Centerra Gold Inc. (“Centerra” or the “Company”) (TSX: CG and NYSE:
CGAU) today reported its fourth quarter and full year 2023
operating and financial results.
President and CEO, Paul Tomory, commented,
“Centerra delivered a strong finish to 2023, producing 350,317
ounces of gold and 61.9 million pounds of copper in the full year,
with Mount Milligan achieving the highest mill throughput since the
start of operations in August 2013. We met our revised 2023
production and cost guidance, and ended the year with robust cash
and cash equivalents of over $600 million. The fourth quarter of
2023 was our second consecutive quarter of significant free cash
flow, spearheaded by the re-start at Öksüt in June 2023. In 2024,
we expect to produce between 370,000 and 410,000 ounces of gold,
which the midpoint is 11% higher than last year’s production, and
copper production is expected to be between 55 and 65 million
pounds. We are well-positioned for a strong 2024 as we continue to
deliver on our strategic plan and maximize the value of the assets
in our portfolio.”
Fourth Quarter 2023
Highlights
Operations
- Production: Fourth
quarter 2023 consolidated gold production of 129,259 ounces,
including production of 40,503 ounces of gold from the Mount
Milligan Mine (“Mount Milligan”) and 88,756 ounces of gold from the
Öksüt Mine (“Öksüt”). Copper production in the quarter was 19.7
million pounds.
- Sales: Fourth
quarter 2023 gold sales of 130,281 ounces at an average realized
gold priceNG of $1,846 per ounce and copper sales of 16.6 million
pounds at an average realized copper priceNG of $3.00 per pound.
The average realized gold and copper prices include the impact from
the Mount Milligan streaming agreement.
- Costs:
Consolidated gold production costs were $595 per ounce and all-in
sustaining costs (“AISC”) on by-product basisNG were $831 per ounce
for the quarter.
- Capital
expendituresNG: Fourth quarter 2023
additions to property, plant, equipment (“PPE”) and sustaining
capital expendituresNG were $67.9 million and $34.5 million,
respectively. Sustaining capital expendituresNG in the fourth
quarter 2023 primarily included construction of a water pumping
system at Mount Milligan, and deferred stripping and heap leach
expansion at Öksüt.
Financial
- Net earnings:
Fourth quarter 2023 net loss of $28.8 million or a loss of $0.13
per share and adjusted net earningsNG of $61.2 million or $0.28 per
share. Main adjustments include $50.0 million of reclamation
provision revaluation expense and $34.1 million of impairment loss
relating to the Kemess Project and Berg property. For additional
adjustments refer to the “Non-GAAP and Other Financial Measures”
disclosure at the end of this news release.
- Free cash
flowNG: In the fourth quarter 2023, cash
provided by operating activities was $145.4 million and free cash
flowNG was $111.0 million. This includes $144.3 million of cash
provided by mine operations and $127.9 million of free cash flow at
Öksüt.
- Cash and cash
equivalents: Total liquidity of $1,011.0 million,
representing a cash balance of $612.9 million and $398.1 million
available under a corporate credit facility as at December
31,2023.
- 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 and cancelled 361,500 common shares in the
fourth quarter 2023, for the total consideration of $2.1
million.
- Corporate development
updates: In the fourth quarter 2023, Centerra received a
milestone payment of $25 million from a subsidiary of the Orion
Mine Finance Group in relation to the sale of its 50% interest in
the Greenstone Gold Mines Partnership (“Greenstone Project”) in
2021.
Full Year 2023 Highlights
Operations
- Production: Full
year 2023 consolidated gold production was 350,317 ounces,
achieving the mid-point of the 2023 gold production guidance range,
including production of 154,391 ounces of gold from Mount Milligan
and 195,926 ounces of gold from Öksüt. Copper production for the
full year was 61.9 million pounds, in line with the 2023 copper
production guidance range.
- Sales: Full year
2023 gold sales of 348,399 ounces at an average realized gold price
of $1,718 per ounce and copper sales of 60.1 million pounds at an
average realized copper price of $3.01 per pound.
- Costs: Full year
2023 consolidated gold production costs were $733 per ounce and
AISC on by-product basisNG were $1,013 per ounce, in line with the
2023 gold production cost and AISC on by-product basisNG guidance
ranges.
- Capital
expendituresNG: Full year 2023 additions
to property, plant, equipment (“PPE”) and sustaining capital
expendituresNG were $121.7 million and $83.5 million, respectively.
Sustaining capital expendituresNG for the full year were below the
2023 guidance range as a result of lower capitalization to the
tailings storage facility (“TSF”) at Mount Milligan and the
deferral of some capital spending to 2024.
- 2024 Guidance: As
published on February 14, 2024, Centerra’s 2024 consolidated gold
production guidance is between 370,000 and 410,000 ounces, an 11%
increase from the midpoint of guidance over last year’s production,
and copper production guidance is between 55 and 65 million pounds
of copper. 2024 consolidated gold production cost guidance is
between $800 and $900 per ounce and consolidated AISC on a
by-product basisNG guidance is between $1,075 and $1,175 per
ounce.
Financial
- Net earnings: Full
year 2023 net loss of $81.3 million or a loss of $0.37 per share
and adjusted net earningsNG of $10.5 million or $0.05 per share.
Main adjustments include $34.2 million of reclamation provision
revaluation recovery, $34.1 million of impairment loss relating to
the Kemess Project and Berg property, $19.7 million of income tax
expense resulting from the effect of foreign exchange rate changes
on monetary assets and liabilities in the determination of taxable
income related to Öksüt and Mount Milligan as well as a one-time
income tax levied on taxpayers eligible to claim Turkish Investment
Incentive Certificate benefits in 2022. For additional adjustments
refer to the “Non-GAAP and Other Financial Measures” disclosure at
the end of this news release.
- Free cash
flowNG: Full year 2023 cash provided by
operating activities of $245.6 million and free cash flowNG of
$160.2 million.
Other
- Share buybacks:
During the year-ended December 31, 2023, Centerra repurchased and
cancelled 3,475,800 common shares for a total consideration of
$20.4 million under its NCIB program.
- Öksüt: On May 31,
2023, the Turkish Ministry of Environment, Urbanization and Climate
Change approved an amended Environmental Impact Assessment for
Öksüt and the Company resumed full operations at the mine on June
5, 2023.
- Corporate credit
facility: In September 2023, the Company announced the
extension of its $400 million revolving credit facility, which is
currently undrawn, with a renewed four-year term maturing on
September 8, 2027.
- Strategic plan: In
September 2023, Centerra announced its strategic plan for each
asset in the Company’s portfolio along with its approach to capital
allocation. The strategic plan identifies the opportunities at each
asset that will maximize the value and drive future growth for the
Company. In conjunction with the execution of the strategic plan,
Centerra developed a capital allocation strategy that is currently
focused on returning capital to shareholders through dividends and
share buybacks, investing in internal projects and exploration
within the current portfolio, and evaluating external opportunities
for growth.
- Renewal of
NCIB: In November 2023, Centerra renewed its NCIB
to purchase for cancellation up to an aggregate of 18,293,896
common shares in the capital of the Company (“Common Shares”),
representing 10% of the public float.
Highlights Subsequent to Year End
2023
- Mount Milligan mine life
extension and additional agreement with Royal Gold:
Centerra announced an additional agreement with Royal Gold related
to Mount Milligan, which resulted in a life of mine extension to
2035, and established favourable parameters for potential future
mine life extensions. This is a key first step in the Company’s
strategy to realize the full potential of this cornerstone asset in
a top-tier mining jurisdiction. For additional details, please
refer to the announcement entitled “Centerra Gold Announces Mount
Milligan Mine Life Extension and Additional Agreement with Royal
Gold”, issued on February 14, 2024.
Table 1 - Overview of Consolidated Financial and
Operating Highlights
| ($millions, except as
noted) |
Three months endedDecember 31, |
Years endedDecember 31, |
|
|
2023 |
|
2022 |
|
% Change |
2023 |
|
2022 |
|
% Change |
| Financial
Highlights |
|
|
|
|
|
|
Revenue |
340.0 |
|
208.3 |
|
63 |
% |
1,094.9 |
|
850.2 |
|
29 |
% |
| Production costs |
161.3 |
|
158.1 |
|
2 |
% |
706.0 |
|
574.6 |
|
23 |
% |
|
Depreciation, depletion, and amortization ("DDA") |
40.6 |
|
17.2 |
|
136 |
% |
124.9 |
|
97.1 |
|
29 |
% |
|
Earnings from mine operations |
138.1 |
|
33.0 |
|
318 |
% |
264.0 |
|
178.5 |
|
48 |
% |
| Net loss |
(28.8 |
) |
(130.1 |
) |
78 |
% |
(81.3 |
) |
(77.2 |
) |
(5 |
)% |
| Adjusted net earnings
(loss)(1) |
61.2 |
|
(13.7 |
) |
547 |
% |
10.5 |
|
(9.4 |
) |
212 |
% |
| Cash provided by (used in)
operating activities |
145.4 |
|
(9.8 |
) |
1584 |
% |
245.6 |
|
(2.0 |
) |
12380 |
% |
| Free cash flow
(deficit)(1) |
111.0 |
|
(25.3 |
) |
539 |
% |
160.2 |
|
(82.9 |
) |
293 |
% |
| Additions to property, plant
and equipment (“PP&E”) |
67.9 |
|
27.9 |
|
143 |
% |
121.7 |
|
275.1 |
|
(56 |
)% |
| Capital expenditures -
total(1) |
36.4 |
|
15.4 |
|
136 |
% |
88.3 |
|
73.2 |
|
21 |
% |
|
Sustaining capital expenditures(1) |
34.5 |
|
15.3 |
|
125 |
% |
83.5 |
|
71.1 |
|
17 |
% |
|
Non-sustaining capital expenditures(1) |
1.9 |
|
0.1 |
|
1800 |
% |
4.8 |
|
2.1 |
|
129 |
% |
| Net loss per common share -
$/share basic(2) |
(0.13 |
) |
(0.59 |
) |
78 |
% |
(0.37 |
) |
(0.29 |
) |
(27 |
)% |
|
Adjusted net earnings (loss) per common share - $/share
basic(1)(2) |
0.28 |
|
(0.06 |
) |
567 |
% |
0.05 |
|
(0.04 |
) |
225 |
% |
|
Operating highlights |
|
|
|
|
|
|
| Gold produced (oz) |
129,259 |
|
53,222 |
|
143 |
% |
350,317 |
|
243,867 |
|
44 |
% |
| Gold sold (oz) |
130,281 |
|
49,443 |
|
163 |
% |
348,399 |
|
242,193 |
|
44 |
% |
| Average market gold price
($/oz) |
1,974 |
|
1,728 |
|
14 |
% |
1,942 |
|
1,800 |
|
8 |
% |
| Average realized gold price
($/oz )(3) |
1,846 |
|
1,352 |
|
37 |
% |
1,718 |
|
1,446 |
|
19 |
% |
| Copper produced (000s
lbs) |
19,695 |
|
16,909 |
|
16 |
% |
61,862 |
|
73,864 |
|
(16 |
)% |
| Copper sold (000s lbs) |
16,562 |
|
15,374 |
|
8 |
% |
60,109 |
|
73,392 |
|
(18 |
)% |
| Average market copper price
($/lb) |
3.70 |
|
3.63 |
|
2 |
% |
3.85 |
|
3.99 |
|
(4 |
)% |
| Average realized copper price
($/lb)(3) |
3.00 |
|
3.43 |
|
(13 |
)% |
3.01 |
|
2.95 |
|
2 |
% |
| Molybdenum sold (000s
lbs) |
2,158 |
|
4,040 |
|
(47 |
)% |
11,235 |
|
13,448 |
|
(16 |
)% |
| Average market molybdenum
price ($/lb) |
18.64 |
|
21.49 |
|
(13 |
)% |
24.19 |
|
18.73 |
|
29 |
% |
| Average
realized molybdenum price ($/lb) |
20.35 |
|
20.86 |
|
(2 |
)% |
25.39 |
|
19.69 |
|
29 |
% |
|
Unit costs |
|
|
|
|
|
|
| Gold production costs
($/oz)(4) |
595 |
|
790 |
|
(25 |
)% |
733 |
|
681 |
|
8 |
% |
| All-in sustaining costs on a
by-product basis ($/oz)(1)(4) |
831 |
|
987 |
|
(16 |
)% |
1,013 |
|
860 |
|
18 |
% |
| All-in costs on a by-product
basis ($/oz)(1)(4) |
973 |
|
1,572 |
|
(38 |
)% |
1,285 |
|
1,201 |
|
7 |
% |
| Gold - All-in sustaining costs
on a co-product basis ($/oz)(1)(4) |
905 |
|
1,308 |
|
(31 |
)% |
1,069 |
|
1,112 |
|
(4 |
)% |
| Copper production costs
($/lb)(4) |
1.85 |
|
2.00 |
|
(8 |
)% |
2.29 |
|
1.70 |
|
35 |
% |
| Copper - All-in sustaining
costs on a co-product basis – ($/lb)(1)(4) |
2.42 |
|
2.40 |
|
1 |
% |
2.69 |
|
2.12 |
|
27 |
% |
(1) Non-GAAP financial measure. See discussion
under “Non-GAAP and Other Financial
Measures”.(2) As at December 31, 2023, the
Company had 215,497,133 common shares issued and
outstanding.(3) This supplementary financial
measure within the meaning of National Instrument 52-112 - Non-GAAP
and Other Financial Measures Disclosure (“NI 51-112”). is
calculated as a ratio of revenue from the consolidated financial
statements and units of metal sold and includes the impact from the
Mount Milligan Streaming Agreement, copper hedges and
mark-to-market adjustments on metal sold not yet finally
settled.(4) All per unit costs metrics are
expressed on a metal sold basis.
2024 Outlook
Centerra’s 2024 outlook and comparative actual
results for 2023 are set out in the tables below.
|
|
Units |
2024Guidance |
2023Actuals |
|
Production |
|
|
|
|
Total gold production(1) |
(Koz) |
370 - 410 |
350 |
|
Mount Milligan Mine(2)(3)(4) |
(Koz) |
180 - 200 |
154 |
|
Öksüt Mine |
(Koz) |
190 - 210 |
196 |
|
Total copper production(2)(3)(4) |
(Mlb) |
55 - 65 |
62 |
|
Unit Costs(5) |
|
|
|
|
Gold production costs(1) |
($/oz) |
800 - 900 |
733 |
|
Mount Milligan Mine(2) |
($/oz) |
950 - 1,050 |
1,088 |
|
Öksüt Mine |
($/oz) |
650 - 750 |
457 |
|
All-in sustaining costs on a by-product basisNG(1)(3)(4) |
($/oz) |
1,075 - 1,175 |
1,013 |
|
Mount Milligan Mine(4) |
($/oz) |
1,075 - 1,175 |
1,156 |
|
Öksüt Mine |
($/oz) |
900 - 1,000 |
675 |
|
Capital Expenditures |
|
|
|
|
Additions to PP&E(1) |
($M) |
108 - 140 |
121.7 |
|
Mount Milligan Mine |
($M) |
55 - 65 |
62.0 |
|
Öksüt Mine |
($M) |
40 - 50 |
50.5 |
|
Total Capital ExpendituresNG(1) |
($M) |
108 - 140 |
88.3 |
|
Mount Milligan Mine |
($M) |
55 - 65 |
44.0 |
|
Öksüt Mine |
($M) |
40 - 50 |
36.9 |
|
Sustaining Capital ExpendituresNG(1) |
($M) |
100 - 125 |
83.5 |
|
Mount Milligan Mine |
($M) |
55 - 65 |
44.0 |
|
Öksüt Mine |
($M) |
40 - 50 |
36.9 |
|
Non-sustaining Capital ExpendituresNG(6) |
($M) |
8 - 15 |
4.8 |
|
Depreciation, depletion and amortization(1) |
($M) |
140 - 165 |
124.9 |
|
Mount Milligan Mine |
($M) |
90 - 100 |
76.5 |
|
Öksüt Mine |
($M) |
45 - 55 |
44.1 |
|
Income tax and BC mineral tax expense(1) |
($M) |
47 - 57 |
85.7 |
|
Mount Milligan Mine |
($M) |
1 - 5 |
2.0 |
|
Öksüt Mine |
($M) |
46 - 52 |
83.7 |
- 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 Streaming Agreement”) in
the presented periods. Using an assumed market gold price of $1,850
per ounce and a blended copper price of $3.50 per pound for 2024,
Mount Milligan Mine’s average realized gold and copper price for
2024 would be $1,355 per ounce and $2.94 per pound, respectively,
compared to average realized prices of $1,431 per ounce and $3.01
per pound in 2023, when factoring in the Mount Milligan Streaming
Agreement and concentrate refining and treatment costs. The blended
copper price of $3.50 per pound factors in copper hedges in place
as of December 31, 2023.
- In 2024, gold and copper production
at the Mount Milligan Mine is projected with recoveries estimated
at 64% and 78%, respectively. This compares to the 2023 recoveries
of 64.0% for gold and 77.6% for copper for in 2023. Gold production
at the Öksüt Mine assumes recoveries of approximately 76%.
- Unit costs include a credit for
forecasted copper sales treated as by-product for all-in sustaining
costsNG and all-in costsNG. Production for copper and gold reflects
estimated metallurgical losses resulting from handling of the
concentrate and metal deductions levied by smelters.
- Units noted as ($/oz) relate to
gold ounces and ($/lb) relate to copper pounds.
Molybdenum Business Unit
|
(Expressed in millions of United States dollars) |
2024Guidance |
2023Actuals |
|
Langeloth Facility |
|
|
|
Loss from operationsNG(1) |
(5) - (15) |
(14) |
|
Cash (used in) provided by operations before changes in working
capital |
(5) - 0 |
(8) |
|
Changes in Working Capital |
(20) - 20 |
(10) |
|
Cash (Used in) Provided by Operations |
(25) - 20 |
(18) |
|
Sustaining Capital ExpendituresNG |
(5) - (10) |
(1) |
|
Free Cash Flow (Deficit) from OperationsNG(2) |
(30) - 10 |
(19) |
|
Thompson Creek
Mine(2) |
|
|
|
Non-sustaining Capital ExpendituresNG |
(7) - (12) |
(1) |
|
Project Evaluation Expenses(3) |
(17) - (20) |
(13) |
|
Care and Maintenance Expenses |
(1) - (3) |
(10) |
|
Cash Used in Operations |
(25) - (35) |
(24) |
|
Endako Mine |
|
|
|
Care and Maintenance Expenses |
(5) - (7) |
(5) |
|
Reclamation Costs(4) |
(15) - (18) |
(21) |
|
Cash Used in Operations |
(20) - (25) |
(9) |
- Includes DDA of $4.3 million in the 2023 actuals and $5 to $10
million in 2024 guidance.
- Outlook range for the Thompson Creek Mine relates to the first
half of 2024 only.
- Project evaluation expenses are recognized as expense in the
consolidated statements of loss.
- Relates to reclamation costs included in the reclamation
provision as at December 31, 2023.
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 2023 are
set out in the following table:
|
(Expressed in millions of United States dollars) |
2024Guidance |
2023 Actuals |
|
Project Exploration and Evaluation Costs(1) |
|
|
|
Goldfield Project |
9 - 13 |
15.4 |
|
Thompson Creek Mine(2) |
17 - 20 |
13.0 |
|
Total Project Evaluation Costs |
26 - 33 |
28.4 |
|
Brownfield Exploration(1) |
17 - 22 |
40.7 |
|
Greenfield and Generative Exploration |
18 - 23 |
10.0 |
|
Total Exploration Costs |
35 - 45 |
50.7 |
|
Total Exploration and Project Evaluation Costs |
61 - 78 |
79.1 |
|
Other Costs |
|
|
|
Kemess Project(3) |
24 - 30 |
11.1 |
|
Corporate Administration Costs |
37 - 42 |
44.9 |
|
Stock-based Compensation |
8 - 10 |
9.2 |
|
Other Corporate Administration Costs |
29 - 32 |
35.7 |
- The exploration and project
evaluation costs include both expensed exploration and project
evaluation costs as well as capitalized exploration costs and
exclude business development expenses. Approximately $1.3 million
of these capitalized exploration costs are also included in the
projected 2024 sustaining capital expendituresNG at the Mount
Milligan Mine, compared to $1.2 million of capitalized exploration
costs at the Mount Milligan Mine incurred in 2023. In addition,
approximately $0.8 million of capitalized project evaluation costs
at the Goldfield project are also included in 2024 non-sustaining
capital expendituresNG compared to $3.7 million of such costs in
2023.
- Outlook range for the Thompson
Creek Mine relates to the first half of 2024 only.
- Relates to reclamation costs
included in the reclamation provision as at December 31, 2023.
Mount Milligan
Mount Milligan produced 40,503 ounces of gold
and 19.7 million pounds of copper in the fourth quarter of 2023. In
the full year 2023, Mount Milligan produced 154,391 ounces of gold
and 61.9 million pounds of copper, achieving production guidance
for the year of 150,000 to 160,000 ounces of gold and 60 to 70
million pounds of copper. During the fourth quarter of 2023, mining
activities were carried out in phases 5, 6, 7, and 9 of the open
pit. A total of 12.4 million tonnes were mined in the fourth
quarter of 2023. Process plant throughput for the fourth quarter of
2023 was 5.8 million tonnes and averaged 60,927 tonnes per day. In
the full year 2023, Mount Milligan achieved the highest mill
throughput since the start of operations in August 2013.
Mount Milligan’s 2024 gold production guidance
is 180,000 to 200,000 ounces, which, at the midpoint, is 23% higher
than last year’s production. This is mainly due to mine sequencing
and higher gold grades. 2024 copper production is expected to be 55
to 65 million pounds. Both gold and copper production are expected
to be evenly weighted throughout the year, however, gold and copper
sales in the second half of 2024 are expected to contribute
approximately 55% of the annual sales.
Gold production costs in the fourth quarter 2023
were $946 per ounce. Full year 2023 gold production costs were
$1,088 per ounce, in line with the previously disclosed guidance
range of $1,050 to $1,100 per ounce. Fourth quarter 2023 AISC on a
by-product basisNG was $946 per ounce, and full year 2023 AISC on a
by-product basisNG was $1,156 per ounce, beating the previously
disclosed guidance range of $1,175 to $1,225 per ounce.
At Mount Milligan, full year 2024 gold
production costs are expected to be $950 to $1,050 per ounce. Full
year 2024 AISC on a by-product basisNG guidance at Mount Milligan
is expected to be $1,075 to $1,175 per ounce. In the fourth quarter
of 2023, Centerra embarked on a site-wide optimization program at
Mount Milligan, focused on a holistic assessment of occupational
health and safety, as well as improvements in mine and plant
operations. This program is focused on all aspects of the operation
to maximize the potential of the orebody, setting up Mount Milligan
for long-term success to 2035 and beyond. Some examples of
initiatives include:
- Occupational health and
safety: improvements through a complete engagement of the
operating team, with a focus on improving employee retention and
reduced turnover.
- Mine: improvements
of the load/haul cycle, productivity, enhanced mine maintenance
practices and refinement of the geometallurgical model; working
towards seamless integration of mine and plant operations.
- Plant: continuous
improvement in the overall operability of the plant, flotation
circuit, consumables, materials handling systems, and blending
consistency of feed to the plant. The Company expects these actions
to enhance plant throughput and recovery.
The Company is encouraged by the preliminary
cash flow improvement estimates from the first phases of work on
the program. Estimates of the potential cost savings from the asset
optimization review are still being developed and are not included
in Mount Milligan’s 2024 cost guidance ranges.
On February 14, 2024, Centerra announced that
the Company and its subsidiaries have entered into an additional
agreement with Royal Gold relating to Mount Milligan, which has
resulted in a life of mine extension to 2035 and established
favourable parameters for potential future mine life extensions.
Centerra will be initiating a Preliminary Economic Assessment
(“PEA”) to include significant drilling completed to the west of
the pit not currently included in the existing resource, plus
inclusion of existing resources, most of which are classified in
the measured and indicated categories. The PEA will also evaluate
several capital projects to support further expansion of Mount
Milligan’s life, including options for a new tailings storage
facility and potential process plant upgrades. The Company will
also be starting the associated work on permitting and engagement
with its First Nations partners and local stakeholders. The PEA is
expected to be completed in the first half of 2025.
Öksüt
Öksüt produced 88,756 ounces of gold in the
fourth quarter of 2023, and 195,926 ounces in the full year 2023,
which is just above the midpoint of the guidance range of 190,000
to 210,000 ounces. During the quarter, mining activities were
focused on phase 5 and phase 6 of the Keltepe pit and in phase 2 of
the Güneytepe pit. In the fourth quarter 2023, a total of 3.5
million tonnes were mined and 1.2 million tonnes were stacked at an
average grade of 1.95 g/t.
Full year 2024 production guidance at Öksüt is
190,000 to 210,000 ounces of gold, which is unchanged from the
previously disclosed life of mine plan published on September 18,
2023. Gold production is expected to be elevated in the first half
of 2024, as the elevated leach pad inventories and stockpiles are
processed through the adsorption, desorption, and recovery (“ADR”)
plant. The Company estimates approximately 60% of the annual
production is weighted to the first half of the year.
Gold production costs and AISC on a by-product
basisNG for the fourth quarter 2023 at Öksüt were $474 per ounce
and $671 per ounce, respectively. Gold production costs and AISC on
a by-product basisNG for the full year 2023 were $457 per ounce and
$675 per ounce, respectively, in line with the previously disclosed
guidance ranges of $425 to $475 per ounce and $625 to $675 per
ounce, respectively. These low costs per ounce were primarily
related to processing the gold-in-carbon and heap leach inventory
that was accumulated at Öksüt in 2022 and first half of 2023 and
had relatively low weighted average costs per ounce.
Öksüt’s full year 2024 gold production costs
guidance is expected to be $650 to $750 per ounce. Full year 2024
AISC on a by-product basisNG guidance at Öksüt is expected to be
$900 to $1,000 per ounce. Costs in 2024 are expected to be higher
than last year due to increased mining and hauling costs, and
higher weighted average cost per ounce in the remaining
inventory.
The Turkish corporate income tax rate applicable
to Öksüt is 25%. In 2024, Öksüt’s current income tax paid is
expected to be between $85 to $95 million, which includes
withholding tax related to repatriation of earnings. As a result of
the expected timing of tax and annual royalty payments, free cash
flow at Öksüt in the second quarter of 2024 is expected to be
impacted by tax and royalty payments.
Molybdenum Business Unit
In the fourth quarter 2023, the Molybdenum
Business Unit sold 2.2 million pounds of molybdenum, generating
revenue of $47.4 million with an average realized price of $20.35
per pound. In the full year 2023, the Molybdenum Business Unit sold
11.2 million pounds of molybdenum, generating revenue of $306.7
million with an average realized price of $25.39 per pound.
During the fourth quarter 2023, Thompson Creek
Mine commenced some early works in the main open pit area that are
expected to continue through 2024. The cost of these activities are
expected to be expensed until mid-2024, following the completion of
a feasibility study.
In the first quarter of 2023, the Langeloth
Facility required a $67 million investment in working capital to
finance its business due to a rapid increase in molybdenum prices.
Approximately $57 million of the investment in working capital has
been released over the remainder of 2023.
Fourth Quarter and Full Year 2023
Operating and Financial Results and Conference Call
Centerra invites you to join its 2023 fourth
quarter conference call on Friday, February 23, 2024, at 9:00am
Eastern Time. Details for the conference call and webcast are
included below.
Webcast
- Participants can access the webcast
at the following
link:https://services.choruscall.ca/links/centerragold2023q4.html
- An archive of the webcast will be
available until the end of day on May 23, 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
1-800-319-4610 or 604-638-5340. 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 March 23, 2024. The recording can be accessed by dialing
412-317-0088 or 1-855-669-9658 and using the passcode 0641. In
addition, the webcast will be archived on Centerra’s website at:
www.centerragold.com/investor/events-presentations.
- 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 December 31, 2023 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
lana.pisarenko@centerragold.com
Additional information on Centerra is available on the
Company’s website at www.centerragold.com, on SEDAR+ at
www.sedarplus.ca and EDGAR at www.sec.gov/edgar.
Caution Regarding Forward-Looking
Information:
This document contains or incorporates by
reference “forward-looking statements” and “forward-looking
information” as defined under applicable Canadian and U.S.
securities legislation. All statements, other than statements of
historical fact, which address events, results, outcomes or
developments that the Company expects to occur are, or may be
deemed to be, forward-looking statements. Such forward-looking
information involves risks, uncertainties and other factors that
could cause actual results, performance, prospects and
opportunities to differ materially from those expressed or implied
by such forward-looking information. Forward-looking statements are
generally, but not always, identified by the use of forward-looking
terminology such as “believe”, “continue”, “expect”, “evaluate”,
“finalizing”, “forecast”, “goal”, “ongoing”, “plan”, “potential”,
“preliminary”, “project”, “restart”, “target” or “update”, or
variations of such words and phrases and similar expressions or
statements that certain actions, events or results “may”, “could”,
“would” or “will” be taken, occur or be achieved or the negative
connotation of such terms.
Such statements include, but may not be limited
to: statements regarding 2024 guidance, outlook and expectations,
including production, cash flow, costs including care and
maintenance and reclamation costs, capital expenditures,
depreciation, depletion and amortization, taxes and cash flows;
exploration potential, budgets, focuses, programs, targets and
projected exploration results; gold and copper prices; 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 fourth
quarter ended December 31, 2023, 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 December 31, |
|
|
Consolidated |
Mount Milligan |
Öksüt |
|
(Unaudited - $millions, unless otherwise
specified) |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Production costs attributable to gold |
77.5 |
|
39.0 |
|
31.4 |
|
39.0 |
|
46.1 |
|
— |
|
Production costs attributable to copper |
30.7 |
|
30.8 |
|
30.7 |
|
30.8 |
|
— |
|
— |
| Total
production costs excluding Molybdenum BU segment, as reported |
108.2 |
|
69.8 |
|
62.1 |
|
69.8 |
|
46.1 |
|
— |
| Adjust
for: |
|
|
|
|
|
|
| Third
party smelting, refining and transport costs |
3.1 |
|
3.5 |
|
2.7 |
|
3.5 |
|
0.4 |
|
— |
|
By-product and co-product credits |
(52.0 |
) |
(54.3 |
) |
(51.9 |
) |
(54.3 |
) |
(0.1 |
) |
— |
| Adjusted
production costs |
59.3 |
|
19.0 |
|
12.9 |
|
19.0 |
|
46.4 |
|
— |
| Corporate
general administrative and other costs |
11.6 |
|
12.1 |
|
0.1 |
|
0.4 |
|
— |
|
— |
|
Reclamation and remediation - accretion (operating sites) |
2.6 |
|
1.7 |
|
0.6 |
|
0.5 |
|
2.0 |
|
1.2 |
|
Sustaining capital expenditures |
33.1 |
|
14.5 |
|
16.3 |
|
9.9 |
|
16.5 |
|
4.6 |
|
Sustaining leases |
1.6 |
|
1.5 |
|
1.4 |
|
1.3 |
|
0.2 |
|
0.2 |
| All-in
sustaining costs on a by-product basis |
108.2 |
|
48.8 |
|
31.3 |
|
31.1 |
|
65.2 |
|
6.0 |
|
Exploration and evaluation costs |
10.8 |
|
23.0 |
|
2.3 |
|
2.0 |
|
0.8 |
|
1.4 |
|
Non-sustaining capital expenditures(1) |
1.9 |
|
0.1 |
|
— |
|
0.1 |
|
— |
|
— |
| Care and
maintenance and other costs |
5.8 |
|
5.8 |
|
— |
|
— |
|
— |
|
1.3 |
| All-in
costs on a by-product basis |
126.8 |
|
77.7 |
|
33.6 |
|
33.2 |
|
66.0 |
|
8.7 |
| Ounces
sold (000s) |
130.3 |
|
49.4 |
|
33.1 |
|
49.4 |
|
97.2 |
|
— |
| Pounds
sold (millions) |
16.6 |
|
15.4 |
|
16.6 |
|
15.4 |
|
— |
|
— |
| Gold
production costs ($/oz) |
595 |
|
790 |
|
946 |
|
790 |
|
474 |
|
n/a |
| All-in
sustaining costs on a by-product basis ($/oz) |
831 |
|
987 |
|
946 |
|
629 |
|
671 |
|
n/a |
| All-in
costs on a by-product basis ($/oz) |
973 |
|
1,572 |
|
1,016 |
|
672 |
|
679 |
|
n/a |
| Gold -
All-in sustaining costs on a co-product basis ($/oz) |
905 |
|
1,308 |
|
1,237 |
|
950 |
|
671 |
|
n/a |
| Copper
production costs ($/pound) |
1.85 |
|
2.00 |
|
1.86 |
|
2.00 |
|
n/a |
|
n/a |
|
Copper - All-in sustaining costs on a co-product basis
($/pound) |
2.42 |
|
2.40 |
|
2.42 |
|
2.40 |
|
n/a |
|
n/a |
(1) Non-sustaining capital
expenditures are distinct projects designed to have a significant
increase in the net present value of the mine.
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:
|
|
Years ended December 31, |
|
|
Consolidated |
Mount Milligan |
Öksüt |
|
(Unaudited - $millions, unless otherwise
specified) |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Production costs attributable to gold |
255.5 |
|
164.9 |
|
165.9 |
|
143.8 |
|
89.6 |
|
21.1 |
|
Production costs attributable to copper |
137.5 |
|
125.1 |
|
137.5 |
|
125.1 |
|
— |
|
— |
| Total
production costs excluding Molybdenum BU segment, as reported |
393.0 |
|
290.0 |
|
303.4 |
|
268.9 |
|
89.6 |
|
21.1 |
| Adjust
for: |
|
|
|
|
|
|
| Third
party smelting, refining and transport costs |
10.9 |
|
12.1 |
|
10.1 |
|
11.9 |
|
0.8 |
|
0.2 |
|
By-product and co-product credits |
(189.4 |
) |
(223.8 |
) |
(189.0 |
) |
(223.8 |
) |
(0.4 |
) |
— |
| Adjusted
production costs |
214.5 |
|
78.3 |
|
124.5 |
|
57.0 |
|
90.0 |
|
21.3 |
| Corporate
general administrative and other costs |
44.4 |
|
47.8 |
|
0.2 |
|
1.1 |
|
— |
|
— |
|
Reclamation and remediation - accretion (operating sites) |
7.0 |
|
7.2 |
|
2.4 |
|
1.8 |
|
4.6 |
|
5.4 |
|
Sustaining capital expenditures |
81.2 |
|
69.1 |
|
44.0 |
|
53.1 |
|
36.9 |
|
16.0 |
|
Sustaining lease payments |
5.9 |
|
5.8 |
|
5.1 |
|
5.1 |
|
0.8 |
|
0.6 |
| All-in
sustaining costs on a by-product basis |
353.0 |
|
208.2 |
|
176.2 |
|
118.1 |
|
132.3 |
|
43.3 |
|
Exploration and study costs |
61.2 |
|
65.7 |
|
6.5 |
|
12.2 |
|
2.1 |
|
3.8 |
|
Non-sustaining capital expenditures |
4.8 |
|
2.1 |
|
— |
|
1.6 |
|
— |
|
— |
| Care and
maintenance and other costs |
28.6 |
|
14.8 |
|
— |
|
— |
|
14.2 |
|
1.7 |
| All-in
costs on a by-product basis |
447.6 |
|
290.8 |
|
182.7 |
|
131.9 |
|
148.6 |
|
48.8 |
| Ounces
sold (000s) |
348.4 |
|
242.2 |
|
152.5 |
|
187.5 |
|
195.9 |
|
54.7 |
| Pounds
sold (millions) |
60.1 |
|
73.4 |
|
60.1 |
|
73.4 |
|
— |
|
— |
| Gold
production costs ($/oz) |
733 |
|
681 |
|
1,088 |
|
767 |
|
457 |
|
386 |
| All-in
sustaining costs on a by-product basis ($/oz) |
1,013 |
|
860 |
|
1,156 |
|
630 |
|
675 |
|
791 |
| All-in
costs on a by-product basis ($/oz) |
1,285 |
|
1,201 |
|
1,199 |
|
704 |
|
758 |
|
891 |
| Gold -
All-in sustaining costs on a co-product basis ($/oz) |
1,069 |
|
1,112 |
|
1,283 |
|
956 |
|
675 |
|
791 |
| Copper
production costs ($/pound) |
2.29 |
|
1.70 |
|
2.29 |
|
1.70 |
|
n/a |
|
n/a |
|
Copper - All-in sustaining costs on a co-product basis
($/pound) |
2.69 |
|
2.12 |
|
2.69 |
|
2.12 |
|
n/a |
|
n/a |
Adjusted net earnings (loss) is a
non-GAAP financial measure and can be reconciled as
follows:
|
|
Three months endedDecember 31, |
Years endedDecember 31, |
|
($millions, except as noted) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Net loss |
$ |
(28.8 |
) |
$ |
(130.1 |
) |
$ |
(81.3 |
) |
$ |
(77.2 |
) |
| Adjust
for items not associated with ongoing operations: |
|
|
|
|
|
Reclamation expense (recovery) at the Molybdenum BU sites and the
Kemess Project |
|
50.0 |
|
|
(3.4 |
) |
|
34.2 |
|
|
(94.2 |
) |
|
Impairment loss, net of tax |
|
34.1 |
|
|
138.2 |
|
|
34.1 |
|
|
138.2 |
|
|
Other non-operating losses at the Mount Milligan Mine |
|
2.0 |
|
|
— |
|
|
2.0 |
|
|
— |
|
|
Unrealized foreign exchange loss(1) |
|
2.5 |
|
|
— |
|
|
0.2 |
|
|
— |
|
|
Unrealized loss on non-hedge derivatives |
|
1.6 |
|
|
— |
|
|
1.6 |
|
|
— |
|
|
Income and mining tax adjustments(2) |
|
(0.2 |
) |
|
(14.0 |
) |
|
19.7 |
|
|
13.2 |
|
|
Gain on derecognition of the employee health plan benefit provision
at the Langeloth Facility |
|
— |
|
|
(4.4 |
) |
|
— |
|
|
(4.4 |
) |
|
Kumtor Mine legal costs and other related costs |
|
— |
|
|
— |
|
|
— |
|
|
15.0 |
|
|
Adjusted net earnings (loss) |
$ |
61.2 |
|
$ |
(13.7 |
) |
$ |
10.5 |
|
$ |
(9.4 |
) |
|
|
|
|
|
|
|
Net loss per share - basic |
$ |
(0.13 |
) |
$ |
(0.59 |
) |
$ |
(0.37 |
) |
$ |
(0.29 |
) |
|
Net loss per share - diluted |
$ |
(0.13 |
) |
$ |
(0.59 |
) |
$ |
(0.38 |
) |
$ |
(0.31 |
) |
|
Adjusted net earnings (loss) per share -
basic |
$ |
0.28 |
|
$ |
(0.06 |
) |
$ |
0.05 |
|
$ |
(0.04 |
) |
|
Adjusted net earnings (loss) per share -
diluted |
$ |
0.28 |
|
$ |
(0.06 |
) |
$ |
0.05 |
|
$ |
(0.04 |
) |
(1) Effect of the foreign
exchange movement on the reclamation provision at the Endako Mine
and Kemess Project.(2) Income tax adjustments reflect
the impact of a one-time income tax levied by the Turkish
government, impact of foreign currency translation on deferred
income taxes at the Öksüt Mine and the Mount Milligan Mine, an
election made under local legislation to account for inflation and
increase the tax value of Öksüt Mine’s assets and a withholding tax
expense on the expected repatriation of Öksüt Mine’s earnings.
Free cash flow (deficit) is a non-GAAP
financial measure and can be reconciled as follows:
|
|
Three months ended December 31, |
|
|
Consolidated |
Mount Milligan |
Öksüt |
Molybdenum |
Other |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
2023 |
|
|
2022 |
|
|
Cash provided by (used in) operating
activities |
$ |
145.4 |
|
$ |
(9.8 |
) |
$ |
29.1 |
|
$ |
26.5 |
|
$ |
144.3 |
|
$ |
(11.9 |
) |
$ |
(7.7 |
) |
$ |
8.6 |
$ |
(20.3 |
) |
$ |
(33.0 |
) |
|
Deduct: |
|
|
|
|
|
|
|
|
|
|
|
Property, plant & equipment additions |
|
(34.4 |
) |
|
(15.5 |
) |
|
(15.0 |
) |
|
(10.9 |
) |
|
(16.4 |
) |
|
(4.6 |
) |
|
(1.4 |
) |
|
— |
|
(1.6 |
) |
|
— |
|
|
Free cash flow (deficit) |
$ |
111.0 |
|
$ |
(25.3 |
) |
$ |
14.1 |
|
$ |
15.6 |
|
$ |
127.9 |
|
$ |
(16.5 |
) |
$ |
(9.1 |
) |
$ |
8.6 |
$ |
(21.9 |
) |
$ |
(33.0 |
) |
|
|
Years ended December 31, |
|
|
Consolidated |
Mount Milligan |
Öksüt |
Molybdenum |
Other |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Cash provided by (used in) operating
activities |
$ |
245.6 |
|
$ |
(2.0 |
) |
$ |
113.9 |
|
$ |
161.6 |
|
$ |
275.1 |
|
$ |
(17.5 |
) |
$ |
(44.4 |
) |
$ |
(9.3 |
) |
$ |
(99.0 |
) |
$ |
(136.8 |
) |
|
Deduct: |
|
|
|
|
|
|
|
|
|
|
|
Property, plant & equipment additions |
|
(85.4 |
) |
|
(80.9 |
) |
|
(41.2 |
) |
|
(61.2 |
) |
|
(36.9 |
) |
|
(16.0 |
) |
|
(1.9 |
) |
|
(1.1 |
) |
|
(5.4 |
) |
|
(2.6 |
) |
|
Free cash flow (deficit) |
$ |
160.2 |
|
$ |
(82.9 |
) |
$ |
72.7 |
|
$ |
100.4 |
|
$ |
238.2 |
|
$ |
(33.5 |
) |
$ |
(46.3 |
) |
$ |
(10.4 |
) |
$ |
(104.4 |
) |
$ |
(139.4 |
) |
Sustaining capital expenditures and
non-sustaining capital expenditures are non-GAAP measures and can
be reconciled as follows:
|
|
Three months ended December 31, |
|
|
Consolidated |
Mount Milligan |
Öksüt |
Molybdenum |
Other |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
2022 |
|
2023 |
|
|
2022 |
|
|
Additions to
PP&E(1) |
$ |
67.9 |
|
$ |
27.9 |
|
$ |
36.6 |
|
$ |
14.6 |
|
$ |
27.1 |
|
$ |
5.1 |
|
$ |
1.4 |
$ |
0.8 |
$ |
2.8 |
|
$ |
7.4 |
|
| Adjust
for: |
|
|
|
|
|
|
|
|
|
|
|
Costs capitalized to the ARO assets |
|
(17.6 |
) |
|
(11.7 |
) |
|
(6.8 |
) |
|
(4.4 |
) |
|
(10.4 |
) |
|
— |
|
|
— |
|
— |
|
(0.4 |
) |
|
(7.3 |
) |
|
Costs capitalized to the ROU assets |
|
(13.8 |
) |
|
(0.2 |
) |
|
(13.6 |
) |
|
— |
|
|
(0.2 |
) |
|
(0.2 |
) |
|
— |
|
— |
|
— |
|
|
— |
|
|
Other(1) |
|
(0.1 |
) |
|
(0.6 |
) |
|
0.2 |
|
|
(0.2 |
) |
|
(0.1 |
) |
|
(0.3 |
) |
|
— |
|
— |
|
(0.2 |
) |
|
(0.1 |
) |
|
Capital expenditures |
$ |
36.4 |
|
$ |
15.4 |
|
$ |
16.4 |
|
$ |
10.0 |
|
$ |
16.4 |
|
$ |
4.6 |
|
$ |
1.4 |
$ |
0.8 |
$ |
2.2 |
|
$ |
— |
|
|
Sustaining capital expenditures |
|
34.5 |
|
|
15.3 |
|
|
16.4 |
|
|
9.9 |
|
|
16.4 |
|
|
4.6 |
|
|
1.4 |
|
0.8 |
|
0.3 |
|
|
— |
|
|
Non-sustaining capital expenditures |
|
1.9 |
|
|
0.1 |
|
|
— |
|
|
0.1 |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
1.9 |
|
|
— |
|
(1) Includes reclassification
of insurance and capital spares from supplies inventory to
PP&E.
|
|
Years ended December 31, |
|
|
Consolidated |
Mount Milligan |
Öksüt |
Molybdenum |
Other |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
2023 |
|
|
2022 |
|
|
2023 |
|
2022 |
|
2023 |
|
|
2022 |
|
|
Additions to
PP&E(1) |
$ |
121.7 |
|
$ |
275.1 |
|
$ |
62.0 |
|
$ |
49.2 |
$ |
50.5 |
|
$ |
14.2 |
|
$ |
2.0 |
$ |
1.8 |
$ |
7.2 |
|
$ |
209.9 |
|
| Adjust
for: |
|
|
|
|
|
|
|
|
|
|
|
Costs capitalized to the ARO assets |
|
(16.6 |
) |
|
6.4 |
|
|
(4.3 |
) |
|
5.5 |
|
(11.9 |
) |
|
1.9 |
|
|
— |
|
— |
|
(0.4 |
) |
|
(1.0 |
) |
|
Costs capitalized to the ROU assets |
|
(16.5 |
) |
|
(0.4 |
) |
|
(13.7 |
) |
|
— |
|
(1.4 |
) |
|
(0.4 |
) |
|
— |
|
— |
|
(1.4 |
) |
|
— |
|
|
Costs relating to the acquisition of Goldfield Project |
|
— |
|
|
(208.2 |
) |
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
|
(208.2 |
) |
|
Other(1) |
|
(0.3 |
) |
|
0.3 |
|
|
— |
|
|
— |
|
(0.3 |
) |
|
0.3 |
|
|
— |
|
0.1 |
|
— |
|
|
(0.1 |
) |
|
Capital expenditures |
$ |
88.3 |
|
$ |
73.2 |
|
$ |
44.0 |
|
$ |
54.7 |
$ |
36.9 |
|
$ |
16.0 |
|
$ |
2.0 |
$ |
1.9 |
$ |
5.4 |
|
$ |
0.6 |
|
|
Sustaining capital expenditures |
|
83.5 |
|
|
71.1 |
|
|
44.0 |
|
|
53.1 |
|
36.9 |
|
|
16.0 |
|
|
2.0 |
|
1.9 |
|
0.6 |
|
|
0.1 |
|
|
Non-sustaining capital expenditures |
|
4.8 |
|
|
2.1 |
|
|
— |
|
|
1.6 |
|
— |
|
|
— |
|
|
— |
|
— |
|
4.8 |
|
|
0.5 |
|
(1) Includes reclassification
of insurance and capital spares from supplies inventory to
PP&E.
Centerra Gold (NYSE:CGAU)
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