Centerra Gold Records 2020 Net Earnings of $408.5 million or $1.39 per Common Share, Adjusted Net EarningsNG of $461.9 million or $1.57 per Common Share, Cash from Operations of $930.0 million and Free Cash FlowNG of $603.8 million
NEWS RELEASE
Centerra Gold Records 2020 Net Earnings of $408.5 million or $1.39 per Common Share, Adjusted Net EarningsNG of $461.9 million or $1.57 per Common Share, Cash from Operations of $930.0 million and Free Cash FlowNG of $603.8 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 Gold’s business and operations. See “Caution Regarding Forward-Looking Information”. 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, February 24, 2021: Centerra Gold Inc. (“Centerra” or the “Company”) (TSX: CG) today reported its fourth quarter 2020 results. Key events and operating results of the fourth quarter and year ended December 31, 2020 included:
- Net earnings and adjusted net earningsNG for the quarter of $95.2 million, $0.32 per common share (basic), and $104.5 million, $0.35 per common share (basic), respectively. Net earnings and adjusted net earningsNG for the year of $408.5 million, $1.39 per common share (basic) and $461.9 million, $1.57 per common share (basic), respectively.
- Cash flow from operations and free cash flowNG for the quarter of $182.0 million and $76.8 million, respectively. Cash flow from operations and free cash flowNG for the year of $930.0 million and $603.8 million, respectively.
- Cash position of $545.2 million at year-end.
- Gold Production for the quarter of 172,446 ounces and gold production for the year of 824,059 ounces.
- Copper production for the quarter of 20.4 million pounds and copper production for the year of 82.8 million pounds.
- Gold production costs for the quarter and year were $474 per ounce and $419 per ounce, respectively.
- Copper production costs for the quarter and year were $1.24 per pound and $1.18 per pound, respectively.
- All-in sustaining costs on a by-product basisNG for the quarter and year were $974 per ounce and $729 per ounce, respectively.
- All-in costs on a by-product basisNG for the quarter and year were $1,352 per ounce and $1,059 per ounce, respectively.
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- Kumtor mine mineral reserves increased by 107%(1) to 6.3 million contained ounces of gold(2) as at July 1, 2020. A new Kumtor technical report details a new 11-year mine life; consistent annual gold production averaging 590,000 ounces for five years commencing in 2022, and an average life of mine all-in sustaining costs on a by-product basisNG of $828 per ounce and all-in costs on a byproduct basisNG of $1,044 per ounce.
- Mount Milligan achieved record throughput for the quarter and year, averaging 59,762 and 54,827 tonnes per calendar day, respectively.
- Greenstone property sale announced on December 15, 2020, subsequently closing on January 19, 2021 for final cash consideration received of $210 million and contingent consideration of approximately $75 million(3).
- Quarterly Dividend declared of CAD$0.05 per common share.
Reserve increase calculated by comparing the new 2021 Kumtor Technical Report effective as at July 1, 2020 compared to the December 31, 2019 (1)
reserve statement (less mine depletion from January 1, 2020 to June 30, 2020).
73.3 million tonnes at an average gold grade of 2.66 grams per tonne gold (g/t Au) using gold price of $1,350 per ounce.
(2)
Assuming a gold price of $1,500 per ounce.
(3)
The Company also announced its full-year 2021 guidance and a three-year outlook. Highlights included:
2021 to 2023 Outlook Highlights
- Strong organic gold growth production profile:
- 2021: 740,000 to 820,000 ounces.
- 2022: 920,000 to 1,020,000 ounces.
- 2023: 930,000 to 1,030,000 ounces.
- Maintain robust copper production profile:
- 2021: 70 to 80 million pounds.
- 2022: 90 to 100 million pounds.
- 2023: 70 to 80 million pounds.
2021 Guidance Highlights
- Gold production guidance of 740,000 to 820,000 ounces.
- Copper production guidance of 70 to 80 million pounds.
- Gold production costs guidance of $475 to $525 per ounce.
- All-in sustaining costs on a by-product basisNG guidance of $850 to $900 per ounce is higher than 2020 primarily due to Kumtor processing lower grade material from its stockpiles on surface.
- All-in costs on a by-product basisNG guidance of $1,175 to $1,230 per ounce.
- Total capital spending guidance of $430 to $480 million including capitalized stripping is higher than 2020 due to increased spending at Kumtor and Mount Milligan.
- Total capitalized stripping guidance of $230 to $245 million including $220 to $230 million at Kumtor primarily for mining cut-back 20 and $10 to $15 million at Öksüt.
- Cash provided by operations guidance of $750 to $800 million (assuming US$1,750 gold price).
- Free cash flowNG guidance of $350 to $400 million (assuming US$1,750 gold price).
- Exploration budget of $50 million with approximately 70% focused on brownfield exploration at our three existing operations.
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Commentary
Scott Perry, President and Chief Executive Officer of Centerra stated, “During the fourth quarter, our Öksüt operation continued to demonstrate very high safety performance, achieving the safety milestone of four million consecutive hours without a lost time injury. Additionally, we continue to stay vigilant at all of our operations with rigorous safety protocols to help prevent an outbreak and avoid the spread of the COVID- 19 virus.”
“In 2020, our three operating mines delivered solid performances, including Mount Milligan’s achievement of its highest level of mill throughput and its highest level of concentrate production since the start of the operations in 2014. The Company favourably exceeded its consolidated gold production and cost guidance, delivering more than 824,000 ounces of gold at an all-in sustaining cost on a by-product basisNG of $729 per ounce sold, which was lower than the low-end of our all-in sustaining cost guidance. Kumtor had another strong year where gold production was at the top end of guidance delivering 556,136 ounces of gold at an all-in-sustaining cost on a by-product basisNG of $741 per ounce sold, which was lower than the low-end of its all-in-sustaining cost guidance. In 2020, Mount Milligan exceeded the upper end of its gold production guidance and achieved its copper production guidance, producing 161,855 ounces of gold and 82.8 million pounds of copper at an all-in-sustaining cost on a by-product basisNG of $541 per ounce sold, which was lower than the low-end of its all-in-sustaining cost guidance. Our Öksüt mine, which only came into commercial production May 31, 2020, favourably exceeded both its gold production and cost guidance, achieving 106,068 ounces of gold production at an all-in-sustaining cost on a by-product basisNG of $494 per ounce, which was lower than the low-end of its all-in-sustaining cost guidance.”
“Financially, the Company generated $930.0 million of cash from operations for the year, Öksüt generated $146.1 million, Mount Milligan generated $185.3 million and Kumtor generated $660.6 million. In 2020, $603.8 million of free cash flowNG was generated Company-wide, including $437.9 million of free cash flowNG from Kumtor, $150.2 million from Mount Milligan and $105.2 million from Öksüt. During the year, the Company repaid its debt and ended the year with no debt and cash of $545.2 million. In January 2021, we completed the sale of our 50% interest in the Greenstone Gold Mines Partnership and received a cash payment of approximately $210 million (including adjustments) adding to our strong balance sheet.”
“Based on the Company’s financial position, recent strong operating results and cash flows, the Board approved a quarterly dividend to CAD$0.05 per share on February 23, 2021.”
“Today, the updated Kumtor Mine Technical Report was filed showcasing an extended mine life for Kumtor. The new Kumtor life-of-mine adds significantly to the open pit reserves and has extended Kumtor’s mine life by 5 years. The new mine life is 11 years and milling operations are extended to 2031. The new life of mine plan has consistent annual gold production averaging 590,000 ounces for 5 years commencing in 2022 at an average life of mine all-in sustaining costs on a by-product basisNG of $828 per ounce sold.”
“For 2021, we are estimating consolidated gold production to be in the range of 740,000 to 820,000 ounces and 70 to 80 million pounds of copper production. Centerra’s consolidated all-in sustaining cost on a byproduct basisNG for 2021 is expected to be in the range of $850 to $900 per ounce. We also announced our inaugural three-year outlook which reflects a growing gold production profile in 2022 and 2023. This brings Centerra close to expected annual gold production of approximately one million ounces with a
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declining cost profile which is expected to generate significant diversified free cash flowNG from our operations.”
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 has established strict COVID-19 protocols at its mine sites to help prevent infection and reduce the potential transmission of COVID-19. The company has also implemented travel restrictions and has temporarily closed various administration offices including its head office in Toronto. In addition, operating mine sites continue to assess the resiliency of their supply chains, increase mine site inventories of key materials and develop and implement contingency plans to allow for continued operations.
COVID-19 has not materially affected Centerra’s operations as employee absences due to COVID-19 and other illnesses have so far been successfully managed. The Company notes that the effects of COVID-19 on its business continue to change rapidly. The measures enacted to date 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.
To date, the Company has incurred incremental COVID-19 related costs of $3.0 million.
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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 one of the largest Western-based gold producers in Central Asia. Centerra operates three mines, the Kumtor mine in the Kyrgyz Republic, the Mount Milligan mine in British Columbia, Canada and the Öksüt mine in Turkey. 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 fourth quarter conference call on Wednesday, February 24, 2021 at 9:00 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 (888) 754-4430. International participants may access the call at +1 (416) 641-6701. Results summary slides are available on Centerra Gold’s website at www.centerragold.com. Alternatively, an audio feed 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 March 3, 2021 by calling +1 (416) 626-4100 or 1 (800) 558-5253 and using passcode 21989633.
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 December 31, 2020
This Management Discussion and Analysis (“MD&A”) has been prepared as of February 23, 2021 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 and twelve months ended December 31, 2020 in comparison with the corresponding periods ended December 31, 2019. This discussion should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December 31, 2020 prepared in accordance with International Financial Reporting Standards (“IFRS”). The Company’s audited financial statements and the notes thereto for the year ended December 31, 2020, 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. 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.
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: statements regarding 2021-2023 Outlook and 2021 Guidance, including guidance on production, cost and capital spend in 2021, and the assumptions used in preparing; the impact, if any, of the Kyrgyz Parliamentary election and the aftermath on the Kumtor mine; planned exploration in 2021; possible impacts to its operations relating to COVID-19; the Company’s expectations regarding having sufficient liquidity for 2021; the Company’s expectation regarding having sufficient water at Mount Milligan in the medium term, and its plans for a long term solution; and expectations regarding litigation involving the Company including the HRS litigation impacting the Mount Milligan mine.
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. Factors and assumptions that could cause actual results or events to differ materially from current expectations include, among other things: (A) strategic, legal, planning and other risks, including: political risks associated with the Company’s operations in the Kyrgyz Republic, Turkey and Canada; the failure of the Kyrgyz Republic Government to comply with its continuing obligations under the Strategic Agreement, including the requirement that it comply at all times with its obligations under the Kumtor Project Agreements, allow for the continued operation of the Kumtor mine by KGC and KOC and not take any expropriation action
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against the Kumtor mine; actions by the Kyrgyz Republic Government or any state agency or the General Prosecutor's Office that serve to restrict or otherwise interfere with the payment of funds by KGC and KOC to Centerra; resource nationalism including the management of external stakeholder expectations; the impact of changes in, or to the more aggressive enforcement of, laws, regulations and government practices, including unjustified civil or criminal action against the Company, its affiliates or its current or former employees; risks that community activism may result in increased contributory demands or business interruptions; the risks related to outstanding litigation affecting the Company; the impact of the delay by relevant government agencies to provide required approvals, expertise and permits; potential impact on the Kumtor Project of investigations by Kyrgyz Republic instrumentalities; the impact of constitutional changes in Turkey; the impact of any sanctions imposed by Canada, the United States or other jurisdictions against various Russian and Turkish individuals and entities; potential defects of title in the Company’s properties that are not known as of the date hereof; the inability of the Company and its subsidiaries to enforce their legal rights in certain circumstances; the presence of a significant shareholder that is a state- owned company of the Kyrgyz Republic; risks related to anti-corruption legislation; risks related to the concentration of assets in Central Asia; Centerra not being able to replace mineral reserves; Indigenous claims and consultative issues relating to the Company’s properties which are in proximity to Indigenous communities; and potential risks related to kidnapping or acts of terrorism; (B) risks relating to financial matters, including: sensitivity of the Company’s business to the volatility of gold, copper and other mineral prices, the use of provisionally-priced sales contracts for production at Mount Milligan, reliance on a few key customers for the gold-copper concentrate at Mount Milligan and at Kumtor there is reliance on Kyrgyzaltyn, as Centerra sells all of its gold doré produced from the Kumtor Mine to Kyrgyzaltyn pursuant to the Restated Gold and Silver Sale Agreement; use of commodity derivatives, the imprecision of the Company’s mineral reserves and resources estimates and the assumptions they rely on, the accuracy of the Company’s production and cost estimates, the impact of restrictive covenants in the Company’s credit facilities which may, among other things, restrict the Company from pursuing certain business activities or making distributions from its subsidiaries, the Company’s ability to obtain future financing, the impact of global financial conditions, the impact of currency fluctuations, the effect of market conditions on the Company’s short-term investments, the Company’s ability to make payments including any payments of principal and interest on the Company’s debt facilities depends on the cash flow of its subsidiaries; and (C) risks related to operational matters and geotechnical issues and the Company’s continued ability to successfully manage such matters, including the stability of the pit walls at our operations, the movement of the Davidov Glacier, waste and ice movement and continued performance of the buttress at the Kumtor mine; the occurrence of further ground movements at the Kumtor mine and mechanical availability; the risk of having sufficient water to continue operations at the Mount Milligan mine and achieve expected mill throughput; changes to, or delays in, transportation routes, including cessation or disruption in rail and shipping networks whether caused by decisions of third party providers or force majeure events (including COVID-19); the success of the Company’s future exploration and development activities, including the financial and political risks inherent in carrying out exploration activities; inherent risks associated with the use of sodium cyanide in the mining operations; the adequacy of the Company’s insurance to mitigate operational risks; mechanical breakdowns; the Company’s ability to replace its mineral reserves; the occurrence of any labour unrest or disturbance and the ability of the Company to successfully re-negotiate collective agreements when required; the risk that Centerra’s workforce and operations may be exposed to widespread epidemic including, but not limited to, the COVID-19 pandemic; seismic activity in the vicinity of the Company’s properties; long lead times required for equipment and supplies given the remote location of some of the Company’s operating properties; reliance on a limited number of suppliers for certain consumables, equipment and components; the ability of the Company to address physical and transition risks from climate change and sufficiently manage stakeholder expectations on climate-related issues; the
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Company’s ability to accurately predict decommissioning and reclamation costs; the Company’s ability to attract and retain qualified personnel; competition for mineral acquisition opportunities; risks associated with the conduct of joint ventures/partnerships; and the Company’s ability to manage its projects effectively and to mitigate the potential lack of availability of contractors, budget and timing overruns and project resources. For additional 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 February 23, 2021. 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 .................................................................................................................................................... 10 Consolidated Financial and Operational Highlights ............................................................................. 11 Overview of Consolidated Results ........................................................................................................... 12 Outlook ...................................................................................................................................................... 14 Risks That Can Affect Our Business ....................................................................................................... 22 Financial Performance ............................................................................................................................. 24 Balance Sheet Review ............................................................................................................................... 26 Market Conditions .................................................................................................................................... 28 Financial Instruments ............................................................................................................................... 31 Operating Mines and Facilities ................................................................................................................ 32 Pre-Development Projects ........................................................................................................................ 48 Quarterly Results – Previous Eight Quarters ........................................................................................ 49 Related party transactions ....................................................................................................................... 50 Contingencies............................................................................................................................................. 51 Contractual Obligations ........................................................................................................................... 53 Accounting Estimates, Policies and Changes ......................................................................................... 53 Disclosure Controls and Procedures and Internal Control Over Financial Reporting ...................... 54 Non-GAAP Measures ............................................................................................................................... 54 Qualified Person & QA/QC – Production, Mineral Reserves and Mineral Resources ...................... 59 Mineral Reserves and Mineral Resources .............................................................................................. 60
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Overview
Centerra is a Canadian-based gold mining company focused on operating, developing, exploring and acquiring gold properties worldwide and is one of the largest Western-based gold producers in Central Asia. Centerra’s principal operations are the Kumtor Gold Mine located in the Kyrgyz Republic, the Mount Milligan Gold-Copper Mine located in British Columbia, Canada, and the Öksüt Gold Mine located in Turkey. The Company has one property in Canada in the pre-development stage, the Kemess Underground Gold Property. The Company sold its interest in the Greenstone Gold Mines Partnership, which included its interest in the Hardrock deposit, effective January 19, 2021, and as a result, treated it as available for sale as at December 31, 2020. The Company owns exploration properties in Canada, the United States of America and Turkey and has options to acquire exploration joint venture properties in Canada, Finland, Turkey, and the United States of America. The Company owns various assets within its Molybdenum Business Unit, particularly the Langeloth metallurgical processing facility in Pennsylvania, United States of America and two primary molybdenum mines currently on care and maintenance, Thompson Creek Mine in Idaho, United States of America, and the Endako Mine (75% ownership) in British Columbia, Canada.
As of December 31, 2020, Centerra’s significant subsidiaries are as follows:
Current Property Entity Property - Location Status Ownership Kumtor Gold Company (“KGC”) Operation 100% Kumtor Mine - Kyrgyz Republic
| Thompson Creek Metals Company Inc. | Mount Milligan Mine - Canada | Operation | 100% |
| Öksüt Madencilik A.S. (“OMAS”) | Öksüt Mine - Turkey | Operation | 100% |
| Langeloth Metallurgical Company LLC | Langeloth - United States | Operation | 100% |
| AuRico Metals Inc. | Kemess Underground Project - | Pre-development | 100% |
Canada Greenstone Gold Mines LP Greenstone Gold Property - Canada Available for sale(1) 50% (“Greenstone”)
Thompson Creek Mining Co. Thompson Creek Mine - United Care and 100% States Maintenance Thompson Creek Metals Company Inc. Endako Mine - Canada Care and 75% Maintenance
Property divestment completed on January 19th, 2021.
(1)
Centerra’s common shares are listed for trading on the Toronto Stock Exchange under the symbol CG. As of February 23, 2021, there are 295,856,546 common shares issued and outstanding, options to acquire 3,251,500 common shares outstanding under its stock option plan and 936,947 units outstanding under its restricted share unit plan (exercisable on a 1:1 basis for common shares).
The Company reports the results of its operations in U.S. dollars, however not all of its costs are incurred in U.S. dollars. As such, the movement in exchange rates between currencies in which the Company incurs costs and the U.S. dollar also impacts reported costs of the Company.
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Consolidated Financial and Operational Highlights
| Unaudited ($ millions, except as noted) | Three months ended December 31 | Twelve months ended December 31 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2020 vs 2019 | |||||||||||
| Financial Highlights | 2020 | 2019 | % Change | 2020 | 2019 | 2018 | %Change | ||||
| Revenue | $ | 386.8 | $ | 312.5 | 24% | $ | 1,688.7 | $ | 1,375.3 | 1,129.3 | 23% |
| Production costs | 138.3 | 149.4 | (7%) | 590.6 | 676.6 | 578.4 | (13%) | ||||
| Standby costs | - | 9.1 | (100%) | 6.7 | 9.1 | 10.8 | (26%) | ||||
| Depreciation, depletion and amortization | 65.1 | 59.3 | 10% | 305.3 | 239.6 | 196.9 | 27% | ||||
| Earnings from mine operations | 183.4 | 94.7 | 94% | 786.1 | 450.1 | 343.3 | 75% | ||||
| Net earnings (loss) | $ | 95.2 | $ | (12.2) | 880% | $ | 408.5 | $ | (93.5) | 107.5 | 537% |
| Adjusted net earnings(1) | $ | 104.5 | $ | 22.3 | 369% | $ | 461.9 | $ | 181.5 | 118.1 | 154% |
| Cash provided by operations | 182.0 | 92.5 | 97% | 930.0 | 334.1 | 217.5 | 178% | ||||
| Adjusted cash provided by operations(1) | 182.0 | 92.5 | 97% | 935.0 | 396.7 | 221.9 | 136% | ||||
| Cash provided by operations before changes in working capital | 187.8 | 93.0 | 102% | 852.7 | 398.5 | 341.4 | 114% | ||||
| Free cash flow (deficit)(1) | 76.8 | (0.4) | 100% | 603.8 | 34.7 | (68.4) | 1640% | ||||
| Adjusted free cash flow(1) | 76.8 | (0.4) | 100% | 608.8 | 97.3 | (64.0) | 526% | ||||
| Sustaining capital expenditures(2) | 33.7 | 16.7 | 102% | 97.7 | 74.2 | 86.8 | 32% | ||||
| Non-sustaining capital expenditures(2)(3) | 20.2 | 42.3 | (52%) | 69.8 | 148.9 | 97.7 | (53%) | ||||
| Capitalized stripping(2) | 55.3 | 28.2 | 96% | 154.0 | 76.5 | 103.9 | 101% | ||||
| Total assets | $ | 3,136.0 | $ | 2,701.7 | 16% | $ | 3,136.0 | $ | 2,701.7 | 2,826.7 | 16% |
| Long-term debt and lease obligations | 14.3 | 88.3 | (84%) | 14.3 | 88.3 | 183.5 | (84%) | ||||
| Cash, cash equivalents and restricted cash(4) | 547.9 | 70.7 | 675% | 547.9 | 70.7 | 179.2 | 675% | ||||
| Per Share Data | |||||||||||
| Earnings per common share - $ basic (5) | $ | 0.32 | $ | (0.04) | 900% | $ | 1.39 | $ | (0.32) | 0.37 | 534% |
| Adjusted net earnings per common share - $ basic (1)(5) | $ | 0.35 | $ | 0.08 | 338% | $ | 1.57 | $ | 0.62 | 0.40 | 153% |
| Per Ounce Data (except as noted) | |||||||||||
| Average gold spot price ($/oz)(6) | 1,876 | 1,483 | 27% | 1,772 | 1,393 | 1,269 | 27% | ||||
| Average realized gold price ($/oz sold)(1)(6) | 1,760 | 1,403 | 25% | 1,670 | 1,309 | 1,175 | 28% | ||||
| Average copper spot price ($/lb)(6) | 3.27 | 2.68 | 22% | 2.80 | 2.73 | 2.96 | 3% | ||||
| Average realized copper price ($/lb sold)(1)(6) | 2.79 | 2.23 | 25% | 2.22 | 2.09 | 2.02 | 6% | ||||
| Operating Highlights | |||||||||||
| Gold produced (oz) | 172,446 | 194,507 | (11%) | 824,059 | 783,308 | 729,556 | 5% | ||||
| Gold sold (oz) | 169,950 | 169,892 | 0% | 828,816 | 780,654 | 709,330 | 6% | ||||
| Copper produced (000's lb) | 20,376 | 18,079 | 13% | 82,816 | 71,146 | 47,091 | 16% | ||||
| Copper sold (000's lb) | 18,975 | 14,301 | 33% | 80,477 | 67,430 | 44,370 | 19% | ||||
| Unit Costs | |||||||||||
| Gold production costs ($/oz sold)(7) | $ | 474 | $ | 455 | 4% | $ | 419 | $ | 465 | 464 | (10%) |
| Gold - All-in sustaining costs on a by-product basis ($/oz sold)(1)(7) | $ | 974 | $ | 799 | 22% | $ | 729 | $ | 708 | 754 | 3% |
| Gold - All-in costs on a by-product basis ($ /oz sold)(1)(7) | $ | 1,352 | $ | 1,331 | 2% | $ | 1,059 | $ | 1,126 | 1,100 | (6%) |
| Gold - All-in sustaining costs on a co-product basis($/oz sold)(1)(7) | $ | 1,073 | $ | 829 | 29% | $ | 799 | $ | 737 | 750 | 8% |
| Copper production costs ($/lb sold)(7) | $ | 1.24 | $ | 1.50 | (17%) | $ | 1.18 | $ | 1.46 | 1.26 | (19%) |
| Copper - All-in sustaining costs on a co-product basis – ($/lb)(1)(7) | $ | 1.79 | $ | 2.28 | (21%) | $ | 1.47 | $ | 1.85 | 1.77 | (21%) |
Non-GAAP measure. See discussion under “Non-GAAP Measures”.
(1)
Capital expenditures are presented on a cash basis.
(2)
Non-sustaining capital expenditures are distinct projects designed to have a significant increase in the net present value of the mine. In the current year, (3)
non-sustaining capital expenditures included construction costs related to the Öksüt mine and additional costs related to cut-back 20 at the Kumtor mine.
Includes restricted cash of $2.7 million as at December 31, 2020 (December 31, 2019: $28.0 million and December 31, 2018: $27.5 million).
(4)
As at December 31 2020, the Company had 295,827,906 common shares issued and outstanding.
(5)
Average for the period as reported by the London Bullion Market Association (US dollar Gold P.M. Fix Rate) and London Metal Exchange (LME).
(6)
Combines streamed and unstreamed amounts.
(7)
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Overview of Consolidated Results
Fourth Quarter 2020 compared to Fourth Quarter 2019
Net earnings of $95.2 million and adjusted net earningsNG of $104.5 million were recognized in the fourth quarter of 2020, compared to a net loss of $12.2 million and adjusted net earningsNG of $22.3 million in the fourth quarter of 2019. The increase in adjusted net earningsNG was due to contributions from the new Öksüt mine in 2020 with 39,380 gold ounces sold in the fourth quarter, 25% higher average realized prices for both gold and copper and lower production and depreciation costs at Kumtor, partially offset by decreased gold ounces sold at Kumtor and higher depreciation costs at the Mount Milligan mine.
Cash provided by operations was $182.0 million in the fourth quarter of 2020, compared to cash provided by operations of $92.5 million in the fourth quarter of 2019. The increase in cash provided by operations was due to increased earnings from mine operations including earnings from the Öksüt mine which began production in 2020 and increased cash from working capital due to the processing of previously built-up stockpiles at the Kumtor mine.
Free cash flowNG of $76.8 million was recognized in the fourth quarter of 2020 compared to a free cash flow deficitNG of $0.4 million in the fourth quarter of 2019. The increase in free cash flowNG was due to higher cash provided by operations and lower non-sustaining capital expenditures as construction of the Öksüt mine was completed, partially offset by increased capitalized stripping at Kumtor and greater sustaining capital at the Mount Milligan and Kumtor mines.
Year ended December 31, 2020 compared to 2019
Net earnings were $408.5 million and adjusted net earningsNG were $461.9 million in 2020, compared to a net loss of $93.5 million and adjusted net earningsNG of $181.5 million in 2019.
The increase in adjusted net earningsNG was due to contributions from the new Öksüt mine, 28% higher realized gold prices, increased copper pounds sold at Mount Milligan and lower production costs at both Kumtor and Mount Milligan. This was partially offset by lower gold ounces sold and an increase in depreciation costs at the Kumtor and Mount Milligan mines.
Significant adjusting items to net earnings in 2020 include:
- $53.4 million asset retirement obligation (“ARO”) expense at the non-operating sites due to a significant decrease in the risk-free rate assumption, and
Significant adjusting items to the net loss in 2019 include:
- $230.5 million impairment charge on the assets at the Mount Milligan mine,
- $34.5 million ARO expense at the non-operating sites due to a significant change in the risk-free rate assumption, and
- $10.0 million charge relating to the completion of the Strategic Agreement with the Kyrgyz Government.
Cash provided by operations of $930.0 million and adjusted cash provided by operationsNG of $935.0 million were recognized in 2020, compared to cash provided by operations of $334.1 million and adjusted cash provided by operationsNG of $396.7 million in 2019. The increase in cash provided by operations was due to increased earnings from mine operations in 2020 including contributions from the Öksüt mine, increased cash from working capital from processing of stockpiles at Kumtor and a $22.8 million tax refund
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