Centerra Gold Records Net Earnings of $20.0 million or $0.07 per Common Share, Adjusted Net EarningsNG of $46.4 million or $0.16 per Common Share and Cash from Operations of $121.1 million All figures are in United States dollars and all production figures are on a 100% basis unless otherwise
NEWS RELEASE
Centerra Gold Records Net Earnings of $20.0 million or $0.07 per Common Share, Adjusted Net EarningsNG of $46.4 million or $0.16 per Common Share and Cash from Operations of $121.1 million
All figures are in United States dollars and all production figures are on a 100% basis unless otherwise stated. This news release contains forward looking information regarding Centerra’s business and operations. See “Caution Regarding Forward-Looking Information”.
Toronto, Canada, May 1, 2020: Centerra Gold Inc. (“Centerra” or the “Company”) (TSX: CG) today reported first quarter 2020 results. Key events and operating results of the first quarter included:
- Net earnings of $20.0 million and adjusted net earningsNG of $46.4 million, $0.07 and $0.16 per common share, respectively.
- Cash flow from operations was $121.1 million.
- Production totalled 190,474 ounces of gold, including pre-commercial ounces from Öksüt, and 20.1 million pounds of copper.
- Production costs per ounce of gold sold were $423 per ounce.
- Production costs per pound of copper sold were $1.34 per pound.
- All-in sustaining costs on a by-product basis per ounce soldNG were $712 per ounce.
- Cash net of debt position of $57.8 million at quarter end, includes cash of $193.8 million. As at March 31, 2020, the Company had $136 million drawn on its Corporate credit facility with total liquidity of $557.8 million.
- COVID-19 update: Kumtor operating at targeted levels for both mill and mining production, Öksüt open pit mining recommenced mid-April after a two-week period of reduced manpower, Mount Milligan expected to return to targeted levels in the first half of May after reducing manpower on April 6 and completing a scheduled two-week shutdown for process plant maintenance. The Company continues to comply with government regulations relating to COVID- 19 as well as take steps to ensure safety of personnel and continuity of operations, including supply chains.
- No change to 2020 guidance. To date the COVID-19 pandemic has not resulted in any material impact on Centerra’s operations and the Company currently does not expect it will impact its 2020 production. However, the potential effects of COVID-19 are unpredictable, and the Company continues to monitor the situation at each of its sites and take steps to prevent or minimize any effects the pandemic may have.
- Dividend of C$0.04 per common share approved April 30, 2020, payable on June 4, 2020 to shareholders of record on May 21, 2020.
All references in this document denoted with NG, indicate a non-GAAP term which is discussed under “Non-GAAP Measures” and reconciled to the most directly comparable GAAP measure.
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Commentary
Scott Perry, President and Chief Executive Officer of Centerra stated, “During the current outbreak of COVID-19, we are consciously taking the necessary precautionary measures to prevent the spread and ensure the health, safety and well-being of our employees, contractors and communities. We have also celebrated a recent safety milestone, when on April 19, 2020, Öksüt achieved one year without a lost time injury. Our continued commitment to Work Safe Home Safe is a driving force behind achieving such milestones.”
“The strong operating performance at Kumtor and Mount Milligan in the fourth quarter of 2019 has carried over into the first quarter of 2020. These two operations delivered consolidated gold production of 185,988 ounces at all-in sustaining costsNG on a by-product basis of $712 per ounce sold in the quarter. Kumtor had another strong quarter producing 152,307 ounces of gold production at all-in-sustaining costsNG on a byproduct basis of $644 per ounce sold. Mount Milligan produced 33,681 ounces of gold and 20.1 million pounds of copper at all-in-sustaining costsNG on a by-product basis of $901 per ounce sold. Öksüt poured its first gold in January and produced 4,486 ounces in the quarter as it transitioned from construction into operations. In aggregate our three operations delivered consolidated gold production of 190,474 ounces.”
“During the quarter, Kumtor continued to operate at its planned production rates, with the process plant continuing to operate at approximately 18,000 tonnes per day processing stockpiled ore. In response to COVID-19, the site has extended the crew rotation schedule from the usual two-week rotation up to four weeks, replacement crews are brought in early and segregated; they are thoroughly screened prior to a crew change and the various crews are separated by department when on site.”
“At Mount Milligan, we did announce a two-week reduction in process plant throughput with a significant reduction in manpower related to mining activities as a precautionary action related to preventing the spread of COVID-19. The process plant continued to process stockpiled material before we commenced a scheduled two-week maintenance shutdown of the process plant. We have completed the scheduled mill maintenance and are ramping back up to full capacity. The spring melt has now commenced which will facilitate a significant water draw and is expected to provide more than sufficient levels of water to run at full capacity through the year as planned.”
“In Turkey, at Öksüt, we ceased mining activities on March 31, 2020, in response to the Turkish Government initiatives aimed at reducing the spread of COVID-19. During that time, we continued to stack ore onto the heap leach pad, continued to irrigate the pad and operated the ADR plant. After a two-week period, in compliance with Turkish Government requirements, we brought back the mining crew to recommence mining and to continue ramping-up the site to full operations.”
“Presently, we are experiencing favourable currency exchange rates in the countries we operate in, as well as low diesel prices which are expected to benefit the cost structure at our operations. In late April 2020, the hedging committee approved an expansion of the Company’s hedging policies for both diesel and Canadian dollar hedging for a period up to 24 months, previously limited to a 12-month period. This increased coverage will enable our Kumtor and Mount Milligan operations to continue to benefit in the medium term from current diesel prices and the Canadian exchange rate.”
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“Financially, the Company generated $121.1 million of cash from operations for the first three months of 2020, which includes $134.3 million from Kumtor and $27.2 million from Mount Milligan. During the first three months of 2020, Kumtor and Mount Milligan delivered free cash flowNG of $96 million and $22 million, respectively. Company-wide, free cash flow NG in the first quarter of 2020 was $77 million and we finished the quarter with a cash net of debt position of $57.8 million and liquidity of $557.8 million.”
“Based on the Company’s financial position, recent strong operating results and cash flows, the Board approved on April 30, 2020 a dividend of C$0.04 per share.”
COVID-19 Update
Centerra continues to prioritize the health, safety and well-being of its employees, contractors, communities, and other stakeholders during the current outbreak of COVID-19 and to take steps to minimize the effect of the pandemic on its business.
The Company undertook a significant reduction of manpower and operations at the Öksüt Project on March 31, 2020 for a two-week period. This decision was taken in response to Turkish government initiatives aimed at reducing the spread of COVID-19. The reduction resulted in the suspension of open pit mining activities, though limited crews remained on site to place ore on the heap leach pad, to operate the Adsorption-Desorption-Recovery (“ADR”) plant and to perform essential site services. Mining operations recommenced in mid-April 2020, though operating on the weekend is subject to weekly approvals (which have been obtained to date).
At Mount Milligan, as a precautionary measure, the mine reduced its activities and subsequently the process plant undertook a two-week planned maintenance shutdown. Operations of the process plant restarted in late April and mine operations are expected to ramp up production in mid-May.
Kumtor operations have continued with the support of the Kyrgyz Republic Government. Kumtor has implemented a number of proactive measures to prevent the spread of COVID-19 such as extending mine site crew rotations to four-weeks compared to two-weeks and separating key process plant personnel from mining crews.
All other sites have also implemented a number of measures to prevent the spread of COVID-19 and ensure the safety of their respective employees, contractors, communities and other stakeholders, including developing detailed plans in case a reduction in or cessation of operations becomes necessary. Centerra’s sites are complying with all government regulation relating to COVID-19.
On April 28, 2020, a Kemess employee informed the Company they had tested positive for COVID-19 while on break from site. The employee was last present at the Kemess site on April 16, 2020. As an immediate measure, Kemess employees and relevant health authorities, including the Northern Health Authority of British Columbia, have been informed and the Company has activated protocols to limit the spread of the virus. The Company is also investigating when the employee may have contracted the virus and whether other individuals may have been exposed.
| To date, there are limited confirmed cases of COVID-19 in the Issyk-Kul district of the | Kyrgyz Republic, | |
| and the Kayseri province of Turkey, where the Kumtor Mine and the Öksüt Mine are located, and from | ||
| where they source their main workforce. To date, there have been limited reported cases | in the Prince |
George area of British Columbia from which the Mount Milligan Mine sources some of its workforce. To
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ensure appropriate social distancing, the Company has temporarily closed its head office in Toronto, Ontario and regional offices in Bishkek, Kyrgyz Republic, Prince George, British Columbia and Ankara,
| Turkey and has asked its workforce to operate remotely. | The Company is continuously monitoring |
| information published by the Public Health Agency of Canada, U.S. Centers for Disease Control and | |
| Prevention (CDC), the World Health Organization (WHO) and other guidance released from relevant | |
| government agencies. |
In addition, Centerra has taken a series of measures to provide its employees with accurate information, help prevent infection and reduce the potential transmission of COVID-19. These include activation of a global crisis management team, frequent communication with and compassionate support of all our people, a complete prohibition on employee travel, strict protocols for access to and from work at operating sites, including temperature checks and interviews upon entry, increased cleaning and hygiene protocols, modifications to work shifts and accommodations at site.
In addition to the above precautionary measures, operating mine sites continue to assess the resiliency of their supply chains, increasing mine site inventories of key materials and developing contingency plans to allow for continued operations.
The Company notes that the situation is fluid and has been changing rapidly. The measures enacted reflect the Company’s best assessment at this time but will remain flexible and be revised as necessary or advisable and/or as recommended by the public health and governmental authorities. There can be no assurance that future events or circumstances relating to COVID-19 will not disrupt ongoing operations or affect 2020 guidance.
Exploration Update
Exploration activities in the first quarter of 2020 included drilling, surface sampling, geological mapping and geophysical surveying at the Company’s various projects (including earn-in properties), targeting gold and copper mineralization in Canada, Mexico, Turkey, Finland, USA and Kyrgyzstan. Exploration expenditures totaled $7.8 million in the first quarter of 2020 compared to $5.0 million in the same quarter of 2019. The Company’s 2020 exploration program is primarily focused on brownfield exploration at Kumtor, Mount Milligan, and Öksüt.
Drill programs at Mount Milligan and Kumtor were suspended in March and early April, respectively, to reduce manpower at sites in response to COVID-19. The Company expects the drilling (including at Öksüt) to resume later in the second quarter of 2020.
Brownfield Exploration
Kumtor Mine
The drilling program for 2020 includes 55,000 metres of exploration and 15,000 metres of infill drilling, which are focused on priority and high potential targets. Primary targets include various zones of the Central, Southwestern and Sarytor pits where a recently updated Kumtor resource block model, based on enhanced geological modelling and positive drilling results between 2018 and 2019, demonstrated substantial growth in measured, indicated and inferred resources.
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In addition, exploration drilling is expected to resume in the underexplored segments of the Kumtor Gold Trend – the NE Targets, Bordoo, Akbel and conceptual targets (Hope Zone and others).
During the first quarter of 2020, exploration drilling programs continued with the completion of fifty-three diamond drill holes for 13,816 metres and eighteen reverse circulation (RC) drill holes for 2,037 metres. Exploration drilling focused on testing zones of sulfide and oxide mineralization near the surface for additional open pit resources, at the corridor between the Central and Southwest pits (Hockey Stick and Kosholuu zones), on the periphery of the Sarytor Pit, Northeast targets, Muzdusuu area and also on the northeast side of the Central Pit.
Central Pit In the Hockey Stick Zone, four exploration drill holes for 885 metres were completed. The best intercepts are as follows:
D2009 7.2 metres @ 1.86 g/t Gold (“Au”) from 101.8 metres 1.0 metres @ 2.32 g/t Au from 120.5 metres 10.2 metres @ 1.00 g/t Au from 136.0 metres 9.8 metres @ 1.06 g/t Au from 159.4 metres
In the northeast wall of the Central Pit, six exploration drill holes for 1,472 metres were completed in the quarter. Significant intersections are reported below:
D2039A 9.0 metres @ 1.04 g/t Au from 63.2 metres
Southwest Area In the first quarter of 2020, a total of twenty-one diamond drill holes were completed in the Southwest area for a total of 5,230 metres.
Seventeen drill holes have been completed between Southwest and Central pits on the Hope Zone for a total of 3,195 metres. Results from recent drilling have delineated a lens-shaped oxide gold mineralization. This mineralization extends along the hanging wall of the Kumtor lower thrust for more than 400 metres. The mineralization is partially eroded in the eastern direction and is still open to the west. Maximum thickness of the oxide mineralization is around 25 metres. Recent drilling results indicate new potential oxide areas that require further exploration. Results for most of the first quarter of 2020 drilling is pending and selected intercepts to date are highlighted below:
| SW-19-295 | 29.2 metres @ 4.76 g/t Au from 165.8 metres Including 13.0 metres @ 9.61 g/t Au from 175.8 metres |
| SW-19-301 | 28.6 meters @ 10.33 g/t Au from 61.4 metres Including 6.3 metres @ 21.49 g/t Au from 71.1 metres |
In the Kosholuu Zone, four drill holes were completed for a total of 2,035 metres. Assay results are not yet available. Several pervasive alteration zones were intersected in hole SW-20-320. The combined width of the mineralized intervals is about 50 meters.
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Sarytor Area
In the Sarytor Area, eleven drill holes were completed for a total of 3,426 metres. Drilling has intersected strong mineralization in all holes. Selected best intersections are reported below.
| SR-19-229 | 30.6 metres @ 2.01 g/t Au from 341.3 metres Including 7.6 metres @ 4.27 g/t Au from 264.3 metres |
| SR-19-230 | 50.3 metres @ 1.46 g/t Au from 176.7 metres Including 3.7 metres @ 3.00 g/t Au from 222.3 metres 6.0 metres @ 1.66 g/t Au from 256.0 metres |
| SR-19-231 | 5.7 metres @ 1.56 g/t Au from 181.4 metres 36.5 metres @ 2.47 g/t Au from 193.6 metres Including 9.7 metres @ 5.13 g/t Au from 220.4 metres |
| SR-20-234 | 41.2 metres @ 2.69 g/t Au from 197.7 metres Including 3.8 metres @ 5.68 g/t Au from 13.2 metres |
| SR-20-238 | 24.3 metres @ 3.34 g/t Au from 200.5 metres Including 5.0m @ 8.96 g/t Au from 217.1 metres 17.3 metres @ 3.49 g/t Au from 230.8 metres 5.0 metres @ 2.55 g/t Au from 253.2 metres |
| SR-20-239 | 36.1 metres @ 2.51 g/t Au from 226.1 metres Including 4.2m @ 5.54 g/t Au from 226.1 metres |
| SR-20-240 | 49.1 metres @ 3.24 g/t Au from 229.0-278.1 metres Including 7.8m @ 6.69 g/t Au from 231.2 metres |
Northeast Area
In the Northeast Area, one diamond drill hole for 345 metres and eighteen reverse circulation (RC) drill holes for 2,037 metres were completed in the quarter. Results of RC drilling has revealed several intervals of gold mineralization. The most significant results were found in the north-western part of the area where drilling intersected oxide gold mineralization confined to tectonic mélange zone. Selected best intercepts are listed below, but most of the results are not yet available. Further drilling in the Northeast Area will be planned after obtaining results from the holes drilled in the quarter.
| DNR2024 | 76.0 metres @ 0.95 g/t Au from 0.0 metres Including 32.0 metres @ 1.90 g/t Au from 25.0 metres |
| DNR2031A | 19.0 metres @ 1.27 g/t Au from 30.0 metres Including 7.0 metres @ 2.94 g/t Au from 30.0 metres |
Muzdusuu Area
Eleven diamond drill holes were completed in the Muzdusuu Area for a total of 2,458 metres. Drilling in the Muzdusuu Area (outside Central Pit) is designed to explore for oxide gold mineralization along the Kumtor lower thrust. Several drill holes intersected broad intervals (up to 34 metres) of oxidized limestone, which carry low Au values.
DM2043 34.1 metres @ 0.63 g/t Au from 67.4 metres Including 10.8m @ 1.28 g/t Au from 77.2 metres
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The above mineralized intercept was calculated using a cut-off grade of 1.0 g/t Au for sulfide and 0.1 g/t Au for oxide mineralization, minimum interval of 4.0 metres and a maximum internal dilution interval of 5.0 metres. Drill collar locations and associated graphics are available at the following link:
https://pr.globenewswire.com/FileDownloader/DownloadFile?source=ml&fileGuid=628538a 8-5aa1-42a4-9bbf-ee8625f76863
Mount Milligan Mine
The 2020 in-pit infill/expansion drilling program at Mount Milligan began in February. Four drill holes were completed during the first quarter totalling 1,659 metres. This included two drill holes in the Rainbow Fault Extension Zone south of the Southern Star deposit, one drill hole in the Saddle Gap between the Saddle and 66 zones, and one drill hole in the Great Eastern Fault Zone. Best assay results returned during the quarter for the first two drill holes are reported below. Results for the remaining drill holes are pending. Rainbow Fault Extension Zone
| 20-1235 | 96.9 metres @ 0.29 g/t Au, 0.13% Copper (“Cu”) from 232.0 metres Including 2.0 metres @ 3.04 g/t Au, 0.86% Cu from 240.0 metres |
| 20-1236 | 17.2 metres @ 0.23 g/t Au, 0.08% Cu from 237.0 metres |
DDH 20-1235 represents a 210 metre step-out to the south of recent drilling (DDH19-1129) at the southern margin of the Southern Star deposit. The 2020 in-pit infill/expansion and brownfield skid drilling programs are being undertaken within and marginal to the 2017 ultimate pit boundary. The in-pit program consists of approximately forty drill holes (17,500 metres) in five target zones (Southern Star, Saddle, DWBX, WBX and GE Fault). The brownfield program consists of approximately twenty-five drill holes (10,000 metres) in six target zones (South Boundary, RF Extension, SS West, King Richard, Goldmark-Oliver and North Slope/Zone 4).
The above mineralized intercepts were calculated using a cut-off grade of 0.1 g/t Au and a maximum internal dilution interval of 4 metres. Drill collar locations and associated graphics are available at the following link:
https://pr.globenewswire.com/FileDownloader/DownloadFile?source=ml&fileGuid=628538 a8-5aa1-42a4-9bbf-ee8625f76863
A listing of the drill results, drill hole locations and plan map for the Mount Milligan Mine have been filed on the System for Electronic Document Analysis and Retrieval (‘SEDAR’) at www.sedar.com and are available at the Company’s web site www.centerragold.com.
Öksüt Mine
At the Öksüt Mine, planning for the 2020 diamond drilling program was completed in the first quarter of 2020. Subject to the continuing impact of COVID-19, the drilling program is expected to commence in the second quarter of 2020 with three drilling rigs.
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Qualified Person & QA/QC – Exploration
Exploration information and other related scientific and technical information in this document regarding the Kumtor Mine were prepared in accordance with the standards of NI 43-101 and were prepared, reviewed, verified and compiled by Boris Kotlyar, a member with the American Institute of Professional Geologists (AIPG), Chief Geologist, Global Exploration with Centerra, who is the qualified person for the purpose of NI 43-101. Sample preparation, analytical techniques, laboratories used and quality assurancequality control protocols used during the exploration drilling programs are done as described in the Kumtor Technical Report dated December 31, 2014. The Kumtor deposit is described in the 2019 Annual Information Form and the Kumtor Technical Report, which are both filed on SEDAR at www.sedar.com.
Exploration information and other related scientific and technical information in this document regarding the Mount Milligan Mine were prepared in accordance with the standards of NI 43-101 and were prepared, reviewed, verified and compiled by C. Paul Jago, Member of the Engineers and Geoscientists British Columbia, Exploration Manager at Centerra’s Mount Milligan Mine, who is the qualified person for the purpose of NI 43-101. Sample preparation, analytical techniques, laboratories used and quality assurance quality control protocols used during the exploration drilling programs are done consistent with industry standards and independent certified assay labs are used. The Mount Milligan deposit is described in the 2019 Annual Information Form and a technical report dated March 26, 2020 (with an effective date of December 31, 2019) prepared in accordance win NI 43-101, both of which are available on SEDAR at www.sedar.com.
Exploration information and other related scientific and technical information in this document regarding the Öksüt Mine were prepared, reviewed, verified and compiled in accordance with NI 43-101 by Mustafa Cihan, Member of the Australian Institute of Geoscientists (AIG), Exploration Manager Turkey at Centerra’s Turkish subsidiary Centerra Madencilik A.Ş., who is the qualified person for the purpose of NI 43-101. Sample preparation, analytical techniques, laboratories used and quality assurance-quality control protocols used during the exploration drilling programs are done consistent with industry standards and independent certified assay labs are used. The Öksüt deposit is described in Centerra’s most recently filed Annual Information Form and in a technical report dated September 3, 2015 (with an effective date of June 30, 2015) prepared in accordance with NI 43-101 both of which are available on SEDAR at www.sedar.com.
About Centerra
Centerra Gold Inc. is a Canadian-based gold mining company focused on operating, developing, exploring and acquiring gold properties in North America, Asia and other markets worldwide and is the largest Western-based gold producer in Central Asia. Centerra operates two flagship assets, the Kumtor Mine in the Kyrgyz Republic, the Mount Milligan Mine in British Columbia, Canada and now has a third operating gold mine, the 100%-owned Öksüt Mine in Turkey, which began production in January 2020. Centerra's shares trade on the Toronto Stock Exchange (TSX) under the symbol CG. The Company is based in Toronto, Ontario, Canada.
Conference Call
Centerra invites you to join its 2020 first quarter conference call on Friday, May 1, 2020 at 8:30 AM Eastern Time. The call is open to all investors and the media. To join the call, please dial toll-free in North America 1 (800) 895-8003. International participants may access the call at +1 (212) 231-2909. Results summary slides are available on Centerra Gold’s website at www.centerragold.com. Alternatively, an audio feed
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webcast will be broadcast live by Intrado and can be accessed live at Centerra Gold’s website at www.centerragold.com. A recording of the call will be available on www.centerragold.com shortly after the call and via telephone until midnight Eastern Time on May 8, 2020 by calling (416) 626-4100 or (800) 558-5253 and using passcode 21958980.
For more information:
John W. Pearson Vice President, Investor Relations Centerra Gold Inc.
(416) 204-1953 [email protected]
Additional information on Centerra is available on the Company’s web site at
www.centerragold.com and at SEDAR at www.sedar.com.
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Management’s Discussion and Analysis For the Period Ended March 31, 2020
This Management Discussion and Analysis (“MD&A”) has been prepared as of April 30, 2020, and is intended to provide a review of the financial position and results of operations of Centerra Gold Inc. (“Centerra” or the “Company”) for the three months ended March 31, 2020 in comparison with the corresponding period ended March 31, 2019. This discussion should be read in conjunction with the Company’s unaudited condensed consolidated interim financial statements and the notes thereto for the three months ended March 31, 2020 prepared in accordance with International Financial Reporting Standards (“IFRS”). This MD&A should also be read in conjunction with the Company’s audited annual consolidated financial statements for the years ended December 31, 2019 and 2018, the related MD&A and the Annual Information Form for the year ended December 31, 2019 (the “2019 Annual Information Form”). The Company’s unaudited condensed consolidated interim financial statements and the notes thereto for the three months ended March 31, 2020, 2019 Annual Report and 2019 Annual Information Form are available at www.centerragold.com and on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com. In addition, this discussion contains forward looking information regarding Centerra’s business and operations. Such forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements. See “Caution Regarding Forward-Looking Information” in this discussion. All dollar amounts are expressed in United States dollars (“USD”), except as otherwise indicated.
Caution Regarding Forward-Looking Information
Information contained in this document which are not statements of historical facts, and the documents incorporated by reference herein, may be “forward-looking information” for the purposes of Canadian securities laws. Such forward-looking information involves risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward looking information. The words “believe”, “expect”, “anticipate”, “contemplate”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule”, “understand” and similar expressions identify forward-looking information. These forward-looking statements relate to, among other things: the Company’s expectations regarding possible impacts to its operations relating to COVID-19; statements relating to 2020 guidance; timing for resuming full mill and mining operations at the Mount Milligan Mine; future exploration plans; plans for processing stockpiles at Kumtor and Mount Milligan; our estimates for asset retirement obligations (“ARO”); the Company’s expectations regarding having sufficient liquidity for 2020; expected time frame for completing an updated technical report for Kumtor; extending groundwater capacity from the Lower Rainbow Valley and other targets in the vicinity at Mount Milligan, and expectations of capturing significant water runoff during the spring freshet; timing for completing maintenance work at Mount Milligan and returning to full operation; the timing for resuming full operations at the Öksüt Mine following the temporary suspension commenced on March 31, 2020; continued use of mobile crushers to manage high clay content material at the Öksüt Mine; timing for completing the remaining construction at Öksüt Mine and the commissioning the operations; outstanding investigations and litigation involving the Company including the HRS litigation impacting the Mount Milligan Mine, and the litigation involving the Greenstone Gold Property; and future payments of $22 million by Kumtor Gold Company to the Kyrgyz Republic Regional Fund over the next 30 months.
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Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable by Centerra, are inherently subject to significant technical, political, business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking information. For a list of known risk factors, please see section titled “Risks Factors” in the Company’s most recently filed Annual Information Form available on SEDAR at www.sedar.com.
There can be no assurances that forward-looking information and statements will prove to be accurate, as many factors and future events, both known and unknown could cause actual results, performance or achievements to vary or differ materially from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements contained herein or incorporated by reference. Accordingly, all such factors should be considered carefully when making decisions with respect to Centerra, and prospective investors should not place undue reliance on forward looking information. Forward-looking information is as of April 30, 2020. Centerra assumes no obligation to update or revise forward-looking information to reflect changes in assumptions, changes in circumstances or any other events affecting such forward-looking information, except as required by applicable law.
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TABLE OF CONTENTS
Overview .................................................................................................................................................... 13 Consolidated Financial and Operational Highlights ............................................................................. 14 Overview of Consolidated Results ........................................................................................................... 15 2020 Outlook.............................................................................................................................................. 15 Financial Performance ............................................................................................................................. 16 Balance Sheet Review ............................................................................................................................... 18 Cash Flow Review ..................................................................................................................................... 19 Market Conditions .................................................................................................................................... 20 Financial Instruments ............................................................................................................................... 22 Operating Mines and Facilities ................................................................................................................ 23 Pre-Development Projects ........................................................................................................................ 33 Quarterly Results – Previous Eight Quarters ........................................................................................ 34 Litigation and Contingencies ................................................................................................................... 35 Accounting Estimates, Policies and Changes ......................................................................................... 36 Disclosure Controls and Procedures and Internal Control Over Financial Reporting ...................... 36 Non-GAAP Measures ............................................................................................................................... 37 Qualified Person & QA/QC – Production, Mineral Reserves and Mineral Resources ...................... 42
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