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Centerra Gold Reports 2022 Production, Issues 2023 Mount Milligan Mine Guidance and Provides an Update on the Öksüt Mine

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Centerra Gold Reports 2022 Production, Issues 2023 Mount Milligan Mine Guidance and Provides an Update on the Öksüt Mine

 

 

 

 

 

Centerra Gold Inc. (TSX: CG) (NYSE: CGAU) reports 2022 fourth quarter and full-year production, 2023 production and cost guidance for the Mount Milligan Mine and provides an update on operations at the Öksüt Mine.

 

All figures are in United States dollars. All production figures reflect payable metal quantities and are on a 100%-basis, unless otherwise stated. For references denoted with NG, refer to the “Non-GAAP and Other Financial Measures” disclosure at the end of this news release for a description of these measures.

 

2022 Fourth Quarter and Annual Production Highlights

  • Gold production in the fourth quarter of 2022 was 53,222 ounces solely from the Mount Milligan Mine.
  • Full year 2022 gold production was 243,868 ounces, including 189,177 ounces of gold produced by the Mount Milligan Mine and 54,691 ounces produced by the Öksüt Mine. Additionally, approximately 100,000 recoverable ounces was processed into gold-in-carbon form in 2022 and remains stored at the Öksüt Mine.
  • Copper production was 16.9 million pounds in the fourth quarter and 73.9 million pounds for the full year 2022.

 

2023 Mount Milligan Mine Guidance Highlights

  • 2023 guidance at the Mount Milligan Mine is expected as follows:
    • Gold production of 160,000 to 170,000 ounces.
    • Copper production of 60 to 70 million pounds.
    • Gold production costs per ounce – $900 to $950.
    • All-in sustaining costs on a by-product basis per ounceNG – $1,075 to $1,125.
    • All-in costs on a by-product basis per ounceNG – $1,125 to $1,175.
    • Additions to PP&E – $65 to $70 million.
    • Total capital expendituresNG – $65 to $70 million.

 

Update on Öksüt Mine Operations

 

Gold doré bar production remains suspended at the Öksüt Mine due to mercury detected in the gold room at the ADR plant in March 2022. The Company is currently completing construction of a mercury abatement system to allow processing of mercury bearing ores and is scheduled to be completed in late January. The total capital costs are on target at approximately $5 million. The Company is working with the relevant authorities for the required approvals to restart gold room operations at the ADR plant, which the Company expects will occur shortly after the new Environment Impact Assessment for the Öksüt Mine is approved.

 

The Company recently submitted its updated EIA. The Company is now working with Turkish officials on the regulatory review and approval of its EIA and such other permits that may be required to allow a timely full restart of all operations.

 

The Company is also engaged in other ordinary course permitting matters and in January 2023 it received notices of approval of its operating license extension application for a period of 10 years as well as approval of an enlarged grazing land permit to allow expansion of the Keltepe and Güneytepe pits as planned.

 

Paul Wright, Interim President and Chief Executive Officer of Centerra, said: “Record annual mill throughput highlighted the Mount Milligan Mine’s operating performance in 2022. We anticipate steady production at Mount Milligan in 2023, with management continuing to focus on optimizing the life of mine plan for future years. Cost guidance for the Mount Milligan Mine in 2023 includes the inflationary impact on costs that were prevalent globally through 2022. I am also pleased to report that we have received a 10-year operating license extension for the Öksüt Mine, in addition to the approval of an enlarged grazing land permit. Construction of the mercury abatement system is substantially complete and we are working with the applicable Turkish officials on their review and approval of the updated EIA.”

 

Mount Milligan Mine 2023 Guidance

 

    Guidance Actuals
  Units 2023 Q3 YTD 2022 Q4 2022 2022
Production          
Unstreamed gold production   104-111 88 35 123
Streamed gold production   56-59 48 18 66
Gold production(1)(2) (Koz) 160-170 136 53 189
Unstreamed copper production   49-57 46 14 60
Streamed copper production   11-13 11 3 14
Copper production(1)(2) (Mlb) 60-70 57 17 74
Costs(3)          
Gold production costs ($/oz) 900-950 759
AISC on a by-product basisNG ($/oz) 1,075-1,125 629
AIC on a by-product basisNG ($/oz) 1,125-1,175 713
AISC on a co-product basisNG ($/oz) 1,150-1,200 958
Copper production costs ($/lb) 1.90-2.15 1.63
AISC on a co-product basisNG ($/lb) 2.75-3.00 2.04
Capital Expenditures          
Additions to PP&E ($M) 65-70 34.6
Total Capital ExpendituresNG ($M) 65-70 44.7
SustainingNG ($M) 65-70 43.2
Non-sustainingNG ($M) 1.5

 

(1) The Mount Milligan Mine is subject to an arrangement with RGLD Gold AG and Royal Gold, Inc. (together, “Royal Gold”) which entitles them 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 Arrangement”). Using an assumed market gold price of $1,600 per ounce and a blended copper price of $3.55 per pound for 2023, the Mount Milligan Mine’s average realized gold and copper price would be $1,192 per ounce and $2.98 per pound, respectively, when factoring in the Mount Milligan Streaming Arrangement. The blended copper price of $3.55 per pound factors in 2023 copper hedges and a market price of $3.25 per pound for the unhedged portion.
(2) Gold and copper production at the Mount Milligan Mine assumes recoveries of 66% and 81%, respectively. 2023 gold ounces and copper pounds sold are expected to be consistent with production.
(3) Material assumptions used for cost guidance includes an exchange rate of $1USD:$1.30CAD and a diesel fuel price of $1.00/litre (CAD$1.30/litre) after reflecting the impact of current diesel hedges in place. In this table, units noted as ($/oz) relates to gold ounces and ($/lb) relates to copper pounds.

 

The Mount Milligan Mine’s 2023 copper production is expected to be back-end weighted with approximately 35% of concentrate sales expected to occur in the fourth quarter of 2023.

 

The 2023 cost guidance and capital expenditure metrics are higher when compared to the Mount Milligan Mine’s December 31, 2021 NI 43-101 Technical Report (“Mount Milligan Mine TR”) and results for nine months ended September 30, 2022, driven by the inflationary environment throughout 2022. Inflationary cost pressures have been noted in various areas of the Mount Milligan Mine’s operations, mainly labour, energy and consumables such as grinding media, tires, equipment parts and diesel fuel.

 

The Company continues to optimize the life of mine plan for the Mount Milligan Mine and anticipates increases in both gold and copper production for 2024 and 2025 when compared to the annual figures included in the Mount Milligan Mine TR.

 

Exploration Expenditures

Exploration expenditures for 2023 are expected to be $35 to $45 million, including $10 million towards the Goldfield Project, approximately $13 to $17 million for brownfield exploration (Mount Milligan – $10 to $12 million and Öksüt – $3 to $5 million), and the balance for greenfield and generative exploration programs.

 

Other Material Assumptions

Other material assumptions used in forecasting production and costs for 2023 can be found under the heading “Caution Regarding Forward-Looking Information” in this document. Production, cost, and capital forecasts for 2023 are forward-looking information and are based on key assumptions and subject to material risk factors that could cause actual results to differ materially, and which are discussed under the heading “Material Risks” in the Company’s most recent Annual Information Form.

 

Qualified Person & QA/QC – Production Information

 

The production information and other scientific and technical information presented in this document, including the production estimates, were prepared in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and National Instrument 43-101 Standards of Disclosure for Mineral Projects and were prepared, reviewed, verified, and compiled by Centerra’s geological and mining staff under the supervision of Paul Chawrun, P.Eng who is a member of the Professional Engineers Ontario and Centerra’s Vice President and Chief Operating Officer, who is a qualified person for the purpose of NI 43-101.

 

The Mount Milligan deposit is described in a NI 43-101 technical report dated November 7, 2022 and filed on SEDAR at www.sedar.com. The technical report describes, amount other things, the exploration history, geology, and style of gold mineralization at the Mount Milligan deposit.

 

About Centerra Gold

 

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 District Project in Nevada, United States, the Kemess Underground Project in British Columbia, Canada, and owns and operates the Molybdenum Business Unit in the United States and Canada.

Posted January 17, 2023

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