Centerra Gold Announces Highlights of New Life of Mine Plan for the Mount Milligan Mine, Including an Extension of Mine Life to 2033
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NEWS RELEASE
Centerra Gold Announces Highlights of New Life of Mine Plan for the Mount Milligan
Mine, Including an Extension of Mine Life to 2033
This news release contains forward-looking information regarding Centerra’s business and operations, see the Cautionary
Note Regarding Forward-looking Information on page s 8 to 9. All figures are in United States dollars unless otherwise
stated. All references in this document denoted with NG, indicate a “specified financial meas ure” 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” on pages 37 to 38 in Centerra’ s Management’ s Discussion
& Analysis for the three and six months ended June 30, 2022 for a discussion of the specified financial measures used in
this document.
Toronto, Canada, October 4, 2022: Centerra Gold Inc. (“Centerra” or the “Company”) (TSX: CG) (NYSE:
CGAU) announces highlights from an updated life of mine (“LOM”) for the Mount Milligan Mine.
Mount Milligan Mine LOM Highlights:
• Increase in p roven and probable gold mineral reserves from the 2021 year-end mineral reserve and
resources summary by 1.1 million contained ounces (1.8 million to 2.9 million ) and copper mineral
reserves by 260 million contained pounds (736 million to 996 million). The Mount Milligan Mine
deposit contains mineral reserves totaling 246.2 million tonnes at 0.37 g/t gold and 0.18% copper.
• Mine life extended by over four years, extending open pit mining and milling operations to 2033.
• Increase from the 2020 Mount Milligan Technical Report LOM in total payable gold ounces produced
by more than 0.8 million ounces (1.1 million to 1.9 million) and payable copper pounds produced by
191 million pounds (560 million pounds to 751 million pounds) from 2022 onwards.
• LOM payable gold production of 1.9 million ounces at a production cost of $502 /ounce, an all -in
sustaining cost on a by -product basis NG of $756 /ounce and all -in cost on a by -product basis NG of
$770/ounce.
• Recent inflationary cost pressure will be taken into consideration when the Company updates and
discloses the M ount Milligan Mine’s 2023-2025 production and cost guidance in early 2023. The
Company’s 2022 guidance remains on track for year-end.
• Net cash flow over the LOM is estimated at $640 million using a gold price of $1,500/ounce and copper
price of $3.25/pound and over $1.0 billion at prices of $1,700/ounce of gold and $3.50/pound of copper.
• Mount Milligan’s after-tax net present value (“NPV”) is estimated at $486 million at a 5% discount rate
using a gold price of $1,500/ounce and copper price of $3.25/pound and an estimated $797 million at
gold and copper prices of $1,700/ounce and $3.50/pound, respectively.
• Significant exploration potential exists for new areas of mineralization.
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Mount Milligan Mine Mineral Reserves and Resources
As at December 31, 2021, the Mount Milligan Mine copper-gold porphyry deposit contains combined proven
and probable mineral reserves totaling 246.2 million tonnes (“Mt”) at 0.37g/t gold and 0.18% copper, containing
2.9 million ounces of gold and 1.0 billion pounds of copper. The reserves have been classified as approximately
30% proven and 70% probable on a tonnage basis. The mineral reserve within the 2021 reserve pit shell was
based on a net smelter return (“NSR”) cut-off value of $7.40/t (C$9.62/t) and used $1,350 per ounce gold and
$3.25 per pound copper as the price assumptions.
Table 1-1: Mineral Reserve Statement – Effective Date December 31, 2021
Mineral Reserve Category Tonnes (kt) Gold
Grade (g/t)
Copper
Grade (%)
Contained
Gold (koz)
Contained
Copper (Mlbs)
Proven 76,477 0.37 0.20 914 337
Probable 169,681 0.37 0.18 2,011 659
Total 246,158 0.37 0.18 2,925 996
1) CIM definitions were followed for the classification of Mineral Reserves.
2) Mineral Reserves are estimated at $7.40/t (C$9.62/t) NSR cut-off value using metal prices of $3.25 per pound copper and $1,350 per ounce gold,
and an exchange rate of US$1.00/C$1.30.
3) Figures may not total exactly due to rounding.
4) As of June 30, 2022, Gold Contained and Copper Contained have been depleted from the above figures by approximately 82koz and 38Mlbs from
the above December 31, 2021 reserve balances, respectively.
5) Production at Mount Milligan is subject to a streaming agreement with RGLD Gold AG and Royal Gold, Inc. (collectively, “Royal Gold”) which
entitles Royal Gold to 35% of gold produced and 18.75% of the copper production from the Mount Milligan Mine. Under the stream arrangement,
Royal Gold will pay $435 per ounce of gold delivered and 15% of the spot price per metric tonne of copper delivered. Mineral reserves and resources
for the Mount Milligan property are presented on a 100% basis.
At December 31, 2021, the Mount Milligan deposit also contains a combined measured and indicated mineral
resource (exclusive of mineral reserves) of 189.3 Mt at 0.30g/t gold and 0.18% copper (1.8 million ounces of
gold and 742 million pounds of copper) and a n inferred mineral resource of 5 Mt at 0.47g/t gold and 0.07%
copper. The mineral resource within the 2021 resource pit shell was based on a cut-off grade of 0.2% copper-
equivalent (“CuEq”) and used $1,550 per ounce gold and $3.50 per pound copper as the price assumptions.
Table 1-2: Mineral Resource Statement – Effective Date December 31, 2021 (exclusive of Mineral Reserves)
Mineral Resource
Category
Cut-off
CuEq (%)
Tonnes
(kt)
Gold Grade
(g/t)
Copper
Grade (%)
Contained
Gold (koz)
Contained
Copper (Mlbs)
Measured (M) 0.2 36,529 0.26 0.21 305 169
Indicated (I) 0.2 152,796 0.31 0.17 1,523 573
Total M+I 0.2 189,325 0.30 0.18 1,828 742
Inferred 0.2 4,638 0.47 0.07 70 7
1) CIM definitions were followed for the classification of Mineral Resources.
2) Mineral Resources are reported at a 0.2% CuEq cut -off value using assumed metal prices of $3.50 per pound copper and $1,550 per ounce gold,
and an exchange rate of US$1.00/C$1.30.
3) All figures have been rounded to reflect the relative accuracy of the estimates.
4) Mineral Resources that are not Mineral Reserves do not have a demonstrated economic viability. Mineral Resources reported exclusive of Mineral
Reserves.
5) Inferred mineral resources have a great amount of uncertainty as to their existence and as to whether they can be mined economically. It cannot be
assumed that all or part of the inferred mineral resources will ever be upgraded to a higher category.
6) Production at Mount Milligan is subject to a streaming agreement with Royal Gold which entitles Royal Gold to 35% of gold produced and 18.75%
of the copper production from the Mount Milligan Mine. Under the stream arrangement, Royal Gold will pay $435 per ounce of gold delivered and
15% of the spot price per metric tonne of copper delivere d. Mineral reserves and resources for the Mount Milligan property are presented on a
100% basis.
3
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Table 1-3: Summary of 2022 Mount Milligan Mine Reserves
As at December 31, 2021
Life of Mine1 Sensitivity
Proven & Probable Reserves1 (Mt) 246.2 Mt at 0.37 g/t gold, 0.18% copper
Contained gold ounces1 (koz) 2,925
Contained copper pounds1 (Mlbs) 996
Mine life (years) 11
Annual mill throughput (Mt) 21.9
Average milling rate (tpd) 60,000
Gold recovery (%) 68.0
Copper recovery (%) 80.2
Average annual gold production (oz) 175,000
Average annual copper production (Mlbs) 68
Total ounces payable produced (koz) 1,927
Total pounds payable produced (Mlbs) 751
Gold price ($/oz) $1,500 $1,700
Copper price ($/lb) $3.25 $3.50
Production cost ($/oz) $502 $424
All-in sustaining costNG ($/oz) $756 $678
Sustaining capitalNG,2 ($M) $494 $494
Net Cash Flow3 ($M) $640 $1,035
NPV (5% discount) ($M) $486 $797
1) Mineral reserves calculated using a gold price of $1,350 per ounce and copper price of $3.25 per pound.
2) Sustaining capital excludes working capital investments.
3) Net Cash Flow is defined as cash provided by oper ating activities less cash used in investing activities and lease payments. Net Cash
Flow includes cash flow estimates for the year of 2022 of $75 million (life of mine) and $117 million (sensitivity), calculated using the
above commodity price assumptions for the full year. The 2022 cash flow estimates will differ from the actual results for the year due to
differences in actual prices, costs, foreign exchange rates, and production metrics and estimates.
The open pit was optimized using long -term metal price estimates of $1,350 per ounce gold and $3.25 per
pound copper, an exchange rate of US$1.00/C$1.30, and costs related to mining, processing and general and
administrative expenses (including site services) and sustaining capital costs. Other factors considered to
determine economic viability include metallurgical recoveries, concentrate grades, transportation costs, smelter
treatment charges, royalties and streams.
The NSR cut-off was calculated to be $7.40/t (C$9.62/t) which was comprised of the costs for processing and
general and administrative operating costs (“opex”) and sustaining capital expendituresNG, taking into account
the mine’s expected cost structure. Mining opex and mining sustaining capital expenditures NG are excluded
from the NSR cut off calculation. One -time processing or general and administrative sustaining capital
expendituresNG items were also excluded from the NSR cut-off calculation.
The Company will continue to optimize the LOM plan. The updated LOM has both expanded the reserves pit
shell and increased the gold and copper metal contained within the previous reserves pit shell, with a significant
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increase in the gold reserves through expanded areas of the pit limits to include gold zones with low copper
grades. For the LOM optimization, the material movement and phasing stra tegies were optimized to smooth
out the annual grades, strip ratio and equipment productivities. In addition, due to the geometry of the orebody,
build-up of ore stockpile in periods is necessary in advance of lower grade periods as well as ore blending f or
maximum copper recovery and concentrate quality.
Operating and Capital Costs Summary
Total operating and capital costs over the Mount Milligan Mine’s LOM, net of copper credits, are estimated at
$3,502 million.
Table 2-1: Costs Summary - December 31, 2021 LOM
Costs Summary (Total LOM) $M
Mining (includes costs associated with the tailings storage facility (“TSF”))
_
990
Milling 1,212
Admin and Plant Services 492
Transportation 168
Selling and Marketing 94
Treatment and Refining 180
Capital 366
Total 3,502
Capital Costs
The LOM capital costs for the Mount Milligan Mine are summarized in the following table:
Table 2-2: Capital Costs Summary - December 31, 2021 LOM
Capital Category $M
Mining Capital
Mine Equipment Replacement 81
Equipment Component Replacement 151
Sub Total Mining 232
Processing Capital
Process Plant Maintenance 25
Process Plant Operating 8
Water Management 44
Sub Total Processing 77
Long-Term Agreements requiring capitalization (IFRS 16)1 57
Total Capital Expenditures (excluding TSF capitalized costs) 366
TSF Capitalization 128
Total Capital Expenditures 494
1) Consists of the Mount Milligan Mine site major leases that are required to be classified as capital leases in accordance with IFRS 16.
5
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The capital cost estimate assumes investment in and replacement of a portion of the heavy -duty mobile fleet,
including investment comprising replacement/addition of eleven haul trucks, eight dozers, two graders, and one
loader. The capital costs listed in Table 2-2, consists exclusively of sustaining capital expendituresNG. The cost
of mine equipment and component replacement accounts for more than 60% of these LOM sustaining capital
requirements (excluding the TSF capitalized costs).
Waste mined at the Mount Milligan Mine is used for routine TSF raises, the cost of which is capitalized as TSF
stepout rather than classified as capitalized stripping.
The current mine plan does not contemplate any non-sustaining capital expendituresNG; however, the Company
is currently assessing a number of growth projects and may allocate capital to such projects if the economic
benefits warrant.
Operating Costs
Operating costs were based on first principle models, which includes current and historical data, for mining,
processing and administration for an eleven-year mine life. This includes detailed estimates of personnel for all
required roles/functions. Total LOM operating costs are summarized below:
Table 2-3: Operating Costs Summary - December 31, 2021 LOM
LOM Cost ($’000) $/tonne1
Mining 990,177 $2.13
Milling 1,212,159 $4.99
Administration 491,775 $2.03
Total 2,694,111
1) Unit mining costs per tonne are calculated based on tonnes mined and unit milling and administrative costs have been calculated per tonne
processed.
Sensitivities
The following tables depict economic sensitivities to gold price, copper price, change in cost estimates and
currency fluctuations to the USD, respectively:
Table 3-1: Sensitivity of NPV to Gold Price Changes
NPV $ millions Sensitivity to Gold Price at 0%, 5%, and 8% Discount Rates
Discount Rate / Gold Price ($/oz)
($/ounce)
0% 5% 8%
-20% 277 200 168
-10% 459 343 294
$1,500 640 486 421
10% 822 630 547
20% 1004 773 674
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Table 3-2: Sensitivity of NPV to Copper Price Changes
NPV $ millions Sensitivity to Copper Price at 0%, 5% and 8% Discount Rates
Discount Rate / Copper Price ($/lb) 0% 5% 8%
-20% 244 174 146
-10% 442 330 283
$3.25 640 486 421
10% 838 642 558
20% 1037 798 696
Table 3-3: Sensitivity of NPV to the Impact of Change in Total Operating and Capital Cost Estimates
NPV $ millions Sensitivities to costs at $1,500/oz gold and 5% Discount Rate
Variable Operating Costs Capital Costs
-20% $926 $567
-10% $706 $527
Base Case $486 $486
10% $267 $446
20% $47 $406
Table 3-4: Sensitivity of NPV to the Impact of Change in Exchange Rate
NPV $ millions Sensitivity to FX at 0%, 5% and 8% Discount Rates
Discount Rate / FX (USD/CAD) 0 % 5 % 8 %
-20% ($60) ($66) ($66)
-10% $329 $241 $205
1.30 $640 $486 $421
10% $895 $687 $598
20% $1,107 $854 $745
The Company utilizes rolling three-year foreign exchange and diesel hedging programs in order to manage its
exposure to adverse fluctuations in the Canadian dollar and diesel fuel prices. Impact from these programs are
not factored into the above sensitivities.
Mount Milligan Exploration Potential
Significant exploration potential exists at the Mount Milligan Mine peripheral to the current open pit and within
the wider tenement holdings. Ongoing resource expansion drilling on the west wall of the pit (DW BX and
Goldmark zones) and below the current ultimate open pit boundary (MBX and WBX Deep zones) continues to
be successful with the assays returned to date being of similar or higher grade to the current block model.
Exploration drilling for both shallow (Great Eastern fault) and deep (Great Eastern stock) copper -gold
mineralization immediately to the east of the current ultimate open pit boundary has returned a number of
significant intersections. The shallow copper-gold intersections at Great Eastern fault support the potential for
future resource growth. Exploration drilling is currently underway to further define the potential for economic
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resources in these areas with mineralization remaining open at depth below and adjacent to the current ultimate
open-pit boundary. Exploration for both shallow structurally controlled, high gold -low copper style
mineralization and for shallow gold and copper porphyry mineralization, is continuing to the north of the open
pit (Oliver zone), west of the open pit (North Slope, Goldmark, Southern Star West zones) and to the south of
the open pit (South Boundary, Rainbow Extension zones).
Outside of the immediate Mount Milligan deposit, greenfield exploration to identify new porphyry copper-gold
deposits and low sulphidation epithermal gold -silver deposits within the Mount Milligan tenement package
continues.
NI 43-101 Technical Report
This LOM will be included in a new technical report to be filed within 45 days following this news release (the
“2022 Mount Milligan Technical Report”). The 2022 Mount Milligan Technical Report will include revisions
to the resource model, metallurgical re coveries, capital and operating cost estimates, NSR cut -off value, and
the LOM open pit design. The technical report will be prepared in accordance with National Instrument 43-101
Standards of Disclosure for Mineral Projects (“NI 43-101”) and will be filed on SEDAR and EDGAR during
the fourth quarter of 2022 with an effective date of December 31, 2021.
Qualified Persons & QA/QC
The technical information contained in this news release relating to mineral reserve estimates of the Mount
Milligan Mine is based on, and fairly represents, information compiled by Gordon Zurowski, P.Eng who is a
member of the Professional Engineers Ontario. Mr. Zurowski is independent within the meaning of Canadian
Securities Administrator’s NI -43-101, as a full -time employee of AGP Mining Consultants, Inc . and not
Centerra. Mr. Zurowski has sufficient experience which is relevant to the style of minerali zation and type of
deposit under consideration and to the activity which he is undertaking to qualify as a "Qualified Person" under
NI 43-101 Standards of Disclosure for Mineral Projects. Mr. Zurowski has consented to the inclusion in this
news release of the mineral reserve estimates based on his compiled information in the form and context in
which it appears in this news release.
The technical information contained in this news release relating to the Mount Milligan Mine's mineral resource
estimates is based on, and fairly represents, information compiled by Brian Thomas, P.Eng who is a member of
the Professional Geoscientists of Ontario. Mr. Thomas is independent within the meaning of NI 43 -101, as a
full-time employee of WSP Global Inc. and not Centerra . Mr. Thomas has sufficient experience which is
relevant to the style of mineralization and type of deposit under consideration and to the activity which he i s
undertaking to qualify as a "Qualified Person" under NI 43-101 Standards of Disclosure for Mineral Projects.
Mr. Thomas has consented to the inclusion in this news release of the mineral resource estimates based on his
compiled information in the form and context in which it appears in this news release.
All mineral reserve and resources have been estimated in accordance with the standards of the Canadian
Institute of Mining, Metallurgy and Petroleum and NI 43-101.
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Exploration information and related scientific and technical information in this document regarding the Mount
Milligan Mine were prepared in accordance with the standards of NI 43 -101 and were prepared, reviewed,
verified, and compiled by Cheyenne Sica, Member of the Association of Professional Geoscientists Ontario,
Exploration Manager at Centerra’s Mount Milligan Mine, who is the qualified person for the purpose of NI 43-
101. Sample preparation, analytical techni ques, laboratories used, and quality assurance and quality control
protocols used during the exploration drilling programs are done consistent with industry standards while
independent certified assay labs are used. The Mount Milligan Mine’s deposit is described in the 2021 AIF
prepared in accordance with NI 43 -101, which is available on SEDAR at www.sedar.com and EDGAR at
www.sec.gov/edgar.
Caution Regarding Forward-Looking Information
Information contained in this news release 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 and within the meaning of the United States Private Securities Litigation Reform Act of 1995 . Such
forward-looking information involves risk s, 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”, “assume”, “expect”, “contemplate”, “plan”, “potential”, “continue”,
“estimate”, “may”, “will” and similar expressions identify forward-looking information. These forward-looking
statements relate to, among other things , mineral reserve and mineral resource estimates ; LOM estimates for
the Mount Milligan Mine, including expected gold and copper production and the extension of the mine life,
life of mine operating and capital costs,; LOM optimization; TSF raises; resource expansion or growth;
assessment of growth projects and any allocation of capital to such projects; future exploration potential; timing
and scope of future exploration (brownfields or greenfields); anticipated costs and expenditures and other
information that is based on forecasts of future operational or financial results, est imates of amounts not yet
determinable and assumptions of management; and management’s expectations regarding completing the 2022
Mount Milligan Technical Report . Forward -looking information is necessarily based upon a number of
estimates and assumptions that, while considered reasonable by Centerra, are inherently subject to significant
political, business, economic and competitive uncertainties and contingencies. Known and unknown factors
could cause actual results to differ materially from those project ed in the forward -looking information. For a
full list of the risk factors that can affect the Company, see its management’s discussion and analysis for the
year ended December 31, 202 1 and its most recently filed annual information form available on SEDAR at
www.sedar.com and EDGAR at www.sec.gov/edgar.
Market price fluctuations in gold, copper and other metals, as well as increased capital or production costs or
reduced recovery rates may render ore reserves containing lower grades of mineralization uneconomic and may
ultimately result in a restatement of mineral reserves. The extent to which mineral resources may ultimately be
reclassified as proven or probable mineral reserves is dependent upon the demonstration of their profitable
recovery. Economic and technological factors which may change over time always influence the evaluation of
mineral reserves or mineral resources. Centerra has not adjusted mineral resource figures in consideration of