Centerra Gold Records Net Earnings of $80.7 million or $0.27 per Common Share, Adjusted Net EarningsNG of $97.8 million or $0.33 per Common Share and Cash from Operations of $268.1 million; Increases Quarterly Dividend by 25%
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NEWS RELEASE
Centerra Gold Records Net Earnings of $80.7 million or $0.27 per Common Share,
Adjusted Net EarningsNG of $97.8 million or $0.33 per Common Share and Cash from Operations
of $268.1 million; Increases Quarterly Dividend by 25%
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”.
Toronto, Canada, July 31, 2020: Centerra Gold Inc. (“Centerra” or the “Company”) (TSX: CG) today
reported its second quarter 2020 results. Key events and operating results of the second quarter included:
Net earnings of $80.7 million and adjusted net earningsNG of $97.8 million, $0.27 and $0.33 per
common share (basic), respectively.
Cash flow from operations was $268.1 million.
Production totalled 219,692 ounces of gold and 19.1 million pounds of copper.
Production costs per ounce of gold sold were $410 per ounce.
Production costs per pound of copper sold were $1.20 per pound.
All-in sustaining costs on a by-product basis per ounce soldNG were $804 per ounce.
Cash position of $212 million at quarter end with total liquidity of $712 million. As at June 30,
2020, the Company’s $500 million corporate credit facility was undrawn.
Commercial production achieved on May 31, 2020 at the Ök süt Mine which generated positive
operating cash flow of $13.5 million and free cash flowNG of $5.0 million during the quarter.
Robust spring melt at Mount Milligan resulting in stored water inventory in excess of 6 million
cubic metres at the end of the second quarter.
An updated Kumtor 43-101 technical report is expected to be released in the fall of 2020.
No change to 2020 production and cost guidance and a modification to growth capital NG
guidance.
Quarterly Dividend increased by 25% to C$0.05 per common share.
All references in this document denoted with NG, indicate a non-GAAP term which is discussed under
“Non-GAAP Measures” and reconciled to the mo st directly comparable GAAP measure.
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Commentary
Scott Perry, President and Chief Executive Officer of Cent erra stated, “We continue to stay vigilant at all
of our operations to prevent an outbreak and avoid the spread of the COVID-19 virus and to ensure the
health, safety and well-being of our employees, contr actors and communities. At our Öksüt operation, we
have celebrated a recent safety milestone, when on July 19, 2020, Öksüt ach ieved 3 million work hours
without a lost time injury. Our continued commitment to Work Safe Home Safe is a driving force behind
achieving such milestones.”
“The strong operating performance at Kumtor and Mount Milligan continued into this quarter and our Öksüt
Mine achieved commercial production during the qua rter. Our operations in the quarter delivered
consolidated gold production of 219,692 ounces at all-in sustaining costsNG on a by-product basis of $804
per ounce sold in the quarter. Kumtor had anothe r strong quarter producing 173,245 ounces of gold at all-
in sustaining costsNG on a by-product basis of $696 per ounce sold. Mount Milligan produced 35,656 ounces
of gold and 19.1 million pounds of copper at all-in sustaining costs NG on a by-product basis of $679 per
ounce sold and Öksüt produced 10,791 ounces of gold, 5,619 ounces were commercial production. During
the quarter, Öksüt’s all-in sustaining costsNG on a by-product basis was $537 per ounce, being our lowest
cost mine in the quarter.”
“Financially, the Company generated $268.1 million of cash from operations for the second quarter of 2020,
which includes $220.4 million from Kumtor, $41.6 milli on from Mount Milligan and $13.5 million from
Öksüt. During the second quarter of 2020, Kumtor , Mount Milligan and Öksüt delivered free cash flow NG
of $156.9 million, $34.4 million and $5.0 million, respectively. Company-wide, free cash flow NG in the
second quarter of 2020 was $169.1 million and we finished the quarter with cash of $212.2 million and no
debt outstanding after repaying our corporate revolving credit facility in the quarter.”
“The decision of Centerra’s Board to increase the quarterly dividend by 25% to C$0.05 per common share
announced today and planned into the future was based on our strong operating performance and the higher
gold price environment, both of which contributed to our growing free cash flow and a debt-free balance
sheet as at June 30, 2020.”
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. Centerra has taken a series of measures to provide its employees with
accurate information, help prevent infection and reduce the potential transmission of COVID-19, including
activation of a global crisis management team, frequent communication with and compassionate support of
all our people, travel restrictions, and the temporary closure of various administration offices including our
head office in Toronto. Each Centerra site rapi dly and successfully implemented proactive measures to
minimize the impact of COVID-19 on operations, includi ng strict protocols for access to operating sites,
temperature checks and questioning upon entry, incr eased cleaning and hygiene protocols, modifications
to work shifts and accommodation at site and an o ffsite quarantine facility established specifically for
employees travelling to the Kumtor Mine site. In add ition, our operating mine sites continue to assess the
resiliency of their supply chain, are increasing mine site inventories of key materials and developing
contingency plans to allow for continued operations.
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The Company completed a company-wide COVID-19 em ployee survey in June to obtain feedback from
employees on Centerra’s response to the pandemic a nd most importantly, on whether the Company is
keeping employees well-informed and providing ade quate support both physica lly and emotionally. The
responses company-wide were favorable and Centerra will continue to address concerns and adapt its
practices as necessary throughout the stages of this crisis.
While the majority of Centerra’s operating sites ar e currently operating without significant interruption,
there has been an increase in the infection rates of COVID-19 and other illnesses in the Kyrgyz Republic
which is beginning to have an impact on the ava ilable workforce for the Kumt or Mine. While Kumtor’s
performance during the second quarter was unaffected, the Company is putting in place measures to manage
the reduced workforce at Kumtor by mining waste below capacity while maintaining gold production levels
by processing stockpiles as planned for the year. Fo r further details on the impact of COVID-19 on
Centerra’s operating sites and development projects please see “Operating Mines and Facilities” and “Pre-
Development Projects”.
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 w ill remain flexible and be revised
as necessary or advisable and/or as recommended by the public health and governmental authorities.
Exploration Update
Exploration activities in the second quarter of 2020 included drilling, surface sampling, geological mapping
and geophysical surveying at the Company’s various projects (including earn-in properties); targeting gold
and copper mineralization in Cana da, Mexico, Turkey, Finland, USA and the Kyrgyz Republic. The
Company has expanded its 2020 exploration program when compared to 2019 and is primarily focused on
brownfield exploration at Kumtor, Mount Milligan and Öksüt. Exploration expenditures totalled $6.6
million in the second quarter of 2020, which included the impact of delays associated with COVID-19,
compared to $6.3 million in the same quarter of 2019.
Kumtor Mine
The 2020 planned drilling program at Kumtor includes 55,000 metres of exploration and 15,000 metres of
infill drilling, which are focused on pr iority primary and potential targets. Primary targets include various
zones of the Central, Southwest and Sarytor deposits (areas) based on enhanced geological modelling from
the recently updated Kumtor resource block model, and positive drilling results from 2018 and 2019. In
addition, the 2020 planned drilling program at Kumtor includes the underexplored segments of the Kumtor
Gold Trend – the Northeast targets, Bordoo, Akbel a nd conceptual targets (Hope Zone and others). An
exploration potential update will be included in an updated Kumtor 43-101 technical report expected to be
released in the fall of 2020.
In April, due to COVID-19 preventive measures, exploration drilling at Kumtor was temporarily suspended,
resuming in June 2020. Due to the delay, a certain portion of the planned drilling program could be deferred
to 2021.
During the second quarter of 2020, exploration drilling programs continued with the completion of fifteen
diamond drill holes for 4,663 metres. Exploration dri lling focused on testing zones of sulfide and oxide
mineralization along the corridor between the Central and Southwest pits (Kosholuu, Hope and Southwest
Oxide Deep zones), on the periphery of the Sarytor Pit, Northeast targets and Muzdusuu area.
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Southwest Deposit (Area)
In the second quarter of 2020, a total of eleven diam ond drill holes were completed in the Southwest area
for a total of 2,902 metres.
Three drill holes have been completed between Southwest and Central pits in the Hope Zone for a total of
508 metres. Results from recent drilling have delineated a lens-shaped oxide gold mineralization. This
mineralization extends along the hanging wall of the Ku mtor Lower Thrust for more than 400 metres and
is opened in both directions along the main NE strike.
Hole SW-20-319 intersected broad dispersed gold mineralization in Tertiary sediments.
Significant intersections are reported below:
SW-20-313 9.0 metres @ 1.13 g/t Gold (“Au”), from 277.8 metres
4.3 metres @ 4.78 g/t Au from 289.2 metres
SW-20-319 39.0 metres @ 0.45 g/t Au from 19.6 metres
Including 15.0 metres @ 0.92 g/t Au from 29.6 metres
In the Kosholuu Zone, three drill holes were completed for a total of 708.2 metres. Selected best intercepts
are listed below.
SW-20-318 15.9 metres @ 1.65 g/t Au from 196.8 metres
10.4 metres @ 4.29 g/t Au from 221.7 metres
SW-20-320 18.3 metres @ 6.50 g/t Au from 225.0 metres
Including 5.0 metres @ 13.08 g/t Au from 234.7 metres
Five drill holes were completed for a total of 1,686.5 metres in the H ope Zone and tested inferred oxide
mineralization. A selected best intercept is listed below:
SW-20-324 21.7 metres @ 6.09 g/t Au from 226.0 metres
Including 3.0 metres @ 12.93 g/t Au from 238.0 metres
Sarytor Deposit (Area)
In the second quarter, drilling was not conducted at the Sarytor area, but results were obtained for the hole
drilled in the first quarter. Significant intervals are shown below.
SR-20-244 66.4 metres @ 2.05 g/t Au from 262.3 metres
Including 9.9 metres @ 4.77 g/t Au from 285.6 metres
Northeast Deposit (Area)
In the Northeast area, one diamond drill hole was comp leted during this quarter and results were obtained
for previously completed reverse circulation (RC) drilling.
A few broad and low-grade intervals of sulfide and oxide mineralization were intersected. Oxide
mineralization was identified in the northwestern part of the area, along the tectonic mélange zone.
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Muzdusuu Area
Four diamond drill holes were completed in the Muzdus uu Area for a total of 1,040 metres. Results were
also obtained for holes completed in the first quarter . Drilling in the Muzdusuu Area (outside Central Pit)
is designed to explore for oxide and mixed gold mineralization along the Kumtor Lower Thrust. A few drill
holes intersected broad intervals (up to 68 metres) of a mixed (oxide + sulfide) gold mineralization.
Hole DM2067 has tested inferred dispersed gold minerali zation target in the Tertiary sediments (Parking
Lot target) and intersected broad interval of a low-grade mineralization.
Significant intervals are shown below.
DM2059 68.8 metres @ 1.38 g/t Au from 120.7 metres
Including 31.0m @ 2.75 g/t Au from 136.0 metres
DM2062 57.3 metres @ 1.02 g/t Au from 96.2 metres
Including 25.2m @ 2.06 g/t Au from 127.6 metres
DM2067 234.6 metres @ 0.20 g/t Au from 78.6 metres
Including 31.0m @ 0.39 g/t Au from 147.6 metres
The above mineralized intercepts were calculated using a cut-off grade of 1.0 g/t Au for sulfide and 0.1 g/t
Au for oxide mineralization, minimum interval of 4. 0 metres and a maximum internal dilution interval of
5.0 metres. The true widths for sulfide mineralized intervals reported represent approximately 70 to 95%
of the stated down hole interval. Significant assa y intervals reported for oxide mineralization represent
apparent widths due to the uncertainty of the nature of the mineralization at the time of reporting. Drill
collar locations and associated graphics are available at the following link:
https://pr.globenewswire.com/FileDownloader/DownloadFile?source=ml&fileGuid=8e9ad544-6c3b-4ea5-b386-
8e57ddd0746d
A full listing of the drill results, drill hole locations and plan map (including the azimuth, dip of drill holes,
and depth of the sample intervals) 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.
Mount Milligan Mine
The 2020 planned drilling program at Mount Milligan includes 17,500 metres (at approximately 40 drill
sites) in five target zones of in-pit exploration, 10, 000 metres of brownfield exploration and 3,000 metres
of greenfield exploration. In March, due to COVID-19 preventive measures, exploration drilling at Mount
Milligan was temporarily suspended and resumed in June 2020, with no impact to the planned drilling
programs anticipated for the remainder of 2020. In the second quarter, two drill holes were completed in
the Great Eastern Fault target area (20-1240, 20-2141 ), and one was in progress, totalling 1,274 metres
drilled. Assay results were returned for two drill holes during the quarter an d best weighted average
intersections are reported below.
Saddle/66 Gap zone (In-Pit)
DDH 20-1237 and 20-1238 tested for an extension of mineralization into a gap in known reserves between
the Saddle and 66 zones; and a deep geophysical ta rget. DDH 20-1237 was abandoned at 26.8 metres for
technical reasons. Significant pyrite mineralization in both drill holes is relate d to dykes (monzonite and
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trachyte) proximal to faults. The deep interval in 20-1238 was intersected in the immediate footwall of
Harris fault.
DDH 20-
1237
17.1 metres @ 0.62 g/t Au, 0.10% Copper (“Cu”) from 9.8 metres
including 6.7 metres @ 1.07 g/t Au, 0.17% Cu from 20.1 metres
DDH 20-
1238
16.0 metres @ 1.19 g/t Au, 0.03% Cu from 82.0 metres
including 3.6 metres @ 4.79 g/t Au, 0.05% Cu from 83.5 metres
76.1 metres @ 0.81 g/t Au, 0.03% Cu from 440.0 metres
including 13.2 metres @ 1.57 g/t Au, 0.07% Cu from 449.8 metres
and 2.0 metres @ 3.50 g/t Au, 0.05% Cu from 489.0 metres
and 2.0 metres @ 3.20 g/t Au, 0.08% Cu from 496.8 metres
and 2.0 metres @ 4.57 g/t Au, 0.02% Cu from 510.0 metres
13.0 metres @ 2.17 g/t Au, 0.02% Cu from 524.0 metres
including 11.5 metres @ 2.41 g/t Au, 0.02% Cu from 524.0 metres.
The above mineralized interc epts were calculated using a cut-o ff grade of 0.1 g/t Au and a maximum
internal dilution interval of 4 metres. Significant assay intervals reported represent apparent widths due
to the undefined geometry of mineralization in this zone, relationship between fault blocks, and conceptual
nature of the exploration target. Drill collar locatio ns and associated graphics are available at the
following link:
https://pr.globenewswire.com/FileDownloader/DownloadFile?source=ml&fileGuid=8e9ad544-6c3b-4ea5-b386-
8e57ddd0746d
Greenfield exploration (MAX project)
The 2020 greenfield Phase-1 drilling program was comp leted in the second quarter of 2020 at the Max
project. The Max project consists of a block of 12 mineral claims (4,869 ha) under option from Jama
Holdings Inc., 21 kilometres south of the Mount Milligan mine processing facilities and adjoins the Mount
Milligan property on the south. The program was s upported by helicopter in June 2020, completing seven
drill holes (3,573 metres) from five pads in two target areas. The prospect has si milar geology, structure,
geophysical and geochemical signature as the Mount Milligan MBX deposit. Assay results are pending.
A full listing of the drill results, drill hole locations and plan map (including the azimuth, dip of drill holes,
and depth of the sample intervals) 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.
Öksüt Mine
The 2020 planned drilling program at Öksüt includes 20, 000 metres of diamond drilling, focused on near
pit resource expansion and other oxide gold targets. The 2020 diamond drilling program has been designed
to:
expand the oxide gold resources around the known deposits at Keltepe and Güneytepe as well as at
Keltepe North and Keltepe North-West,
further test the oxide gold potential at Yelibelen, Büyüktepe, Boztepe and other targets,
further delineate the supergene copper mineralization at depth, and test other deeper targets.
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Drilling, which commenced towards the end of the second quarter of 2020 with one exploration hole being
completed for 246 metres at the periphery of Güneytepe, will continue into the third quarter of 2020.
The 2020 planned drilling program has not been imp acted by the COVID-19 prev entive measures at the
Öksüt mine site.
Assay results have been received for the completed drill hole. The highlights are:
ODD0391
9.6 metres @ 0.29 g/t Au from 81.1 metres
115.8 metres @ 0.60 g/t Au from 95.8 metres
including 18.6 metres @ 1.28 g/t Au from 129.4 metres
and 6.7 metres @ 1.01 g/t Au from 169.6 metres
The above mineralized intercepts were calculated using a cut-off grade of 0.2 g/t Au and a maximum
internal dilution interval of 5 metres. The true wi dths of the mineralized in tervals reported represent
approximately 60 to 90% of the stated downhole inte rval. Drill collar locations and associated graphics
are available at the following link:
https://pr.globenewswire.com/FileDownloader/DownloadFile?source=ml&fileGuid=8e9ad544-6c3b-4ea5-b386-
8e57ddd0746d
A full listing of the drill results, drill hole locations and plan map (including the azimuth, dip of drill holes,
and depth of the sample intervals) for the Öksüt Gold 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 2020 Kemess brownfield drilling program is focused on the Kemess North Trend and comprises three
drill holes (2,700 metres) at the Nugget historic resource to test for mineralization up-dip of the 2019 drilling
and up to three drill holes (2,000 metres) at the Kem ess East resource to test for an extension of known
mineralization. Drilling at Kemess East will attempt to reuse and extend 2017 drill holes, or alternatively,
a single drill hole (2,000 metres) may be drilled from surfa ce. In late June, crews mobilized to site and
began preparations, but no drill core was produced. The program is expected to run until late August.
Other Projects
During the second quarter of 2020, greenfield exploration programs targeting gold and copper were ongoing
in Canada, Turkey, Mexico, USA and Finland.
Qualified Person & QA/QC – Exploration
Exploration information and related scientific and te chnical information in this document 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 compile d by Boris Kotlyar, a member with the American
Institute of Professional Geologists (AIPG), Chief Geologist, Global Exploration with Centerra, 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 as
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described in the Kumtor Technical Report dated De cember 31, 2014. The Kumtor deposit is described in
the 2019 Annual Information Form and the Kumtor T echnical Report, which are both filed on SEDAR at
www.sedar.com.
Exploration information and related scientific and te chnical information in this document regarding the
Mount Milligan Mine were prepared in accordance w ith 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 43-101. Sample preparation, analytical techniques, laboratories used, and quality assurance
quality control protocols used during the exploration drilling programs are done c onsistent with industry
standards and independent certified assay labs are u sed. The Mount Milligan depos it is described in the
2019 Annual Information Form and a technical report dated March 26, 2020 (with an effective date of
December 31, 2019) prepared in accordance with NI 43-101, both of which are available on SEDAR at
www.sedar.com.
Exploration information and related scientific and te chnical information in this document regarding the
Öksüt Gold Mine were prepared, reviewed, verified and compiled in accordance with NI 43-101 by Mustafa
Cihan, Member of the Australian Institute of Geo scientists (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 de posit 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 43-1 01, both of which are available on SEDAR at
www.sedar.com.