Centerra Gold Inc. (“Centerra” or the “Company”) (TSX: CG and NYSE:
CGAU) today reported its second quarter 2024 operating and
financial results.
President and CEO, Paul Tomory, commented,
“Centerra delivered another quarter of solid operating performance
and maintained consistent cash flow from operations before changes
in working capital and income taxes paid, with year-to-date
production and costs in line with our guidance. We ended the second
quarter with cash and cash equivalents of $592 million after making
routine statutory tax and royalty payments in Türkiye totalling
$105 million. We remained active on share buybacks and declared a
quarterly dividend, delivering on our disciplined approach of
returning capital to shareholders.
“Looking ahead, later this summer we expect to
announce our integrated strategy for the Molybdenum Business Unit,
including results of a feasibility study on the restart of the
Thompson Creek mine and the details of an optimized commercial
model at Langeloth. Additionally, we expect to publish an initial
resource estimate at Goldfield by the end of 2024 and a preliminary
economic assessment in the first half of 2025 illustrating future
potential at Mount Milligan. Our production, cost and capital
expenditure guidance for 2024 is unchanged. We continue to deliver
on our value maximizing strategy, focused on realizing the full
potential of each of Centerra’s assets,” concluded Mr. Tomory.
Second Quarter 2024
Highlights
Operations
- Production:
Consolidated gold production of 89,828 ounces, including 38,609
ounces from the Mount Milligan Mine (“Mount Milligan”) and 51,219
ounces from the Öksüt Mine (“Öksüt”). Copper production in the
quarter was 13.5 million pounds.
- Sales: Second
quarter 2024 gold sales of 83,258 ounces at an average realized
gold priceNG of $2,097 per ounce and copper sales of 11.7 million
pounds at an average realized copper priceNG of $3.79 per pound.
The average realized gold and copper prices include the impact of
the Mount Milligan streaming agreement.
- Costs:
Consolidated gold production costs were $870 per ounce and all-in
sustaining costs (“AISC”) on a by-product basisNG were $1,179 per
ounce for the quarter.
- Capital
expendituresNG: Additions to property,
plant, and equipment (“PP&E”) and sustaining capital
expendituresNG were $37.9 million and $30.6 million, respectively.
Sustaining capital expendituresNG in the second quarter 2024
included step-out capital for the tailings storage facility,
equipment overhauls, projects related to water sourcing and access,
and in-pit capital exploration at Mount Milligan, as well as
capitalized stripping and expansions at the heap leach pad and
waste rock dump at Öksüt.
Financial
- Net earnings:
Second quarter 2024 net earnings were $37.7 million, or $0.18 per
share, and adjusted net earningsNG were $46.4 million or $0.23 per
share. Adjustments to net earnings included $7.4 million of
unrealized loss on the financial asset related to the additional
agreement with Royal Gold, $5.5 million of unrealized foreign
currency exchange gains and $5.1 million of reclamation provision
revaluation recovery. 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: In the
second quarter 2024, cash provided by operating activities before
working capital and income taxes paid was $93.7 million, consistent
with last quarter. Cash provided by operating activities was $2.6
million and free cash flowNG deficit was $27.0 million, impacted
mainly by statutory tax and royalty payments at Öksüt.
- Cash and cash
equivalents: Total liquidity of $992.4 million as at June
30, 2024, comprising a cash balance of $592.4 million and $400.0
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 1,439,700 common shares in the second quarter
2024, for the total consideration of $9.8 million.
- Thompson Creek Feasibility
Study: In the second quarter of 2024, following
environmental studies and regulatory reviews, Centerra obtained
authorizations for additional lands at Thompson Creek mine, which
will enable a proposed pit highwall layback. This approval is
subject to a minor update to the reclamation plan and is a key
first step in the overall permitting process. Work is progressing
on a feasibility study to evaluate the restart of mining operations
at the Thompson Creek mine. The Company expects to share results of
the study in late summer of 2024, in conjunction with details of an
optimized commercial model for Langeloth.
Highlights Subsequent to Quarter
End
- Environmental, Social and
Governance (“ESG”) Report: On July 18, 2024, Centerra
published its 2023 ESG Report, which outlines the Company’s health,
safety, environmental, social and governance performance for the
year ended December 31, 2023. The report can be accessed on
Centerra’s website at www.centerragold.com/sustainability.
Table 1 - Overview of Consolidated
Financial and Operating Highlights
|
($millions, except as noted) |
Three months ended June 30, |
Six months ended June 30, |
|
|
2024 |
|
2023 |
|
% Change |
|
2024 |
2023 |
|
% Change |
|
|
Financial Highlights |
|
|
|
|
|
|
Revenue |
282.3 |
|
184.5 |
|
53 |
% |
588.2 |
411.0 |
|
43 |
% |
|
Production costs |
162.5 |
|
153.5 |
|
6 |
% |
336.3 |
357.8 |
|
(6 |
)% |
|
Depreciation, depletion, and amortization ("DDA") |
27.5 |
|
23.3 |
|
18 |
% |
60.8 |
41.8 |
|
45 |
% |
|
Earnings from mine operations |
92.3 |
|
7.7 |
|
1099 |
% |
191.0 |
11.4 |
|
1575 |
% |
|
Net earnings (loss) |
37.7 |
|
(39.7 |
) |
195 |
% |
104.1 |
(113.1 |
) |
192 |
% |
|
Adjusted net earnings (loss)(1) |
46.4 |
|
(42.3 |
) |
210 |
% |
77.7 |
(95.1 |
) |
182 |
% |
|
Cash provided by (used in) operating activities |
2.6 |
|
33.4 |
|
92 |
% |
102.0 |
(66.4 |
) |
254 |
% |
|
Free cash flow (deficit)(1) |
(27.0 |
) |
10.6 |
|
(355 |
)% |
54.1 |
(95.3 |
) |
157 |
% |
|
Additions to property, plant and equipment (“PP&E”) |
37.9 |
|
20.8 |
|
82 |
% |
53.2 |
28.8 |
|
85 |
% |
|
Capital expenditures - total(1) |
36.3 |
|
22.5 |
|
61 |
% |
53.1 |
27.4 |
|
94 |
% |
|
Sustaining capital expenditures(1) |
30.6 |
|
20.7 |
|
48 |
% |
46.8 |
25.6 |
|
83 |
% |
|
Non-sustaining capital expenditures(1) |
5.7 |
|
1.8 |
|
217 |
% |
6.3 |
1.8 |
|
250 |
% |
|
Net earnings (loss) per common share - $/share basic(2) |
0.18 |
|
(0.18 |
) |
200 |
% |
0.49 |
(0.52 |
) |
195 |
% |
|
Adjusted net earnings (loss) per common share - $/share
basic(1)(2) |
0.23 |
|
(0.20 |
) |
215 |
% |
0.36 |
(0.44 |
) |
182 |
% |
|
Operating highlights |
|
|
|
|
|
|
|
Gold produced (oz) |
89,828 |
|
61,622 |
|
46 |
% |
201,169 |
94,837 |
|
112 |
% |
|
Gold sold (oz) |
83,258 |
|
48,155 |
|
73 |
% |
187,571 |
87,145 |
|
115 |
% |
|
Average market gold price ($/oz) |
2,238 |
|
1,976 |
|
13 |
% |
2,203 |
1,932 |
|
14 |
% |
|
Average realized gold price ($/oz )(3) |
2,097 |
|
1,532 |
|
37 |
% |
1,955 |
1,493 |
|
31 |
% |
|
Copper produced (000s lbs) |
13,549 |
|
13,787 |
|
(2 |
)% |
27,880 |
27,142 |
|
3 |
% |
|
Copper sold (000s lbs) |
11,705 |
|
12,831 |
|
(9 |
)% |
27,327 |
28,162 |
|
(3 |
)% |
|
Average market copper price ($/lb) |
4.42 |
|
3.84 |
|
15 |
% |
4.12 |
3.95 |
|
4 |
% |
|
Average realized copper price ($/lb)(3) |
3.79 |
|
2.56 |
|
48 |
% |
3.41 |
3.03 |
|
13 |
% |
|
Molybdenum sold (000s lbs) |
2,675 |
|
3,030 |
|
(12 |
)% |
5,623 |
6,377 |
|
(12 |
)% |
|
Average market molybdenum price ($/lb) |
21.79 |
|
21.23 |
|
3 |
% |
19.93 |
27.09 |
|
(26 |
)% |
|
Average realized molybdenum price ($/lb) |
22.10 |
|
24.01 |
|
(8 |
)% |
21.25 |
29.08 |
|
(27 |
)% |
|
Unit costs |
|
|
|
|
|
|
|
Gold production costs ($/oz)(4) |
870 |
|
1,066 |
|
(18 |
)% |
802 |
1,085 |
|
(26 |
)% |
|
All-in sustaining costs on a by-product basis ($/oz)(1)(4) |
1,179 |
|
1,711 |
|
(31 |
)% |
1,001 |
1,564 |
|
(36 |
)% |
|
All-in costs on a by-product basis ($/oz)(1)(4) |
1,442 |
|
2,284 |
|
(37 |
)% |
1,191 |
2,205 |
|
(46 |
)% |
|
Gold - All-in sustaining costs on a co-product basis
($/oz)(1)(4) |
1,260 |
|
1,656 |
|
(24 |
)% |
1,125 |
1,635 |
|
(31 |
)% |
|
Copper production costs ($/lb)(4) |
2.47 |
|
2.28 |
|
8 |
% |
2.14 |
2.51 |
|
(15 |
)% |
|
Copper - All-in sustaining costs on a co-product basis –
($/lb)(1)(4) |
3.21 |
|
2.77 |
|
16 |
% |
2.55 |
2.81 |
|
(9 |
)% |
|
(1) |
|
Non-GAAP financial measure. See discussion under “Non-GAAP and
Other Financial Measures”. |
|
(2) |
|
As at June 30, 2024, the Company had 213,175,964 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
There has been no change to the Company’s 2024
guidance metrics except the expected Öksüt Mine current income
taxes were increased from a range of $54 to $60 million to a range
of $64 to $70 million reflecting higher gold prices expected for
the year. The Company’s full year 2024 outlook, as adjusted, and
comparative actual results for the six months ended June 30, 2024
are set out in the following table:
|
|
Units |
2024Guidance |
Six months ended June 30, 2024 |
|
Production |
|
|
|
|
Total gold production(1) |
(Koz) |
370 - 410 |
201 |
|
Mount Milligan Mine(2)(3)(4) |
(Koz) |
180 - 200 |
87 |
|
Öksüt Mine |
(Koz) |
190 - 210 |
114 |
|
Total copper production(2)(3)(4) |
(Mlb) |
55 - 65 |
28 |
|
Unit Costs(5) |
|
|
|
|
Gold production costs(1) |
($/oz) |
800 - 900 |
802 |
|
Mount Milligan Mine(2) |
($/oz) |
950 - 1,050 |
1,017 |
|
Öksüt Mine |
($/oz) |
650 - 750 |
653 |
|
All-in sustaining costs on a by-product basisNG(1)(3)(4) |
($/oz) |
1,075 - 1,175 |
1,001 |
|
Mount Milligan Mine(4) |
($/oz) |
1,075 - 1,175 |
912 |
|
Öksüt Mine |
($/oz) |
900 - 1,000 |
879 |
|
Capital Expenditures |
|
|
|
|
Additions to PP&E(1) |
($M) |
108 - 140 |
53.2 |
|
Mount Milligan Mine |
($M) |
55 - 65 |
19.6 |
|
Öksüt Mine |
($M) |
40 - 50 |
21.6 |
|
Total Capital ExpendituresNG(1) |
($M) |
108 - 140 |
53.1 |
|
Mount Milligan Mine |
($M) |
55 - 65 |
21.5 |
|
Öksüt Mine |
($M) |
40 - 50 |
20.1 |
|
Sustaining Capital ExpendituresNG(1) |
($M) |
100 - 125 |
46.8 |
|
Mount Milligan Mine |
($M) |
55 - 65 |
21.5 |
|
Öksüt Mine |
($M) |
40 - 50 |
20.1 |
|
Non-sustaining Capital ExpendituresNG(1) |
($M) |
8 - 15 |
6.3 |
|
Depreciation, depletion and amortization(1) |
($M) |
140 - 165 |
60.8 |
|
Mount Milligan Mine |
($M) |
90 - 100 |
32.4 |
|
Öksüt Mine |
($M) |
45 - 55 |
26.8 |
|
Income tax and BC mineral tax expense(1) |
($M) |
65 - 75 |
46.4 |
|
Mount Milligan Mine |
($M) |
1 - 5 |
1.6 |
|
Öksüt Mine |
($M) |
64 - 70 |
44.8 |
- Consolidated
Centerra figures.
- The Mount Milligan Mine is subject
to an arrangement with RGLD Gold AG and Royal Gold Inc. (together,
“Royal Gold”) which entitles Royal Gold to purchase 35% and 18.75%
of gold and copper produced, respectively, and requires Royal Gold
to pay $435 per ounce of gold and 15% of the spot price per metric
tonne of copper delivered (“Mount Milligan Mine Streaming
Agreement”). Using an assumed market gold price of $2,200 per ounce
and a blended copper price of $4.25 per pound for the second half
of 2024, Mount Milligan Mine’s average realized gold and copper
price for the remaining two quarters of 2024 would be $1,578 per
ounce and $3.32 per pound, respectively, compared to average
realized prices of $1,955 per ounce and $3.41 per pound in the
six-month period ended June 30, 2024, when factoring in the
Mount Milligan Streaming Agreement and concentrate refining and
treatment costs. The blended copper price of $4.25 per pound
factors in copper hedges in place as of June 30, 2024.
- Gold and copper production for the
second half of the year at the Mount Milligan Mine assumes
estimated recoveries of 63% to 65% for gold and 76% to 78% for
copper compared to actual recoveries for gold of 65.1% and for
copper of 76.5% achieved in the first six months of 2024. The
Company estimates full year recoveries of 64% for gold and 78% for
copper.
- Unit costs include a credit for
forecasted copper sales treated as by-product for all-in sustaining
costsNG and all-in costsNG. Production for copper and gold reflects
estimated metallurgical losses resulting from handling of the
concentrate and metal deductions levied by smelters.
- Units noted as ($/oz) relate to
gold ounces and ($/lb) relate to copper pounds.
Molybdenum Business Unit
|
(Expressed in millions of United States dollars) |
2024 Guidance |
Six months ended June 30, 2024 |
|
Langeloth Facility |
|
|
|
Loss from operationsNG(1) |
(5) - (15) |
(4.9) |
|
DD&A Expense |
5 - 10 |
1.6 |
|
Cash (used in) provided by operations before changes in working
capital |
(5) - 0 |
(3.3) |
|
Changes in Working Capital |
(20) - 20 |
5.0 |
|
Cash (Used in) Provided by Operations |
(25) - 20 |
1.7 |
|
Sustaining Capital ExpendituresNG |
(5) - (10) |
(3.7) |
|
Free Cash Flow (Deficit) from OperationsNG(2) |
(30) - 10 |
(2.0) |
|
Thompson Creek Mine(2) |
|
|
|
Project Evaluation Expenses(3) |
(17) - (20) |
(13.7) |
|
Care and Maintenance Expenses - Cash |
(1) - (3) |
(1.6) |
|
Cash (used in) provided by operations before changes in working
capital |
(18) - (23) |
(15.3) |
|
Changes in Working Capital |
— |
1.1 |
|
Cash Used in Operations |
(18) - (23) |
(14.2) |
|
Non-sustaining Capital ExpendituresNG |
(7) - (12) |
(2.1) |
|
Free Cash Flow (Deficit) from OperationsNG |
(25) - (35) |
(16.3) |
|
Endako Mine |
|
|
|
Care and Maintenance Expenses |
(5) - (7) |
(1.8) |
|
Reclamation Costs |
(15) - (18) |
(0.4) |
|
Cash Used in Operations |
(20) - (25) |
(2.2) |
- Additions to
PP&E calculations for calculating Free Cash Flow (Deficit) from
OperationsNG include only cash expenditures for PP&E
additions.
- Relates to the
original outlook range for the Thompson Creek Mine for the first
six months of 2024 only. The difference between original guidance
range and actual amount incurred for the six months ended June 30,
2024 is expected to be spent in the third quarter of 2024.
- 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 six
months ended June 30, 2024 are set out in the following table:
|
(Expressed in millions of United States dollars) |
2024 Guidance |
Six months ended June 30, 2024 |
|
Project Exploration and Evaluation Costs |
|
|
|
Goldfield Project |
9 - 13 |
3.8 |
|
Thompson Creek Mine(1) |
17 - 20 |
13.7 |
|
Total Project Evaluation Costs |
26 - 33 |
18.4 |
|
Brownfield Exploration(2) |
17 - 22 |
4.3 |
|
Greenfield and Generative Exploration |
18 - 23 |
13.8 |
|
Total Exploration Costs(2) |
35 - 45 |
18.1 |
|
Total Exploration and Project Evaluation Costs |
61 - 78 |
36.5 |
|
Other Costs |
|
|
|
Kemess Project(3) |
19 - 25 |
6.3 |
|
Corporate Administration Costs |
37 - 42 |
20.8 |
|
Stock-based Compensation |
8 - 10 |
3.3 |
|
Other Corporate Administration Costs |
29 - 32 |
17.5 |
- Outlook range for the Thompson
Creek Mine relates to the first six months of 2024 only.
- Total exploration costs include
capitalized exploration costs at the Mount Milligan Mine of $1.0
million for the six months ended June 30, 2024.
- Kemess Project costs include care
and maintenance costs as well as reclamation costs included in the
reclamation provision as at June 30, 2024.
Mount Milligan
Mount Milligan produced 38,609 ounces of gold
and 13.5 million pounds of copper in the second quarter of 2024.
Mining activities were carried out in phases 5, 6, 7, and 9 of the
open pit. A total of 12.3 million tonnes were mined in the second
quarter of 2024. Process plant throughput for the second quarter of
2024 was 5.3 million tonnes, averaging 58,520 tonnes per day. Gold
sales were down 30% and copper sales were down 25% compared to last
quarter. As previously disclosed, the lower sales volumes were
anticipated due to the timing of shipments. Both gold and copper
sales are expected to increase in the second half of 2024,
contributing approximately 60% of annual sales. 2024 guidance
metrics at Mount Milligan remain unchanged.
Gold production costs in the second quarter 2024
were $1,102 per ounce. AISC on a by-product basisNG was $1,234 per
ounce, higher than last quarter due to lower sales (as noted above)
and higher sustaining capital expenditures.
In the second quarter 2024, sustaining capital
expenditures at Mount Milligan were $17.4 million, focused on the
tailings storage facility, equipment overhauls, projects related to
water sourcing and access, and in-pit capital exploration.
Centerra continued to execute on its site-wide
optimization program at Mount Milligan, initially launched in the
fourth quarter 2023. The program is 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.
While the optimization program is still ongoing, year-to-date the
Company has started to see productivity improvements in the
load-haul cycle at the mine, as well as the unit processing costs
related to recycling grinding media and maintenance efficiencies.
In the first six months of 2024, milling costs were $5.60 per tonne
processed, 12% lower than the first six months of last year. Due to
the longer-term nature of the mining optimization initiatives, the
Company expects to see improvements in mining costs per tonne in
2025.
In February 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. Work is progressing on 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 the first half of 2025.
Öksüt
Öksüt produced 51,219 ounces of gold in the
second quarter of 2024. Production was lower than last quarter due
to processing most of the gold inventory that had accumulated in
the previous year and seasonally significant precipitation leading
to a minor amount of dilution to the pregnant gold solution which
negatively affected gold recoveries. Mining activities were focused
on phase 5 and phase 6 of the Keltepe pit and in phase 2 of the
Güneytepe pit. A total of 3.9 million tonnes were mined and 1.1
million tonnes were stacked at an average grade of 1.12 g/t. The
2024 production guidance at Öksüt is unchanged, with approximately
40% to 45% of the annual production weighted to the second half of
the year.
Gold production costs and AISC on a by-product
basisNG for the second quarter 2024 at Öksüt were $729 per ounce
and $943 per ounce, respectively. These costs were higher compared
to last quarter primarily due to lower sales and higher royalty
costs resulting from higher average realized gold prices. Öksüt’s
gold production costs guidance and AISC on a by-product basisNG
guidance for 2024 is unchanged. However, AISC on a by-product
basisNG could exceed the guidance range if gold prices remain at
current levels, due to resulting higher royalty rates.
In the second quarter 2024, sustaining capital
expenditures at Öksüt were $8.8 million, focused on capitalized
stripping, heap leach pad expansion and waste rock dump
expansion.
In the second quarter of 2024, the Company made
an annual royalty payment of $28.6 million and tax payments of
$76.4 million to the Turkish government. However, cash flow from
operations at Öksüt before statutory payments for tax and royalty
remained consistent quarter-over-quarter.
Molybdenum Business Unit
In the second quarter 2024, the Molybdenum
Business Unit sold 2.7 million pounds of molybdenum, generating
revenue of $61.2 million with an average realized price of $22.10
per pound. As part of Centerra’s previously disclosed 2024
guidance, Langeloth underwent an acid plant maintenance shutdown in
the second quarter 2024, which was completed on time and on budget.
The site has returned to normal operations.
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 second quarter of 2024, Thompson Creek
continued 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.
While the current Thompson Creek mine permit
authorizations support early works and certain activities defined
under the limited notice to proceed, Centerra is advancing
discussions with an inter-agency task force to obtain permit
modifications for the full scope of an optimized mine plan, which
includes additional land for the pit highwall layback under the
jurisdiction of the U.S. Forest Service. This permitting work is
building on the historical permits already in place. In the second
quarter of 2024, following environmental studies and regulatory
reviews Centerra obtained authorizations for additional lands at
Thompson Creek, which will enable a proposed pit highwall layback.
Due to strong collaboration and proactive support from federal and
Idaho state regulatory agencies, Centerra received authorizations,
subject to a minor update to the reclamation plan. This is a key
first step in the overall permitting process. Thompson Creek is
also proactively progressing environmental studies which should
support future permitting of a second mine plan modification for
additional waste rock quantities which is not required for several
years.
Second Quarter 2024 Operating and
Financial Results Webcast and Conference Call
Centerra invites you to join its 2024 second
quarter conference call on Friday, August 2, 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 webcast link.
- An archive of the webcast will be
available until the end of day on November 2, 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 made available via telephone for one month, until the end
of day September 2, 2024. The recording can be accessed by dialing
1-855-669-9658 or 412-317-0088 and using the access code 2059323.
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 June 30, 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.
Qualified Person
All scientific and technical information
presented in this document has been prepared in accordance with the
standards of the Canadian Institute of Mining, Metallurgy and
Petroleum and National Instrument 43-101 and has been reviewed,
verified, and compiled 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,
the qualified person for the purpose of National Instrument
43-101.
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 second
quarter ended June 30, 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 June 30, |
|
|
Consolidated |
Mount Milligan |
Öksüt |
|
(Unaudited - $millions, unless otherwise
specified) |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
Production costs attributable to gold |
72.4 |
|
51.3 |
|
34.6 |
|
47.0 |
|
37.8 |
|
4.3 |
|
Production costs attributable to copper |
28.8 |
|
29.3 |
|
28.8 |
|
29.3 |
|
— |
|
— |
|
Total production costs excluding Molybdenum BU segment, as
reported |
101.2 |
|
80.6 |
|
63.4 |
|
76.3 |
|
37.8 |
|
4.3 |
|
Adjust for: |
|
|
|
|
|
|
|
Third party smelting, refining and transport costs |
2.4 |
|
3.2 |
|
2.2 |
|
3.2 |
|
0.2 |
|
— |
|
By-product and co-product credits |
(46.5 |
) |
(34.7 |
) |
(46.3 |
) |
(34.7 |
) |
(0.2 |
) |
— |
|
Adjusted production costs |
57.1 |
|
49.1 |
|
19.3 |
|
44.8 |
|
37.8 |
|
4.3 |
|
Corporate general administrative and other costs |
10.8 |
|
10.2 |
|
0.2 |
|
— |
|
0.2 |
|
— |
|
Reclamation and remediation - accretion (operating sites) |
2.3 |
|
1.1 |
|
0.5 |
|
0.6 |
|
1.8 |
|
0.5 |
|
Sustaining capital expenditures |
26.3 |
|
20.6 |
|
17.4 |
|
13.3 |
|
8.8 |
|
7.3 |
|
Sustaining leases |
1.6 |
|
1.4 |
|
1.3 |
|
1.3 |
|
0.3 |
|
0.1 |
|
All-in sustaining costs on a by-product basis |
98.1 |
|
82.4 |
|
38.7 |
|
60.0 |
|
48.9 |
|
12.2 |
|
Exploration and evaluation costs |
13.2 |
|
18.6 |
|
2.5 |
|
0.9 |
|
0.2 |
|
0.5 |
|
Non-sustaining capital expenditures(1) |
0.2 |
|
1.8 |
|
— |
|
— |
|
— |
|
— |
|
Care and maintenance and other costs |
8.5 |
|
7.3 |
|
1.3 |
|
— |
|
— |
|
4.7 |
|
All-in costs on a by-product basis |
120.0 |
|
110.0 |
|
42.6 |
|
60.9 |
|
49.1 |
|
17.4 |
|
Ounces sold (000s) |
83.3 |
|
48.2 |
|
31.4 |
|
37.5 |
|
51.9 |
|
10.7 |
|
Pounds sold (millions) |
11.7 |
|
12.8 |
|
11.7 |
|
12.8 |
|
— |
|
— |
|
Gold production costs ($/oz) |
870 |
|
1,066 |
|
1,102 |
|
1,255 |
|
729 |
|
404 |
|
All-in sustaining costs on a by-product basis ($/oz) |
1,179 |
|
1,711 |
|
1,234 |
|
1,599 |
|
943 |
|
1,143 |
|
All-in costs on a by-product basis ($/oz) |
1,442 |
|
2,284 |
|
1,356 |
|
1,624 |
|
947 |
|
1,625 |
|
Gold - All-in sustaining costs on a co-product basis ($/oz) |
1,260 |
|
1,656 |
|
1,449 |
|
1,529 |
|
943 |
|
1,143 |
|
Copper production costs ($/pound) |
2.47 |
|
2.28 |
|
2.46 |
|
2.28 |
|
n/a |
|
n/a |
|
Copper - All-in sustaining costs on a co-product basis
($/pound) |
3.21 |
|
2.77 |
|
3.21 |
|
2.77 |
|
n/a |
|
n/a |
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 - $millions, unless otherwise
specified) |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
Production costs attributable to gold |
150.4 |
|
94.6 |
|
77.8 |
|
90.3 |
|
72.6 |
|
4.3 |
|
Production costs attributable to copper |
58.6 |
|
70.6 |
|
58.6 |
|
70.6 |
|
— |
|
— |
|
Total production costs excluding Molybdenum BU segment, as
reported |
209.0 |
|
165.2 |
|
136.4 |
|
160.9 |
|
72.6 |
|
4.3 |
|
Adjust for: |
|
|
|
|
|
|
|
Third party smelting, refining and transport costs |
5.1 |
|
5.0 |
|
4.6 |
|
5.0 |
|
0.5 |
|
— |
|
By-product and co-product credits |
(97.0 |
) |
(89.2 |
) |
(96.8 |
) |
(89.2 |
) |
(0.2 |
) |
— |
|
Adjusted production costs |
117.1 |
|
81.0 |
|
44.2 |
|
76.7 |
|
72.9 |
|
4.3 |
|
Corporate general administrative and other costs |
20.4 |
|
24.9 |
|
0.2 |
|
0.1 |
|
0.4 |
|
— |
|
Reclamation and remediation - accretion (operating sites) |
4.9 |
|
2.1 |
|
1.2 |
|
1.2 |
|
3.7 |
|
0.9 |
|
Sustaining capital expenditures |
42.0 |
|
25.5 |
|
21.5 |
|
15.1 |
|
20.1 |
|
10.4 |
|
Sustaining lease payments |
3.2 |
|
2.8 |
|
2.7 |
|
2.5 |
|
0.5 |
|
0.3 |
|
All-in sustaining costs on a by-product basis |
187.6 |
|
136.3 |
|
69.8 |
|
95.6 |
|
97.6 |
|
15.9 |
|
Exploration and study costs |
21.0 |
|
33.8 |
|
3.0 |
|
1.3 |
|
0.4 |
|
0.9 |
|
Non-sustaining capital expenditures |
0.6 |
|
1.8 |
|
— |
|
— |
|
— |
|
— |
|
Care and maintenance and other costs |
14.1 |
|
20.2 |
|
2.6 |
|
— |
|
— |
|
14.2 |
|
All-in costs on a by-product basis |
223.3 |
|
192.1 |
|
75.4 |
|
96.9 |
|
98.0 |
|
31.0 |
|
Ounces sold (000s) |
187.6 |
|
87.1 |
|
76.5 |
|
76.5 |
|
111.0 |
|
10.7 |
|
Pounds sold (millions) |
27.3 |
|
28.2 |
|
27.3 |
|
28.2 |
|
— |
|
— |
|
Gold production costs ($/oz) |
802 |
|
1,085 |
|
1,017 |
|
1,181 |
|
653 |
|
404 |
|
All-in sustaining costs on a by-product basis ($/oz) |
1,001 |
|
1,564 |
|
912 |
|
1,250 |
|
879 |
|
1,484 |
|
All-in costs on a by-product basis ($/oz) |
1,191 |
|
2,205 |
|
985 |
|
1,267 |
|
882 |
|
2,896 |
|
Gold - All-in sustaining costs on a co-product basis ($/oz) |
1,125 |
|
1,635 |
|
1,216 |
|
1,330 |
|
879 |
|
1,484 |
|
Copper production costs ($/pound) |
2.14 |
|
2.51 |
|
2.15 |
|
2.51 |
|
n/a |
|
n/a |
|
Copper - All-in sustaining costs on a co-product basis
($/pound) |
2.55 |
|
2.81 |
|
2.55 |
|
2.81 |
|
n/a |
|
n/a |
Adjusted net earnings (loss) is a
non-GAAP financial measure and can be reconciled as
follows:
|
|
Three months ended June 30, |
Six months ended June 30, |
|
($millions, except as noted) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
Net earnings (loss) |
$ |
37.7 |
|
$ |
(39.7 |
) |
$ |
104.1 |
|
$ |
(113.1 |
) |
|
Adjust for items not associated with ongoing operations: |
|
|
|
|
|
Unrealized loss on financial assets relating to the Additional
Royal Gold Agreement |
|
7.4 |
|
|
— |
|
|
8.9 |
|
|
— |
|
|
Unrealized foreign exchange loss (gain)(1) |
|
5.5 |
|
|
— |
|
|
(3.4 |
) |
|
— |
|
|
Transaction costs related to the Additional Royal Gold
Agreement |
|
— |
|
|
— |
|
|
2.5 |
|
|
— |
|
|
Income and mining tax adjustments(2) |
|
1.9 |
|
|
5.7 |
|
|
(4.9 |
) |
|
10.7 |
|
|
Transaction costs related to the Additional Royal Gold
Agreement |
|
— |
|
|
— |
|
|
2.5 |
|
|
— |
|
|
Unrealized gain on marketable securities |
|
(1.0 |
) |
|
— |
|
|
0.6 |
|
|
— |
|
|
Reclamation (recovery) expense at the Molybdenum BU sites and the
Kemess Project |
|
(5.1 |
) |
|
(8.3 |
) |
|
(30.1 |
) |
|
7.3 |
|
|
Adjusted net earnings (loss) |
$ |
46.4 |
|
$ |
(42.3 |
) |
$ |
77.7 |
|
$ |
(95.1 |
) |
|
|
|
|
|
|
|
Net earnings (loss) per share - basic |
$ |
0.18 |
|
$ |
(0.18 |
) |
$ |
0.49 |
|
$ |
(0.52 |
) |
|
Net earnings (loss) per share - diluted |
$ |
0.18 |
|
$ |
(0.18 |
) |
$ |
0.47 |
|
$ |
(0.52 |
) |
|
Adjusted net earnings (loss) per share -
basic |
$ |
0.23 |
|
$ |
(0.20 |
) |
$ |
0.36 |
|
$ |
(0.44 |
) |
|
Adjusted net earnings (loss) per share -
diluted |
$ |
0.23 |
|
$ |
(0.20 |
) |
$ |
0.36 |
|
$ |
(0.43 |
) |
|
(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 reflect the impact of foreign currency
translation on deferred income taxes at the Öksüt Mine and the
Mount Milligan Mine and the impact of a one-time income tax levied
by the Turkish government in the prior period. |
|
|
|
|
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 |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
Cash provided by (used in) operating
activities(1) |
$ |
2.6 |
|
$ |
33.4 |
|
$ |
29.0 |
|
$ |
21.6 |
|
$ |
(2.1 |
) |
$ |
7.7 |
|
$ |
(8.2 |
) |
$ |
30.7 |
|
$ |
(16.1 |
) |
$ |
(26.6 |
) |
|
Deduct: |
|
|
|
|
|
|
|
|
|
|
|
Property, plant & equipment additions |
|
(29.6 |
) |
|
(22.8 |
) |
|
(15.5 |
) |
|
(12.8 |
) |
|
(8.8 |
) |
|
(7.3 |
) |
|
(4.9 |
) |
|
(0.1 |
) |
|
(0.4 |
) |
|
(2.6 |
) |
|
Free cash flow (deficit) |
$ |
(27.0 |
) |
$ |
10.6 |
|
$ |
13.5 |
|
$ |
8.8 |
|
$ |
(10.9 |
) |
$ |
0.4 |
|
$ |
(13.1 |
) |
$ |
30.6 |
|
$ |
(16.5 |
) |
$ |
(29.2 |
) |
|
(1) |
|
As presented in the Company’s condensed consolidated statements of
cash flows. |
|
|
Six months ended June 30, |
|
|
Consolidated |
Mount Milligan |
Öksüt |
Molybdenum |
Other |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
Cash provided by (used in) operating
activities |
$ |
102.0 |
|
$ |
(66.4 |
) |
$ |
59.0 |
|
$ |
49.2 |
|
$ |
99.3 |
|
$ |
(13.1 |
) |
$ |
(14.7 |
) |
$ |
(45.9 |
) |
$ |
(41.6 |
) |
$ |
(56.6 |
) |
|
Deduct: |
|
|
|
|
|
|
|
|
|
|
|
Property, plant & equipment additions |
|
(47.8 |
) |
|
(28.9 |
) |
|
(21.4 |
) |
|
(15.8 |
) |
|
(20.1 |
) |
|
(10.4 |
) |
|
(5.8 |
) |
|
(0.1 |
) |
|
(0.5 |
) |
|
(2.6 |
) |
|
Free cash flow (deficit) |
$ |
54.2 |
|
$ |
(95.3 |
) |
$ |
37.6 |
|
$ |
33.4 |
|
$ |
79.2 |
|
$ |
(23.5 |
) |
$ |
(20.5 |
) |
$ |
(46.0 |
) |
$ |
(42.1 |
) |
$ |
(59.2 |
) |
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 |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
2024 |
|
|
2023 |
|
|
2024 |
|
2023 |
|
2024 |
|
|
2023 |
|
|
Additions to PP&E(1) |
$ |
37.9 |
|
$ |
20.8 |
|
$ |
18.8 |
|
$ |
11.8 |
$ |
9.0 |
|
$ |
7.0 |
|
$ |
9.6 |
$ |
0.1 |
$ |
0.5 |
|
$ |
1.9 |
|
|
Adjust for: |
|
|
|
|
|
|
|
|
|
|
|
Costs capitalized to the ARO assets |
|
1.1 |
|
|
2.1 |
|
|
0.9 |
|
|
1.2 |
|
0.2 |
|
|
0.9 |
|
|
— |
|
— |
|
— |
|
|
— |
|
|
Costs capitalized to the ROU assets |
|
(2.0 |
) |
|
0.2 |
|
|
(1.8 |
) |
|
0.2 |
|
(0.1 |
) |
|
— |
|
|
— |
|
— |
|
(0.1 |
) |
|
— |
|
|
Other(2) |
|
(0.7 |
) |
|
(0.6 |
) |
|
(0.5 |
) |
|
0.1 |
|
(0.3 |
) |
|
(0.6 |
) |
|
— |
|
— |
|
0.1 |
|
|
(0.1 |
) |
|
Capital expenditures |
$ |
36.3 |
|
$ |
22.5 |
|
$ |
17.4 |
|
$ |
13.3 |
$ |
8.8 |
|
$ |
7.3 |
|
$ |
9.6 |
$ |
0.1 |
$ |
0.5 |
|
$ |
1.8 |
|
|
Sustaining capital expenditures |
|
30.6 |
|
|
20.7 |
|
|
17.4 |
|
|
13.3 |
|
8.8 |
|
|
7.3 |
|
|
4.4 |
|
0.1 |
|
— |
|
|
— |
|
|
Non-sustaining capital expenditures |
|
5.7 |
|
|
1.8 |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
|
5.2 |
|
— |
|
0.5 |
|
|
1.8 |
|
|
(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. |
|
|
Six months ended June 30, |
|
|
Consolidated |
Mount Milligan |
Öksüt |
Molybdenum |
Other |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
2023 |
|
2024 |
|
|
2023 |
|
|
Additions to PP&E(1) |
$ |
53.2 |
|
$ |
28.8 |
|
$ |
19.6 |
|
$ |
16.1 |
|
$ |
21.6 |
|
$ |
10.7 |
|
$ |
10.5 |
$ |
0.1 |
$ |
1.5 |
|
$ |
1.9 |
|
|
Adjust for: |
|
|
|
|
|
|
|
|
|
|
|
Costs capitalized to the ARO assets |
|
2.7 |
|
|
(0.8 |
) |
|
4.1 |
|
|
(0.6 |
) |
|
(0.9 |
) |
|
(0.2 |
) |
|
— |
|
— |
|
(0.5 |
) |
|
— |
|
|
Costs capitalized to the ROU assets |
|
(2.8 |
) |
|
0.1 |
|
|
(1.8 |
) |
|
0.1 |
|
|
(0.6 |
) |
|
— |
|
|
— |
|
— |
|
(0.4 |
) |
|
— |
|
|
Other(2) |
|
— |
|
|
(0.7 |
) |
|
(0.4 |
) |
|
(0.5 |
) |
|
— |
|
|
(0.1 |
) |
|
— |
|
— |
|
0.4 |
|
|
(0.1 |
) |
|
Capital expenditures |
$ |
53.1 |
|
$ |
27.4 |
|
$ |
21.5 |
|
$ |
15.1 |
|
$ |
20.1 |
|
$ |
10.4 |
|
$ |
10.5 |
$ |
0.1 |
$ |
1.0 |
|
$ |
1.8 |
|
|
Sustaining capital expenditures |
|
46.8 |
|
|
25.6 |
|
|
21.5 |
|
|
15.1 |
|
|
20.1 |
|
|
10.4 |
|
|
4.9 |
|
0.1 |
|
0.3 |
|
|
— |
|
|
Non-sustaining capital expenditures |
|
6.3 |
|
|
1.8 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
5.6 |
|
— |
|
0.7 |
|
|
1.8 |
|
|
(1) |
|
As presented in note 16 of the Company’s consolidated financial
statements. |
|
(2) |
|
Includes reclassification of insurance and capital spares from
supplies inventory to PP&E. |
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