Centerra Gold Records Third Quarter Net Earnings of $27.6 million ($0.09 per common share), Adjusted Net EarningsNG of $35.7 million ($0.12 per common share), Cash Provided by Operating Activities of $62.4 million and Free Cash FlowNG of $41.0 million.
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NEWS RELEASE
Centerra Gold Records Third Quarter Net Earnings of $27.6 million ($0.09 per common share),
Adjusted Net EarningsNG of $35.7 million ($0.12 per common share), Cash Provided by Operating
Activities of $62.4 million and Free Cash FlowNG of $41.0 million.
All figures are in United States dollars and all production figures are on a 100% basis and continuing
operations basis, unless otherwise stated. This news release contains forward-looking information
regarding Centerra Gold’s business and operations. See “Caution Regarding Forward-Looking
Information”. 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, November 5, 2021: Centerra Gold Inc. (“Centerra” or the “Company”) (TSX: CG and
NYSE: CGAU) today reported its third quarter 2021 results.
Significant financial and operating highlights of the third quarter include:
• Net earnings and adjusted net earningsNG of $27.6 million or $0.09 per common share (basic),
and $35.7 million or $0.12 per common share (basic), respectively.
• Cash flow provided by operating activities and free cash flowNG of $62.4 million and $41.0
million, respectively.
• Mount Milligan Mine and Öksüt Mine recognized free cash flow from mine operations of $25.9
million and $48.9 million, respectively.
• Cash position at quarter-end of $911.7 million with total liquidity of $1,311.7 million.
• Consolidated production of 76,913 ounces of gold and 17.9 million pounds of copper.
• Consolidated gold production costs and copper production costs were $630 per ounce and $1.50
per pound, respectively.
• Consolidated all-in sustaining costs on a by-product basisNG and consolidated all-in costs on a
by-product basisNG were $781 per ounce and $932 per ounce, respectively.
• Full-year 2021 cost guidance lowered for the Öksüt Mine. The Öksüt Mine’s gold production
costs and all-in sustaining costs on a by-product basisNG are now expected to be in the range of
$450 to $500 per ounce and $680 to $730 per ounce , respectively. The Company’s consolidated
gold production costs and all-in sustaining costs on a by-product basisNG are now expected to be in
the range of $600 to $650 per ounce and $700 to $750 per ounce, respectively.
• Legal proceedings relating to the Kumtor Mine continue. During the third quarter of 2021, an
arbitrator was appointed in the arbitration proceedings against the Kyrgyz Republic and
Kyrgyzaltyn JSC and the Company filed an application seeking interim measures in the Kumtor
arbitration proceedings to prevent, among other things, the Kyrgyz Republic and Kyrgyzaltyn JSC
from causing irreparable damage to the mine. On October 27, 2021, the appointed arbitrator
resigned, citing the refusal by the Kyrgyz Republic and Kyrgyzaltyn JSC to agree to protections he
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had requested against personal claims being brought against him by the parties or to pay his
requested fees. The Company has requested that the Permanent Court of Arbitration and its
designated appointing authority promptly appoint a replacement arbitrator.
• Quarterly dividend declared of CAD$0.07 per common share.
Commentary
Scott Perry, President and Chief Executive Officer of Centerra stated, “During the third quarter we
continued to demonstrate positive safety performance as the Öksüt mine achieved two million work hours
without a lost-time injury. At the same time, Thom pson Creek Mine, Langeloth Facility and Kemess UG
Project each achieved one year without a lost-time injury and our 75%-owned Endako Mine achieved eight
years without a lost-time injury.”
“Across the organization we continue to stay vigilant with respect to the COVID -19 virus. At both our
Mount Milligan and Öksüt Mines, vaccination clinics have been set up for employees and contractors, with
second vaccination doses having been provided to the majority of site employees. We are proactively
maintaining our rigorous safety protocols across the organization to prevent any outbreaks and reduce the
spread of COVID- 19 for the health and safety of our employees, contractors, communities and other
stakeholders.”
“Our operations performed well in the third quarter and we achieved Company-wide gold production from
continuing operations of 76,913 ounces at all-in sustaining costs on a by-product basis of $781 per ounce.
With this performance, and what we are expecting in the fourth quarter, we are on track to achieve the
upper-end of our gold production guidance and the lower-end of the all-in sustaining costs on a by-product
basis guidance. During the third quarter, the Mount Milligan Mine produced 39,658 ounces of gold and
17.9 million pounds of copper at all-in sustaining costs on a by-product basis of $727 per ounce. In the
same period, t he Öksüt Mine produced 37,255 ounces of gold at all-in sustaining costs on a by-product
basis of $603 per ounce during the third quarter as we started mining and stacking higher grade material,
making it our lowest cost producer in the quarter.”
“F
inancially, the Company continues to generate significant free cash flow, even without the contribution
from the Kumtor Mine. During the third quarter, we generated $62.4 million in cash provided by operating
activities, including $43.3 million from the Mount Milligan Mine and $52.1 million from the Öksüt Mine.
Company-wide free cash flow from continuing operations in the third quarter of 2021 totalled $41.0 million,
including $25.9 million from the Mount Milligan Mine and $48.9 million from the Öksüt Mine. Both mines
are on track to achieve record free cash flow for the full year. We finished the quarter with a debt-free
balance sheet and a cash position of $911.7 million.”
“Based on the Company’s financial position, strong operating results and cash flows, the Board approved
on November 4, 2021, a quarterly dividend of CAD$0.07 per share.”
“While we continue to seek resolution to the Kumtor Mine dispute, the Company continues to be financially
and operationally strong. At the Öksüt Mine, mining activities will continue in the high-grade zones in the
fourth quarter of 2021 and in 2022. Based on the consolidated results for the first nine months of the year,
including consolidated free cash flow NG from continuing operations of $139.7 million, the Company
remains on track to achieve our revised 2021 consolidated production and cost guidance and potentially
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exceed the upper-end of our consolidated free cash flowNG from continuing operations guidance of $125 to
$175 million in 2021.”
“Lastly, I would like to recognize that after more than 15 years with Centerra, John Pearson, Vice-President,
Investor Relations will be retiring at the end of this year. I want to congratulate John on his upcoming
retirement and thank him for his continuous commitment and dedicated service. During his long tenure,
with Centerra, John has been the backbone of our investor relations efforts , consistently communicating
with the marketplace. Over this time , the Company transformed from having a Central Asia focus into a
multi-mine diverse business. On behalf of myself, the Company, and the Board, I would like to wish John
a happy retirement. Upon John’s retirement, all investor relations responsibilities will be assumed by Toby
Caron, Treasurer and Director, Investor Relations.”
Exploration Update
Exploration activities in the third quarter of 2021 included drilling, surface sampling, geological mapping
and geophysical surveying at the Company’s various projects and earn-in properties, targeting gold and
copper mineralization in Canada, Turkey, Finland and the United States of America.
Exploration expenditures at the Company’s operations were $7.2 million in the third quarter of 2021 The
activities were focused on expanded drilling programs at the Mount Milligan Mine and the Öksüt Mine, as
well as at the Sivritepe Project in Turkey.
A resource expansion drilling program commenced in August 2021 at the Mount Milligan Mine. The
drilling is designed to develop and upgrade resources and reserves in the MBX, WBX and DWBX zones
below and to the west of the current ultimate open-pit boundary. There is the potential for s ignificant
resources to exist in these areas and a ssays returned throughout the third quarter of 2021 show wide
intercepts of potentially significant mineralization outside the ultimate open-pit boundary. The resource
expansion drilling program will continue into the fourth quarter of 2021 and additional drilling will be
completed in advance of an updated resource model to support a new life-of-mine plan.
At the Öksüt Mine, a resource expansion drilling which commenced earlier in the year was completed early
in the third quarter of 2021. Drilling activities were performed to provide greater confidence to the resources
and reserves within the Keltepe and Güneytepe deposits in support of an updated resource model and new
life-of-mine plan. Exploration drilling activities completed late in the third quarter of 2021 expanded oxide
gold mineralization at the Keltepe North and Keltepe Northwest deposits and provided encouragement that
it may be possible to join these two deposits in the future.
S
elected drill program results and intercepts are highlighted in the supplementary data at the end of this
news release. The drill collar locations and associated graphics are available at the following link:
http://ml.globenewswire.com/Resource/Download/7c29d6c2-5f7e-4117-9e23-a12eae1bccab
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About Centerra Gold
Centerra Gold Inc. is a Canadian-based gold mining company focused on operating, developing, exploring
and acquiring gold properties in North America, Turkey, and other markets worldwide. Centerra operates
two mines: the Mount Milligan Mine in British Columbia, Canada, and the Öksüt Mine in Turkey. While
the Company still owns the Kumtor M ine in the Kyrgyz Republic , it is currently no longer under the
Company’s control. The Company also owns the pre-development stage Kemess Underground Project in
British Columbia, Canada and owns and operates the Molybdenum Business Unit in the United States.
Centerra's shares trade on the Toronto Stock Exchange (“TSX”) under the symbol CG and on the New York
Stock Exchange (“NYSE”) under the symbol CGAU. The Company is based in Toronto, Ontario, Canada.
Conference Call
Centerra invites you to join its 2021 third quarter conference call on Friday, November 5, 2021 at 9:00 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) 759-0876. International participants may access the call at: +1 (416) 981-0157. Results
summary presentation slides are available on Centerra Gold’s website at www.centerragold.com .
Alternatively, an audio feed webcast will be broadcast live by Intrado and can be accessed live on Centerra
Gold’s website at www.centerragold.com. A recording of the call will also be available on Centerra Gold’s
website at www.centerragold.com shortly after the call and via telephone until midnight Eastern Standard
Time on November 12, 2021 by calling: +1 (416) 626- 4100 or 1 (800) 558- 5253 and using pas scode
21998229.
For more information:
John W. Pearson
Vice President, Investor Relations
Centerra Gold Inc.
(416) 204-1953
Toby Caron
Treasurer and Director, Investor Relations
Centerra Gold Inc.
(416) 204-1153
Additional information on Centerra Gold is available on the Company’s website at
www.centerragold.com and on SEDAR at www.sedar.com and EDGAR at www.sec.gov/edgar.
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Management’s Discussion and Analysis
For the Period Ended September 30, 2021
This Management Discussion and Analysis (“MD&A”) has been prepared as of November 4, 2021 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 nine months ended September 30 , 2021 in comparison
with the corresponding period ended September 30, 2020. This discussion should be read in conjunction
with the Company’s unaudited condensed consolidated interim financial statements (the “interim financial
statements”) and the notes thereto, for the three and nine months ended September 30 , 2021 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, 2020 and 2019, the related MD&A and the Annual Information Form for the year ended
December 31, 2020 (the “2020 AIF”). The Company’s unaudited condensed consolidated interim financial
statements and the notes thereto for the three and nine months ended September 30, 2021, the 2020 Annual
Report and the 2020 AIF are available at www.centerragold.com, on the System for Electronic Document
Analysis and Retrieval (“SEDAR”) at www.sedar.com and on the Electronic Data Gathering, Analysis and
Retrieval system (“EDGAR”) at www.sec.gov/edgar. In addition, this MD&A 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 “Caution Regarding Forward -Looking Information” in
this MD&A. All dollar amounts are expressed in United States dollars (“USD”), except as otherwise
indicated. 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.
Caution Regarding Forward-Looking Information
Information c ontained in this MD&A which is not a statement of historical fact, and the documents
incorporated by reference herein, may be “forward-looking information” for the purposes of Canadian
securities laws and within the meaning of the United States Private Securities Litigation Reform Act of
1995. Such forward-looking information involves 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 regarding 2021 G uidance, including outlook on
production (including the timing thereof), cost, free cash flow and capital spend in 2021, and the
assumptions used in preparing such guidance and outlook, including those discussed under “2021 Material
Assumptions”; the impact of the seizure of the Kumtor Mine on the Company’s other operations and
businesses; the outcome of arbitration and other proceedings initiated by the Company regarding the
unlawful seizure by the Kyrgyz Government of the Kumtor Mine in May, 2021, or the outcome or effect of
the legacy e nvironmental and tax disputes and criminal investigations relating to the Kumtor Mine, or the
outcome of any future discussions or negotiations to resolve any or all of the disputes relating to the Kumtor
Mine; possible impacts to operations relating to COVID-19; the Company’s expectation regarding having
sufficient water at the Mount Milligan Mine in the medium-term for its targeted throughput and its plans
for a long-term water solution; the Company’s continued evaluation of potential activity at the Kemess East
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Project; expectations regarding the resources and reserves within the Keltepe and Güneytepe deposits in
support of an updated resource model and new life-of-mine plan; expectations regarding the future joining
of the Keltepe North and Keltepe Northwest deposits; the Company’s expectations regarding exploration
results in connection with the Sivritepe Project and 2XFred Project; the Company’s expectations of
adequate liquidity and capital resources for 2021; and, expectations regarding contingent payments to be
received from the sale of Greenstone Partnership.
Forward-l ooking information is necessarily based upon a number of estimates and assumptions that, while
considered reasonable by Centerra, are inherently subject to significant technical, 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. Factors and
assumptions that could cause actual results or events to differ materially from current expectations include,
among other things: (A) strategic, legal, planning and other risks, including: political risks associated with
the Company’s operations in Turkey and Canada; resource nationalism including the management of
external stakeholder expectations; the impact of changes in, or to the more aggressive enforcement of, laws,
regulations and government practices, including unjustified civil or criminal action against the Company,
its affiliates, or its current or former employees; risks that community activism may result in increased
contributory demands or business interruptions; the risks related to outstanding litigation affecting the
Company, including the potential failure to negotiate a mutually acceptable outcome of disputes relating
to the Kumtor Mine; risks that an arbitrator will reject the Company’s claims against the Kyrgyz Republic
and/or Kyrgyzaltyn JSC (“Kyrgyzaltyn”) or that such claims may not be practically en forceable against
the Kyrgyz Republic and/or Kyrgyzaltyn; risks related to the continued imposition by the Kyrgyz
Government of external management on the Company’s wholly-owned subsidiary, Kumtor Gold Company
(“KGC”) or the prolongation of such external management, including risks that the external manager
materially damages the Kumtor Mine’s operations; the ongoing failure of the Kyrgyz Republic Government
to comply with its continuing obligations under the investment agreements governing the Kumtor Mine and
not take any expropriation action against the Kumtor Mine; risks that the Kyrgyz Government undertake
further unjustified civil or criminal action against the Company, its affiliates, or its current or former
employees; the impact of constitutional changes in Turkey; the impact of any sanctions imposed by Canada,
the United States or other jurisdictions against various Russian and Turkish individuals and entities;
potential defects of title in the Company’s properties that are not known as of the date hereof; the inability
of the Company and its subsidiaries to enforce their legal rights in certain circumstances; the presence of
a significant shareholder that is a state-owned company of the Kyrgyz Republic; risks related to anti-
corruption legislation; risks related to the concentration of assets in Central A sia ; Centerra not being able
to replace mineral reserves; Indigenous claims and consultative issues relating to the Company’s
properties which are in proximity to Indigenous communities; and, potential risks related to kidnapping or
acts of terrorism; (B) risks relating to financial matters, including: sensitivity of the Company’s business
to the volatility of gold, copper and other mineral prices; the use of provisionally-priced sales contracts for
production at the Mount Milligan Mine; reliance on a few key customers for the gold-copper concentrate
at the Mount Milligan Mine; use of commodity derivatives; the imprecision of the Company’s mineral
reserves and resources estimates and the assumptions they rely on; the accuracy of the Company’s
production and cost estimates; the impact of restrictive covenants in the Company’s credit facilities which
may, among other things, restrict the Company from pursuing certain business activities or making
distributions from its subsidiaries; the Company’s ability to obtain future financing; the impact of global
financial conditions; the impact of currency fluctuations; the effect of market conditions on the Company’s
short-term investments; and, the fact that the Company’s ability to make payments, including any payments
of principal and interest on the Company’s debt facilities, depends on the cash flow of its subsidiaries; and,
(C) risks related to operational matters and geotechnical issues and the Company’s continued ability to
successfully manage such matters, including the stability of the pit walls at the Company’s operations; the
risk of having sufficient water to continue operations at the Mount Milligan Mine and achieve expected mill
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throughput; the success of the Company’s future exploration and development activities, including the
financial and political risks inherent in carrying out exploration activities; inherent risks associated with
the use of sodium cyanide in mining operations; the adequacy of the Company’s insurance to mitigate
operational risks; mechanical breakdowns; the occurrence of any labour unrest or disturbance and the
ability of the Company to successfully renegotiate collective agreements when required; the risk that
Centerra’s workforce and operations may be exposed to widespread epidemic including, but not limited to,
the COVID-19 pandemic; seismic activity; long lead-times required for equipment and supplies given the
remote location of some of the Company’s operating properties; reliance on a limited number of suppliers
for certain consumables, equipment and components; the ability of the Company to address physical and
transition risks from climate change and sufficiently manage stakeholder expectations on climate-related
issues; the Company’s ability to accurately predict decommissioning and reclamation costs; the Company’s
ability to attract and retain qualified personnel; competition for mineral acquisition opportunities; risks
associated with the conduct of joint ventures/partnerships; and the Company’s ability to manage its
projects effectively and to mitigate the potential lack of availabili ty of contractors, budget a nd timing
overruns and project resources. For additional risk factors, please see section titled “Risk Factors” in the
Company’s most recently filed 2020 AIF available on SEDAR at www.sedar.com and EDGAR at
www.sec.gov/edgar.
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 November 4, 2021. 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
Overview of Consolidated Financial and Operating Results ................................................................ 10
Overview of Consolidated Results ........................................................................................................... 11
Outlook ...................................................................................................................................................... 14
Recent Events and Developments ............................................................................................................ 19
Financial Performance ............................................................................................................................. 23
Balance Sheet Review ............................................................................................................................... 25
Financial Instruments ............................................................................................................................... 28
Operating Mines and Facilities ................................................................................................................ 29
Discontinued Operations .......................................................................................................................... 40
Quarterly Results – Previous Eight Quarters ........................................................................................ 41
Related party transactions ....................................................................................................................... 41
Contingencies............................................................................................................................................. 41
Accounting Estimates, Policies and Changes ......................................................................................... 43
Disclosure Controls and Procedures and Internal Controls Over Financial Reporting .................... 43
Non-GAAP Measures ............................................................................................................................... 44
Qualified Person & QA/QC – Non-Exploration (including Production information) ........................ 50