |
|
1.6 |
|
|
(2.9 |
) |
|
3.2 |
|
|
(1.8 |
) |
|
(1.1 |
) |
|
(1.1 |
) |
|
— |
|
|
— |
|
|
(0.5 |
) |
|
— |
|
|
Costs capitalized to the ROU assets |
|
(0.8 |
) |
|
(0.1 |
) |
|
— |
|
|
(0.1 |
) |
|
(0.5 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(0.3 |
) |
|
— |
|
|
Other(2) |
|
0.7 |
|
|
(0.1 |
) |
|
0.1 |
|
|
(0.6 |
) |
|
0.3 |
|
|
0.5 |
|
|
— |
|
|
— |
|
|
0.3 |
|
|
— |
|
|
Capital expenditures |
$ |
16.8 |
|
$ |
4.9 |
|
$ |
4.1 |
|
$ |
1.8 |
|
$ |
11.3 |
|
$ |
3.1 |
|
$ |
0.9 |
|
$ |
— |
|
$ |
0.5 |
|
$ |
— |
|
|
Sustaining capital expenditures |
|
16.2 |
|
|
4.9 |
|
|
4.1 |
|
|
1.8 |
|
|
11.3 |
|
|
3.1 |
|
|
0.5 |
|
|
— |
|
|
0.3 |
|
|
— |
|
|
Non-sustaining capital expenditures |
|
0.6 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
0.4 |
|
|
— |
|
|
0.2 |
|
|
— |
|
| (1) |
|
As presented in note 16 of the Company’s condensed consolidated
interim financial statements. |
| (2) |
|
Includes reclassification of insurance and capital spares from
supplies inventory to PP&E. |
Centerra Gold (TSX:CG)
過去 株価チャート
から 12 2024 まで 1 2025
Centerra Gold (TSX:CG)
過去 株価チャート
から 1 2024 まで 1 2025
