Centerra Gold Inc. (“Centerra” or the “Company”) (TSX: CG) (NYSE:
CGAU) is pleased to announce its strategic plan for each asset in
the Company’s portfolio along with the Company’s approach to
capital allocation.
President and CEO, Paul Tomory, commented, “We
are excited to roll-out our strategic plan that focuses on
maximizing the value for each asset in our portfolio. The plan
identifies the opportunities at each asset that will drive future
value and growth for the Company. Specifically, at Mount Milligan,
we expect strong operational performance in the next few years, and
we will work to optimize operations and maximize the value of the
large deposit. At Öksüt, our life of mine plan demonstrates
particularly strong production and cost performance over the next
two years with a steady gold production profile continuing
throughout the life of mine. Our prefeasibility study on the
Thompson Creek molybdenum mine supports a disciplined path to
restarting operations and realizing significant vertical
integration synergies with the Langeloth Metallurgical Facility.
And finally, at the Goldfield Project, we have decided to
re-evaluate the project scope of work to achieve a lower capital
flowsheet and to maximize the returns on the project. Our
exploration focus will now be on oxide and transition material,
with the timing of an initial resource estimate contingent on
exploration success and metallurgical testwork.”
“In conjunction with execution of the strategic
plan, we have also developed a capital allocation strategy which
focuses on returning capital to shareholders through dividends and
share buybacks, investing in internal projects and exploration
within our current portfolio and evaluating external opportunities
for growth. We believe that Centerra’s exposure to gold and base
metals is a differentiating factor, however, our strategic plan has
us remaining a gold-focused company. Today’s announcement provides
a clear path to delivering safe and sustainable operations and
creating value for our shareholders and local stakeholders in the
future.”
Mount Milligan Mine (“Mount
Milligan”)
Mount Milligan’s production in the first half of
2023 was impacted by mine sequencing and lower than planned gold
grades as a result of mining in an ore-waste transition zone, which
caused lower metal recoveries and throughput challenges in the
processing plant in the first quarter. The Company has completed
mining in the ore-waste transition zone in Phase 9 and is currently
mining the higher-grade copper and gold zones from Phase 7 and
Phase 9 in the second half of 2023.
Centerra views Mount Milligan’s substantial
resource base as a strategic asset and is advancing work on
productivity and cost efficiencies in concert with mine plan
optimization to offset some of the recent inflationary pressures
that have impacted the industry. In parallel, Centerra is working
to explore ways to maximize the value of the very large mineral
endowment.
Öksüt Mine (“Öksüt”)
As previously disclosed, Öksüt resumed full
operations on June 5, 2023. In June 2023, the mine started ramping
up its crushing, stacking, and processing activities and produced
20,503 ounces during the month. Öksüt continues to process
gold-in-carbon inventory, and on July 31, 2023 Centerra issued 2023
gold production guidance of 180,000 to 190,000 ounces.
The Company expects elevated production at Öksüt
through mid-2024, as the inventory and stockpiles are processed
through the adsorption, desorption, and recovery (“ADR”) plant, at
which point, the production levels are expected to return to steady
state. The life of mine (“LOM”) plan, in the table below, has been
updated to reflect the restart of operations and other
optimizations. The updated Öksüt LOM will generate positive free
cash flow, and the mine remains a strategic asset in Centerra’s
portfolio.
Öksüt LOM Plan
|
Gold Production (Koz) |
Gold Production Costs ($/oz) |
AISC on a by-product basisNG
($/oz) |
Additions to PP&E / Total Capital
ExpendituresNG(2)
($M) |
Q2 YTD 2023 |
20.5 |
$404 |
$1,484 |
$11 |
2023(1) |
180 – 190 |
$450 – $500 |
$650 – $700 |
$35 – $45 |
2024 |
190 – 210 |
$600 – $700 |
$800 – $900 |
$30 – $40 |
2025 |
125 – 145 |
$725 – $825 |
$875 – $975 |
$10 – $15 |
2026 |
110 – 130 |
$800 – $900 |
$925 – $1,025 |
$5 – $10 |
2027 |
110 – 130 |
$800 – $900 |
$925 – $1,025 |
$5 – $10 |
2028 |
100 – 120 |
$900 – $1,000 |
$975 – $1,075 |
$0 – $5 |
2029 |
40 – 50 |
$1,500 – $1,600 |
$1,600 – $1,700 |
- |
(1) As a result of restarting activities at
Öksüt, Centerra published Öksüt guidance on July 31, 2023 in
conjunction with the Company’s second quarter 2023 results. (2)
Additions to Property, Plant, and Equipment (“PP&E”) is the
same as Total Capital ExpendituresNG for full year estimates in
2023-2029.
Molybdenum Business Unit
The Molybdenum Business Unit (“MBU”) is a fully
integrated business in North America with a long operating history.
The MBU consists of the Thompson Creek Mine (“Thompson Creek”) in
Idaho, the Endako Mine (“Endako”) in northern British Columbia, a
joint venture in which Centerra owns a 75% interest and the
remaining 25% is held by Sojitz Moly Resources, Inc., and the
Langeloth Metallurgical Facility (“Langeloth”) near Pittsburgh,
Pennsylvania. The two mines have been in care and maintenance since
late 2014 and mid-2015, respectively, with significant
infrastructure in place that is in excellent condition, while
Langeloth has continued to operate at reduced capacity processing
third party concentrates and selling finished molybdenum
products.
The Company has completed a prefeasibility study
(“PFS”) on the restart of mining at Thompson Creek, with the
objective of realizing value for the MBU. A restart of Thompson
Creek, vertically integrated with operations at Langeloth, would
result in a combined $373 million after-tax net present value (5%)
(“NPV5%”) and 16% after-tax internal rate of return (“IRR”), based
on a flat molybdenum price of $20 per pound.
Langeloth is among the largest molybdenum
conversion plants in North America and is a unique and strategic
asset given its proximity to the North American steel market.
Significant synergies and margin improvements that will enhance
future cash flow generation and profitability from the MBU will
result from: (1) increased capacity utilization at Langeloth from
the current level of 30-35% to leverage fixed costs; (2) ability to
blend the high-quality Thompson Creek concentrate with lower
quality third-party concentrates; and (3) ability to produce an
increased volume of higher margin final molybdenum products.
Overall, the restart and integration of Thompson Creek with
Langeloth presents an opportunity to establish a fully integrated
business that can leverage existing infrastructure and create
long-term value through profitable operations and significant
optionality.
The Thompson Creek PFS includes an optimized
mine plan with an 11-year mine life. A summary of the PFS
production profile is included in the table below.
Thompson Creek PFS Production Profile
|
Ore Mined(M tonnes) |
Grade(% Mo) |
Molybdenum Production(Mlbs) |
Year 1 |
5 |
0.03% |
3 |
Year 2 – Year 3(1) |
10 |
0.05% |
11 |
Year 4 – Year 8(1) |
9 |
0.07% |
13 |
Year 9 – Year 11(1) |
8 |
0.08% |
14 |
Total LOM |
95 |
0.07% |
134 |
(1) Ore mined, grade, and molybdenum production
are annual weighted averages for the stated period. NOTE: Numbers
may not add due to rounding.
The cost profile associated with the Thompson
Creek PFS, shown in the table below, is split into three phases,
largely driven by the grade profile in the production table above.
The average production cost breakdown over the LOM is approximately
50% mining, 35% processing, and 15% general and administration.
Thompson Creek PFS Cost Profile
|
Production Costs($/lb Mo) |
AISC on a by-product
basisNG($/lb Mo) |
Year 2 – Year 3 |
$13 – $16 |
$15 – $18 |
Year 4 – Year 8 |
$10 – $13 |
$12 – $15 |
Year 9 – Year 11 |
$7 – $10 |
$8 – $11 |
In line with the Company’s disciplined approach
to capital allocation, Centerra expects to phase the operations
restart at Thompson Creek. The PFS, requiring between $350 and $400
million of pre-production capital expenditures, includes an
optimized mine design, which leads to a longer mine life and
provides for greater exposure to molybdenum price cycles. As
previously disclosed with the Company’s outlook on February 23,
2023, capital spending at Thompson Creek in 2023 is expected to be
$9 to $10 million associated with advancement of project studies
including project de-risking activities such as geotechnical
drilling, additional engineering costs and site early works.
The Company has commenced a feasibility study
(“FS”) for Thompson Creek, which is expected to be completed by
mid-2024. Upon completion of the FS, the Company expects to
authorize a limited notice to proceed, requiring $100 to $125
million of capital for pre-stripping within current authorizations
and to purchase long lead items. While the current authorizations
support early works and certain activities defined in the limited
notice to proceed stage, the Company has initiated discussions with
the appropriate authorities to obtain a modified permit for the
full scope of the optimized mine plan. The Company expects to
authorize full notice to proceed in mid-2025, linked to sufficient
progress toward permit modification approvals for the optimized
mine plan, at which time the remaining $250 to $275 million of
capital will be released to complete the project. First production
is expected in the second half of 2027. A breakdown of the PFS
capital spending profile is included in the table below.
Thompson Creek PFS Capital Expenditures
Stage |
Expected Timeframe |
Additions to PP&E / Capital
ExpendituresNG(1)
($M) |
Limited notice to proceed |
Mid-2024 to Mid-2025 |
$100 – $125 |
Full notice to proceed |
Mid-2025 to Mid-2027 |
$250 – $275 |
Total Pre-Production Non-Sustaining Capital
ExpendituresNG |
$350 – $400 |
(1) Additions to Property, Plant, and Equipment
(“PP&E”) is the same as Total Capital ExpendituresNG.
The Thompson Creek PFS and synergies at
Langeloth demonstrate solid economics at flat molybdenum prices of
$20 per pound. The sensitivity of project economics due to changes
in molybdenum prices is illustrated in the table below.
Project Economics Sensitivity to Molybdenum
Prices
Project Economics |
Molybdenum Price ($/pound) |
$17.50 |
$20 (PFS price) |
$22.50 |
$25 |
NPV5% |
$153M |
$373M |
$569M |
$761M |
IRR |
10% |
16% |
20% |
25% |
Endako is expected to remain in care and
maintenance as the Company focuses on the Thompson Creek restart.
Endako is an important molybdenum asset with a large defined
resource in a top-tier jurisdiction, with valuable modern plant
infrastructure, providing longer-term optionality. Should Endako be
restarted in the future, it could support many years of continuous
mining from Centerra’s MBU.
While Centerra remains primarily a gold mining
business, the Company sees value from its exposure to base metals.
As part of the value maximizing plan for the MBU, the Company will
evaluate all strategic options for the assets.
Goldfield Project
As previously disclosed with the Company’s
second quarter results on July 31, 2023, after a review of the
Goldfield Project (“Goldfield”), the Company has made the decision
to re-evaluate the project scope of work to achieve a lower capital
flowsheet and to maximize returns on the project. As a result, it
will now focus exploration activities only on oxide and transition
material, principally in the Gemfield and nearby deposit areas. Due
to this strategic pivot, Centerra will take additional time to
perform exploration activities in Goldfield’s large, underexplored
land position before releasing an initial resource estimate. The
timing for Goldfield’s initial resource estimate will be contingent
on exploration success and metallurgical testwork. Centerra will
provide an update on exploration progress at Goldfield with the
Company’s third quarter 2023 results. The Company continues to
believe that Goldfield presents an attractive opportunity in a top
mining jurisdiction.
Kemess
Kemess is a past producing mine located in the
Toodoggone district within British Columbia’s prolific Golden
Horseshoe, a highly prospective area with multiple gold and copper
discoveries. Kemess benefits from infrastructure already on-site,
including a process plant, water treatment plant, air strip, and an
open pit available for waste storage. In addition, Kemess has
several permits in place and an impact benefit agreement with its
First Nation partner. Centerra’s strategic approach at Kemess is to
leverage the existing infrastructure to unlock regional potential
and continue to evaluate the underground prospect of Kemess which
could be a future source of gold and copper production.
Capital Allocation
Centerra expects to generate significant free
cash flow in the short- and medium-term and has developed a capital
allocation strategy that focuses on three key areas: (1) returning
capital to shareholders through continued dividends and share
buybacks; (2) investing in internal growth projects and exploration
within the Company’s current portfolio, including the Thompson
Creek restart, the Goldfield project and greenfield exploration;
and (3) evaluating external opportunities for growth. Even after
accounting for these three areas of priority, the Company expects
to maintain a significant cash balance through the end of 2024 and
beyond.
Exploration
Total exploration expenditures estimated for
2023 are expected to be $40 to $50 million. This includes
exploration spending at Goldfield of $16 to $20 million, $16 to $19
million on greenfield and generative exploration projects, and $8
to $11 million on brownfield exploration. In 2023, brownfield
exploration at Mount Milligan is focused on resource expansion
drilling programs within the open-pit and to the west and southwest
of the ultimate pit margins, while exploration at Öksüt will
continue to test oxide gold potential at peripheral prospects and
assess potential for deeper porphyry-style copper-gold
mineralization. In the next few years, Centerra will continue to
invest in exploration spending with roughly 50% of annual
exploration spending allocated to brownfield and 50% allocated to
greenfield activities.
About Centerra Gold
Centerra Gold Inc. is a Canadian-based gold
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 District Project in
Nevada, United States, the Kemess Underground 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
Shae FrosstManager, Investor Relations(416)
204-2159shae.frosst@centerragold.com
Additional information on Centerra is available on the
Company’s website at www.centerragold.com and at
SEDAR at www.sedar.com and EDGAR at
www.sec.gov/edgar.
Qualified Persons
Andrey Shabunin, Professional Engineer, member
of Professional Engineers of Ontario and General Manager of Öksüt
Mine at Öksüt Madencilik Sanayi Ticaret A.Ş., a wholly owned
subsidiary of Centerra, has reviewed and approved the scientific
and technical information under the heading “Öksüt Mine (“Öksüt”)”
in this news release. Mr. Shabunin is a Qualified Person within the
meaning of National Instrument 43-101 – Standards of Disclosure for
Mineral Projects of the Canadian Securities Administrators (“NI
43-101”).
Jean-Francois St-Onge, Professional Engineer,
member of the Professional Engineer of Ontario (PEO) and Centerra’s
Senior Director, Technical Services, has reviewed and approved the
scientific and technical information in this news release related
to mining. Mr. St-Onge is a Qualified Person within the meaning of
NI 43-101.
Lars Weiershäuser, PhD, P.Geo, and Centerra’s
Director, Geology, has reviewed and approved the scientific and
technical information included in this news release related to
geology and mineral resources. Dr. Weiershäuser is a Qualified
Person within the meaning of NI 43-101.
Anna Malevich, Professional Engineer, member of
the Professional Engineers of Ontario (PEO) and Centerra’s Senior
Director, Projects has reviewed and approved the scientific and
technical information included in this news release related to
processing and metallurgy. Ms. Malevich is a Qualified Person
within the meaning of 43-101.
All other scientific and technical information
presented in this document was reviewed and approved by Centerra’s
geological and mining staff under the supervision of W. Paul
Chawrun, Professional Engineer, member of the Professional
Engineers of Ontario (PEO) and Centerra’s Executive Vice President
and Chief Operating Officer. Mr. Chawrun is a Qualified Person
within the meaning of NI 43-101.
Caution Regarding Forward-Looking
Information:
Information contained in this document which is
not a statement of historical fact, and the documents incorporated
by reference herein, may be “forward-looking information” for the
purposes of Canadian securities laws and within the meaning of the
United States Private Securities Litigation Reform Act of 1995.
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. The words
"achieve", “advance”, “assume”, “anticipate”, “approach”,
“believe”, “budget”, “contemplate”, “contingent”, “continue”,
“could”, “deliver”, “de-risk”, “develop”, “enhance”, “estimate”,
“evaluate”, “expand”, “expect”, “explore”, “focus”, “forecast”,
“future”, “generate”, “growth”, “in line”, “improve”, “intend”,
“may”, “maximize”, “modify”, “obtain”, “offset”, “on track”,
“optimize”, “path”, “plan”, "potential", “re-evaluate”, “realize”,
“remaining”, “restart”, “result”, “schedule”, “sees”, “seek”,
“strategy”, “subject to”, “target”, “test”, “understand”, “update”,
“will”, and similar expressions identify forward-looking
information. These forward-looking statements relate to, among
other things: statements regarding the Company’s strategic plan for
each asset in its portfolio and maximizing the value thereof, 2023
Guidance, including production, costs, capital expenditures and
cash flows; the expected profile of the Company’s future production
and costs; expectations that the Mount Milligan Mine is on track to
access higher grades in the second half of 2023 and Mount Milligan
Mine’s production will be weighted to the back end of 2023;
expectations of gold processing at the Öksüt Mine, including
processing Öksüt Mine’s gold in carbon inventory and gold in ore
stockpiles and on the heap leach pad; strategic options for the
entire Molybdenum Business Unit; re-evaluating the Goldfield
Project including achieving a lower capital flow sheet and
maximizing returns on the project; the Company’s capital allocation
strategy regarding dividends and share buybacks; investing in
internal projects and exploration within the Company’s current
portfolio; evaluating external opportunities for growth; and
ongoing evaluations of a restart of the Thompson Creek Mine,
including synergies created at Langeloth its operating capacities
and the use of the concentrate from the Thompson Creek Mine,
projected net present value and internal rates of return on such a
restart and receiving required permitting and authorization from
the relevant authorities concerning a restart; the future of Endako
if restarted; exploration activities and metallurgical test work at
the Goldfield Project; the regional potential and underground
prospects at Kemess; and the future exploration plans for the
Company.
Forward-looking information is necessarily based
upon a number of estimates and assumptions that, while considered
reasonable by Centerra, are inherently subject to significant
technical, political, business, economic and competitive
uncertainties and contingencies. Known and unknown factors could
cause actual results to differ materially from those projected in
the forward- looking information. Factors and assumptions that
could cause actual results or events to differ materially from
current expectations include, among other things: (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 Company receiving approval for the
renewal of its normal course issuer bid; 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 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; 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; 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; and
(C) risks related to operational matters and geotechnical issues
and the Company’s continued ability to successfully manage such
matters, including: the Company receiving the required
authorizations and permits for the restart of Thompson Creek; the
ability of the Company to blend concentrate from Thompson Creek at
Langeloth; the stability of the pit walls at the Company’s
operations; 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; 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, wildfires,
earthquakes, COVID-19, or other global events such as wars); 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; 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; 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. For additional risk factors, please see section
titled “Risks Factors” in the Company’s most recently filed Annual
Information Form (“AIF”) available on SEDAR at www.sedar.com and
EDGAR at www.sec.gov/edgar.
There can be no assurances that forward-looking
information and statements will prove to be accurate, as many
factors and future events, both known and unknown could cause
actual results, performance or achievements to vary or differ
materially from the results, performance or achievements that are
or may be expressed or implied by such forward-looking statements
contained herein or incorporated by reference. Accordingly, all
such factors should be considered carefully when making decisions
with respect to Centerra, and prospective investors should not
place undue reliance on forward-looking information.
Forward-looking information is as of September 18, 2023. Centerra
assumes no obligation to update or revise forward-looking
information to reflect changes in assumptions, changes in
circumstances or any other events affecting such forward-looking
information, 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.
- 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.
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 June 30, |
|
Consolidated |
Mount Milligan |
Öksüt |
(Unaudited - $millions, unless otherwise
specified) |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
2022 |
Production costs attributable to gold |
51.3 |
|
40.0 |
|
47.0 |
|
40.0 |
|
4.3 |
— |
Production costs attributable to copper |
29.3 |
|
29.8 |
|
29.3 |
|
29.8 |
|
— |
— |
Total
production costs excluding molybdenum segment, as reported |
80.6 |
|
69.8 |
|
76.3 |
|
69.8 |
|
4.3 |
— |
Adjust
for: |
|
|
|
|
|
|
Third
party smelting, refining and transport costs |
3.2 |
|
3.0 |
|
3.2 |
|
3.0 |
|
— |
— |
By-product and co-product credits |
(34.7 |
) |
(43.5 |
) |
(34.7 |
) |
(43.5 |
) |
— |
— |
Adjusted
production costs |
49.1 |
|
29.3 |
|
44.8 |
|
29.3 |
|
4.3 |
— |
Corporate
general administrative and other costs |
10.2 |
|
11.7 |
|
— |
|
0.4 |
|
— |
— |
Reclamation and remediation - accretion (operating sites) |
1.1 |
|
2.1 |
|
0.6 |
|
0.6 |
|
0.5 |
1.5 |
Sustaining capital expenditures |
20.6 |
|
24.5 |
|
13.3 |
|
20.2 |
|
7.3 |
4.2 |
Sustaining leases |
1.4 |
|
1.4 |
|
1.3 |
|
1.3 |
|
0.1 |
0.1 |
All-in
sustaining costs on a by-product basis |
82.4 |
|
69.0 |
|
60.0 |
|
51.8 |
|
12.2 |
5.8 |
Exploration and evaluation costs |
18.6 |
|
13.4 |
|
0.9 |
|
3.1 |
|
0.5 |
1.2 |
Non-sustaining capital expenditures(1) |
1.8 |
|
1.0 |
|
— |
|
0.6 |
|
— |
— |
Care and
maintenance and other costs |
7.3 |
|
3.2 |
|
— |
|
— |
|
4.7 |
0.1 |
All-in
costs on a by-product basis |
110.0 |
|
86.6 |
|
60.9 |
|
55.5 |
|
17.4 |
7.1 |
Ounces
sold (000s) |
48.2 |
|
41.6 |
|
37.5 |
|
41.6 |
|
10.7 |
— |
Pounds
sold (millions) |
12.8 |
|
18.9 |
|
12.8 |
|
18.9 |
|
— |
— |
Gold
production costs ($/oz) |
1,066 |
|
961 |
|
1,255 |
|
961 |
|
404 |
n/a |
All-in
sustaining costs on a by-product basis ($/oz) |
1,711 |
|
1,659 |
|
1,599 |
|
1,245 |
|
1,143 |
n/a |
All-in
costs on a by-product basis ($/oz) |
2,284 |
|
2,082 |
|
1,624 |
|
1,334 |
|
1,625 |
n/a |
Gold -
All-in sustaining costs on a co-product basis ($/oz) |
1,656 |
|
1,699 |
|
1,529 |
|
1,286 |
|
1,143 |
n/a |
Copper
production costs ($/pound) |
2.28 |
|
1.58 |
|
2.28 |
|
1.58 |
|
n/a |
n/a |
Copper - All-in sustaining costs on a co-product basis
($/pound) |
2.77 |
|
2.10 |
|
2.77 |
|
2.10 |
|
n/a |
n/a |
(1) Non-sustaining capital
expenditures are distinct projects designed to have a significant
increase in the net present value of the mine. In the current
quarter, non-sustaining capital expenditures include costs related
to the installation of the staged flotation reactors at the Mount
Milligan Mine.
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:
|
Six months ended June 30, |
|
Consolidated |
Mount Milligan |
Öksüt |
(Unaudited - $millions, unless otherwise
specified) |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
2022 |
Production costs attributable to gold |
94.6 |
|
85.2 |
|
90.3 |
|
64.0 |
|
4.3 |
21.1 |
Production costs attributable to copper |
70.6 |
|
64.4 |
|
70.6 |
|
64.4 |
|
— |
— |
Total
production costs excluding molybdenum segment, as reported |
165.2 |
|
149.6 |
|
160.9 |
|
128.4 |
|
4.3 |
21.1 |
Adjust
for: |
|
|
|
|
|
|
Third
party smelting, refining and transport costs |
5.0 |
|
6.2 |
|
5.0 |
|
6.0 |
|
— |
0.2 |
By-product and co-product credits |
(89.2 |
) |
(119.0 |
) |
(89.2 |
) |
(119.0 |
) |
— |
— |
Adjusted
production costs |
81.0 |
|
36.8 |
|
76.7 |
|
15.4 |
|
4.3 |
21.3 |
Corporate
general administrative and other costs |
24.9 |
|
24.0 |
|
0.1 |
|
0.5 |
|
— |
— |
Reclamation and remediation - accretion (operating sites) |
2.1 |
|
3.6 |
|
1.2 |
|
1.1 |
|
0.9 |
2.5 |
Sustaining capital expenditures |
25.5 |
|
39.2 |
|
15.1 |
|
32.8 |
|
10.4 |
6.4 |
Sustaining lease payments |
2.8 |
|
2.9 |
|
2.5 |
|
2.6 |
|
0.3 |
0.3 |
All-in
sustaining costs on a by-product basis |
136.3 |
|
106.5 |
|
95.6 |
|
52.4 |
|
15.9 |
30.5 |
Exploration and study costs |
33.8 |
|
21.6 |
|
1.3 |
|
6.5 |
|
0.9 |
1.7 |
Non-sustaining capital expenditures |
1.8 |
|
1.8 |
|
— |
|
1.5 |
|
— |
— |
Care and
maintenance and other costs |
20.2 |
|
5.8 |
|
— |
|
— |
|
14.2 |
0.1 |
All-in
costs on a by-product basis |
192.1 |
|
135.7 |
|
96.9 |
|
60.4 |
|
31.0 |
32.3 |
Ounces
sold (000s) |
87.1 |
|
136.5 |
|
76.5 |
|
81.8 |
|
10.7 |
54.7 |
Pounds
sold (millions) |
28.2 |
|
38.4 |
|
28.2 |
|
38.4 |
|
— |
— |
Gold
production costs ($/oz) |
1,085 |
|
624 |
|
1,181 |
|
783 |
|
404 |
386 |
All-in
sustaining costs on a by-product basis ($/oz) |
1,564 |
|
780 |
|
1,250 |
|
641 |
|
1,484 |
557 |
All-in
costs on a by-product basis ($/oz) |
2,205 |
|
994 |
|
1,267 |
|
738 |
|
2,896 |
590 |
Gold -
All-in sustaining costs on a co-product basis ($/oz) |
1,635 |
|
1,008 |
|
1,330 |
|
1,021 |
|
1,484 |
557 |
Copper
production costs ($/pound) |
2.51 |
|
1.68 |
|
2.51 |
|
1.68 |
|
n/a |
n/a |
Copper - All-in sustaining costs on a co-product basis
($/pound) |
2.81 |
|
2.18 |
|
2.81 |
|
2.18 |
|
n/a |
n/a |
Free cash flow (deficit) is a non-GAAP
financial measure and can be reconciled as follows:
|
Three months ended June 30, |
|
Consolidated |
Mount Milligan |
Öksüt |
Molybdenum |
Other |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
|
2023 |
|
|
2022 |
|
Cash (used in) provided by operating
activities(1) |
$ |
33.4 |
|
$ |
(3.5 |
) |
$ |
21.6 |
|
$ |
80.9 |
|
$ |
7.7 |
|
$ |
(51.2 |
) |
$ |
30.7 |
|
$ |
(6.1 |
) |
$ |
(26.6 |
) |
$ |
(27.1 |
) |
Deduct: |
|
|
|
|
|
|
|
|
|
|
Property, plant & equipment additions(1) |
|
(22.8 |
) |
|
(27.7 |
) |
|
(12.8 |
) |
|
(23.4 |
) |
|
(7.3 |
) |
|
(4.2 |
) |
|
(0.1 |
) |
|
— |
|
|
(2.6 |
) |
|
(0.1 |
) |
Free cash flow (deficit) |
$ |
10.6 |
|
$ |
(31.2 |
) |
$ |
8.8 |
|
$ |
57.5 |
|
$ |
0.4 |
|
$ |
(55.4 |
) |
$ |
30.6 |
|
$ |
(6.1 |
) |
$ |
(29.2 |
) |
$ |
(27.2 |
) |
(1) As presented in the Company’s
condensed consolidated statements of cash flows.
|
Six months ended June 30, |
|
Consolidated |
Mount Milligan |
Öksüt |
Molybdenum |
Other |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Cash (used in) provided by operating
activities(1) |
$ |
(66.4 |
) |
$ |
24.8 |
|
$ |
49.2 |
|
$ |
101.7 |
|
$ |
(13.1 |
) |
$ |
12.4 |
|
$ |
(45.9 |
) |
$ |
(25.9 |
) |
$ |
(56.6 |
) |
$ |
(63.4 |
) |
Deduct: |
|
|
|
|
|
|
|
|
|
|
Property, plant & equipment additions(1) |
|
(28.9 |
) |
|
(46.9 |
) |
|
(15.8 |
) |
|
(37.8 |
) |
|
(10.4 |
) |
|
(6.4 |
) |
|
(0.1 |
) |
|
(0.3 |
) |
|
(2.6 |
) |
|
(2.4 |
) |
Free cash (deficit) flow |
$ |
(95.3 |
) |
$ |
(22.1 |
) |
$ |
33.4 |
|
$ |
63.9 |
|
$ |
(23.5 |
) |
$ |
6.0 |
|
$ |
(46.0 |
) |
$ |
(26.2 |
) |
$ |
(59.2 |
) |
$ |
(65.8 |
) |
(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 June 30, |
|
Consolidated |
Mount Milligan |
Öksüt |
Molybdenum |
Other |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
2022 |
|
2023 |
|
|
2022 |
|
|
2023 |
|
2022 |
|
2023 |
|
|
2022 |
|
Additions to
PP&E(1) |
$ |
20.8 |
|
$ |
25.2 |
|
$ |
11.8 |
$ |
18.3 |
$ |
7.0 |
|
$ |
5.6 |
|
$ |
0.1 |
$ |
0.2 |
$ |
1.9 |
|
$ |
1.1 |
|
Adjust
for: |
|
|
|
|
|
|
|
|
|
|
Costs capitalized to the ARO assets |
|
2.1 |
|
|
0.6 |
|
|
1.2 |
|
2.2 |
|
0.9 |
|
|
(0.7 |
) |
|
— |
|
— |
|
— |
|
|
(0.9 |
) |
Costs capitalized to the ROU assets |
|
0.2 |
|
|
(0.2 |
) |
|
0.2 |
|
— |
|
— |
|
|
(0.2 |
) |
|
— |
|
— |
|
— |
|
|
— |
|
Costs relating to the acquisition of Goldfield Project |
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
|
— |
|
Other(2) |
|
(0.6 |
) |
|
0.1 |
|
|
0.1 |
|
0.4 |
|
(0.6 |
) |
|
(0.5 |
) |
|
— |
|
— |
|
(0.1 |
) |
|
0.2 |
|
Capital expenditures |
$ |
22.5 |
|
$ |
25.7 |
|
$ |
13.3 |
$ |
20.9 |
$ |
7.3 |
|
$ |
4.2 |
|
$ |
0.1 |
$ |
0.2 |
$ |
1.8 |
|
$ |
0.4 |
|
Sustaining capital expenditures |
|
20.7 |
|
|
24.7 |
|
|
13.3 |
|
20.3 |
|
7.3 |
|
|
4.2 |
|
|
0.1 |
|
0.2 |
|
— |
|
|
0.1 |
|
Non-sustaining capital expenditures |
|
1.8 |
|
|
1.0 |
|
|
— |
|
0.6 |
|
— |
|
|
— |
|
|
— |
|
— |
|
1.8 |
|
|
0.4 |
|
(1) As presented in the Company’s
condensed consolidated financial
statements.(2) Includes reclassification of
insurance and capital spares from supplies inventory to
PP&E.
|
Six months ended June 30, |
|
Consolidated |
Mount Milligan |
Öksüt |
Molybdenum |
Other |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
2023 |
|
|
2022 |
|
|
2023 |
|
2022 |
|
2023 |
|
|
2022 |
|
Additions to
PP&E(1) |
$ |
28.8 |
|
$ |
235.4 |
|
$ |
16.1 |
|
$ |
28.0 |
$ |
10.7 |
|
$ |
5.1 |
|
$ |
0.1 |
$ |
0.4 |
$ |
1.9 |
|
$ |
201.9 |
|
Adjust
for: |
|
|
|
|
|
|
|
|
|
|
Costs capitalized to the ARO assets |
|
(0.8 |
) |
|
13.9 |
|
|
(0.6 |
) |
|
5.9 |
|
(0.2 |
) |
|
1.20 |
|
|
— |
|
— |
|
0.0 |
|
|
6.8 |
|
Costs capitalized to the ROU assets |
|
0.1 |
|
|
(0.2 |
) |
|
0.10 |
|
|
0.0 |
|
0.0 |
|
|
(0.2 |
) |
|
— |
|
— |
|
— |
|
|
— |
|
Costs relating to the acquisition of Goldfield Project |
|
0.0 |
|
|
(208.2 |
) |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
— |
|
0.0 |
|
|
(208.2 |
) |
Other(2) |
|
(0.7 |
) |
|
0.8 |
|
|
(0.5 |
) |
|
0.4 |
|
(0.1 |
) |
|
0.2 |
|
|
— |
|
0.2 |
|
(0.1 |
) |
|
— |
|
Capital expenditures |
$ |
27.4 |
|
$ |
41.7 |
|
$ |
15.1 |
|
$ |
34.3 |
$ |
10.4 |
|
$ |
6.3 |
|
$ |
0.1 |
$ |
0.6 |
$ |
1.8 |
|
$ |
0.5 |
|
Sustaining capital expenditures |
|
25.6 |
|
|
39.8 |
|
|
15.1 |
|
|
32.8 |
|
10.4 |
|
|
6.3 |
|
|
0.1 |
|
0.6 |
|
— |
|
|
0.1 |
|
Non-sustaining capital expenditures |
|
1.8 |
|
|
1.9 |
|
|
— |
|
|
1.5 |
|
— |
|
|
— |
|
|
— |
|
— |
|
1.8 |
|
|
0.4 |
|
(1) As presented in the Company’s
consolidated financial statements.(2) Includes
reclassification of insurance and capital spares from supplies
inventory to PP&E
Centerra Gold (TSX:CG)
Gráfico Histórico do Ativo
De Nov 2024 até Dez 2024
Centerra Gold (TSX:CG)
Gráfico Histórico do Ativo
De Dez 2023 até Dez 2024