Centerra Gold Reports First Quarter Results Net Earnings of $89.4 million ($0.30 per common share) and Adjusted Net EarningsNG of $56.4 million ($0.19 per common share). All figures are in United States dollars and all production figures are on a 100%-basis and continuing operations basis, unless ot
NEWS RELEASE
Centerra Gold Reports First Quarter Results
Net Earnings of $89.4 million ($0.30 per common share) and
Adjusted Net EarningsNG of $56.4 million ($0.19 per common share).
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” in Centerra Gold’s Management’s Discussion & Analysis for the three months ended March
31, 2022 (“MD&A”) included in this press release. All references in this document denoted with NG indicate a “specified financial
measure” within the meaning of National Instrument 52 -112 Non-GAAP and Other Financial Measures Disclosure of the Canadian
Securities Administrators. None of these specified measures is a standardized financial measure under International Financia l
Reporting Standards (“IFRS”) and these measures might not be comparable to similar financial measures disclosed by other issu ers.
See “Non-GAAP and Other Financial Measures” in the MD&A included in this press release for a discussion of the specified financial
measures used in this document and a reconciliation to the most directly comparable IFRS measure.
Toronto, Canada, May 4, 2022: Centerra Gold Inc. (“Centerra” or the “Company”) (TSX: CG and NYSE: CGAU) today
reported its first quarter of 2022 results.
Significant financial and operating results of the first quarter ended March 31, 2022 included:
• Net earnings for the quarter of $89.4 million or $0.30 per common share (basic).
• Adjusted net earningsNG for the quarter of $56.4 million or $0.19 per common share (basic).
• Cash provided by operating activities for the quarter of $28.3 million.
• Free cash flowNG for the quarter of $9.1 million.
• Gold production for the quarter of 93,784 ounces.
• Copper production for the quarter of 20.6 million pounds.
• Gold production costs for the quarter of $497 per ounce.
• Copper production costs for the quarter of $1.68 per pound.
• All-in sustaining costs on a by-product basisNG for the quarter of $395 per ounce.
• All-in costs on a by-product basisNG for the quarter of $516 per ounce.
• Strong balance sheet with cash position at the quarter-end of $768.4 million.
• Centerra completed the acquisition of the Goldfield Project on February 28.
• The ADR plant at the Öksüt Mine remains on a shutdown since early March due to mercury detected in the
gold room. Mining, crushing, stacking and heap leaching activities continue at the site while the Company is
evaluating different options to address the issue.
• The Company’s full -year 2022 guidance for the Öksüt Mine and consolidated Centerra remain under
review while guidance for the Mount Milligan Mine is unchanged since the last update.
• The impact of the COVID -19 pandemic on its business continues to be minima l as employee absences due
to COVID-19, or any other illnesses have been successfully managed.
• Centerra entered into a global arrangement agreement with Kyrgyzaltyn JSC (“Kyrgyzaltyn”) and the
government of Kyrgyz Republic on April 4, 2022 to effect a clean separation of Centerra from Kyrgyzaltyn and
Kyrgyz Republic, including through the disposition of Centerra’s ownership in the Kumtor Mine and investment
in the Kyrgyz Republic, the purchase for cancellation by Centerra of all of Kyrgyzaltyn’s 77.4 millio n Centerra
common shares, the termination of Kyrgyzaltyn’s involvement in the Company, and the resolution of their
disputes, among other provisions.
• Quarterly Dividend declared of CAD$0.07 per common share.
Commentary
Scott Perry, President and Chief Executive Officer of Centerra stated, “In the first quarter, we continued to demonstrate
that safety remains Centerra’s top priority, as the Öksüt Mine once again achieved one million consecutive hours of work
without a lost time injury. We continue with renewed focus on our safety journey at the Mount Milligan Mine.”
“In the first quarter of 2022, our operating mines continued to deliver strong performance, producing 93,784 ounces of
gold and 20.6 million pounds of copper, at gold production costs of $497 per ounce sold and all -in sustaining costs on a
by-product basisNG of $395 per ounce sold. Although the ADR plant at the Öksüt Mine was placed on a shutdown in early
March, the Company was able to produce 54,691 ounces fro m the mine in the first quarter at gold production costs and
all-in-sustaining cost on a by -product basisNG of $386 and $451 per ounce sold, respectively. The Mount Milligan Mine
started the year strong, continuing to demonstrate its reputation as a low co st operator, producing 39,093 ounces of gold,
in addition to 20.6 million pounds of copper at gold production costs and all-in-sustaining cost on a by-product basisNG of
$647 and $15 per ounce sold, respectively. While the all-in-sustaining cost on a by-product basisNG of $15 per ounce sold
at the Mount Milligan Mine was positively impacted by by -product credits, the all -in-sustaining cost on a co - product
basisNG was $819 per ounce sold. Financially, the Company generated cash provided by operating activities of
$28.3 million, including $63.6 million generated at the Öksüt Mine and $20.8 million from the Mount Milligan Mine. The
Mount Milligan Mine’s cash generation was impacted by the timing of cash collection on the gold and copper concentrate
sale of $42 million occurring late in the quarter with cash not received until the second quarter of 2022. After closing the
acquisition of the Goldfield Project, the Company ended the quarter with a cash balance of $768.4 million.”
“In 2022, we continue to expect s trong operational performance at the Mount Milligan Mine, with full -year guidance
unchanged from the last update. The Öksüt Mine 2022 gold doré bar production guidance remains under review. While
the ADR plant at the Öksüt Mine remains currently on a shutd own, mining, crushing, stacking, and leaching activities
continue according to plan up to the stage of loading gold onto carbon. The Company continues to evaluate options to
remediate the issue at the ADR plant while undertaking an analysis to determine al ternative means of monetizing gold in
carbon material which could provide a temporary solution until gold doré bar production is restarted at site or over the life
of mine with minimal equipment required at the ADR plant.”
“Subsequent to quarter-end, we announced that we had entered into a global arrangement agreement with Kyrgyzaltyn and
the Kyrgyz Republic, with the hopes to close the agreement in the coming months. This agreement allows Centerra to
move forward with a renewed focus on our core operations. We continue to invest in greenfield and brownfield exploration,
with increased drilling programs at the Mount Milligan and Öksüt Mines, where we have seen promising results. Following
the closing of the Goldfield project’ s acquisition, we initiated planning of drilling programs as well as permitting,
community outreach, regulatory compliance and land management activities. We continue the work on the new Mount
Milligan Mine technical report which is expected to be released in the second quarter of 2022.”
“Based on the Company’s continued strong financial position, operating results and cash flows, the Board approved a
quarterly dividend of CAD$0.07 per share on May 3, 2022 to shareholders of record on May 18, 2022.”
“We expect 2022 to be a transformative year for Centerra and we expect to see continued strong performance from our
operating mines, advancement of the Goldfield Project, and meaningful generation of cash provided by operating activities
and free cash flowNG.”
Board and Management Changes
Centerra is pleased to announce the appointment of Wendy Kei to its Board of Directors. Ms. Kei is an accomplished
finance executive with over 25 years of business experience in a variety of industries, including mining sector. She brings
a strong focus on corporate governance, finance, risk management and significant expertise in executing complex mergers
and acquisitions. Ms. Kei is a Chartered Professional Accountant and previously served as Chief Financial Officer of
Dominion Diamond Corporation (formerly Harry Winston Diamond Corporation and Aber Diamond Corporation). Ms.
Kei is a member of the Chartered Professional Accountants of Ontario, holds an ICD.D designation from the Institute of
Corporate Directors and holds a Bachelor of Mathematics from the University of Waterloo. Ms. Kei was selected as a 2016
Diversity 50 Candidate by the Canadian Board Diversity Council.
Centerra also announces that Dan Desjardins has retired as the Company’s Vice President and Chief Operating Officer.
The Company offers its sincere thanks and gratitude to Dan for his dedication, leadership and contributions to the
strategic direction of Centerra during his many years of service since joining the Company in 2015. Under Mr. Desjardins’
leadership, first as President of Kumtor Gold Company and subsequently as Vice President and Chief Operating Officer,
and through his enduring passion for continuous improvement, the Kumtor Mine was elevated to world -class status and
the construction of the Öksüt Mine was delivered on time and under budget and has since fully repaid its upfront investment
within its first two years of commercial production. The Company thanks Mr. Desjardins for his contributions to Centerra
over the many years and wishes Dan all the best in his retirement.
Exploration Update
Exploration activities in the first quarter of 2022 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 for the first quarter of 2022 were $8.2 million.
The activities were primarily focused on expanded drilling programs at the Moun t Milligan Mine and the Öksüt Mine.
In the first quarter of 2022, 18 drill holes totalling 11,320 metres of diamond drilling were completed at the Mount Milligan
Mine, including exploration drilling (3,803 metres in 7 drill holes) and resource expansion drilling (7,517 metres in 11
drill holes). In 2022, drilling at the Mount Milligan Mine will continue to t arget gold and copper porphyry mineralization
below and adjacent to the current ultimate open-pit boundary, as well as continue to test targets with potential for shallower
mineralization peripheral to the current pits.
In the first quarter of 2022, exploration activities at the Öksüt Mine comprised diamond drilling (2,344 metres in ten drill
holes). Exploration drilling activities were mainly focused on testing the potential for further oxide gold mineralization at
the Keltepe Northwest and Keltepe North -Northwest deposits. In the second quarter of 2022, drilling at the Öksüt Mine
will continue to target potential expansion of oxide gold mineralization at the Keltepe North, Keltepe Northwest, and
Keltepe North-Northwest deposits as well as testing the pote ntial for new oxide gold mineralization at targets peripheral
to the known deposits.
The Goldfield Project in Nevada has three known deposits, Gemfield, Goldfield Main and McMahon Ridge, as well as
large areas of underexplored and highly prospective tenur e. Initial exploration activities involved review and assessment
of the geological, geophysical, geochemical, and drilling data, geological modelling and interpretation, planning of
geophysical surveys, and the design of exploration and infill/resource exp ansion drilling programs. Airborne and ground
geophysical surveys and reverse circulation drilling programs are planned to commence in the second quarter of 2022.
Selected 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 :
http://ml.globenewswire.com/Resource/Download/9fed935b-5a71-4650-88dc-16d4481be14e
About Centerra
Centerra Gold Inc. is a Canadian -based mining company focused on operating, developing, exploring and acquiring gold
and copper properties in North America, Turkey, and other markets worldwide. Centerr a operates two mines: the Mount
Milligan Mine in British Columbia, Canada, and the Öksüt Mine in Turkey. While the Company still owns the Kumtor
Mine in the Kyrgyz Republic, it is currently no longer under the Company’s control. The Company also owns the Goldfield
District Project in Nevada, United States, the Kemess Underground Project in British Columbia, Canada, and owns and
operates the Molybdenum Business Unit in the United States and Canada. 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 2022 first quarter conference call on Wednesday, May 4, 2 022 at 9:30 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 (877) 758 -1913.
International participants may access the call at +1 (416) 641 -6202. Results summary presentation slides are available on
Centerra’s website at www.centerragold.com. Alternatively, an audio feed webcast will be broadcast live by Notified
(formerly Intrado) and can be accessed live at Centerra’s website at www.centerragold.com. A recording of the call will
be available on Centerra’s website at www.centerragold.com shortly after the call and via telephone until midnight Eastern
Standard Time on May 18, 2022 by calling +1 (416) 626-4100 or (800) 558-5253 and using passcode 22018170.
For more information:
Toby Caron Shae Frosst
Treasurer and Director, Investor Relations Manager, Investor Relations
(416) 204-1694 (416) 204-2159
[email protected] [email protected]
Additional information on Centerra is available on the Company’s website at www.centerragold.com and at
SEDAR at www.sedar.com and EDGAR at www.sec.gov/edgar.
Management’s
Discussion and
Analysis
For the Three Months Ended March 31, 2022 and 2021
This Management’s Discussion and Analysis (“MD&A”) has been prepared as of May 3, 2022 and is intended to provide a review
of the financial position and results of operations of Centerra Gold Inc. (“Centerra” or the “Company”) for the three months
ended March 31, 2022 in comparison with the corresponding period ended March 31, 2021. This discussion should be read in
conjunction with the Company’s unaudited condensed consolidated interim financial statements and the notes thereto for the three
months ended March 31, 2022 prepared in accordance with International Financial Reporting Standards (“IFRS”). The
Company’s unaudited condensed consolidated interim financial statements and the notes thereto for the three months ended
March 31, 2022, are available at www.centerragold.com and on the System for Electro nic Document Analysis and Retrieval
(“SEDAR”) at www.sedar.com and EDGAR at www.sec.gov/edgar . In addition, this discussion contains forward -looking
information regarding Centerra’s business and operations. Such forward-looking statements involve risks, uncertainties and other
factors that could cause actual results to differ materially from those expressed or implied by such forward -looking statements.
See “Caution Regarding Forward -Looking Information” below. All dollar amounts are expressed in United States dollars
(“USD”), except as otherwise indicated. All references in this document denoted with NG indicate a “specified financial measure”
within the meaning of N ational Instrument 52 -112 Non -GAAP and Other Financial Measures Disclosure of the Canadian
Securities Administrators. None of these measures is a standardized financial measure under IFRS and these measures might not
be comparable to similar financial measures disclosed by other issuers. See section “Non-GAAP and Other Financial Measures”
below for a discussion of the specified financial measures used in this document and a reconciliation to the most directly
comparable IFRS measure.
Caution Regarding Forward -Looking Information
Information contained in this document which is not a statement of historical fact, and the documents incorporated by referen ce
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 oppor tunities 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 2022 Outlook and 2022
Guidance, including outlook on production (including the timing thereof), cost, free cash flow and capital spend in 2022, and the
assumptions used in preparing such guidance and Outlook, including those discussed under “2022 Material Assumptions”; the
impact of the seizure of the Kumtor Mine by the Kyrgyz Republic in May 2021 on the Company’s other operations and businesses;
the expected benefits of the Arrangement Agreement (as defined herein); the expected timing to close the Arrangement (as defined
herein); the expected timing to suspend and terminate the various proceedings contemplated by the Arrangement, including the
withdrawal or termination of the Kyrgyz Proceedings (as defined herein); and the timing of Centerra’s special meeting of
shareholders to consider and vote on the Plan of Arrangement contemplated by the Arrangement Agreement (as defined herein);
and matters related thereto; the outcome of arbitration and other proceedings initiated by the Company regarding the unlawful
seizure by the Kyrgyz Republic of the Kumtor Mine in May 2021, or the outcome or effect of the legacy environmental and tax
disputes and criminal investigations relating to the Kumtor Mine; possible impacts to its operations relating to COVID -19; the
Company’s expectation regarding having sufficient water at Mount Milligan 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 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; expectations in respect of the
acquisition of the Goldfield District Project (the “Goldfield Project”), including the anticipated benefits and strategic rationale of
the transaction and future prospects in respect of the Goldfield Project; the Company’s expectations of adequate liquidity and
capital resources for 2022; plans to reduce working capital balance at the Molybdenum Business Unit and plans related to
potential restart or divestment of the Thomson Creek Mine or the Endako Mine; and, expectations regarding contingent payments
to be received from the sale of Greenstone Partnership.
Forward-looking 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 operation s in Turkey, the USA 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 governmen t
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; risks that any of the conditions precedent to the Arrangement will not be satisfied in
a timely manner or at all; the impact of any actions taken by the Kyrgyz Republic Parliament or the Kyrgyz Republic, or any of its
instrumentalities, prior to the completion of the Arrangement, including the failure of the Kyrgyz Government and/or Kyrgyzaltyn
to comply with their respective obligations under the Arrangement Agreement; risks related to the continued imposition by the
Kyrgyz Republic of external management on the Company’s wholly-owned subsidiary, Kumtor Gold Company CJSC (“KGC”) or
the prolongation of such external management, including risks that the external manager materially damages the Kumtor Mine’s
operations; the inability of the external management of KGC to obtain equipment, spare parts, consumables or other supplies; the
Kyrgyz Republic taking further steps to nationalize or expropriate the Kumtor Mine, and/or utilizing the purported environmental
and tax claims being asserted against KGC to strip KGC of its assets prior to the Completion of the Arrange ment; risks that the
Kyrgyz Republic undertake further unjustified civil or criminal action against the Company, its affiliates, or its current or former
employees; the uncertainty of potential outcomes in the Kyrgyz Proceedings (as defined herein), the arbitration process (including
risks that an arbitrator will reject the Company’s claims against the Kyrgyz Republic and/or Kyrgyzaltyn or that such claims may
not be practically enforceable against the Kyrgyz Republic and/or Kyrgyzaltyn), the Chapter 11 proceedings, or the proceedings
before the Ontario court against Tengiz Bolturuk; 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; 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; completion of the acquisition of the Goldfield Project
in accordance with, and on the timeline contemplated by, the terms and conditions of the relevant agreements in respect there of,
management’s assessment of the effects of the successful completion of the proposed acquisition of the Goldfi eld Project and the
making of a determination to proceed with the development of the Goldfield Project on terms acceptable to Centerra; (B) risks
relating to financial matters, including: sensitivity of the Company’s business to the volatility of gold, cop per 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 imprecisi on 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; changes to tax regimes; the
Company’s ability to obtain future financing; the impact of global financial conditions; the impact of currency fluc tuations; the
effect of market conditions on the Company’s short -term investments; the Company’s ability to make payments, including any
payments of principal and interest on the Company’s debt facilities, which 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 integrity of tailings storage faciliti es and the
management thereof, including as to stability, compliance with laws, regulations, licenses and permits, controlling seepages and
storage of water where applicable; the risk of having sufficient water to continue operations at the Mount Milligan Mine and
achieve expected mill throughput; changes to, or delays in the Company’s supply chain and transportation routes, including
cessation or disruption in rail and shipping networks whether caused by decisions of third-party providers or force majeure events
(including, but not limited to, flooding, wildfires, COVID -19, or other global events such as wars); the success of the Company’s
future exploration and development activities, including the financial and political risks inherent in carrying out explorati on
activities; inherent risks associated with the use of sodium cyanide in the mining operations; the adequacy of the Company’s
insurance to mitigate operational and corporate 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 workforc e and operations may be exposed to widespread epidemic including, but not limited to, the COVID -19
pandemic; seismic activity; wildfires; long lead -times required for equipment and supplies given the remote location of some of
the Company’s operating properties and disruptions caused by global events and disruptions caused by global events; 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 availabilit y of
contractors, budget and timing overruns and project resources. For additional risk factors, please see section titled “Risks
Factors” in the Company’s most recently filed Annual Information Form (“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 May 3, 20 22. 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.
TABLE OF CONTENTS
Overview ....................................................................................................................................................................... 1
Overview of Consolidated Financial and Operational Highlights ........................................................................... 2
Overview of Consolidated Results .............................................................................................................................. 3
Outlook .......................................................................................................................................................................... 4
Recent Events and Developments ............................................................................................................................... 4
Financial Performance ................................................................................................................................................. 7
Financial Instruments .................................................................................................................................................. 9
Balance Sheet Review .................................................................................................................................................. 10
Liquidity and Capital Resources................................................................................................................................. 10
Operating Mines and Facilities ................................................................................................................................... 11
Discontinued Operations ............................................................................................................................................. 20
Quarterly Results – Previous Eight Quarters ............................................................................................................ 21
Related Party Transactions ......................................................................................................................................... 21
Accounting Estimates, Policies and Changes ............................................................................................................. 22
Disclosure Controls and Procedures and Internal Control Over Financial Reporting .......................................... 22
Non-GAAP and Other Financial Measures ............................................................................................................... 23
Qualified Person & QA/QC – Production, Mineral Reserves and Mineral Resources .......................................... 28