Centerra Gold Records Third Quarter 2018 Net Earnings of $6 million; Increases 2018 Gold Production Guidance Range to 665,000 to 705,000 ounces and Lowers Cost Guidance Range to $782 to $829 per ounce sold
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NEWS RELEASE
Centerra Gold Records Third Quarter 2018 Net Earnings of $6 million; Increases 2018
Gold Production Guidance Range to 665,000 to 705,000 ounces and Lowers Cost Guidance
Range to $782 to $829 per ounce sold
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 and nine-month
periods ended September 30, 2018. 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”, included in the Company’s MD&A herein, and reconciled to the most directly comparable GAAP
measure.
Toronto, Canada, October 31, 2018: Centerra Gold Inc. (“Centerra” or “Company”) (TSX: CG) today
reported net earnings of $6 million or $0.02 per common share (basic) on revenues of $259.1 million in the
third quarter of 2018. The third quarter 2018 results include an impairment charge of $8.5 million to write-
down the net assets of the Company’s Mongolian business unit to their sale value which closed on October
11, 2018. Excluding this item, adjusted earningsNG in the third quarter of 2018 were $14.5 million or $0.05
per common share (basic). During the same period in 2017, the Company reported a net loss of $0.8 million
or nil per common share (basic) on revenues of $276.2 million. The third quarter 2017 results included a
one-time charge of $60 million ($0.20 per share) as a result of the settlement reached with the Government
of the Kyrgyz Republic and a gain from proceeds received of $9.8 million ($6.9 million net of tax or $0.02
per share) on the sale of the ATO property in Mongolia. Excluding these items, adjusted earningsNG in the
third quarter 2017 were $52.3 million or $0.18 per common share (basic).
2018 Third Quarter Highlights
• Increased Company-wide gold production guidance range for 2018 to 665,000 to 705,000 ounces
(from 625,000 to 695,000) reflecting increased gold production guidance at Kumtor of 490,000 to
510,000 ounces (from 450,000 to 500,000).
• Lowered all-in sustaining costs on a by -product basis per ounce sold NG Company-wide range to
$782 to $829 (from $812 to $903) which reflects lower cost guidance at both Kumtor and Mount
Milligan. Capital spending lowered to $217 million (from $237 million), reflecting lower spending
at the Öksüt Project and at Kumtor.
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• Produced a total of 181,243 ounces of gold, including 122,445 ounces at Kumtor and 58,798 ounces
at Mount Milligan. Kumtor accessed and processed high grade ore ahead of plan.
• Sold a total of 166,716 ounces of gold in the quarter, including 119,521 ounces at Kumtor and
47,195 ounces at Mount Milligan.
• Produced 12.7 million pounds of copper during the period and sold 13.6 million pounds of copper
at Mount Milligan.
• Company-wide all-in sustaining costs on a by-product basis per ounce soldNG were $698, excluding
revenue-based tax in the Kyrgyz Republic and income tax.
• Progressed construction of the Öksüt Project, substantially completing main road access and site
preparation and advancing site infrastructure preparation. The Öksüt Project remains on budget
and on schedule.
• Completed the sale of the Company’s Mongolian business unit on October 11, 2018 for net
proceeds of $35 million.
• Extended long-stop date in connection with the Strategic Agreement with the Go vernment of the
Kyrgyz Republic to January 31, 2019.
• Gold and copper mineralization identified at depth and to the west of Mount Milligan’s existing pit
design.
• Cash provided by operating activities before changes in working capitalNG of $67.1 million.
• Cash, cash equivalents, restricted cash and short -term investments at September 30, 2018 were
$222 million.
Mount Milligan Water Matters
As noted in the Company’s September 14, 2018 news release, Mount Milligan received approval to access
certain short-term water sources, namely to (i) pump from groundwater wells within Mount Milligan’s
tailings storage facility (“TSF”) (as well as from a single groundwater well outside of the TSF for the entire
life-of-mine) and (ii) pump up to 15% of the base flow from Philip Lake until November 15, 2018.
In addition, and in accordance with its regulatory plan, the Company has made applications for certain
additional / extended water sources until 2021 and is also working on a long-term solution to meet its water
needs at Mount Milligan. The Company is in discussions with regulators, First Nations and other affected
stakeholders with respect to such applications.
The Company notes that as the flow from its current water sources declines during the fourth quarter and
during the remainder of the winter season, Mount Milligan expects to reduce its throughput to properly
manage its water balance until the water flow increases in the spring.
See “Operating Mines and Facilities – Mount Milligan Mine – Water Permitting Update” and “2018
Outlook” for further details.
Sale of Mongolian business unit
On September 25, 2018, the Company entered into a definitive agreement to sell its Mongolian business
unit, including Boroo Gold LLC (including the mine and processing facility) and Centerra Gold Mongolia
LLC (including the Gatsuurt Gold Project) to OZD ASIA PTE Ltd. (“OZD”), for net proceeds of $35
million. The agreement closed on October 11, 2018 when the proceeds were transferred.
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In the third quarter of 2018, the Company wrote-down the net assets of the Company’s Mongolian business
unit to $35 million and recorded an impairment charge of $8.5 million (included in discontinued
operations), which represents the amount by which its net carrying value exceeds the proceeds less
transaction costs.
Commentary
Scott Perry, President and Chief Executive Officer of Centerra stated, “Our sites had another safe quarter
and we continue to roll out phase two of our Work Safe – Home Safe program, as we strive to zero harm
within the work place.”
“During the quarter and earlier than planned, Kumtor accessed and started mining and processing the
higher-grade material from the SB Zone in the Central Pit. As a result, Kumtor delivered better than planned
results in the quarter, producing over 122,000 ounces of gold at all-in sustaining costs (before taxes)NG of
$662 per ounce sold. Company-wide the operations produced a total of 181,243 ounces of gold and 12.7
million pounds of copper in the quarter.”
“Company-wide our all-in sustaining costs on a by-product basis per ounce sold (before taxes)NG were $698
per ounce for the quarter bringing year-to-date to $861 per ounce.”
“With our third quarter earnings release today, the Company increased its gold production guidance for
Kumtor for the year to 490,000 – 510,000 ounces and Company-wide to 665,000 to 705,000 ounces. We
also lowered our expected all-in sustaining costs on a by-product basis (before taxes)NG at Kumtor to $700
to $750 per ounce sold and at Mount Milligan to $825 to $875 per ounce sold, which bring the Company’s
consolidated all-in sustaining costs on a by-product basis (before taxes)NG to $782 to $829 per ounce sold.”
“C
onstruction activity continued at the Öksüt Project in Turkey as the main access road and site road
construction were substantially completed and the installations including the crusher area, ADR plant area,
heap leach pad site and other site infrastructure are advancing according to plan.”
“The Kemess Project achieved another milestone in the quarter as it received its effluent discharge permit
after receiving the amendment to its Mines Act Permit in the second quarter, which approved the
underground mine plan and reclamation program for the Kemess Underground Project.”
“Financially, the business delivered approximately $67 million of consolidated cash from operations before
changes in working capitalNG in the quarter. Kumtor and Mount Milligan generated $64 million and $19
million respectively, before working capital changes.”
“Lastly, after the end of the quarter, we announced the sale of our Mongolian business unit for net proceeds
of $35 million. I would like to acknowledge and to personally express my heartfelt thanks to all of our
former colleagues in Mongolia for their contributions over many years to Centerra.”
Exploration Update
Exploration expenditures in the third quarter of 2018 totaled $7.2 million compared to $2.5 million in the
same quarter of 2017, reflecting the restart of exploration activities at Kumtor in 2018. Exploration activities
during the third quarter included drilling, trenching, surface sampling, geological mapping and geophysical
surveying at the Company’s various projects.
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Kyrgyz Republic
Kumtor Mine
Kumtor has designed and initiated a two-year 60,000 metre drill program to test potential extensions of
gold mineralization along the Kumtor trend. The program is focused within the Central, South-West and
Sarytor pits and the North-East Target area. A budget of $18 million has been allocated to the program with
$6.5 million for 2018 and $11.5 million budgeted for 2019.
Drilling in 2018 is planned to test near surface targets, including the Hockey Stick Zone, the north- west
periphery of the Central Pit and the corridor between the Central Pit and South-West Pit.
During the third quarter of 2018, 30 diamond drill holes were completed for a total 8,318 metres, at the
vicinity of the Central and South-West Pits and the North-East Target area. More than half of the holes (17
drill holes for a total 4,507 metres) were completed in the Central Pit area targeting the Hockey Stick Zone.
Significant intercepts are:
D1784 32.1 metres @ 1.37 g/t Gold (“Au”) from 191.7 metres;
D1785 15.0 metres @ 3.62 g/t Au from 176.3 metres;
D1786 24.5 metres @ 2.79 g/t Au from 181.5 metres
D1786 4. 7 metres @ 2.37 g/t Au from 232.0 metres;
D1787 19.9 metres @ 2.80 g/t Au from 174.2 metres;
D1790 18.5 metres @ 3.62 g/t Au from 156.0 metres
D1790 26.4 metres @ 5.57 g/t Au from 180.5 metres
Includes 9.8 metres @ 10.42 g/t Au from 186.0 metres;
D1795 7.0 metres @ 2.45 g/t Au from 22.0 metres;
D1797 48.4 metres @ 2.85 g/t Au from 154.9 metres
Includes 3.7 metres @ 11.51 g/t Au from 196.1 metres;
D1803 4.4 metres @ 2.78 g/t Au from 73.6 metres.
In the South-West area, 7 drill holes were completed for a total 2,297.7 metres. Best intercepts include:
SW-18-257 11.0 metres @ 1.57 g/t Au from 307.9 metres
SW-18-257 34.0 metres @ 2.23 g/t Au from 344.7 metres;
SW-18-258 11.6 metres @ 2.15 g/t Au from 290.9 metres
SW-18-258 9.9 metres @ 2.95 g/t Au from 344.7 metres;
SW-18-259 22.9 metres @ 2.82 g/t Au from 377.3 metres
Includes 3.1 metres @ 8.80 g/t Au from 377.3 metres;
SW-18-262 4.8
metres @ 1.78 g/t Au from 15.7 metres.
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In the North-East area, 6 drill holes were completed for a total 1,512.4 metres. The best intercept is:
DN1800 5.8 metres @ 1.00 g/t Au from 75.2 metres.
In the fourth quarter of 2018, drilling will be focused on inferred near-surface mineralization in the north-
east wall of the Central Zone, south-west extension of the Hockey Stick Zone and periphery of the North-
East target.
The above mineralized intercepts were calculated using a cut-off grade of 1.0 g/t Au, minimum interval of
4.0 metres and a maximum internal dilution interval of 5.0 metres. Drill collar locations and associated
graphics are available at the following link:
http://resource.globenewswire.com/Resource/Download/9a34de56-af74-465c-8617-99019cd8a4a7
A 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.
Canada
Mount Milligan Mine
Exploration activities in the third quarter of 2018 at Mount Milligan included brownfield exploration
drilling (within the mine lease) and greenfield exploration drilling (outside the mine lease). Phase-2 of the
near-pit infill and expansion drilling began in the Saddle Zone in September.
Receipt of assay results for the latter drill holes of the Phase-1 near-pit infill and expansion drilling program
continued during the third quarter. The program was completed on June 30, 2018 and totaled 10,985 metres
in 30 drill holes (18-1056 to 18-1084) including one geotechnical hole. The last five drill holes were
completed within the 66 Zone. Selected best results include:
18-1080: 125.0 metres @ 0.91 g/t Au, 0.01% Copper (“Cu”) from 47.0 metres;
18-1081: 54.0 metres @ 0.46 g/t Au, 0.01% Cu from 103.0 metres;
18-1082: 145.2 metres @ 0.94 g/t Au, 0.08% Cu from 4.1 metres;
18-1084: 56.0 metres @ 1.99 g/t Au, 0.04% Cu from 3.1 metres;
The brownfield drilling program completed a total of 6,669 metres in 12 drill holes and three target areas
within the mine lease up to 730 metres west of the ultimate pit boundary. Assay results demonstrate near
surface high-gold-low-copper targets in all zones and additional gold-copper mineralized porphyries at
deeper levels. Selected best results include:
18-1093 (Saddle West zone): 23.0 metres @ 0.98 g/t Au, 0.07% Cu from 242.0 metres;
18-1105 (Saddle West zone): 14.2 metres @ 0.82 g/t Au, 0.11% Cu from 142.0 metres;
18-1108 (Saddle West zone): 7.9 metres @ 4.69 g/t Au, 0.03% Cu from 112.1 metres;
18-1085(Goldmark zone): 29.8 metres @ 0.24 g/t Au, 0.38% Cu from 261.2 metres;
18-1086 (Goldmark zone): 23.1 metres @ 6.21 g/ t Au, 0.04% Cu from 20.2 metres;
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18-1098 (Goldmark zone): 11.0 metres @ 1.46 g/t Au, 0.33% Cu from 160.0 metres;
18-1102(Goldmark zone): 15.0 metres @ 0.62 g/t Au, 0.32% Cu from 165.0 metres;
34.8 metres @ 0.42 g/t Au, 0.15% Cu from 457.5 metres;
18-1089 (North Slope zone): 11.4 metres @ 0.54 g/t Au, 0.13% Cu from 4.6 metres;
18-1097 (North Slope zone): 22.5 metres @ 0.67 g/t Au, 0.02% Cu from 126.5 metres;
99.0 metres @ 0.35 g/t Au, 0.18% Cu from 283.5 metres;
18-1107(North Slope zone): 18.3 metres @ 1.41 g/t Au, 0.08% Cu from 66.0 metres.
The 2018 greenfield helicopter supported drilling program completed a total of 5,411 metres in 12 drill
holes and in three target areas outside of the mine lease; the D2 & Heidi Stock target areas, about three
kilometres west of the mine, and the Mitzi East target area, about three kilometres north of the mine.
Geologic information and assay results are being used to delineate the margins of the porphyry system. A
porphyry copper target was identified on the west side of the mine lease. Selected best results include:
18-1106 (Heidi Stock): 33.6 metres @ 0.07 g/t Au, 0.21% Cu from 17.0 metres.
The above mineralized intercepts (except for 18-1106) were calculated using a cut-off grade of 0.1 g/t Au
and a maximum internal dilution interval of 4 metres. 18-1106 was calculated using a cut-off grade of 0.1%
Cu. Drill collar locations and associated graphics are available at the following:
http://resource.globenewswire.com/Resource/Download/9a34de56-af74-465c-8617-99019cd8a4a7
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.
Turkey
Öksüt Gold Project
At the Öksüt Gold Project, two additional drill rigs were deployed during the third quarter of 2018. The
drilling program is focused on resource expansion and upgrade at the Keltepe deposit, targeting supergene
copper mineralization at depth, and testing oxide gold mineralization potential at other targets around the
known deposits, including Keltepe NW and Yelibelen. In addition to these, a conceptual porphyry-style
Cu/Au target was tested at Boztepe.
In the third quarter of 2018, 3,750 metres in 11 holes were completed. A total of 4,860 metres have been
drilled of the initial 6,000 metres planned for the 2018 drilling program. Based on the results received to
date, an additional 2,000 metres of drilling has been added to the 2018 drilling program.
Significant gold and copper mineralization have been intercepted with some of the better intervals being:
Keltepe (Testing for oxide Au resource expansion/conversion and resource upgrade)
ODD0308: 48.8 metres @ 0.44 g/t Au from 66 metres;
ODD0311A: 180.4 metres @ 0.88 g/t Au from 25.3 metres
Includes 25.5 metres @ 1.17 g/t Au;
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ODD0313: 162.1 metres @ 1.65 g/t Au from 71.5 metres
Includes 57.8 metres @ 2.86 g/t Au;
ODD0316: 193.2 metres @ 2.2 g/t Au from 16.6 metres
Includes 86 metres @ 3.27 g/t Au.
Keltepe (Testing for supergene Cu mineralization at depth)
ODD0311A: 5 metres @ 1.49% Cu and 0.38 g/t Au from 343.8 metres;
ODD0313: 16.9 metres @ 0.77% Cu and 1.72 g/t Au from 219.9 metres;
Includes 2.4 metres @ 3.05% Cu and 3.52 g/t Au;
ODD0316: 51.3 metres @ 1.15% Cu and 1.67 g/t Au from 209.8 metres
Includes 4.3 metres @ 8.89% Cu and 2.3 g/t Au.
The above mineralized intercepts were calculated using a cut-off grade of 0.2 g/t Au and a maximum
internal dilution interval of 5.0 metres. Drill collar locations and associated graphics are available at the
following link:
http://resource.globenewswire.com/Resource/Download/9a34de56-af74-465c-8617-99019cd8a4a7
A listing of the drill results, drill hole locations and plan map for the Öksüt Gold Project 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.
Greenfields Exploration
Yamaç Project
At the Yamaç Project in Turkey, drill permits are still pending for the proposed step-out drill testing at 200
metre centres. Limited site preparations were commenced in anticipation of the drill permits being received
in the third quarter.
Other Projects
During the third quarter of 2018, exploration programs targeting gold and copper were ongoing in Turkey,
Canada, Mexico, Nicaragua and Sweden.
Qualified Person & QA/QC - Exploration
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.
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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 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 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 in accordance with NI 43-101 and were prepared, reviewed, verified and
compiled by Mustafa Cihan, Member of the Australian Institute of Geoscientists (AIG), Exploration
Manager at Centerra’s Turkish subsidiary Öksüt 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.