All figures are in United States dollars and all production figures are on a 100%-basis and continuing operations basis, unless otherwise stated. This news release contains forward-looking information regarding Centerra Gold’s business and operations. See “Caution Regarding Forward-Looking Information” in Centerra Gold’s Management’s Discussion & Analysis for the three and nine months ended September 30, 2022 (“MD&A”) included in this press release. All references in this document denoted with NG indicate a “specified financial measure” within the meaning of National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure of the Canadian Securities Administrators. None of these specified measures is a standardized financial measure under International Financial Reporting Standards (“IFRS”) and these measures might not be comparable to similar financial measures disclosed by other issuers. See “Non-GAAP and Other Financial Measures” in the MD&A included in this press release for a discussion of the specified financial measures used in this document and a reconciliation to the most directly comparable IFRS measure.
Centerra Gold Inc. (TSX: CG) (NYSE: CGAU) reported its third quarter of 2022 results.
Significant financial and operating results of the third quarter ended September 30, 2022 included:
Paul Wright, Interim President and Chief Executive Officer of Centerra stated, “Since accepting the role of Interim President and Chief Executive Officer on September 6, 2022, I’ve been able to use my first 60 days to visit all of our operating sites and engage many of our shareholders, The overarching impression that I’ve been left with is that we have solid operating teams managing our assets, and I’m excited for the future of the Company.”
“In the third quarter of 2022, the Company continued to demonstrate that safety remains Centerra’s top priority, with the Öksüt Mine’s team achieving one million hours without a lost time injury. Subsequent to the quarter-end, the Company announced highlights from the Mount Milligan Mine’s LOM, including an extension of the mine life to 2033 and an increase in proven and probable gold and copper reserves of 1.1 million contained ounces and 260 million contained pounds, respectively.”
“On the operational front, the Mount Milligan Mine produced 54,134 ounces of gold and 19.0 million pounds of copper in the third quarter, and at the Öksüt Mine, approximately 40,000 ounces were added to the stored in gold-in-carbon inventory. The Mount Milligan Mine 2022 gold and copper production remains on track and the mine continues to forecast strong cash flows for the year.”
“At the Öksüt Mine, the retrofit of the ADR plant remains on track to be completed in late 2022. The Company suspended leaching operations at the Öksüt Mine in August 2022 while it advances its applications for an updated EIA, but mining, crushing and stacking activities continue at the mine. The extent of mining, crushing and stacking activity for the remainder of the year will continue to be evaluated as the Company advances through the permitting process and may be reduced significantly prior to the end of the year.”
“Financially, in the third quarter, we recorded a consolidated free cash flow deficitNG of $35.5 million; however, the free cash flow from mine operationsNG generated at the Mount Milligan Mine of $20.9 million was able to offset a majority of the free cash flow deficit from mine operationsNG at the Öksüt Mine of $23.0 million. The Company ended the quarter with a cash position at the end of the period of $580.8 million. Based on the Company’s strong financial position, the Board approved a quarterly dividend of CAD$0.07 per share on November 4, 2022 to shareholders of record on November 18, 2022. In consideration of Centerra’s current market valuation and to increase shareholder returns, in October the Company also announced a normal course issuer bid.”
Update on Öksüt Mine Operations
On March 18, 2022, Centerra announced that it had suspended gold doré bar production at the Öksüt Mine due to mercury detected in the gold room at the ADR plant. An engineered solution was developed with the assistance of external consultants to ensure that mercury levels are detected, monitored and captured to prevent exposure to personnel and to safeguard the environment. The Company is currently constructing a mercury retort system to allow mercury to be safely vaporized from the sludge with the vapor condensed and collected in a fully contained system. The furnace off-gas system will also be replaced to ensure that any remaining mercury is scrubbed from the gas and captured.
All of the major equipment is mostly fabricated and has largely been delivered to site. Construction is progressing well and is expected to be completed in late 2022, with total capital costs expected to be approximately $5 million. The Company will work with relevant authorities to obtain the required approvals to restart gold room operations at the ADR plant which the Company now expects will occur once shortly after the new EIA for the Öksüt Mine is approved.
From the date of suspension of gold room operations through to August 2022, the Company continued to process ore into gold-in-carbon form and has approximately 100,000 recoverable ounces of stored gold-in-carbon as at September 30, 2022.
In May 2022 the Öksüt Mine was inspected by the Ministry of Environment, Urbanization and Climate Change (the “Ministry of Environment”). The Ministry of Environment informed the Öksüt Mine of a number of deficiencies relating to the Öksüt Mine’s environmental impact assessment. The Company has worked to address the majority of the deficiencies and following several further discussions with the Ministry of Environment, the Company: (i) determined that an updated EIA should be prepared and submitted to clarify various production and other capacity limits and to align the EIA permit levels with expected operating plans; (ii) the Öksüt Mine suspended leaching of ore on the heap leach pad and ceased using activated carbon on site effective late August 2022 though mining, crushing and stacking activities continue in line with existing EIA limits. The extent of mining, crushing and stacking activity for the remainder of the year will continue to be evaluated as the Company advances through the permitting process and may be reduced significantly prior to the end of the year.
The Öksüt Mine’s application to update its EIA was submitted to regulators at the end of August 2022 and the full EIA submission, inclusive of all supporting technical studies, is expected to be submitted before the end of 2022. Following the final EIA submission, the Company expects to work with Turkish officials and other stakeholders 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. Once operations resume, the ADR plant is expected to have sufficient production capacity to process up to approximately 35,000 ounces of gold per month, which would allow the stored gold-in-carbon inventory to be processed on a timely basis.
The Company is also in pursuit of other ordinary course permits, including: (i) an enlarged grazing land permit to allow expansion of the existing operation to the currently defined EIA boundary of the Keltepe and Güneytepe pits; and (ii) an extension of the Öksüt Mine’s overall operating license which is scheduled to expire in January 2023.
Exploration activities in the third quarter of 2022 included drilling, surface sampling, geological mapping and geophysical surveying at the Company’s various projects and earn-in properties, targeting gold and copper mineralization in Canada, Türkiye, and the United States of America. Exploration expenditures in the third quarter of 2022 were $23.2 million. The activities were primarily focused on expanded drilling programs at the Mount Milligan Mine in British Columbia, the Öksüt Mine in Türkiye, the Goldfield Project in Nevada, and greenfield projects in the USA and Türkiye.
At the Mount Milligan Mine, 32 diamond drill holes, totalling 16,653 metres, were completed in the third quarter of 2022, including brownfield exploration drilling (11,801 metres in 22 drill holes) and resource expansion drilling (4,852 metres in 10 drill holes). The Company expects to continue exploration drilling in the fourth quarter of 2022.
At the Öksüt Mine, 43 drill holes and 18 reverse circulation drill holes, totalling 15,840 metres, were completed in the third quarter of 2022. Exploration drilling activities were mainly undertaken at the Keltepe, Güneytepe, Keltepe North, Keltepe Northwest, and Keltepe North-Northwest deposits with the aim of expanding known oxide gold mineralization resources. Drilling also continued testing peripheral targets, such as the Yelibelen and Büyüktepe prospects. The Company expects to continue this work in the fourth quarter.
At the Goldfield Project, exploration activities in the third quarter of 2022 included brownfield diamond core and RC drilling at the Gemfield and Goldfield Main deposits. Drill programs included infill, resource expansion, and exploration drilling, as well metallurgical, geotechnical, and hydrogeochemical drilling in support of the preparation of an initial resource estimate in 2023 and a feasibility study thereafter. Drilling comprised 12,400 metres of exploration drilling and technical services drilling in 54 drill holes, including 24 RC drill holes for 5,400 metres and 30 diamond drill holes for 7,000 metres. Late in the quarter, two additional rigs were added to increase drill production for the total of four rigs at site as of September 30, 2022. As of the end of the third quarter, 16,500 metres of exploration and technical services drilling have been completed in 80 drill holes in 2022. All assay results are pending. The Company expects to continue this work in the fourth quarter of 2022.
Selected drill program results and intercepts are highlighted in the supplementary data at the end of this news release. The drill collar locations and associated graphics are available at the following: https://ml.globenewswire.com/media/b54b7caa-fb95-4b8b-99ad-1ac639294106/document/?v=11042022080500.
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. The Company is based in Toronto, Ontario, Canada.
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