Centerra Gold Records Net Loss for 2019 of $94 million or $0.32 per Common Share Adjusted Net EarningsNG of $182 million or $0.62 per Common Share; Declares Dividend of CAD$0.04 per Common Share; Provides COVID-19 Update
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NEWS RELEASE
Centerra Gold Records Net Loss for 2019 of $94 million or $0.32 per Common Share
Adjusted Net EarningsNG of $182 million or $0.62 per Common Share;
Declares Dividend of CAD$0.04 per Common Share; Provides COVID-19 Update
All figures are in United States dollars and all production figures are on a 100% basis unless otherwise
stated.
Toronto, Canada, March 26, 2020: Centerra Gold Inc. (“Centerra” or the “Company”) (TSX: CG) today
reported fourth quarter and full-year 2019 results. Key events and operating results of the fourth quarter
and year included:
• Net loss for the quarter of $12.2 million, $0.04 per common share (basic) and net loss for the year
of $93.5 million, $0.32 per common share (basic).
• Adjusted net earningsNG for the quarter of $22.3 million, $0.08 per common share (basic) and
adjusted net earningsNG for the year of $181.5 million, $0.62 per common share (basic).
• Cash flow from operations for the quarter and year was $92.5 million and $334.1 million,
respectively. Adjusted cash flow from operationsNG for the quarter and year was $92.5 million and
$396.7 million, respectively.
• Gold Production for the quarter of 194,507 ounces and gold production for the year of 783,308
ounces, in excess of the high end of our full-year guidance of 765,000 ounces.
• Copper production for the quarter of 18.1 million pounds and copper production for the year of
71.1 million pounds, within our guidance range.
• Production costs per ounce of gold sold for the quarter and year were $455 per ounce and $465
per ounce, respectively.
• Production costs per pound of copper sold for the quarter and year were $1.50 per pound and
$1.46 per pound, respectively.
• All-in sustaining costs per ounce soldNG for the quarter was $799 per ounce and $708 per ounce
for the year, below the annual guidance range of $713 to $743 per ounce.
• Debt net of cash of $34.8 million at the end of 2019, includes cash of $42.7 million. On January
30, 2020, the Company cancelled the $150 million Öksüt Project finance facility and repaid the
$78 million drawn balance which resulted in the release of $25 million in restricted cash.
• Proven and probable gold mineral reserves total an estimated 11.1 million ounces of contained
gold (442 Mt at 0.78 g/t gold) at year-end, reflecting 2019 mining depletion and the impact of the
updated Mount Milligan NI 43-101 technical report.
• Proven and probable copper mineral reserves total an estimated 1,589 million pounds of
contained copper (298.4 Mt at 0.24% copper) at year-end, reflecting 2019 mining depletion and
the impact of the updated Mount Milligan NI 43-101 technical report.
• In December 2019, the Kumtor Mine experienced a significant waste rock movement at the Lysii
waste rock dump resulting in two employee fatalities.
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Key events subsequent to year-end:
• In January 2020, the Company received all the necessary approvals and permits to recommence
mining operations at the Kumtor Mine.
• In January 2020, the Company announced that first gold pour was achieved at the Öksüt Project.
The Company completed first gold pour on time and under budget.
• In February 2020, a Kumtor employee succumbed to a fatal injury while operating an excavator
near the edge of Petrov Lake.
• In March 2020, the Company filed an updated NI 43-101 technical report for the Mount Milligan
Mine with an effective date of December 31, 2019.
• Dividend of CAD$0.04 per common share declared in March 2020.
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.
Commentary
Scott Perry, President and Chief Executive Officer of Centerra stated, “We are fully committed to
understanding the circumstances that led to the troubling safety incidents at Kumtor in December 2019 and
February 2020, so that we can take all necessary steps to prevent such incidents from happening in the
future. We remain steadfast in our resolve to ensure that everyone who works at our operations can do so
safely and will return home safely, each and every day. There is nothing more important.”
“In 2019, due to the strong operating performance at both operations, the Company exceeded its
consolidated gold production and cost guidance, delivering more than 783,300 ounces of gold at an all-in
sustaining costNG on a by-product basis of $708 per ounce sold, which was lower than the low-end of our
all-in sustaining cost guidance. Kumtor had another strong year exceeding its revised production guidance
in delivering 600,201 ounces of gold production at an all-in-sustaining cost on a by-product basis of $598
per ounce sold, which was lower than the low-end of its all-in-sustaining cost guidance. In 2019, Mount
Milligan exceeded the upper end of its gold production guidance and achieved the mid-point of its copper
production guidance, producing 183,107 ounces of gold and 71.1 million pounds of copper. All-in-
sustaining cost on a by-product basis was above guidance at $828 per ounce sold.”
“Financially, the Company generated a meaningful $334.1 million of cash from operations for the year,
Mount Milligan generated $62.2 million and Kumtor generated $376.2 million. In 2019, Kumtor generated
$240 million of free cash flowNG and Mount Milligan generated $27 million which enabled the Company
to aggressively pay down its debt over the year by approximately $111 million ending the year with debt
net of cash of $34.8 million (excluding restricted cash).”
“Based on the Company’s financial position, recent strong operating results and cash flows, the Board
approved on March 25, 2020 a dividend of Cdn$0.04 per share.”
“For 2020, we are estimating consolidated gold production to be in the range of 740,000 to 820,000 ounces
combined with 80 million to 90 million pounds of payable copper production from Mount Milligan.
Centerra’s consolidated all-in sustaining cost on a by-product basis per ounce soldNG for 2020 is expected
to be in the range of $820 to $870 per ounce.”
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“Our projected capital expenditures for 2020, excluding capitalized stripping, is estimated to be $169
million which includes $109 million of sustaining capital and $60 million of growth capital spending.
Growth capital spending includes $29 million at the Öksüt Project in Turkey as we complete the
construction of the site, $13 million at the Kemess Underground Project and $18 million at the Kumtor
Mine. Total capitalized stripping for 2020 is estimated to be $236 million, including $215 million at the
Kumtor Mine and $21 million at the Öksüt Project, with a total cash component of $193 million, including
$173 million at the Kumtor Mine and $20 million at the Öksüt Project.” See “2020 Outlook” for further
details.”
“At Kumtor over the past 18 months we have invested significantly in exploration drilling and at year-end
we can see the results as Kumtor’s open pit measured and indicated gold mineral resources increased by
3.3 million contained ounces to 6.3 million contained ounces and open pit inferred gold mineral resources
increased by 1.2 million contained ounces to 1.4 million contained ounces. We are now in the process of
updating Kumtor’s life-of-mine plan and an updated technical report which we plan to release in the second
half of 2020.”
COVID-19 Update
Centerra continues to prioritize the health, safety and well-being of its employees, contractors, communities
and other stakeholders, particularly during the current outbreak of COVID -19. To date, the Company has
experienced no operating or production disruptions nor any supply chain interruptions or impact.
However, the Company has decided to undertake a significant reduction of manpower and operations at the
Öksüt Project on March 31, 2020 for an initial period of two weeks. This decision was taken in response to
recent Turkish government initiatives aimed to reducing the spread of COVID-19. The reduction will result
in a suspension of open pit mining activities, though limited crews will remain on site to place ore on the
heap leach pad, to operate the ADR plant and to perform essential site services. Approximately 150,000
tonnes of crushed material is available at site for stacking (such volume represents approximately 15 days
worth of stacking activity). Öksüt has prepared detailed plans in case a further reduction or cessation of
operations becomes necessary or desirable.
Kumtor and Mount Milligan operations continue for the time being and, in the case of Kumtor, with the
support of the Kyrgyz Republic Government. Each site has implemented a number of proactive measures
to prevent the spread of COVID -19 and ensure the safety of its employees, contractors, com munities and
other stakeholders. Both Kumtor and Mount Milligan have also made detailed plans in case a reduction or
cessation in operations becomes necessary or desirable.
Scott Perry, President and Chief Executive Officer, commented: “The safety of our employees remains our
top priority during the outbreak of COVID -19 and we are taking action based on the best available
information we have. We believe that the temporary reduction of operations at Öksüt is the most prudent
course of action at this juncture. Kumtor and Mount Milligan remain in operation for the time being, but
we will not hesitate to reduce or shut down operations at those sites if we believe it is required to responsibly
protect people.” To ensure appropriate social distancing, the Company has temporarily closed its head
office in Toronto and regional offices in Bishkek, Kyrgyz Republic, Prince George, British Columbia and
Ankara, Turkey and has asked its workforce to operate remotely.
To date, there are no confirmed cases of COVID-19 in the Issyk-Kul district of the Kyrgyz Republic, nor
the Kayseri province of Turkey, where the Kumtor Mine and the Öksüt Mine are located, respectively, and
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from where they source their main workforce. To date, there has been a few reported cases in Prince George
area of British Columbia from which the Mount Milligan Mine sources some of its workforce.
The Company is continuously monitoring information published by the Public Health Agency of Canada,
U.S. Centers for Disease Control and Prevention (CDC), the World Health Organization (WHO) and other
guidance released from appropriate government agencies.
Centerra has taken the following measures to provide its employees with accurate information, help prevent
infection and reduce the potential transmission of COVID-19:
• Pandemic & Crisis Management: A global crisis management team was activated in early March.
The team, comprised of executives and local site leaders, has been leading Centerra’s global
response and has implemented a corporate pandemic response plan complemented by local site -
specific crisis management plans.
• Health and Mental Well -being Support: Centerra continues to educate and raise awareness on
COVID-19 facts and preventative actions through frequent communication with employees and is
directing leaders to offer compassionate support for employees who are concerned about their
wellbeing and the wellbeing of their families. Any employee who is feeling unwell or experiencing
flu-like symptoms has been advised to stay home. The Company is conducting temperature checks
using non-contact thermometers and asking health questions of all individuals entering any of its
sites. A standard operating procedure has been implemented in case there is a need for individual
isolation and subsequent transportation from site for any individual who exhibits COVID-19 related
symptoms.
• Workplace Hygiene: All sites have increased daily cleaning of all common areas and spaces where
there is frequent employee c ontact, including shared objects and any high -touch surfaces. Proper
food hygiene and preparation practices have been reinforced at the Company’s mine sites which
have onsite living quarters.
• Remote Working: As noted above, to promote social distancing practices, corporate and regional
offices have been closed for the time being and flexible work arrangements have been implemented
globally. Site employees who can work at home have been encouraged to do so. The Company has
also moved to virtual meetings acr oss the organization where possible or limited attendees at
meetings while practicing prudent social distancing.
• Travel and Site Visit Restrictions: The Company has instituted a no -air travel policy. At the
guidance of public health authorities, individuals who have recently returned from either business
or non-business-related travel have entered a 14-day self-isolation period. In addition, a visitor ban
has been instituted at all sites, including our operating mines, development projects and at our care
and maintenance sites.
In addition to the above precautionary measures, operating mine sites have been actively assessing the
resiliency of their supply chain , increasing mine site inventories of key materials and developing
contingency plans to allow for continued operations.
The Company notes that the situation is fluid and has been changing rapidly. The measures enacted reflect
the Company’s best assessment at this time but will remain flexible and be revised as necessary or advisable
and/ or as recommended by the public health and governmental authorities.
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About Centerra
Centerra Gold Inc. is a Canadian-based gold mining company focused on operating, developing, exploring
and acquiring gold properties in North America, Asia and other markets worldwide and is the largest
Western-based gold producer in Central Asia. Centerra operates two flagship assets, the Kumtor Mine in
the Kyrgyz Republic, the Mount Milligan Mine in British Columbia, Canada and now has a third operating
gold mine, the 100%-owned Öksüt Mine in Turkey, which began production in January 2020 . Centerra's
shares trade on the Toronto Stock Exchange (TSX) under the symbol CG. The Company is based in
Toronto, Ontario, Canada.
Conference Call
Centerra invites you to join its 2019 conference call on Thursday, March 26, 2020 at 10:00 AM Eastern
Time. The call is open to all investors and the media. To join the call, please dial toll-free in North America
1-800-952-1797. International participants may access the call at +1 416-641-6701. Results summary slides
are available on Centerra Gold’s website at www.centerragold.com. Alternatively, an audio feed webcast
will be broadcast live by Nasdaq Corporate Solutions and can be accessed live at Centerra Gold’s website
at www.centerragold.com. A recording of the call will be available on www.centerragold.com shortly after
the call and via telephone until midnight Eastern Time on April 2, 2020 by calling (416) 626-4100 or (800)
558-5253 and using passcode 21953022.
For more information:
John W. Pearson
Vice President, Investor Relations
Centerra Gold Inc.
(416) 204-1953
Additional information on Centerra is available on the Company’s web site at
www.centerragold.com and at SEDAR at www.sedar.com.
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Management’s Discussion and Analysis
For the Period Ended December 31, 2019
This Management Discussion and Analysis (“MD&A”) has been prepared as of March 25, 2020, and is
intended to provide a review of the financial position and results of operations of Centerra Gold Inc.
(“Centerra” or the “Company”) for the three and twelve months ended December 31, 2019 in comparison
with the corresponding periods ended December 31, 2018. This discussion should be read in conjunction
with the Company’s audited financial statements and the notes thereto for the year ended December 31,
2019 prepared in accordance with International Financial Reporting Standards (“IFRS”). The Company’s
audited financial statements and the notes thereto for year ended December 31, 2019, are available at
www.centerragold.com and on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at
www.sedar.com. 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.
All dollar amounts are expressed in United States dollars (“USD”), except as otherwise indicated.
Caution Regarding Forward-Looking Information
Information contained in this document which are not statements of historical facts, and the documents
incorporated by reference herein, may be “forward-looking information” for the purposes of Canadian
securities laws. Such forward-looking information involves risks, uncertainties and other factors that could
cause actual results, performance, prospects and opportunities to differ materially from those expressed or
implied by such forward looking information. The words “believe”, “expect”, “anticipate”,
“contemplate”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule”,
“understand” and similar expressions identify forward-looking information. These forward-looking
statements relate to, among other things: statements under the heading “2020 Outlook” including expected
gold and copper production in 2020, expectations regarding throughput rates per calendar day at the
Mount Milligan mill, plans for maintenance work at our mines which will impact production, expectations
for ramping up gold production at the Öksüt Project, production costs and all-in sustaining costs, capital
spending and other expenditures expected for 2020, and expectations about the molybdenum business unit
in 2020; our estimates for asset retirement obligations; the Company’s expectations regarding having
sufficient liquidity for 2020; the Company’s expectations of extending the term of permits received for
pumping from a wellfield; expectations regarding having sufficient water in the tailings storage facility for
2020; the Company’s plans and timing for developing and submitting requests to implement a long-term
solution to the Mount Milligan water sufficiency issues, including consultations with potentially affected
Indigenous groups and regulators; expectations regarding the construction completion of the Öksüt Project
and timing of ramp up of operations; the expectations that the Kyrgyz Government will continue to comply
with the terms of the Strategic Agreement; the outcome of the litigation involving the Company, the
Greenstone Managing Partner, Premier Gold and its nominees to the Greenstone Managing Partner board
of directors; the Company’s planned exploration activities; the Company’s cash on hand, working capital,
future cash flows and existing credit facilities being sufficient to fund anticipated operating cash
requirements and statements found under the heading “2020 Outlook”, including forecast 2020 production
figures and costs, capital spending (growth and sustaining) and exploration expenditures and taxes;
expectations of not needing to slow production at Mount Milligan to conserve water; and the Company will
achieve Mount Milligan production and costs estimates as detailed in the updated NI 43-101 technical
report for Mount Milligan.
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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 projected in the forward-looking information. For a list of known risk factors,
please see “Risks That Can Affect our Business”.
Furthermore, market price fluctuations in gold and copper, 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 reserves. The extent to which resources may ultimately be
reclassified as proven or probable reserves is dependent upon the demonstration of their profitable
recovery. Economic and technological factors which may change over time always influence the evaluation
of reserves or resources. Centerra has not adjusted mineral resource figures in consideration of these risks
and, therefore, Centerra can give no assurances that any mineral resource estimate will ultimately be
reclassified as proven and probable reserves.
Mineral resources are not mineral reserves, and do not have demonstrated economic viability, but do have
reasonable prospects for economic extraction. Measured and indicated resources are sufficiently well
defined to allow geological and grade continuity to be reasonably assumed and permit the application of
technical and economic parameters in assessing the economic viability of the resource. Inferred resources
are estimated on limited information not sufficient to verify geological and grade continuity or to allow
technical and economic parameters to be applied. Inferred resources are too speculative geologically to
have economic considerations applied to them to enable them to be categorized as mineral reserves. There
is no certainty that mineral resources of any category can be upgraded to mineral reserves through
continued exploration.
There can be no assurances that forward-looking information and statements will prove to be accurate, as
many factors and future events, both known and unknown could cause actual results, performance or
achievements to vary or differ materially from the results, performance or achievements that are or may be
expressed or implied by such forward-looking statements contained herein or incorporated by reference.
Accordingly, all such factors should be considered carefully when making decisions with respect to
Centerra, and prospective investors should not place undue reliance on forward looking information.
Forward-looking information is as of March 25, 2020. Centerra assumes no obligation to update or revise
forward looking information to reflect changes in assumptions, changes in circumstances or any other
events affecting such forward-looking information, except as required by applicable law.
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TABLE OF CONTENTS
Overview ...................................................................................................................................................... 9
Consolidated Financial and Operational Highlights ............................................................................. 10
Overview of Consolidated Results ........................................................................................................... 11
2020 Outlook.............................................................................................................................................. 12
Risks That Can Affect Our Business ....................................................................................................... 18
Financial Performance ............................................................................................................................. 20
Balance Sheet Review ............................................................................................................................... 23
Market Conditions .................................................................................................................................... 24
Financial Instruments ............................................................................................................................... 27
Operating Mines and Facilities ................................................................................................................ 27
Construction and Development Projects ................................................................................................ 43
Quarterly Results – Previous Eight Quarters ........................................................................................ 45
Related party transactions ....................................................................................................................... 45
Contingencies............................................................................................................................................. 47
Contractual Obligations ........................................................................................................................... 52
Accounting Estimates, Policies and Changes ......................................................................................... 52
Disclosure Controls and Procedures and Internal Control Over Financial Reporting ...................... 53
Non-GAAP Measures ............................................................................................................................... 53
Qualified Person & QA/QC – Production Information......................................................................... 58
Qualified Person & QA/QC – Mineral Reserves and Mineral Resources ........................................... 58
Mineral Reserves and Mineral Resources .............................................................................................. 59