Centerra Gold 2015 Third Quarter Results

NEWS RELEASE Centerra Gold 2015 Third Quarter Results

This news release contains forward-looking information that is subject to the risk factors and assumptions set out on page 29 and in the Cautionary Note Regarding Forward-looking Information on page 34. It should be read in conjunction with the Company’s unaudited interim condensed consolidated financial statements and notes for the three and nine months ended September 30, 2015 and associated Management’s Discussion and Analysis. The condensed consolidated interim financial statements of Centerra are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. All figures are in United States dollars unless otherwise stated.

To view Management’s Discussion and Analysis and the Unaudited Interim Condensed Consolidated Financial Statements and Notes for the three and nine months ended September 30, 2015, please visit the following link: http://media3.marketwire.com/docs/cg1027mdafs.pdf Toronto, Canada, October 27, 2015: Centerra Gold Inc. (TSX: CG) today reported a net loss of $18.1 million or $0.08 per common share (basic) in the third quarter of 2015, compared to a net loss of $3.2 million or $0.01 per common share (basic) for the same period in 2014. The 2015 loss was the result of a non-cash impairment charge of $18.7 million ($0.08 per share) of the goodwill in the Kyrgyz reporting segment. Additionally, the third quarter of 2015 reflects lower operating costs and lower taxes, partially offset by fewer ounces sold and lower average realized gold price¹, in the quarter.

For the first nine months of 2015, the Company recorded net earnings of $44.5 million or $0.19 per common share (basic), compared to a net loss of $32.8 million or $0.14 per common share (basic) in the comparative period of 2014, reflecting a 28% increase in gold ounces sold and lower operating costs year-to-date and a non-cash impairment charge of $18.7 million ($0.08 per share).

2015 Third Quarter Highlights

• Announced positive feasibility study results and the planned development of the Company’s 100% owned Öksüt Gold Project, subject to final approval of the Turkish environmental impact assessment (EIA) and receipt of all required permits.
• Lowered all-in sustaining cost¹ guidance for the year to $827 to $875 per ounce sold reflecting lower diesel fuel prices and favourable exchange rates for local currencies at Kumtor.
• Produced 107,485 ounces of gold in the third quarter, which includes 103,701 ounces at Kumtor and 3,784 ounces at Boroo, and 403,256 ounces of gold year-to-date.
• All-in sustaining costs per ounce sold¹ of $1,089 for the third quarter and $881 year-to-date, which excludes revenue-based tax in the Kyrgyz Republic and income taxes.
• Cash provided by operations in the third quarter totaled $41.1 million.
• Kumtor received approval from the Kyrgyz State Agency for Environmental Protection and Forestry of its 2015 annual mine plan.
• Following the quarter-end, announced the appointment of Scott Perry as CEO, effective November 1, 2015, to replace Ian Atkinson who is retiring and the appointment of Frank Herbert as President.

Centerra’s cash, cash equivalents and short-term investments at the end of the third quarter of 2015 decreased to $537.4 million after investing $69.1 million in its properties, making a $8.3 million payment to the Greenstone Gold Mines LP (the “Greenstone Partnership”) and paying $7.2 million in dividends in the quarter compared to $562.0 million at December 31, 2014. As at September 30, 2015, the Company had drawn $76 million on its $150 million revolving credit facility with the European Bank for Reconstruction and Development (EBRD), leaving a balance of $74 million undrawn. The amount drawn is due to be repaid in February 2016. Centerra believes, based on its current forecast, that it has sufficient cash and short-term investments to carry out its business plan in 2015 (see “2015 Outlook”).

Commentary

Ian Atkinson, President and CEO of Centerra Gold stated, “Kumtor again performed well during the quarter producing 103,701 ounces of gold and mining accessed the upper parts of the SB Zone as expected. We are on track to meet our production guidance and have lowered our all-in sustaining¹ and all-in cost¹ guidance reflecting lower diesel fuel prices, favourable exchange rates and overall better operating performance at Kumtor. Financially, the Company is in good shape with cash, cash equivalents and short-term investments of $537 million or $461 million, net of debt, at September 30, 2015. During the third quarter cash provided by operations was $41.3 million.”

“At the Öksüt Project in Turkey, we announced the development decision for the project, subject to final approval of the Turkish EIA and receipt of all required permits. The EIA process continues with formal approval from the Turkish regulatory authorities expected in the fourth quarter 2015, which will allow us to apply for all required permits. We expect to begin development of the Öksüt Project in the first quarter of 2016 with first gold production anticipated in the second quarter of 2017. Drilling at Öksüt in the quarter extended the Guneytepe deposit to the north and identified additional oxide gold mineralization which is expected to add to the existing resource estimate and drilling on the Keltepe NW prospect identified oxide mineralization which suggests the potential of additional oxide gold resources to complement the Keltepe and Guneytepe resources.”

“In Mongolia, we continued our discussions with the Government regarding Gatsuurt and have agreed to a 3% special royalty in place of the Government acquiring a 34% ownership interest in Gatsuurt. It is our understanding that the Government has recently submitted a revised proposal regarding its ownership interest in the Gatsuurt Project to Parliament for review.”

“At the Greenstone Gold Property, an updated resource calculation was completed during the quarter. As a result Centerra contributed to the partnership an additional C$11 million ($8.3 million) based on the results.”

“In the Kyrgyz Republic, on September 21, 2015, Kumtor received approval of its 2015 annual mine plan from the State Agency for Environmental Protection and Forestry. We have now received all approvals for the 2015 annual mine plan from the relevant Kyrgyz Republic agencies. On October 4, 2015, the country successfully held its parliamentary elections and we await the formation of the new government, which we will work with toward a resolution of all outstanding matters affecting the Kumtor Project. As we have stated previously any proposed resolution would need to be fair to all shareholders of Centerra,” Mr. Atkinson concluded.

Recent Developments

The following is a summary of recent events affecting the Company. For further information, see “Other Corporate Developments”.

Kumtor Operations The Company continues to be in discussions with the Government of the Kyrgyz Republic relating to the • possible restructuring of the Kumtor project. As previously disclosed, the Kyrgyz Republic Parliament passed a resolution on June 29, 2015 to ensure the continued operation of the Kumtor mine and to carry out an examination of the updated Kumtor life-of-mine plan, presented in the Kumtor Technical Report dated March 20, 2015, and its impact on the Kyrgyz Republic.

• On September 21, 2015, Kumtor received approval from the State Agency for Environmental Protection and Forestry to continue to mine ore according to the 2015 annual mine plan.

Mongolian Operations

• The Company continued to engage in discussions with the Mongolian Government regarding the development of the Gatsuurt Project and in mid-October agreed with the Government to a 3% special royalty in place of the Government acquiring a 34% ownership interest in the project. The Company understands that the Government has recently submitted a revised proposal regarding its ownership interest in the Gatsuurt Project to Parliament for review. Further development of the Gatsuurt Project is subject to, among other things, receiving Parliamentary approval of the Mongolian state interest in the project as well as all required approvals and regulatory commissioning from the Mongolian Government.

Öksüt Project The Company announced on July 28, 2015 the positive feasibility study results and the planned • development of the 100%-owned Öksüt Project, followed by the filing of a Technical Report on September 3, 2015. The report details include an eight year mine life, production of 895,000 ounces of gold with an all-in cash cost (including taxes) of $777 per ounce sold¹. The Technical Report is available on SEDAR and on the Company’s website.

• The environmental impact assessment (EIA) process for the Öksüt Project continues on schedule with formal EIA approval from Turkish regulatory authorities expected in the fourth quarter 2015. Receipt of permits is contingent on the approval of the EIA and applications for all required permits will follow immediately upon approval of the EIA.

Greenstone Gold Property

• As contemplated by the implementation agreement between Centerra and Premier Gold Mines Limited (“Premier”) regarding the Greenstone Gold Property, an updated resource calculation was completed during the third quarter of 2015 and based on these results, the Company paid to the partnership an amount of C$11 million ($8.3 million). The contribution was subsequently distributed to Premier as a capital distribution from the partnership.

Corporate

• The Company announced on October 13, 2015 that Scott Perry will be appointed as Chief Executive Officer (CEO), effective November 1, 2015, and will replace Ian Atkinson who, as previously announced, is retiring by year-end. Additionally, Centerra announced the appointment of Mr. Frank Herbert as President.
• On September 8, 2015, the original court order issued in February 2015 in the proceedings commenced by Valerie Belokon (“Belokon”) against the Kyrgyz Republic and Kyrgyzaltyn was amended. The effect of the amendment was to limit the security being set aside for the Belokon proceeding. The number of restricted Centerra shares was amended to 3,787,879 shares (formerly 6,500,240 shares), and the amount of dividends to be held in trust for the Belokon proceeding was capped at C$10 million. Amounts held in trust in excess of C$10 million were released to Kyrgyzaltyn in September 2015.
• On October 7, 2015, the Kyrgyz Republic’s request to extradite Mr. Len Homeniuk from Bulgaria to the Kyrgyz Republic was denied. Mr. Homeniuk was Centerra’s President and CEO from 2004 until his retirement in June 2008. Mr. Homeniuk has now returned home to the United States.
• On October 15, 2015, Centerra received an Ontario court order in favour of Entes Industrial Plants Construction & Erection Contracting Co. Inc. (“Entes”) which has an arbitral award against the Kyrgyz Republic for $22.7 million. The injunction (i) prohibits Kyrgyzaltyn from, among other things, selling or transferring 7,465,776 shares of Centerra held by it; and (ii) requires Centerra to pay any dividends declared on Centerra shares held by Kyrgyzaltyn into trust for the benefit of the Entes enforcement application. The order does not set a cap on the amount of dividends to be held in trust.

Consolidated Financial and Operating Summary

(1) Includes business development of $nil and $1.9 million for the three and nine months ended September 30, 2015, respectively ($0.2 million and $0.3 million for the three and nine months ended September 30, 2014, respectively).

(2) As at September 30, 2015, the Company had 236,570,443 common shares issued and outstanding.

(3) Average for the period as reported by the London Bullion Market Association (US dollar Gold P.M. Fix Rate).

(4) Adjusted operating costs, all-in sustaining costs, all-in costs and all-in costs - including taxes ($ millions and per ounce sold) as well as average realized gold price per ounce and cost of sales per ounce sold are non-GAAP measures and are discussed under “Non-GAAP Measures”.

(5) Includes capitalized stripping of $64.9 million and $198.4 million in the three and nine months ended September 30, 2015, respectively ($53.5 million and $228.5 million in the three months and nine months ended September 30, 2014, respectively).

(6) Operating costs (on a sales basis) are comprised of mine operating costs such as mining, processing, regional office administration, royalties and production taxes (except at Kumtor where revenue-based taxes are excluded), but excludes reclamation costs and depreciation, depletion and amortization. Operating costs (on a sales basis) represents the cash component of cost of sales associated with the ounces sold in the period.

(7) Results may not add due to rounding.

Third Quarter 2015 compared to Third Quarter 2014

• Gold production for the third quarter of 2015 totaled 107,485 ounces compared to 110,792 ounces in the comparative quarter of 2014. The decrease in ounces reflects lower production at Boroo as a result of the cessation of milling operations in December 2014. Kumtor’s production was 9% higher in the third quarter of 2015 compared to the same quarter of 2014 due to higher mill throughput and recoveries, partially offset by lower grades.
• All-in sustaining costs per ounce sold¹, which excludes revenue-based tax and income tax, for the third quarter decreased to $1,089 from $1,139 in the comparative period of 2014. The decrease in the third quarter of 2015 results primarily from lower operating costs.
• All-in costs per ounce sold¹, which excludes revenue-based tax and income tax, were $1,216 compared to $1,344 in the comparative quarter of 2014. All-in costs per ounce sold¹ include all cash costs related to gold production, excluding revenue-based tax and income tax. The decrease reflects the lower operating costs, lower spending on growth capital¹ at Kumtor and lower exploration costs, partially offset by additional spending in the third quarter of 2015 for pre-development activities at the Greenstone Gold Property.
• Goodwill for the Kyrgyz reporting segment was impaired by $18.7 million as a result of the annual goodwill impairment test carried out at September 1, 2015, based on the current Kumtor life of mine plan. As a result there is no goodwill remaining. The test assumptions were updated from the last evaluation carried out at December 31, 2014. The test result was heavily impacted by lower gold prices, as spot gold prices continued to decrease in the first eight months of 2015, and by a higher discount rate which reflected increased country risk. This was partially offset by lower operating costs mainly from lower diesel prices and favourable currency movements.
• Revenue in the third quarter of 2015 decreased 14% to $116.2 million, as a result of 4% less ounces sold (103,467 ounces in the third quarter of 2015 compared to 107,367 ounces in the third quarter of 2014) and an 11% lower average realized gold price¹ ($1,123 per ounce compared to $1,265 per ounce in the same quarter of 2014).
• In the third quarter of 2015, ounces sold decreased 4% compared to the third quarter of 2014 but cost of sales decreased by 24% to $76.1 million compared to the same period of 2014. This reflected the lower costs in both the stockpiled ore and in the ore mined and processed at Kumtor from cut-back 16 in the third quarter of 2015. In particular, the cost of sales in the third quarter of 2015 benefited from cutback 16 containing more ounces and from lower operating costs (for diesel, labour and other consumables) and reduced waste stripping as compared to cut-back 15 ore that was processed in the third quarter of 2014. Depreciation, depletion and amortization (“DD&A”) associated with production was $40.8 million in the third quarter of 2015 as compared to $44.5 million in the same quarter of 2014, reflecting lower capitalized stripping charges per ounce from cut-back 16 ore, partially offset by the increased ounces sold in 2015.
• Operating costs (on a sales basis) decreased to $35.3 million in the third quarter of 2015 from $56.2 million in the same period of 2014. The decrease was due to processing lower cost ounces at Kumtor which reflects a reduction in costs for diesel, labour and other consumables as well as favourable movements in the local currency as compared to the same period of 2014. Operating costs at Boroo were lower in the third quarter of 2015 as compared to the same period in 2014 as milling activities ceased in late 2014. Site support costs at Boroo in the third quarter of 2015 were lower reflecting reduced personnel levels.
• During the third quarter of 2015 Boroo incurred standby costs to maintain the mill and operation on care and maintenance of approximately $1.0 million which included spending mainly on labour to maintain equipment in a ready state, as well as fixed costs for administration.
• In the third quarter of 2015, pre-development projects costs increased by $1.8 million to $3.3 million compared to the same quarter in 2014. The increase in the third quarter of 2015 represents higher spending at the Company’s Greenstone Gold Property, partially offset by lower expensed costs at the Öksüt Project as capitalization of project costs commenced on August 1, 2015 with the board decision to move to development.
• Exploration expenditures in the third quarter of 2015 totaled $3.1 million compared to $4.8 million in the same period of 2014. The decrease in the third quarter of 2015 reflects reduced spending on the Company’s projects in Turkey and Mongolia.
• Other expenses of $2.3 million were incurred in the third quarter of 2015, including a $1.7 million write-off of infrastructure at Kumtor which was not relocated after the waste rock dump movement and the impact of exchange movements. Other income of $1.6 million was recorded in third quarter of 2014, representing proceeds from an insurance claim at Kumtor.

• Corporate administration costs increased to $8.0 million in the third quarter of 2015 from $5.9 million in the same period of 2014, due mainly to an increase in share-based compensation, partially offset by the impact of currency movements. The Company’s share price increased by 6% during the third quarter of 2015 as compared to a decrease in share price of 25% during the same quarter of 2014. Share-based compensation was a charge of $2.3 million in the third quarter of 2015 compared to a credit of $0.2 million in the same period of 2014.

• Cash provided by operations increased by $55.1 million in the third quarter of 2015 to $41.1 million mainly as a result of lower working capital levels and lower operating costs.
• Total capital expenditures in the third quarter of 2015 were $94.7 million, which included sustaining capital¹ of $14.8 million, growth capital¹ of $1.9 million, $1.8 million of Öksüt Project development costs, $3.0 million of Greenstone Gold Property development costs, $8.3 million of Greenstone Partnership acquisition costs and $64.9 million of capitalized stripping costs ($49.1 million cash). Capital expenditures in the same quarter of 2014 were $83.1 million, which included $14.2 million for sustaining capital¹ and $15.4 million for growth capital¹ and capitalized stripping of $53.5 million ($38.5 million cash). The higher capital expenditures in the third quarter of 2015 resulted mainly from higher capitalized stripping, spending on development projects and lower growth capital¹ spent at Kumtor.

First Nine Months 2015 compared to First Nine Months 2014

• Gold production for the first nine months of 2015 totaled 403,256 ounces compared to 319,585 ounces in the comparative period of 2014. The increase in production is primarily due to higher mill grades and higher recoveries at Kumtor.
• All-in sustaining costs per ounce sold¹, which excludes revenue-based tax and income tax, for the first nine months of 2015, was $881 compared to $1,246 in the same period of 2014. The decrease in the first nine months of 2015 reflects 29% more ounces sold, lower operating costs in 2015 mainly for diesel, labour and consumables and lower costs for capitalized stripping, partially offset by higher spending on sustaining capital^l as compared to the first nine months of 2014.
• All-in costs per ounce sold¹, which excludes revenue-based tax and income tax, for the first nine months of 2015, were $987, compared to $1,388 per ounce sold in the first nine months of 2014. The decrease reflects the additional ounces sold, the lower costs (described above), lower exploration costs

and lower spending for growth capital¹ at Kumtor. These costs were partially offset by higher spending on pre-development activities at the Greenstone Gold Property and at the Öksüt Project in the first nine months of 2015.

• In connection with the annual goodwill impairment test carried out at September 1, 2015, the goodwill for the Kyrgyz reporting segment was impaired by $18.7 million. As a result, there is no goodwill remaining. The impairment reflects lower gold prices, as spot gold prices continued to decrease in the first eight months of 2015, and a higher discount rate. This was partially offset by lower operating costs mainly from lower diesel prices and favourable currency movements.

Revenue in the first nine months of 2015 increased 18% to $475.6 million, as a result of 28% more • ounces sold (401,778 ounces compared to 314,864 ounces in the first nine months of 2014) partially offset by an 8% lower average realized gold price¹ ($1,184 per ounce compared to $1,281 per ounce in the same period of 2014).

• In the first nine months of 2015, cost of sales decreased by 15% to $271.1 million due primarily to lower operating costs and lower DD&A associated with the cut-back 16 ore processed and sold. The cost of sales in the first nine months of 2015 benefited from cut-back 16 containing more ounces and lower operating costs (for diesel, labour and other consumables) and reduced waste stripping as compared to cut-back 15 ore that was processed in the first nine months of 2014. DD&A associated with production decreased to $156.3 million in the first nine months of 2015 from $172.0 million in the comparative period of 2014, reflecting lower capitalized stripping charges per ounce from cut-back 16 ore, partially offset by the increased ounces sold in 2015.
• Operating costs (on a sales basis)¹ decreased by $32.3 million to $114.8 million in the first nine months of 2015 compared to the same period in 2014, mainly as a result of lower operating costs for fuel, labour and consumables, as well as favourable exchange rate movements in the Kyrgyz Som. This was partially offset by higher ounces sold in the first nine months of 2015.
• During the first nine months of 2015 Boroo incurred standby costs totaling $4.8 million to place and maintain the mill and operation on care and maintenance which included spending mainly on labour to clean the circuits and maintain equipment in a ready state, as well as fixed costs for administration. There was $0.2 million of standby costs incurred in the same period of 2014.
• In the first nine months of 2015, pre-development projects costs increased by $7.9 million to $11.5 million compared to the same period in 2014. The increase represents spending at the Greenstone Gold Property and higher spending at the Company’s Öksüt Project.
• Exploration expenditures in the first nine months totalled $6.1 million compared to $11.3 million in the same period of 2014. The decrease in the first nine months of 2015 reflects reduced spending on the Company’s projects in Turkey and Mongolia and the closure of the regional office in China.
• Business development spending in the first nine months of 2015 totaled $1.9 million, representing consulting and legal charges in connection with the Company’s acquisition of its 50% interest in Greenstone Partnership. There was minimal spending on business development activities in the same period of 2014.

Corporate administration costs increased to $28.1 million from $24.2 million in the first nine months of • 2014 due primarily to higher legal and consulting costs related to on-going negotiations with the Kyrgyz and Mongolian governments and higher share-based compensation resulting from the appreciation in the value of the underlying share-based awards to employees. The share-based compensation charge in the first nine months of 2015 was $9.7 million, compared to $6.6 million in the same period in 2014.

• Cash provided by operating activities increased by $126.8 million to $286.0 million in the first nine months of 2015 compared to $159.4 million in the same period of 2014. The increase mainly reflects the higher earnings in 2015 and lower working capital levels.
• Total capital expenditures in the first nine months of 2015 were $336.9 million, which included sustaining capital¹ of $39.4 million, growth capital¹ of $12.8 million, $1.8 million of Öksüt Project development costs, Greenstone Gold development costs of $8.8 million, $75.7 million of Greenstone Gold Property acquisition costs, and $198.4 million of capitalized stripping costs ($150.3 million cash) at Kumtor. Capital expenditures in the same period of 2014 were $293.5 million, which included $35.8 million for sustaining capital¹ and $29.2 million for growth capital¹ and capitalized stripping of $228.5 million ($162.4 million cash). Total capital expenditures were 15% higher for the first nine months of 2015 as a result of the Greenstone Gold Property acquisition costs and higher sustaining capital¹ (an increase of 10%) partially offset by lower growth capital¹ (a decrease of 56%) and lower capitalized stripping at Kumtor (a decrease of 13%).

Third Quarter Operations Update Kumtor Mine

(1) Adjusted operating costs, all-in sustaining costs, all-in costs and all-in costs – including taxes (in $ millions and per ounce sold), as well as average realized gold price per ounce sold, cost of sales per ounce sold and capital expenditures (sustaining and growth) are non-GAAP measures and are discussed under “Non-GAAP Measures”.

(2) Operating costs (on a sales basis) is comprised of mine operating costs such as mining, processing, regional office administration, royalties and production taxes (except at Kumtor where revenue-based taxes are excluded), but excludes reclamation costs and depreciation, depletion and amortization.

(3) Results may not add due to rounding.

At the Kumtor mine in the Kyrgyz Republic, mining activities in the third quarter of 2015 continued to focus on waste stripping from cut-back 17, while the mill primarily processed ore from stockpiles. Total waste rock and ore mined during the third quarter of 2015 was 41.9 million tonnes compared to 48.7 million tonnes in the comparative period of 2014, representing a decrease of 14%, primarily due to a 6% increase in average haulage distance when compared to the same period of 2014. Other factors impacting mining included a decrease in haul truck availability of 5% and the impact of unusually warm and wet weather conditions that resulted in lost production hours during the third quarter of 2015. During the third quarter of 2015, Kumtor mined 1.1 million tonnes of ore at an average grade of 1.80 g/t, compared to 1.4 million tonnes of ore mined at an average grade of 3.49 g/t in the third quarter of 2014.

Gold production for the third quarter of 2015 was 103,701 ounces of gold compared to 95,265 ounces of gold in the comparative period of 2014. During the third quarter of 2015, Kumtor’s average mill head grade was 2.83 g/t with a recovery of 75.7%, compared to 3.05 g/t and a recovery of 72.7% for the same period of 2014. Approximately 1.5 million tonnes were processed in the third quarter of 2015, 5% higher than the comparative period of 2014 due to higher mill availability and higher hourly throughput.

Operating costs (on a sales basis), excluding capitalized stripping decreased 24% to $33.5 million in the third quarter of 2015 from $43.8 million in the same period of 2014. The decrease was due to processing lower cost ounces at Kumtor that was driven by a reduction in cost for diesel, labour and other consumables as well as favourable movements in exchange rates as compared to the same period of 2014.

Mining costs, including capitalized stripping costs, totaled $52.3 million for the third quarter of 2015, which was $12.9 million less than the comparative quarter of 2014. Decreased costs for the period include lower diesel costs of ($10.3 million) due to lower global fuel prices (on average 51.6 cents per liter compared to 71.0 cents per liter), blasting costs ($2.0 million) due to lower blasted tonnages and the implementation of an improved wider drill pattern on waste material, lower labour costs ($1.5 million) due to favourable exchange movement on local salaries and lubes costs ($0.9 million) due to improved oil analysis processes. The lower costs were partially offset by increased maintenance costs ($0.5 million) mainly attributable to haulage trucks.

Milling costs totaled $16.7 million in the third quarter of 2015 compared to $18.5 million in the same period of 2014. Milling costs in the third quarter of 2015 were lower than the comparative period, mainly due to the timing of mill liner replacements ($0.7 million), lower cyanide costs ($0.6 million), lower maintenance costs ($0.6 million), lower grinding balls costs ($0.4 million) mainly due to lower global steel costs and lower carbon costs ($0.4 million) due to processing consistent ore types allowing a lower consumption rate per tonne. This was partially offset, by higher electricity costs ($0.5 million).

Site support costs were $11.5 million in the third quarter of 2015 compared to $13.9 million in the same period of 2014. Site support costs decreased primarily due to lower labour costs ($1.1 million) resulting from a favourable exchange movement on local salaries and reduced employee support staff and decreased insurance premiums ($0.4 million).

DD&A associated with sales decreased to $39.3 million in the third quarter of 2015 from $41.1 million in the comparative period of 2014. The comparative period reflects a higher depreciation charge for the ounces poured and sold as more waste material was stripped and fewer ounces mined from cut-back 15 compared to cut-back 16 that was processed and sold during the third quarter of 2015.

All-in sustaining costs per ounce sold¹, which excludes revenue-based tax, for the third quarter of 2015 decreased 10% to $1,000 compared to $1,110 in the comparative period of 2014. The decrease results primarily from more ounces sold and lower operating costs, partially offset by higher capitalized stripping costs in the third quarter of 2015 as ore in cut-back 17 was exposed late in the quarter.

All-in costs per ounce sold¹, which excludes revenue-based tax, for the third quarter of 2015 was $1,014 compared to $1,274 in the comparative period of 2014, representing a decrease of 20%. The decrease is mainly due to the factors described above and a further reduction in growth capital¹ spending for the infrastructure relocation at Kumtor as the Company incurred significant expenditures during the comparative period for the new camp facilities which were substantially completed by the end of June 2015.

Capital expenditures in the third quarter of 2015 totaled $80.7 million which includes $14.4 million of sustaining capital¹ mainly on equipment rebuilds and overhauls, $1.4 million invested in growth capital¹ and $64.9 million for capitalized stripping ($49.1 million cash). Capital expenditures in the comparative quarter of 2014 totaled $82.9 million, consisting of $14.2 million for sustaining capital¹, $15.2 million for growth capital¹ and $53.5 million of capitalized stripping ($38.5 million cash).

Mongolia (Boroo/Gatsuurt)

At the Boroo mine, located in Mongolia, gold production in the third quarter of 2015 was 3,784 ounces compared to 15,527 ounces of gold in the same period of 2014. The lower gold production in the third quarter of 2015 reflects the fact that no mill processing activities occurred during this period. In addition, fewer ounces were poured from the heap leach operation as a result of transitioning to secondary leaching beginning in August 2014, while a portion of the comparative quarter of 2014 benefited from primary leaching. The Company anticipates secondary leaching activities at Boroo to be completed by the end of 2015 and intends to keep the mill on standby awaiting the start-up of the Gatsuurt Project. See “Other Corporate Developments – Mongolia”.

Operating costs (on a sales basis) decreased by $10.6 million to $1.8 million in the third quarter of 2015, as a result of lower activity at the project. Operating costs at Boroo were lower by 86% in the third quarter of 2015 as compared to the same period in 2014 as milling activities ceased in late 2014.

All-in sustaining costs per ounce sold¹ and all-in costs per ounce sold¹ which excludes income tax, increased in the third quarter of 2015 to $1,369 from $924 in the same quarter of 2014. The increase is primarily due to a 83% decrease in ounces sold, partially offset by lower operating costs.

Although the Gatsuurt Project was designated as a mineral deposit of strategic importance by the Mongolian Parliament since January 2015, the project remained under care and maintenance in the third quarter of 2015. The Company continued to engage in discussions with the Mongolian Government regarding the development of the Gatsuurt Project and in mid-October agreed to a 3% special royalty in place of the Government acquiring a 34% ownership interest in the project. The Company understands that the Government has recently submitted a revised proposal regarding its ownership interest in the Gatsuurt Project to Parliament for review. Further development of the project is also subject to, among other things, finalizing a deposit development agreement, and receiving all required approvals and regulatory commissioning from the Mongolian Government. See “Other Corporate Developments – Mongolia”.