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.

TORONTO, July 31, 2023 (GLOBE NEWSWIRE) — Centerra Gold Inc. (“Centerra” or the “Company”) (TSX: CG and NYSE: CGAU) today reported its second quarter 2023 results.\
Second Quarter Highlights
Operations:
Production:

Second quarter 2023 gold production of 61,622 ounces, including production from Mount Milligan Mine (“Mount Milligan”), which achieved record throughput in May and June in the process plant, and a partial month of production from the Öksüt Mine (“Öksüt”). Copper production in the quarter was 13.8 million pounds.

Sales:

Second quarter 2023 gold sales of 48,155 ounces at an average realized market price of $1,532 per ounce and copper sales of 12.8 million pounds at an average realized copper price of $2.56 per pound. Gold sales were 22% lower than gold production in the quarter due to timing related to Turkish national holidays at the end of June 2023.

Costs:

Consolidated gold production costs were $1,066 per ounce and all-in sustaining costs (“AISC”) on by-product basis

NG
were $1,711 per ounce for the quarter. Costs were primarily impacted by mine sequencing and other timing factors, in addition to general inflation on labour and consumable costs. In the quarter, the weakening of the Canadian dollar, which offset some of the cost increases at Mount Milligan, was mitigated by a loss on the Company’s foreign exchange hedging program.

Capital expenditures
NG:

Additions to property, plant, equipment (“PPE”) and sustaining capital expenditures

NG

of $20.8 million and $20.7 million, respectively. Sustaining capital expenditures

NG

in the second quarter 2023 included costs for equipment overhauls and the tailings storage facility (“TSF”) step out at Mount Milligan, as well as capitalized stripping costs at Öksüt.

Updated production guidance:

Centerra’s 2023 consolidated gold production guidance has been updated following the resumption of operations at Öksüt and is now expected to be between 340,000 to 360,000 ounces, including estimated gold production of 180,000 to 190,000 ounces at Öksüt and 160,000 to 170,000 ounces at Mount Milligan. Although guidance for Mount Milligan is unchanged, production is trending to near the low end of the range. Copper production guidance is unchanged and is expected to be within the range of 60 to 70 million pounds.

Updated cost guidance:

Centerra’s 2023 consolidated gold production costs are expected to be $700 to $750 per ounce, reflecting the full restart of gold production at Öksüt, with lower unit costs expected during the second half of 2023. Full year 2023 gold production costs at Öksüt are expected to be $450 to $500 per ounce and the Company has increased full year gold production costs at Mount Milligan which are now expected to be $1,000 to $1,050 per ounce, up from $900 to $950 per ounce previously. Full year 2023 AISC on a by-product basis

NG
is expected to be $1,000 to $1,050 per ounce, including $650 to $700 per ounce at Öksüt and $1,125 to $1,175 per ounce at Mount Milligan, an increase from previous guidance of $1,075 to $1,125.

Financial:
Net loss:
Net loss of $39.7 million or $0.18 per share and adjusted net loss
NG

of $42.3 million or $0.20 per share. Adjustments include $8.3 million of reclamation provision revaluation recovery at sites on care and maintenance and $5.7 million of deferred 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 the Öksüt and the Mount Milligan mines.

Free cash flow
NG:

Cash provided by operating activities of $33.4 million and free cash flow

NG

of $10.6 million, including a $35 million reduction in working capital from the Langeloth Metallurgical Facility.

Cash and cash equivalents:

Total liquidity of $799.9 million, representing a cash balance of $401.8 million and $398.1 million available under a corporate credit facility as at June 30, 2023.

Dividend:

Quarterly dividend declared of C$0.07 per common share

Other:
Öksüt:

On May 31, 2023, the Turkish Ministry of Environment, Urbanization and Climate Change (the “Ministry of Environment”) approved an amended Environmental Impact Assessment (“EIA”) for Öksüt and the Company resumed full operations on June 5, 2023.

Share buy-backs:

Under Centerra’s Normal Course Issuer Bid (“NCIB”) program, the Company repurchased and cancelled 1,271,900 common shares for the total consideration of $7.3 million (C$9.7 million) in the second quarter 2023. The Company continued to make purchases via an Automatic Share Purchase Plan in July 2023.

Executive Appointment:

In May 2023, the Company appointed Hélène Timpano as its new Executive Vice-President, Strategy & Corporate Development.
President and CEO, Paul Tomory, commented, “The second quarter of 2023 was pivotal for Centerra, as we achieved several milestones that should contribute to stronger performance in the second half of the year. Most notably, at the end of May, we received approval from the Turkish Ministry of Environment for Öksüt’s amended EIA. Having received these regulatory approvals, we restarted full operations at the mine in early June and produced 20,503 ounces of gold within the month. Looking ahead, Öksüt’s gold production guidance is between 180,000 and 190,000 ounces of gold in 2023. At Mount Milligan, we sequenced out of the ore-waste transition zone of the mine and are on track to access higher grade copper and gold ore in the second half of the year, which should help to bolster the production profile going forward.”

“We are in the process of evaluating all Centerra’s assets with the intent of developing a comprehensive value maximizing strategic plan. Key aspects of this plan will include a view on the Molybdenum Business Unit, with an assessment of the potential for a restart of operations at the Thompson Creek molybdenum mine in Idaho, continuing to drive operational and technical improvements at Mount Milligan, repositioning our approach at the Goldfield project to target higher returns, and assessing opportunities for growth in gold production. This new strategy will focus on safe and sustainable operations while maximizing value for our shareholders and our local stakeholders.”


Table 1 – Overview of Consolidated Financial and Operating Highlights
($millions, except as noted)
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