Centerra Gold Inc. (“Centerra” or the “Company”) (TSX: CG and NYSE:
CGAU) today reported its third quarter 2024 operating and financial
results.
President and CEO, Paul Tomory, commented,
“Centerra continues to deliver consistent operating performance and
is on track to meet our consolidated production and cost guidance
for the year. We have benefited from margin expansion driven by
stable cost performance in an elevated metal price environment. As
planned, we have returned to strong free cash flow generation in
the third quarter. Even after spending approximately $32 million on
the restart of operations at the Thompson Creek mine, we grew our
cash and cash equivalents to $604 million at the end of the third
quarter. We increased our share buybacks in the third quarter to
$12 million, and declared a quarterly dividend, delivering on our
disciplined approach of returning capital to shareholders.
“We continue to systematically execute on our
strategic plan by working through the assets in our portfolio to
unlock value. In February, we announced an additional agreement
with Royal Gold, which allowed us to extend the mine life at Mount
Milligan by two additional years and created the potential for
future mine life extensions. In September, we announced the restart
of operations at Thompson Creek and a progressive ramp-up of
production at Langeloth, to realize value in our Molybdenum
Business Unit. Looking ahead, we are progressing work at Mount
Milligan on a preliminary economic assessment that is expected to
illustrate the future potential at the mine and is on track to be
completed towards the end of the first half of 2025. We also expect
to publish an initial resource estimate at Goldfield in conjunction
with our year-end reserve and resource update, expected in early
2025. By continuing to execute on our strategic plan, we expect to
create value and growth for our shareholders and stakeholders,”
concluded Mr. Tomory.
Third Quarter 2024
Highlights
Operations
- Production:
Consolidated gold production of 93,712 ounces in the quarter,
including 42,993 ounces from the Mount Milligan Mine (“Mount
Milligan”) and 50,719 ounces from the Öksüt Mine (“Öksüt”). Copper
production in the quarter was 13.7 million pounds. Year-to-date,
consolidated gold and copper production was 294,880 ounces of gold
and 41.6 million pounds of copper. Consolidated full year 2024
production guidance is unchanged at 370,000 to 410,000 ounces of
gold and 55 to 65 million pounds of copper.
- Sales: Third
quarter 2024 gold sales were 96,736 ounces at an average realized
gold priceNG of $2,206 per ounce and copper sales were 14.2 million
pounds at an average realized copper priceNG of $3.37 per pound.
The average realized gold and copper prices include the impact of
the Mount Milligan streaming agreement with Royal Gold. Gold and
copper sales were 16% and 21% higher, respectively, compared to
last quarter, mainly driven by the timing of shipments at Mount
Milligan.
- Costs:
Consolidated gold production costs were $973 per ounce and all-in
sustaining costs (“AISC”) on a by-product basisNG were $1,302 per
ounce for the quarter. Year-to-date, gold production costs were
$860 per ounce and AISC on a by-product basisNG were $1,103 per
ounce. Consolidated full year 2024 cost guidance is unchanged.
Consolidated gold production costs are expected to be $800 to $900
per ounce and AISC on a by-product basisNG is expected to be $1,075
to $1,175 per ounce.
- Capital
expendituresNG: Additions to property,
plant, and equipment (“PP&E”) and sustaining capital
expendituresNG in the quarter were $79.7 million and $35.3 million,
respectively. Sustaining capital expendituresNG in the third
quarter 2024 included construction at the tailings storage facility
and equipment rebuilds at Mount Milligan, as well as capitalized
stripping and expansions at the heap leach pad and waste rock dump
at Öksüt. Non-sustaining capital expendituresNG in the third
quarter were $25.2 million related mainly to the restart of
operations at the Thompson Creek mine (“Thompson Creek”).
Financial
- Net earnings:
Third quarter 2024 net earnings were $28.8 million, or $0.14 per
share, and adjusted net earningsNG were $38.6 million or $0.19 per
share. Adjustments to net earnings included $6.6 million of
reclamation provision revaluation recovery and $1.5 million of
unrealized loss on the financial asset related to the additional
agreement with Royal Gold (the “Additional Royal Gold Agreement”).
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
third quarter 2024, cash provided by operating activities was
$103.6 million and free cash flowNG was $37.4 million. This
includes $97.3 million of cash provided by mine operations and
$86.8 million of free cash flowNG at Öksüt; and $40.2 million of
cash provided by mine operations and $15.6 million of free cash
flowNG at Mount Milligan. This is offset by cash used in operating
activities and a free cash flow deficitNG from Thompson Creek
expenditures.
- Cash and cash
equivalents: Total liquidity of $1,004.3 million as at
September 30, 2024, comprising a cash balance of $604.3 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 1,741,800 common shares in the third quarter
2024, for the total consideration of $12.0 million. In the first
nine months of 2024, Centerra has returned $65 million to
shareholders, including $32 million in share buybacks and $33
million in dividends.
- Thompson Creek feasibility
study results and strategic plan for US Molybdenum
Operations: In September 2024, Centerra announced a
strategic, integrated business plan for its Molybdenum Business
Unit (“MBU”) consisting of a restart of Thompson Creek and a
commercially optimized ramp up plan for the Langeloth Metallurgical
Facility (“Langeloth”), collectively the US Molybdenum Operations
(“US Moly”). The US Moly business is expected to produce an
after-tax net present value (8%) (“NPV8%”) of $472 million. A key
contributor to this value is Langeloth, which at full capacity,
integrated with Thompson Creek, has the potential to generate
robust annual earnings before interest, taxes, depreciation and
amortization (“EBITDA”).
- Intention to renew normal
course issuer bid (“NCIB”): Centerra believes its share
price continues to be trading in a price range that does not
adequately reflect the value of its assets and future prospects. As
a result, subject to the approval of the Toronto Stock Exchange
(“TSX”), Centerra intends to renew its NCIB to purchase for
cancellation a number of common shares in the capital of the
Company (“Common Shares”), representing the greater of 5% of the
issued and outstanding Common Shares or 10% of the public float. As
of October 31, 2024, Centerra had 211,337,985 issued and
outstanding Common Shares.
Table 1 - Overview of Consolidated
Financial and Operating Highlights
($millions, except as noted) |
Three months ended September 30, |
Nine months endedSeptember
30, |
|
2024 |
2023 |
% Change |
2024 |
2023 |
|
% Change |
Financial Highlights |
|
|
|
|
|
Revenue |
323.9 |
343.9 |
(6)% |
912.1 |
754.9 |
|
21 |
% |
Production costs |
183.4 |
186.8 |
(2)% |
519.8 |
544.6 |
|
(5)% |
Depreciation, depletion, and amortization ("DDA") |
33.2 |
42.5 |
(22)% |
93.9 |
84.4 |
|
11 |
% |
Earnings from mine operations |
107.3 |
114.6 |
(6)% |
298.4 |
125.9 |
|
137 |
% |
Net earnings (loss) |
28.8 |
60.6 |
(52)% |
132.9 |
(52.5 |
) |
353 |
% |
Adjusted net earnings (loss)(1) |
38.6 |
44.4 |
(13)% |
116.3 |
(50.7 |
) |
329 |
% |
Cash provided by (used in) operating activities |
103.6 |
166.6 |
(38)% |
205.6 |
100.2 |
|
105 |
% |
Free cash flow(1) |
37.4 |
144.5 |
(74)% |
91.6 |
49.2 |
|
86 |
% |
Additions to property, plant and equipment (“PP&E”) |
79.7 |
25.0 |
219 |
% |
132.9 |
53.8 |
|
147 |
% |
Capital expenditures - total(1) |
60.5 |
24.6 |
146 |
% |
113.6 |
51.9 |
|
119 |
% |
Sustaining capital expenditures(1) |
35.3 |
23.5 |
50 |
% |
82.1 |
49.0 |
|
68 |
% |
Non-sustaining capital expenditures(1) |
25.2 |
1.1 |
2191 |
% |
31.5 |
2.9 |
|
986 |
% |
Net earnings (loss) per common share - $/share basic(2) |
0.14 |
0.28 |
(50)% |
0.62 |
(0.24 |
) |
357 |
% |
Adjusted net earnings (loss) per common share - $/share
basic(1)(2) |
0.19 |
0.21 |
(10)% |
0.54 |
(0.23 |
) |
335 |
% |
Operating highlights |
|
|
|
|
|
|
Gold produced (oz) |
93,712 |
126,221 |
(26)% |
294,880 |
221,058 |
|
33 |
% |
Gold sold (oz) |
96,736 |
130,973 |
(26)% |
284,307 |
218,118 |
|
30 |
% |
Average market gold price ($/oz) |
2,474 |
1,929 |
28 |
% |
2,296 |
1,931 |
|
19 |
% |
Average realized gold price ($/oz )(3) |
2,206 |
1,741 |
27 |
% |
2,040 |
1,642 |
|
24 |
% |
Copper produced (000s lbs) |
13,693 |
15,026 |
(9)% |
41,573 |
42,168 |
|
(1)% |
Copper sold (000s lbs) |
14,209 |
15,385 |
(8)% |
41,536 |
43,548 |
|
(5)% |
Average market copper price ($/lb) |
4.18 |
3.79 |
10 |
% |
4.14 |
3.89 |
|
6 |
% |
Average realized copper price ($/lb)(3) |
3.37 |
2.99 |
13 |
% |
3.39 |
3.01 |
|
13 |
% |
Molybdenum sold (000s lbs) |
2,431 |
2,700 |
(10)% |
8,054 |
9,077 |
|
(11)% |
Average market molybdenum price ($/lb) |
21.78 |
23.77 |
(8)% |
21.17 |
26.05 |
|
(19)% |
Average realized molybdenum price ($/lb)(3) |
23.27 |
24.08 |
(3)% |
21.90 |
25.71 |
|
(15)% |
Unit costs |
|
|
|
|
|
|
Gold production costs ($/oz)(4) |
973 |
643 |
51 |
% |
860 |
820 |
|
5 |
% |
All-in sustaining costs on a by-product basis ($/oz)(1)(4) |
1,302 |
827 |
57 |
% |
1,103 |
1,122 |
|
(2)% |
All-in costs on a by-product basis ($/oz)(1)(4) |
1,509 |
983 |
54 |
% |
1,299 |
1,471 |
|
(12)% |
Gold - All-in sustaining costs on a co-product basis
($/oz)(1)(4) |
1,401 |
858 |
63 |
% |
1,218 |
1,168 |
|
4 |
% |
Copper production costs ($/lb)(4) |
1.99 |
2.30 |
(13)% |
2.09 |
2.43 |
|
(14)% |
Copper - All-in sustaining costs on a co-product basis
($/lb)(1)(4) |
2.69 |
2.73 |
(1)% |
2.61 |
2.78 |
|
(6)% |
(1) |
Non-GAAP financial measure. See discussion under “Non-GAAP and
Other Financial Measures”. |
(2) |
As at September 30, 2024,
the Company had 211,752,347 common shares issued and
outstanding. |
(3) |
This supplementary financial
measure within the meaning of National Instrument 52-112 - Non-GAAP
and Other Financial Measures Disclosure (“NI 51-112”) is calculated
as a ratio of revenue from the consolidated financial statements
and units of metal sold and includes the impact from the Mount
Milligan Streaming Agreement, copper hedges and mark-to-market
adjustments on metal sold not yet finally settled. |
(4) |
All per unit costs metrics are
expressed on a metal sold basis. |
2024 Outlook
The Company’s full year 2024 outlook, and
comparative actual results for the nine months ended September 30,
2024 are set out in the following table:
|
Units |
2024Guidance |
Nine Months Ended September 30, 2024 |
Production |
|
|
|
Total gold production(1) |
(Koz) |
370 - 410 |
295 |
Mount Milligan Mine(2)(3)(4) |
(Koz) |
180 - 200 |
130 |
Öksüt Mine |
(Koz) |
190 - 210 |
165 |
Total copper production(2)(3)(4) |
(Mlb) |
55 - 65 |
42 |
Unit Costs(5) |
|
|
|
Gold production costs(1) |
($/oz) |
800 - 900 |
860 |
Mount Milligan Mine(2) |
($/oz) |
950 - 1,050 |
1,062 |
Öksüt Mine |
($/oz) |
650 - 750 |
710 |
All-in sustaining costs on a by-product basisNG(1)(3)(4) |
($/oz) |
1,075 - 1,175 |
1,103 |
Mount Milligan Mine(4) |
($/oz) |
1,075 - 1,175 |
1,064 |
Öksüt Mine |
($/oz) |
900 - 1,000 |
946 |
Capital Expenditures |
|
|
|
Additions to PP&E(1) |
($M) |
157 - 195 |
132.9 |
Mount Milligan Mine |
($M) |
55 - 65 |
46.8 |
Öksüt Mine |
($M) |
40 - 50 |
39.5 |
Total Capital ExpendituresNG(1) |
($M) |
157 - 195 |
113.6 |
Mount Milligan Mine |
($M) |
55 - 65 |
46.2 |
Öksüt Mine |
($M) |
40 - 50 |
30.6 |
Sustaining Capital ExpendituresNG(1) |
($M) |
101 - 127 |
82.1 |
Mount Milligan Mine |
($M) |
55 - 65 |
46.2 |
Öksüt Mine |
($M) |
40 - 50 |
30.6 |
Non-sustaining Capital ExpendituresNG(1) |
($M) |
56 - 68 |
31.5 |
Depreciation, depletion and amortization(1) |
($M) |
110 - 135 |
93.9 |
Mount Milligan Mine |
($M) |
60 - 70 |
51.4 |
Öksüt Mine |
($M) |
45 - 55 |
39.8 |
Income tax and BC mineral tax expense(1) |
($M) |
75 - 85 |
70.4 |
Mount Milligan Mine |
($M) |
1 - 5 |
2.8 |
Öksüt Mine |
($M) |
74 - 80 |
67.6 |
- 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 $2,500 per ounce
and a blended copper price of $4.25 per pound for the fourth
quarter of 2024, Mount Milligan Mine’s average realized gold and
copper price for the remaining three months of 2024 would be $1,777
per ounce and $3.57 per pound, respectively, compared to average
realized prices of $2,040 per ounce and $3.39 per pound in the
nine-month period ended September 30, 2024, when factoring in the
Mount Milligan Streaming Agreement and concentrate refining and
treatment costs. The blended copper price of $4.25 per pound
factors in copper hedges in place as of September 30, 2024.
- Gold and copper production for the
fourth quarter of the year at the Mount Milligan Mine assumes
estimated recoveries of 63% to 65% for gold and 75% to 77% for
copper compared to actual recoveries for gold of 63.8% and for
copper of 75.6% achieved in the first nine months of 2024. The
Company estimates full year recoveries of 65% for gold and 77% for
copper.
- Unit costs include a credit for
forecasted copper sales treated as by-product for all-in sustaining
costsNG and all-in costsNG. Production for copper and gold reflects
estimated metallurgical losses resulting from handling of the
concentrate and metal deductions levied by smelters.
- Units noted as ($/oz) relate to
gold ounces and ($/lb) relate to copper pounds.
Molybdenum Business Unit
(Expressed in millions of United States dollars) |
2024 Guidance |
Nine Months Ended September 30, 2024 |
Langeloth Facility |
|
|
Loss from operationsNG(1) |
(5) - (15) |
(6.1) |
|
DD&A Expense |
5 - 10 |
2.8 |
|
Other non-cash adjustments |
— |
|
(1.8) |
|
Cash (used in) provided by operations before changes in working
capital |
(5) - 0 |
(5.1) |
|
Changes in Working Capital |
(20) - 20 |
(0.6) |
|
Cash (Used in) Provided by Operations |
(25) - 20 |
(5.7) |
|
Sustaining Capital ExpendituresNG |
(5) - (10) |
(4.9) |
|
Free Cash Flow (Deficit) from OperationsNG(2) |
(30) - 10 |
(10.6) |
|
Thompson Creek Mine(2) |
|
|
Project Evaluation Expenses(3) |
(21.1) |
|
(21.1) |
|
Care and Maintenance Expenses - Cash |
(2.0) |
|
(2.0) |
|
Other non-cash adjustments |
0.1 |
|
0.1 |
|
Cash (used in) provided by operations before changes in working
capital |
(23.0) |
|
(23.0) |
|
Changes in Working Capital |
3.4 |
|
3.4 |
|
Cash Used in Operations |
(19.6) |
|
(19.6) |
|
Non-sustaining Capital ExpendituresNG |
(55) - (65) |
(28.9) |
|
Free Cash Flow (Deficit) from OperationsNG |
(75) - (85) |
(48.5) |
|
Endako Mine |
|
|
Care and Maintenance Expenses |
(5) - (7) |
(3.7) |
|
Reclamation Costs |
(15) - (18) |
(4.0) |
|
Cash Used in Operations |
(20) - (25) |
(7.7) |
|
- Additions to
PP&E calculations for calculating Free Cash Flow (Deficit) from
OperationsNG include only cash expenditures for PP&E
additions.
- Reflects updated
outlook range for the Thompson Creek Mine for the full year of
2024.
- Project evaluation expenses are
recognized as expense in the consolidated statements of earnings
(loss).
Project Evaluation, Exploration, and
Other Costs
(Expressed in millions of United States dollars) |
2024 Guidance |
Nine Months Ended September 30, 2024 |
Project Exploration and Evaluation Costs |
|
|
Goldfield Project |
9 - 13 |
5.7 |
Thompson Creek Mine(1) |
21 - 27 |
21.1 |
Kemess Project |
3 - 5 |
0.5 |
Total Project Evaluation Costs |
33 - 45 |
27.3 |
Brownfield Exploration(2) |
17 - 22 |
18.6 |
Greenfield and Generative Exploration |
18 - 23 |
11.2 |
Total Exploration Costs(2) |
35 - 45 |
29.8 |
Total Exploration and Project Evaluation Costs |
68 - 90 |
57.1 |
Other Costs |
|
|
Kemess Project Care & Maintenance |
12 - 14 |
9.8 |
Corporate Administration Costs |
37 - 42 |
30.7 |
Stock-based Compensation |
8 - 10 |
6.0 |
Other Corporate Administration Costs |
29 - 32 |
24.7 |
- Thompson Creek Mine’s project
evaluation costs updated revised outlook for the full year of
2024.
- Total exploration costs include
capitalized exploration costs at the Mount Milligan Mine of $1.5
million for the nine months ended September 30, 2024..
Mount Milligan
Mount Milligan produced 42,993 ounces of gold
and 13.7 million pounds of copper in the third quarter of 2024. In
the first nine months of 2024, Mount Milligan produced 129,919
ounces of gold and 41.6 million pounds of copper. Mining activities
were carried out in phases 5, 6, 7, and 9 with a total of 11.8
million tonnes mined in the third quarter of 2024. Process plant
throughput for the third quarter of 2024 was 5.6 million tonnes,
averaging 58,520 tonnes per day. Gold sales were 45,968 ounces and
copper sales were 14.2 million pounds in the third quarter, up 46%
and 21% respectively, compared to last quarter. The higher sales
volumes were anticipated due to the timing of shipments. Metal
production in the fourth quarter is expected to be slightly higher
compared to the previous nine months of 2024 due to higher
projected mill throughput and higher expected gold grades. The 2024
production guidance metrics at Mount Milligan remain unchanged at
180,000 to 200,000 ounces of gold and 55 to 65 million pounds of
copper, with gold production trending towards the lower end of the
range.
Gold production costs in the third quarter 2024
were $1,138 per ounce. AISC on a by-product basisNG was $1,318 per
ounce, higher than last quarter due to increased sustaining capital
expenditures. In the first nine months of 2024, gold production
costs were $1,062 per ounce and AISC on a by-product basisNG was
$1,064 per ounce. The Company expects AISC on a by-product basisNG
to be lower in the fourth quarter, compared to the second and third
quarters, driven by higher expected sales and lower expected
sustaining capital expenditures. 2024 cost guidance metrics at
Mount Milligan remain unchanged. Gold production costs are expected
to be $950 to $1,050 per ounce, and AISC on a by-product basisNG is
expected to be $1,075 to $1,175 per ounce. The Company expects AISC
on a by-product basisNG at Mount Milligan to be at the lower end of
the costs guidance range.
In the third quarter 2024, sustaining capital
expendituresNG at Mount Milligan were $24.7 million, focused on the
tailings storage facility dam construction and equipment rebuilds.
Full year 2024 guidance for sustaining capital expendituresNG is
unchanged at $55 to $65 million.
In the third quarter of 2024, Mount Milligan
generated solid cash flow from operations of $40.2 million and
$15.6 million of free cash flowNG.
The site-wide optimization program at Mount
Milligan, initially launched in the fourth quarter 2023, continues
to progress. This program covers all aspects of the operation to
maximize the potential of the orebody, setting up Mount Milligan
for long-term success to 2035 and beyond. Notable achievements in
the first nine months of 2024 include an improved safety record,
increased availability and utilization of the haul fleet and
consistent ore supply which has led to increased mill throughput
per operating day. As part of the optimization program, Mount
Milligan is actively pursuing opportunities to reduce operating
costs. The Company continues to see productivity improvements in
the load-haul cycle at the mine, as well as in the unit processing
costs. In the first nine months of 2024, milling costs were $5.56
per tonne processed, 12% lower than the first nine months of last
year.
In February 2024, Centerra announced that the
Company has entered into the Additional Royal Gold Agreement
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 towards the end of the first half of
2025.
Öksüt
Öksüt produced 50,719 ounces of gold in the
third quarter of 2024, consistent with last quarter, and produced
164,961 ounces of gold in the first nine months of 2024. Mining
activities were focused on phase 5 and phase 4 of the Keltepe pit
and in phase 2 of the Güneytepe pit. A total of 4.9 million tonnes
were mined and 1.5 million tonnes were stacked at an average grade
of 1.05 g/t. In the first nine months of 2024, Öksüt finished
processing the excess gold inventory that it had accumulated in the
previous year, leading to elevated gold production levels. In the
fourth quarter, substantially all gold production is expected from
lower grade areas of the mine. As a result, gold production in the
fourth quarter is expected to contribute approximately 15% to 20%
of the annual gold production. The 2024 production guidance at
Öksüt is unchanged and is expected to be 190,000 to 210,000 ounces
of gold.
Gold production costs and AISC on a by-product
basisNG for the third quarter 2024 at Öksüt were $829 per ounce and
$1,092 per ounce, respectively. These costs were impacted by higher
royalty expense in the quarter due to elevated gold prices. In the
first nine months of 2024, gold production costs were $710 per
ounce and AISC on a by-product basisNG was $946 per ounce. The
Company expects AISC on a by-product basisNG to be the highest in
the fourth quarter, compared to the first nine months of 2024,
driven by lower production due to lower expected grades. Öksüt’s
gold production costs guidance and AISC on a by-product basisNG
guidance for 2024 is unchanged and is expected to be $650 to $750
per ounce, and $900 to $1,000 per ounce, respectively. However,
AISC on a by-product basisNG could slightly exceed the guidance
range due to higher royalty costs driven by elevated gold prices.
Centerra is seeing early indications of high inflation in Türkiye
which is not being fully offset by devaluation of the lira, unlike
in the past few years. The Company is currently evaluating the
potential impact this could have on Öksüt’s cost structure moving
forward.
In the third quarter 2024, sustaining capital
expenditures at Öksüt were $10.5 million, focused on capitalized
stripping, heap leach pad expansion and waste rock dump
expansion.
As expected, in the third quarter of 2024, Öksüt
returned to generating strong cash flow from operations and free
cash flowNG, after making tax and annual royalty payments in the
second quarter of 2024. In the third quarter, Öksüt generated $97.3
million of cash from mine operations and $86.8 million of free cash
flowNG.
Molybdenum Business Unit
In the third quarter 2024, the MBU sold 2.4
million pounds of molybdenum, generating revenue of $60.4 million
with an average realized price of $23.27 per pound.
On September 12, 2024, Centerra announced the
results from its Thompson Creek feasibility study, including a
strategic, integrated business plan for its MBU consisting of a
restart of Thompson Creek and a commercially optimized plan for
Langeloth, collectively US Moly. The Company believes the decision
will unlock significant value through the restart of operations at
Thompson Creek and a progressive ramp-up of production at
Langeloth. When Thompson Creek begins production, currently
targeted for the second half of 2027, it will provide additional
high-grade, high-quality feed to Langeloth, enabling a ramp-up of
production to more fully utilize Langeloth’s full annual capacity
of 40 million pounds, while improving operational flexibility to
meet market demand. For additional details, please refer to the
announcement entitled “Centerra Gold Announces Thompson Creek
Feasibility Study Results and Strategic Plan for US Molybdenum
Operations, Including a Restart of the Thompson Creek Mine and
Ramp-up of Langeloth“, issued on September 12, 2024.
The initial capital investment to restart
Thompson Creek is approximately $397 million. The capital required
is significantly de-risked due to an existing pit, significantly
advanced rebuilds and purchases, and an existing process plant that
requires minimal upgrades and refurbishments. A majority of the
anticipated capital expenditures are focused on capitalized
stripping, plant refurbishments and mine mobile fleet upgrades. At
current metal prices, the capital investment to restart Thompson
Creek is expected to be funded largely from Centerra’s cash flow
from operations.
In the third quarter and first nine months of
2024, non-sustaining capital expendituresNG at Thompson Creek were
$25.2 million and $25.8 million, respectively. Full year 2024
non-sustaining capitalNG guidance at Thompson Creek is expected to
be approximately $55 million to $65 million. Spending in the fourth
quarter of 2024 is expected to include capitalized stripping,
continued refurbishment of the existing mobile equipment fleet,
acquisition of new mine mobile equipment, and initial engineering
work on the mill refurbishment.
Intention to Renew NCIB
Subject to the approval of the approval of the
TSX, Centerra intends to proceed with a renewal of a NCIB to
purchase for cancellation a number of Common Shares representing
the greater of 5% of the issued and outstanding Common Shares or
10% of the public float. As of October 31, 2024, Centerra
had 211,337,985 issued and outstanding Common Shares.
Centerra believes that the Common Shares
continue to be trading in a price range which does not adequately
reflect the value of such shares in relation to Centerra’s assets
and its future prospects. As a result, Centerra believes that the
NCIB will provide the Company with a flexible tool to deploy a
portion of its cash balance pursuant to its capital allocation
framework to, depending upon future Common Share price movements
and other factors, purchase Common Shares for cancellation while
preserving its strong balance sheet position.
Centerra will file a notice of intention to
renew a NCIB with the TSX and, subject to the approval of the TSX,
Centerra may purchase Common Shares under the NCIB over a
twelve-month period. Once the NCIB is commenced, the exact timing
and amount of any purchases will depend on market conditions and
other factors. Centerra will not be obligated to acquire any Common
Shares and may suspend or discontinue purchases under the NCIB at
any time. Any purchases made under the NCIB will be made at market
price at the time of purchase through the facilities of the TSX
and/or alternative Canadian trading systems in accordance with
applicable securities laws and stock exchange rules. The Company’s
previous NCIB authorized the purchase of up to 18,293,896 Common
Shares and expires on November 6, 2024. During the period when that
program operated through October 30, 2024, a total of 5,783,100
Common Shares of the Company were repurchased through the
facilities of the TSX and alternative Canadian trading systems at a
volume weighted average price of C$8.74 per Common Share. Centerra
intends to establish an automatic share purchase plan in connection
with its renewed NCIB to facilitate the purchase of Common Shares
during times when Centerra would ordinarily not be permitted to
purchase Common Shares due to regulatory restrictions or
self-imposed blackout periods. Before entering a black-out period,
Centerra may, but is not required to, instruct its designated
broker to make purchases under the NCIB based on parameters set by
Centerra in accordance with the automatic share purchase plan,
applicable securities laws and stock exchange rules.
Third Quarter 2024 Operating and
Financial Results Webcast and Conference Call
Centerra invites you to join its 2024 third
quarter conference call on Friday, November 1, 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 February 1, 2025.
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 December 1, 2024. The recording can be accessed by dialing
1-855-669-9658 or 412-317-0088 and using the access code 4219380.
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 September 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
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”, “intend”, “ongoing”, “on track”,
“plan”, “potential”, “preliminary”, “project”, “pursuing”,
“realize”, “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, inflation,
depreciation, depletion and amortization, taxes and cash flows;
exploration potential, budgets, focuses, programs, targets and
projected exploration results; gold and copper prices; the
declaration, payment and sustainability of the Company’s dividends;
the continuation of the Company’s NCIB and automatic share purchase
plan including the intention to renew the NCIB and the timing,
methods and quantity of any purchases of Common Shares under the
NCIB; statements relating to the TSX's approval of the NCIB;
compliance with applicable laws and regulations pertaining to the
NCIB; the availability of cash for repurchases of Common Shares
under the NCIB; 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; the
integrated business plan of the Molybdenum Business Unit including
the restart of the Thompson Creek Mine and commercial optimization
of the Langeloth Metallurgical Facility; an initial resource
estimate at the Goldfield Project including the success of
exploration programs or metallurgical testwork; the Company’s
strategic plan; the optimization program at Mount Milligan
including any further improvements to occupational health and
safety, availability and utilization of the haul fleet, mill
throughput and any potential costs savings resulting from the same;
the expected gold production at Öksüt Mine in 2024; royalty rates
and taxes, including withholding taxes related to repatriation of
earnings from Türkiye; project development costs at the Goldfield
Project; 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; 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 and in the Royal Gold Streaming Agreement which may,
among other things, restrict the Company from pursuing certain
business activities. including paying dividends or repurchasing
shares under its normal course issuer bid, 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) risks related to operational matters and
geotechnical issues and the Company’s continued ability to
successfully manage such matters, including: unanticipated ground
and water conditions; 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, pandemics, 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 third
quarter ended September 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.
- EBITDA is a non-GAAP financial
measure that represents earnings before interest, taxes,
depreciation, and amortization. It is calculated by adjusting
earnings from operations as recorded in the consolidated statements
of earnings by depreciation and amortization. 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.
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 September 30, |
|
Consolidated |
Mount Milligan |
Öksüt |
(Unaudited - $millions, unless otherwise
specified) |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
2023 |
|
Production costs attributable to gold |
94.2 |
|
84.2 |
|
52.3 |
|
45.0 |
|
41.9 |
39.2 |
|
Production costs attributable to copper |
28.3 |
|
35.4 |
|
28.3 |
|
35.4 |
|
— |
— |
|
Total production costs excluding Molybdenum BU segment, as
reported |
122.5 |
|
119.6 |
|
80.6 |
|
80.4 |
|
41.9 |
39.2 |
|
Adjust for: |
|
|
|
|
|
|
Third party smelting, refining and transport costs |
3.2 |
|
2.8 |
|
3.0 |
|
2.4 |
|
0.2 |
0.4 |
|
By-product and co-product credits |
(50.1 |
) |
(48.2 |
) |
(50.1 |
) |
(47.9 |
) |
— |
(0.3 |
) |
Adjusted production costs |
75.6 |
|
74.2 |
|
33.5 |
|
34.9 |
|
42.1 |
39.3 |
|
Corporate general administrative and other costs |
10.8 |
|
7.7 |
|
0.5 |
|
— |
|
0.2 |
— |
|
Reclamation and remediation - accretion (operating sites) |
2.7 |
|
2.3 |
|
0.5 |
|
0.6 |
|
2.2 |
1.7 |
|
Sustaining capital expenditures |
35.2 |
|
22.6 |
|
24.7 |
|
12.5 |
|
10.5 |
10.1 |
|
Sustaining lease payments |
1.8 |
|
1.5 |
|
1.3 |
|
1.3 |
|
0.5 |
0.2 |
|
All-in sustaining costs on a by-product basis |
126.1 |
|
108.3 |
|
60.5 |
|
49.2 |
|
55.5 |
51.3 |
|
Exploration and study costs |
13.5 |
|
16.5 |
|
2.3 |
|
2.9 |
|
0.3 |
0.5 |
|
Non-sustaining capital expenditures |
0.2 |
|
1.1 |
|
— |
|
— |
|
— |
— |
|
Care and maintenance and other costs |
6.2 |
|
2.8 |
|
1.5 |
|
— |
|
— |
— |
|
All-in costs on a by-product basis |
146.0 |
|
128.7 |
|
64.3 |
|
52.1 |
|
55.8 |
51.8 |
|
Ounces sold (000s) |
96.7 |
|
131.0 |
|
46.0 |
|
42.9 |
|
50.7 |
88.1 |
|
Pounds sold (millions) |
14.2 |
|
15.4 |
|
14.2 |
|
15.4 |
|
— |
— |
|
Gold production costs ($/oz) |
973 |
|
643 |
|
1,138 |
|
1,050 |
|
829 |
445 |
|
All-in sustaining costs on a by-product basis ($/oz) |
1,302 |
|
827 |
|
1,318 |
|
1,150 |
|
1,092 |
582 |
|
All-in costs on a by-product basis ($/oz) |
1,509 |
|
983 |
|
1,401 |
|
1,218 |
|
1,098 |
586 |
|
Gold - All-in sustaining costs on a co-product basis ($/oz) |
1,401 |
|
858 |
|
1,526 |
|
1,245 |
|
1,092 |
582 |
|
Copper production costs ($/pound) |
1.99 |
|
2.30 |
|
1.99 |
|
2.30 |
|
n/a |
n/a |
|
Copper - All-in sustaining costs on a co-product basis
($/pound) |
2.69 |
|
2.73 |
|
2.69 |
|
2.73 |
|
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:
|
Nine months ended September 30, |
|
Consolidated |
Mount Milligan |
Öksüt |
(Unaudited - $millions, unless otherwise
specified) |
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
Production costs attributable to gold |
244.5 |
|
178.8 |
|
130.1 |
|
135.3 |
|
114.4 |
|
43.5 |
|
Production costs attributable to copper |
86.9 |
|
106.0 |
|
86.9 |
|
106.0 |
|
— |
|
— |
|
Total production costs excluding Molybdenum BU segment, as
reported |
331.4 |
|
284.8 |
|
217.0 |
|
241.3 |
|
114.4 |
|
43.5 |
|
Adjust for: |
|
|
|
|
|
|
Third party smelting, refining and transport costs |
8.3 |
|
7.8 |
|
7.6 |
|
7.4 |
|
0.7 |
|
0.4 |
|
By-product and co-product credits |
(147.1 |
) |
(137.5 |
) |
(146.9 |
) |
(137.2 |
) |
(0.2 |
) |
(0.3 |
) |
Adjusted production costs |
192.6 |
|
155.1 |
|
77.7 |
|
111.5 |
|
114.9 |
|
43.6 |
|
Corporate general administrative and other costs |
31.3 |
|
32.8 |
|
0.7 |
|
0.1 |
|
0.6 |
|
— |
|
Reclamation and remediation - accretion (operating sites) |
7.6 |
|
4.3 |
|
1.7 |
|
1.8 |
|
5.9 |
|
2.5 |
|
Sustaining capital expenditures |
77.2 |
|
48.1 |
|
46.2 |
|
27.6 |
|
30.6 |
|
20.5 |
|
Sustaining lease payments |
5.0 |
|
4.3 |
|
4.0 |
|
3.8 |
|
1.0 |
|
0.5 |
|
All-in sustaining costs on a by-product basis |
313.7 |
|
244.6 |
|
130.3 |
|
144.8 |
|
153.0 |
|
67.1 |
|
Exploration and study costs |
34.5 |
|
50.4 |
|
5.3 |
|
4.2 |
|
0.7 |
|
1.3 |
|
Non-sustaining capital expenditures |
0.8 |
|
2.9 |
|
— |
|
— |
|
— |
|
— |
|
Care and maintenance and other costs |
20.3 |
|
23.0 |
|
4.2 |
|
— |
|
— |
|
14.2 |
|
All-in costs on a by-product basis |
369.3 |
|
320.9 |
|
139.8 |
|
149.0 |
|
153.7 |
|
82.6 |
|
Ounces sold (000s) |
284.3 |
|
218.1 |
|
122.5 |
|
119.3 |
|
161.8 |
|
98.8 |
|
Pounds sold (millions) |
41.5 |
|
43.5 |
|
41.5 |
|
43.5 |
|
— |
|
— |
|
Gold production costs ($/oz) |
860 |
|
820 |
|
1,062 |
|
1,134 |
|
710 |
|
440 |
|
All-in sustaining costs on a by-product basis ($/oz) |
1,103 |
|
1,122 |
|
1,064 |
|
1,214 |
|
946 |
|
679 |
|
All-in costs on a by-product basis ($/oz) |
1,299 |
|
1,471 |
|
1,141 |
|
1,249 |
|
950 |
|
836 |
|
Gold - All-in sustaining costs on a co-product basis ($/oz) |
1,218 |
|
1,168 |
|
1,329 |
|
1,300 |
|
946 |
|
679 |
|
Copper production costs ($/pound) |
2.09 |
|
2.43 |
|
2.09 |
|
2.43 |
|
n/a |
|
n/a |
|
Copper - All-in sustaining costs on a co-product basis
($/pound) |
2.61 |
|
2.78 |
|
2.61 |
|
2.78 |
|
n/a |
|
n/a |
|
Adjusted net earnings (loss) is a
non-GAAP financial measure and can be reconciled as
follows:
|
Three months ended September 30, |
Nine months ended September 30, |
($millions, except as noted) |
|
2024 |
|
2023 |
|
|
2024 |
|
|
2023 |
|
Net earnings (loss) |
$ |
28.8 |
$ |
60.6 |
|
$ |
132.9 |
|
$ |
(52.5 |
) |
Adjust for items not associated with ongoing operations: |
|
|
|
|
Unrealized loss on financial assets relating to the Additional
Royal Gold Agreement |
|
1.5 |
|
— |
|
|
10.4 |
|
|
— |
|
Unrealized foreign exchange loss (gain)(1) |
|
1.3 |
|
(2.3 |
) |
|
(2.1 |
) |
|
(2.3 |
) |
Income and mining tax adjustments(2) |
|
0.4 |
|
9.2 |
|
|
(4.5 |
) |
|
19.9 |
|
Transaction costs related to the Additional Royal Gold
Agreement |
|
— |
|
— |
|
|
2.5 |
|
|
— |
|
Unrealized loss on marketable securities |
|
— |
|
— |
|
|
0.6 |
|
|
— |
|
Reclamation expense (recovery) at the Molybdenum BU sites and the
Kemess Project |
|
6.6 |
|
(23.1 |
) |
|
(23.5 |
) |
|
(15.8 |
) |
Adjusted net earnings (loss) |
$ |
38.6 |
$ |
44.4 |
|
$ |
116.3 |
|
$ |
(50.7 |
) |
|
|
|
|
|
Net earnings (loss) per share - basic |
$ |
0.14 |
$ |
0.28 |
|
$ |
0.62 |
|
$ |
(0.24 |
) |
Net earnings (loss) per share - diluted |
$ |
0.13 |
$ |
0.27 |
|
$ |
0.61 |
|
$ |
(0.25 |
) |
Adjusted net earnings (loss) per share -
basic |
$ |
0.19 |
$ |
0.21 |
|
$ |
0.54 |
|
$ |
(0.23 |
) |
Adjusted net earnings (loss) per share -
diluted |
$ |
0.18 |
$ |
0.20 |
|
$ |
0.54 |
|
$ |
(0.23 |
) |
(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 September 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) |
$ |
103.6 |
|
$ |
166.6 |
|
$ |
40.2 |
|
$ |
35.6 |
|
$ |
97.3 |
|
$ |
143.9 |
|
$ |
(14.0 |
) |
$ |
9.2 |
|
$ |
(19.9 |
) |
$ |
(22.1 |
) |
Deduct: |
|
|
|
|
|
|
|
|
|
|
Property, plant & equipment additions |
|
(66.2 |
) |
|
(22.1 |
) |
|
(24.6 |
) |
|
(10.4 |
) |
|
(10.5 |
) |
|
(10.1 |
) |
|
(31.1 |
) |
|
(0.4 |
) |
|
— |
|
|
(1.2 |
) |
Free cash flow (deficit) |
$ |
37.4 |
|
$ |
144.5 |
|
$ |
15.6 |
|
$ |
25.2 |
|
$ |
86.8 |
|
$ |
133.8 |
|
$ |
(45.1 |
) |
$ |
8.8 |
|
$ |
(19.9 |
) |
$ |
(23.3 |
) |
(1) |
As presented in the Company’s condensed consolidated statements of
cash flows. |
|
Nine months ended September 30, |
|
Consolidated |
Mount Milligan |
Öksüt |
Molybdenum |
Other |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Cash provided by (used in) operating
activities |
$ |
205.6 |
|
$ |
100.2 |
|
$ |
99.3 |
|
$ |
84.8 |
|
$ |
196.6 |
|
$ |
130.8 |
|
$ |
(28.7 |
) |
$ |
(36.7 |
) |
$ |
(61.6 |
) |
$ |
(78.7 |
) |
Deduct: |
|
|
|
|
|
|
|
|
|
|
Property, plant & equipment additions |
|
(114.0 |
) |
|
(51.0 |
) |
|
(46.0 |
) |
|
(26.2 |
) |
|
(30.6 |
) |
|
(20.5 |
) |
|
(36.9 |
) |
|
(0.5 |
) |
|
(0.5 |
) |
|
(3.8 |
) |
Free cash flow (deficit) |
$ |
91.6 |
|
$ |
49.2 |
|
$ |
53.3 |
|
$ |
58.6 |
|
$ |
166.0 |
|
$ |
110.3 |
|
$ |
(65.6 |
) |
$ |
(37.2 |
) |
$ |
(62.1 |
) |
$ |
(82.5 |
) |
Sustaining capital expenditures and
non-sustaining capital expenditures are non-GAAP measures and can
be reconciled as follows:
|
Three months ended September 30, |
|
Consolidated |
Mount Milligan |
Öksüt |
Molybdenum |
Other |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
2024 |
|
|
2023 |
|
Additions to PP&E(1) |
$ |
79.7 |
|
$ |
25.0 |
|
$ |
27.2 |
|
$ |
9.3 |
|
$ |
17.9 |
|
$ |
12.7 |
|
$ |
34.3 |
|
$ |
0.5 |
$ |
0.3 |
|
$ |
2.5 |
|
Adjust for: |
|
|
|
|
|
|
|
|
|
|
Costs capitalized to the ARO assets |
|
(17.8 |
) |
|
1.8 |
|
|
(2.4 |
) |
|
3.1 |
|
|
(6.4 |
) |
|
(1.3 |
) |
|
(9.0 |
) |
|
— |
|
— |
|
|
— |
|
Costs capitalized to the ROU assets |
|
(0.3 |
) |
|
(2.8 |
) |
|
— |
|
|
(0.2 |
) |
|
(1.0 |
) |
|
(1.2 |
) |
|
— |
|
|
— |
|
0.7 |
|
|
(1.4 |
) |
Other(2) |
|
(1.1 |
) |
|
0.7 |
|
|
(0.1 |
) |
|
0.4 |
|
|
— |
|
|
(0.1 |
) |
|
(0.1 |
) |
|
— |
|
(0.9 |
) |
|
0.4 |
|
Capital expenditures |
$ |
60.5 |
|
$ |
24.6 |
|
$ |
24.7 |
|
$ |
12.5 |
|
$ |
10.5 |
|
$ |
10.1 |
|
$ |
25.2 |
|
$ |
0.5 |
$ |
0.1 |
|
$ |
1.5 |
|
Sustaining capital expenditures |
|
35.3 |
|
|
23.5 |
|
|
24.7 |
|
|
12.5 |
|
|
10.5 |
|
|
10.1 |
|
|
— |
|
|
0.5 |
|
0.1 |
|
|
0.4 |
|
Non-sustaining capital expenditures |
|
25.2 |
|
|
1.1 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
25.2 |
|
|
— |
|
— |
|
|
1.1 |
|
(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. |
|
Nine months ended September 30, |
|
Consolidated |
Mount Milligan |
Öksüt |
Molybdenum |
Other |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
2024 |
|
|
2023 |
|
Additions to PP&E(1) |
$ |
132.9 |
|
$ |
53.8 |
|
$ |
46.8 |
|
$ |
25.4 |
|
$ |
39.5 |
|
$ |
23.4 |
|
$ |
44.8 |
|
$ |
0.6 |
$ |
1.8 |
|
$ |
4.4 |
|
Adjust for: |
|
|
|
|
|
|
|
|
|
|
Costs capitalized to the ARO assets |
|
(15.1 |
) |
|
1.0 |
|
|
1.7 |
|
|
2.5 |
|
|
(7.3 |
) |
|
(1.5 |
) |
|
(9.0 |
) |
|
— |
|
(0.5 |
) |
|
— |
|
Costs capitalized to the ROU assets |
|
(3.1 |
) |
|
(2.7 |
) |
|
(1.8 |
) |
|
(0.1 |
) |
|
(1.6 |
) |
|
(1.2 |
) |
|
— |
|
|
— |
|
0.3 |
|
|
(1.4 |
) |
Other(2) |
|
(1.1 |
) |
|
(0.2 |
) |
|
(0.5 |
) |
|
(0.2 |
) |
|
— |
|
|
(0.2 |
) |
|
(0.1 |
) |
|
— |
|
(0.5 |
) |
|
0.2 |
|
Capital expenditures |
$ |
113.6 |
|
$ |
51.9 |
|
$ |
46.2 |
|
$ |
27.6 |
|
$ |
30.6 |
|
$ |
20.5 |
|
$ |
35.7 |
|
$ |
0.6 |
$ |
1.1 |
|
$ |
3.2 |
|
Sustaining capital expenditures |
|
82.1 |
|
|
49.0 |
|
|
46.2 |
|
|
27.6 |
|
|
30.6 |
|
|
20.5 |
|
|
4.9 |
|
|
0.6 |
|
0.4 |
|
|
0.3 |
|
Non-sustaining capital expenditures |
|
31.5 |
|
|
2.9 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
30.8 |
|
|
— |
|
0.7 |
|
|
2.9 |
|
(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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