All figures are in United States dollars and all production figures are on a 100% basis, unless otherwise stated.
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.
Toronto, Canada, July 30, 2019: Centerra Gold Inc. (“Centerra”) (TSX: CG) today reported second quarter 2019 net earnings and adjusted earningsNG of $33.4 million ($0.11 per common share (basic)), compared to net earnings of $43.5 million ($0.15 per common share (basic)) and adjusted earningsNG of $1.0 million (nil per common share (basic)) in the same period of 2018, after adjusting for gains recognized on the sale the Company’s Mongolian operations and sale of a royalty portfolio in 2018. The Company generated cash from operations of $91.0 million and $30.7 million of free cash flowNG compared to cash from operations of $68.1 million and free cash flowNG of $(4.7) million in the second quarter of 2018. 2019 Second Quarter Highlights
• The Company reported net earnings of $33.4 million or $0.11 per common share (basic).
• Cash generated from operations was $91.0 million. Second quarter 2019 cash from operation included $92.7 million from Kumtor and $24.2 million from Mount Milligan, offset by costs incurred by the Molybdenum business and corporate costs.
• The Company produced 199,578 ounces of gold in the period, which includes 151,065 ounces at Kumtor and 48,513 ounces atMount Milligan. Mount Milligan also produced 20.4 million pounds of copper.
• Mount Milligan, mill throughput averaged 53,500 tonnes per calendar day.
• Centerra has tightened the range and modestly increased Kumtor’s annual gold guidance to 550,000 – 575,000 ounces resulting in a revision to our 2019 consolidated gold production guidance to 705,000 – 750,000 ounces.
• The company’s full year gold and copper production guidance for Mount Milligan remains unchanged.
• MountMilligan’s water capture fromthe 2019 spring melt runoff was less than anticipated, creating a risk to the level of production in early 2020 until the spring melt occurs, similar to 2019. The Company continues to explore for additional groundwater sources and to work towards a long-term water solution.
• Consolidated cost of sales increased in the second quarter of 2019 to $238.5 million.
• Consolidated all-in sustaining costs per ounce soldNG for the second quarter 2019 were $716, including $562 at Kumtor and $938 at Mount Milligan.
• Favourably revised 2019 consolidated all-in sustaining costs per ounce soldNG guidance to $713 - $743 and lowered Kumtor’s all-in sustaining costs per ounce soldNG guidance to $635 - $685Mount Milligan’s all-in sustaining costs per ounce soldNG for 2019 remains unchanged.
• Capitalized waste stripping guidance has been increased by $32 million as we mine the initial waste material on cut-back 20 at Kumtor. The change in mine plan, to defer mining of cut-back 19 East, where we were reaching ore, followed the identification of ground instability in the first quarter of 2019. No significant ground movement was identified in the second quarter 2019; we continue to study potential mitigation measures and the long-term impact on our mine plan and reserves of the deferral.
• Construction at the Öksüt Project in Turkey is now 64% complete and remains on schedule with first gold pour expected in January of 2020. The total construction cost is expected to be $20 million under budget.
• The revolving corporate credit facility was repaid in full during the quarter.
• Cash and cash equivalents available at June 30, 2019 were $140.0 million.
• Subsequent to June 30, 2019, we agreed with the Government of the Kyrgyz Republic to extend the long-stop date in connection with the Strategic Agreement to August 10, 2019.

Commentary
Scott Perry, President and Chief Executive Officer of Centerra stated, “We are very pleased to report that our contract workforce at the Kumtor Mine achieved a significant safety milestone during the quarter in attaining one year of lost time incident-free operations. This milestone demonstrates our workforce’s commitment to Centerra’s Work Safe – Home Safe program and our drive to zero harm within the workplace.”
“The operations produced a total of 199,578 ounces of gold and 20.4 million pounds of copper in the quarter. Kumtor had another strong quarter producing 151,065 ounces of gold which was attributable to milling higher grades and achieving higher recoveries as compared to the comparative period. The northwest pit wall where instability was noted in the first quarter has stabilized and no significant ground movement was identified in the second quarter 2019.”
“Mount Milligan achieved production of 48,513 ounces of gold and 20.4 million pounds of copper during the quarter, as the mill returned to targeted full capacity (55,000 tonnes per day) in early May due to increased water availability from the spring melt, even though we experienced a less robust spring melt than anticipated. We continue to explore for additional groundwater sources as we work towards a long-term water solution. During the quarter, mill throughput averaged 53,500 tonnes per calendar day.”
“Company-wide our all-in sustaining costs (before taxes)NG were $716 per ounce sold for the quarter reflecting Kumtor achieving all-in sustaining costs (before taxes)NG of $562 per ounce.”
“With our second quarter earnings release today, the Company tightened the range and modestly increased its gold production guidance for Kumtor for the year to 550,000 – 575,000 ounces and Company-wide gold production to 705,000 to 750,000 ounces from 535,000-565,000 ounces and 690,000-740,000 ounces, respectively. We have also favourably lowered our expected all-in sustaining costs on a by-product basis (before taxes)NG at Kumtor to $635 to $685 per ounce sold, which reduces the Company’s consolidated all-in sustaining costs on a by-product basis (before taxes)NG to $713 to $743 per ounce sold. MountMilligan’s production and cost guidance for 2019 remains unchanged.”
“Construction activity continued at the Öksüt Project in Turkey and the project is now 64% complete. The project remains on schedule with first gold pour now expected in January of 2020 and is projected to be $20 million under budget, including a $10 million reduction in contingencies.”
“Financially, the business delivered $91 million of cash from operations in the quarter. Kumtor and Mount Milligan generated $106 million and $11 million respectively, before working capital changesNG. During the second quarter, Kumtor generated $65 million of free cash flowNG and Mount Milligan generated $18 million of free cash flowNG which enabled the Company to repay in full the corporate credit facility reducing its debt in the quarter by $70 million and ending the quarter with cash and cash equivalents of $140 million (excluding restricted cash).”
Exploration Update
Exploration activities in the second quarter of 2019 included drilling, surface sampling, geological mapping and geophysical surveying at the Company’s various projects targeting gold and copper mineralization in Turkey, Canada, Mexico, Sweden, Finland and Burkina Faso. Exploration expenditures totaled $6.3 million in the second quarter of 2019 compared to $4.8 million in the same quarter of 2018. The Company’s 2019 exploration program is primarily focused on brownfield exploration at Kumtor, Mount Milligan, Öksüt and Kemess.
Kyrgyz Republic
Kumtor Mine
At Kumtor, planned exploration work is aimed at defining additional resources on the flanks of the Central Pit focusing on the Hockey Stick Zone and the SB Zone deep extension to add to the open pit mine life. Exploration drilling is also focused on testing zones of gold mineralization near the surface for additional open pit resources in the corridor between the Central and Southwest pits and on the flanks of the Northeast target area. During the second quarter of 2019, 67 diamond drill holes for 16,223 metres were completed, including 1,866 metres of infill drilling in the SB Zone (drilled below the current ultimate open pit).
Central Pit
In the Hockey Stick Zone, 36 drill holes for 9,771 metres were completed. Results indicate that gold mineralization extends in a southwest direction and represents mineralization that may expand the area’s economic viability. The best intercepts are as follows:
D1873A:
13.1 metres @ 4.17 g/t Gold (“Au”) from 201.4 metres;
Includes 3.7 metres @ 8.63 g/t Au from 204.0 metres;
D1919A:
43.8 metres @ 5.26 g/t Au from 199.4 metres.
Includes 13.9 metres @ 11.66 g/t Au from 220.1 metres.
D1920:
15.4 metres @ 2.15 g/t Au from 161.9 metres.
Includes 3.3 metres @ 4.66 g/t Au from 161.9 metres.
Additional infill, geotechnical and metallurgical drilling (~20,000 metres of drilling, $6 million) was approved in the second quarter of 2019 to further delineate the Hockey Stick Zone to upgrade existing resources categories.
In the Northwest Wall, 10 drill holes were completed for a total 1,340 metres. The best intercept is as follows:
DW1887: 5.1 metres @ 2.34 g/t Au from 158.6 metres

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