International Financial Reporting Standards as issued by the International Accounting Standards Board. All figures
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NEWS RELEASE
Centerra Gold Records $50.4 Million Net Earnings
and Generates $118.8 Million Cash from Operations
This news release contains forward-looking information that is subject to the risk factors and assumptions set out
under “Caution Regarding Forward-looking Information”. It should be read in conjunction with the Company’s
unaudited interim condensed consolidated financial statements and the notes thereto for the three months ended
March 31, 2019. The consolidated financial statements of Centerra Gold Inc. are prepared in accordance with
International Financial Reporting Standards as issued by the International Accounting Standards Board. All figures
are in United States dollars and all production figures are on a 100% basis, unless otherwise stated.
All references in this document denoted with NG, indicate a non-GAAP term which is discussed
under “Non-GAAP Measures” and reconciled to the most directly comparable GAAP measure.
Toronto, Canada, May 1, 2019: Centerra Gold Inc. (“Centerra”) (TSX: CG) today reported first quarter
2019 net earnings of $50.4 million or $0.17 per common share (basic) on revenues of $334.0 million.
During the same period in 2018, the Company reported net earnings of $9.0 million or $0.03 per common
share (basic) on revenues of $235.4 million. Adjusted earningsNG in the first quarter of 2019 were $50.4
million or $0.17 per common share (basic), compared to $13.4 million or $0.05 per common share (basic)
in the first quarter of 2018, which excludes charges relating to the acquisition of AuRico Metals Inc.
2019 First Quarter Highlights
• Company-wide all-in sustaining costs per ounce soldNG was $669, including $553 at Kumtor and
$842 at Mount Milligan.
• Produced 183,563 ounces of gold, which includes 150,308 ounces at Kumtor. Mount Milligan
produced 33,255 ounces of gold and 11.4 million pounds of copper.
• Cash generated from operations totalled $118.8 million (including $120.0 million from Kumtor and
$12.4 million from Mount Milligan).
• Construction at the Öksüt Project in Turkey is now approximately 49% complete.
• Mount Milligan received approvals to access to Philip Lake 1, Rainbow Creek and Meadows Creek
until November 2021.
• Repaid net $21 million on the Company’s credit facilities.
• Cash, cash equivalents and restricted cash increased during the quarter by $28.7 million and at
March 31, 2019 were $207.9 million.
• Re-affirmed 2019 Company-wide guidance, which now reflects Kumtor splitting cut-back 19 into
two phases (East and West) and deferring access to cut-back 19 East to later years in the mine plan
and additional capital stripping on cut-back 20 in 2019. See "Kumtor Operating Results - Kumtor
Ground Movements".
• Kemess Underground Project received its amended air emissions permit on April 8, 2019.
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Commentary
Scott Perry, President and Chief Executive Officer of Centerra stated, “We are very pleased to report that
our Thompson Creek Mine achieved a significant milestone during the quarter in attaining five full years
without a lost time injury. This is evident of our employees embracing our Work Safe – Home Safe program
as we continue to drive to zero harm within the workplace.”
“The operations produced a total of 183,563 ounces of gold and 11.4 million pounds of copper in the
quarter. Kumtor had a very strong quarter producing 150,308 ounces of gold which was attributable to
higher grades and recoveries. At Mount Milligan, the mill processed 32,000 tonnes per operating day
during the quarter as we continued to constrain mill throughput levels pending the onset of the spring melt
season. This resulted in production of 33,255 ounces of gold and 11.4 million pounds of copper during the
quarter. At Mount Milligan, with the receipt of the 3-year permits to access water from Philip Lake 1,
Rainbow Creek and Meadows Creek, the necessary infrastructure was constructed to enable us to pump
water as the spring melt commences. We expect mill throughput levels to be at full capacity (55,000 tonnes
per day) starting mid-May as additional water is captured during the pending spring melt.”
“
Company-wide our all-in sustaining costs (before taxes)NG were $669 per ounce for the quarter reflecting
Kumtor achieving all-in sustaining costs (before taxes)NG of $553 per ounce.”
“Construction activity continued at the Öksüt Project in Turkey and is now approximately 49% complete
overall. The project continues to be on time and on budget, and is on track for first gold pour in the first
quarter of 2020.”
“Our Greenstone Joint Venture achieved a significant milestone in the quarter with the receipt of the
provincial approval of its Environmental Assessment. We continue to advance and finalize the long-term
relationship agreements with the local indigenous groups and work on permit applications.”
“Financially, the business delivered approximately $114 million of consolidated cash provided by
operations before changes in working capitalNG in the quarter. Kumtor and Mount Milligan generated $110
million and $17 million respectively, before working capital changes. During the first quarter, Kumtor
generated $92 million of free cash flowNG which enabled the Company to reduce its debt in the quarter by
approximately $21 million net, ending the quarter with cash and cash equivalents of $180 million
(excluding restricted cash).”
Exploration Update
Exploration activities in the first quarter of 2019 included drilling, surface sampling, geological mapping
and geophysical surveying at the Company’s various projects. Exploration expenditures totalled $5.0
million compared to $2.4 million in the same quarter of 2018.
Kyrgyz Republic
Kumtor Mine
During the first quarter of 2019, exploration drilling programs continued with the completion of fifty-eight
diamond drill holes for 17,052 metres, including 4,615 metres of infill drilling in the SB underground zone.
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Exploration drilling focused on testing zones of mineralization for additional open pit resources in the
Central Pit Area, including the corridor between the Central and Southwest pits and the north-east side of
the Central Pit, SW Area, and on the flanks of the Northeast target area.
Central Pit
In the Hockey Stick Zone, five drill holes for 1,422 metres were completed. The drilling results revealed
intersections of gold mineralization. The best intercepts are as follows:
D1848: 11.9 metres @ 23.05 g/t Au from 232.0 metres
Includes 3.0 metres @ 49.39 g/t Au from 232.9 metres;
D1852: 33.5 metres @ 5.18 g/t Au from 269.2 metres
Includes12.7 metres @ 10.6 g/t Au from 276.2 metres;
D1858: 20.3 metres @ 5.04 g/t Au from 189.5 metres
Includes 5.6 metres @ 11.14 g/t Au from 191.3 metres;
15.9 metres @ 2.02 g/t Au from 227.5 metres
Includes 5.2 metres @ 4.59 g/t Au from 235.2 metres.
Eleven drill holes were completed in the North Wall totaling 2,190 metres. Gold mineralization was
intersected with the best intercepts being:
D1844: 11.6 metres @ 1.31 g/t Au from 49.6 metres;
7.4 metres @ 1.17 g/t Au from 273.4 metres;
D1851: 15.0 metres @ 1.92 g/t Au from 104.0 metres
Includes 5.0 metres @ 4.29 g/t Au from 109.0 metres;
D1860: 8.1 metres @ 1.96 g/t Au from 25.1 metres;
20.8 metres @ 2.92 g/t Au from 143.5 metres;
5.0 metres @ 1.22 g/t Au from 170.2 metres;
D1866A: 20.7 metres @ 5.29 g/t Au from 151.9 metres
Includes 8.0 metres @ 11.08 g/t Au from 155.9 metres;
D1875: 24.0 metres @ 1.85 g/t Au from 119.9 metres
Includes 5.9 metres @ 5.81 g/t Au from 131.6 metres.
In the SB Zone, underground infill drilling was carried out with the completion of fourteen drill holes for
4,615 metres. The best intercepts are as follows:
D1828: 67.2 metres @ 5.91 g/t Au from 297.0 metres
Includes 4.0 metres @ 12.98 g/t Au from 303.0 metres
Includes 3.7 metres @ 13.68 g/t Au from 326.9 metres
Includes 10.8 metres @ 11.92 g/t Au from 334.6 metres;
D1850: 29 metres @ 4.64 g/t Au from 337.0 metres
Includes12.3 metres @ 9.64 g/t Au from 348.0 metres;
D1855: 14.6 metres @ 12.40 g/t Au from 118.3 metres
Includes 6.0 metres @ 28.40 g/t Au from 123.5 metres;
D1868: 68.0 metres @ 5.39 g/t Au from 241.5 metres
Includes 9.8 metres @ 10.97 g/t Au from 246.0 metres
Includes 3.6 metres @ 10.94 g/t Au from 290.0 metres;
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11.0 metres @ 3.84 g/t Au from 316.5 metres;
D1874: 104.8 metres @ 5.61 g/t Au from 36.7 metres
Includes 37.9 metres @ 13.3 g/t Au from 36.7 metres;
D1876: 11.3 metres @ 12.13 g/t Au from 59.2 metres;
D1878: 6.2 metres @ 4.92 g/t Au from 12 metres;
41.1 metres @ 5.88 g/t Au from 36.2 metres
Includes 8.0 metres @ 11.94 g/t Au from 47.3 metres
Includes 5.0 metres @ 11.92 g/t Au from 64.3 metres;
13.0 metres @ 2.66 g/t Au from 85.5 metres;
22.8 metres @ 2.18 g/t Au from 135.8 metres;
Includes 4.0 metres @ 5.12 g/t Au from 141.6 metres.
Southwest Area
Twelve drill holes were completed between Southwest and Central Pits for a total of 3,054.7 metres. The
best intercepts included:
SW-19-275A: 10.4 metres @ 1.64 g/t Au from 189.8 metres;
SW-19-276A: 17.5 metres @ 2.08 g/t Au from 496.5 metres;
27.6 metres @ 2.23 g/t Au from 553.2 metres.
Northeast Area
In Northeast area, eleven drill holes were completed for a total of 3,838.4 metres. The best intercepts are:
DN1853:
7.6 metres @ 6.52 g/t Au from 266.5 metres;
11.3 metres @ 2.42 g/t Au from 301 metres;
DN1859: 11.6 metres @ 2.67 g/t Au from 312.5 metres;
33.6 metres @ 5.72 g/t Au from 330.8 metres;
Includes 14.1 metres @ 11.97 g/t Au from 335.5 metres;
DN1879: 16.8 metres @ 5.35 g/t Au from 282.5 metres;
10.3 metres @ 1.52 g/t Au from 316.5 metres.
The above mineralized intercepts were calculated using a cut-off grade of 1.0 g/t Au, minimum interval of
4.0 m and a maximum internal dilution interval of 5.0 metres. Drill collar locations and associated graphics
are available at the following link:
http://ml.globenewswire.com/Resource/Download/837f5e4e-3a7e-45e7-9efb-cafe01af634f
A complete listing of the drill results, drill hole locations and plan map for the Kumtor Mine have been
filed on the System for Electronic Document Analysis and Retrieval (‘SEDAR’) at www.sedar.com and are
available at the Company’s web site www.centerragold.com.
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Canada
Mount Milligan Mine
The 2019 near pit infill and expansion drilling program at Mount Milligan began in February. A total of
2,040 metres in six drill holes were completed in the Southern Star Zone during the first quarter of 2019.
Selected best results from the first three drill holes are reported below.
Southern Star Zone
19-1128: 43.4 metres @ 0.28 g/t Au, 0.18% Cu from 244.0 metres;
19-1130: 15.0 metres @ 0.36 g/t Au, 0.15% Cu from 67.0 metres;
19-1130: 96.0 metres @ 0.26 g/t Au, 0.15% Cu from 127.0 metres;
19-1130: 15.0 metres @ 0.49 g/t Au, 0.15% Cu from 252.0 metres.
The program will continue to mid-September with approximately 22,500 metres of drilling in 60 drill holes
planned in the Southern Star, Saddle, 66, Great Eastern Fault, MBX, and Oliver zones.
The above mineralized intercepts were calculated using a cut-off grade of 0.1 g/t Au and a maximum
internal dilution interval of 4 metres. Drill collar locations and associated graphics are available at the
following link:
http://ml.globenewswire.com/Resource/Download/837f5e4e-3a7e-45e7-9efb-cafe01af634f
A listing of the drill results, drill hole locations and plan map for the Mount Milligan Mine have been filed
on the System for Electronic Document Analysis and Retrieval (‘SEDAR’) at www.sedar.com and are
available at the Company’s web site www.centerragold.com.
Kemess Project
The 2019 Kemess exploration program started at the end of the first quarter and includes core relogging
(28,000 m etres) and diamond drilling (6,200 m etres to begin in the second half of 2019). Conceptual
exploration targeting continued with the identification of two targets proximal to the Kemess Underground
deposit (KUG Shoulder and Footwall zones).
Turkey
Öksüt Gold Project
At the Öksüt Gold Project, planning for the 2019 diamond drilling program was completed in the first
quarter. The drill program is expected to commence in the middle of the second quarter of 2019 with three
drilling rigs for 47 drill holes totalling 11,000 metres.
During the first quarter of 2019, a 3D non- linear Induced Polarization (IP) geophysical survey, covering
the Keltepe NW, Keltepe, Güneytepe and Yelibelen prospects, was completed. Preliminary results from
the survey have been received and are undergoing compilation and assessment. The aim of the survey is
to generate additional targets and confirm and/or refine deeper targets around the known deposits.
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Greenfields Exploration
Other Projects
During the first quarter of 2019, exploration programs targeting gold and copper were ongoing in Turkey,
Canada, Mexico, Sweden, Finland and Burkina Faso.
Qualified Person & QA/QC
All mineral reserve and mineral resource estimates and other scientific and technical information in this
news release were prepared in accordance with the standards of the Canadian Institute of Mining,
Metallurgy and Petroleum and National Instrument 43-101 – Standards of Disclosure for Mineral Projects
(“NI 43-101”) and were prepared, reviewed, verified and compiled by Centerra’s geological and mining
staff under the supervision of Gordon Reid, Professional Engineer and Centerra’s Vice-President and Chief
Operating Officer, who is the qualified person for the purpose of NI 43-101. Sample preparation, analytical
techniques, laboratories used and quality assurance-quality control protocols used during the drilling
programs are consistent with industry standards and independent certified assay labs are used, with the
exception of the Kumtor project as described in its technical report dated March 20, 2015.
Exploration information and other related scientific and technical information in this news release regarding
the Kumtor Mine were prepared in accordance with the standards of National Instrument 43-101 (“NI 43-
101”) and were prepared, reviewed, verified and compiled by Boris Kotlyar, a member with the American
Institute of Professional Geologists (AIPG), Chief Geologist, Global Exploration with Centerra Gold Inc.,
who is the qualified person for the purpose of NI 43-101. Sample preparation, analytical techniques,
laboratories used and quality assurance-quality control protocols used during the exploration drilling
programs are done consistent with industry standards and independent certified assay labs are used. The
Kumtor deposit is described in Centerra’s most recently filed Annual Information Form and a technical
report dated March 20, 2015 (with an effective date of December 31, 2014), which are both filed on SEDAR
at www.sedar.com.
Exploration information and other related scientific and technical information in this news release regarding
the Mount Milligan Mine were prepared in accordance with the standards of NI 43-101 and were prepared,
reviewed, verified and compiled by C. Paul Jago, Member of the Engineers and Geoscientists British
Columbia, Exploration Manager at Centerra’s Mount Milligan Mine, who is the qualified person for the
purpose of NI 43101. Sample preparation, analytical techniques, laboratories used and quality assurance-
quality control protocols used during the exploration drilling programs are done consistent with industry
standards and independent certified assay labs are used. The Mount Milligan deposit is described in
Centerra’s most recently filed Annual Information Form and a technical report dated March 22, 2017 (with
an effective date of December 31, 2016) prepared in accordance win NI 43-101, both of which are available
on SEDAR at www.sedar.com.
Exploration information and other related scientific and technical information in this news release regarding
the Öksüt Project were prepared, reviewed, verified and compiled in accordance with NI 43-101 by Mustafa
Cihan, Member of the Australian Institute of Geoscientists (AIG), Exploration Manager Turkey at
Centerra’s Turkish subsidiary Centerra Madencilik A.Ş., who is the qualified person for the purpose of NI
43-101. Sample preparation, analytical techniques, laboratories used and quality assurance-quality control
protocols used during the exploration drilling programs are done consistent with industry standards and
independent certified assay labs are used. The Öksüt deposit is described in Centerra’s most recently filed
Annual Information Form and in a technical report dated September 3, 2015 (with an effective date of June
30, 2015) prepared in accordance with NI 43-101 both of which are available on SEDAR at
www.sedar.com.
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This Management Discussion and Analysis (“MD&A”) has been prepared as of April 30, 2019, 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 months ended March 31, 2019 in comparison with the corresponding periods ended
March 31, 2018. This discussion should be read in conjunction with the Company’s unaudited condensed
consolidated interim financial statements and the notes thereto for the three months ended March 31, 2019
prepared in accordance with International Financial Reporting Standards (“IFRS”). This MD&A should also
be read in conjunction with the Company’s audited annual consolidated financial statements for the years ended
December 31, 2018 and 2017, the related MD&A and the Annual Information Form for the year ended December
31, 2018 (the “2018 Annual Information Form”). The Company’s unaudited condensed consolidated interim
financial statements and the notes thereto for the three months ended March 31, 2019, 2018 Annual Report and
2018 Annual Information Form 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 “Risk Factors” and “Caution Regarding Forward-Looking
Information” in this discussion. All dollar amounts are expressed in United States dollars (“USD”), except as
otherwise indicated.
Overview
Centerra is a Canadian-based gold mining company primarily focused on operating, developing, exploring
and acquiring gold and copper properties in North America, Asia and other markets worldwide. Centerra’s
principal operations are the Kumtor Gold Mine located in the Kyrgyz Republic and the Mount Milligan
Gold-Copper Mine located in British Columbia, Canada. The Company is currently constructing its next
gold mine, the Öksüt Project in Turkey, has two development properties in Canada (one of which is held
50%), and properties or joint venture options over properties in Canada, Finland, Mexico, Turkey and the
United States. The Company also has strategic alliance agreements with partners to evaluate potential
opportunities in West Africa and Sweden.
The Company’s significant wholly-owned subsidiaries include Kumtor Gold Company (“KGC” or
“Kumtor”) in the Kyrgyz Republic, Thompson Creek Metals Company Inc. (“Thompson Creek”) and
AuRico Metals Inc. (“AuRico”) in Canada, Langeloth Metallurgical Company LLC (“Langeloth”) and
Thompson Creek Mining Co. in the United States of America and Öksüt Madencilik Sanayi vi TicaretA.S.
(“OMAS”) in Turkey. Additionally, the Company holds, through Thompson Creek, a 75% joint venture
interest in the Endako Mine in British Columbia, Canada. The Company also owns a 50% partnership
interest in Greenstone Gold Mines LP (the “Greenstone Partnership”) which owns the Greenstone Gold
development property including the Hardrock deposit, located in Ontario, Canada. See “Operating Mines
and Facilities”, “Development Projects” and “Other Corporate Developments” for further details.
C
enterra’s common shares are listed for trading on the Toronto Stock Exchange under the symbol CG. As
of April 30, 2019, there are 292,529,974 common shares issued and outstanding and options to acquire
5,424,721 common shares outstanding under its stock option plan and 1,221,074 units outstanding under
its restricted share unit plan.
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Market Conditions
Gold Price
During the first quarter of 2019, the spot gold price fluctuated between a low of $1,279 per ounce and a
high of $1,345 per ounce. The average spot gold price for the first quarter was $1,304 per ounce, a decrease
of $25 per ounce from the first quarter of 2018 average ($1,329 per ounce), and a $75 per ounce increase
compared to the fourth quarter of 2018 average ($1,229 per ounce).
Copper Price
The average spot copper price in the first quarter of 2019 was $2.82 per pound, a $0.33 per pound decrease
compared to the first quarter of 2018 average of $3.15 per pound, and a $0.02 per pound increase compared
to the fourth quarter of 2018 average ($2.80 per pound).
Molybdenum Price
The average molybdenum price in the first quarter of 2019 was $11.78 per pound, a $0.44 per pound
decrease compared to the first quarter of 2018 average of $12.22 per pound, and a $0.27 per pound decrease
compared to the fourth quarter of 2018 average ($12.05 per pound).
Foreign Exchange Rates
USD to CAD
The average U.S. dollar to Canadian dollar exchange rate for the first quarter of 2019 (1.33), weakened
when compared to the average of the fourth quarter of 2018 (1.32), with rates in the first quarter ranging
from 1.31 to 1.36. After starting at its lowest point for the quarter (1.36), the Canadian dollar strengthened
to 1.33 by March 31, 2019.
USD to Kyrgyz Som
The average U.S. dollar to Kyrgyz som exchange rate for the first quarter of 2019 (69.8) was relatively
consistent with the average of the first quarter of 2018 (69.6), with rates in the quarter ranging from 69.7 to
69.9.
USD to Turkish Lira
The average U.S. dollar to Turkish Lira exchange rate for the first quarter of 2019 was 5.4, relatively
consistent with the fourth quarter of 2018 (5.5), but an increase of 42% when compared to the average of
the first quarter of 2018 (3.8). The exchange rate ranged from 5.2 to 5.8 in the first quarter of 2019.
Foreign Exchange Transactions
The Company receives its revenues through the sale of gold, copper and molybdenum in U.S. dollars. The
Company has operations in Canada, including its corporate head office, the Kyrgyz Republic, Turkey and
the United States of America. During the first three months of 2019, the Company incurred combined
expenditures (including capital) of approximately $261 million. Approximately $143 million of this (55%)
was in currencies other than the U.S. dollar. Centerra’s non-U.S. dollar costs includes 65% in Canadian
dollars, 28% in Kyrgyz Soms, 2% in Turkish lira, and 4% in Euros. During the quarter the Canadian dollar
strengthened against the U.S. dollar on average 2.5% from its value at December 31, 2018. The Euro and
the Turkish lira depreciated against the U.S. dollar by approximately 1% and 1.5%, respectively, over the
same period. The net impact of these movements in the three months ended March 31, 2019 was to increase
costs in the period by $2.3 million (decrease of $0.1 million in the three months ended March 31, 2018).